Soweto owes Eskom R17 billion – half of entire country’s debt
26 September 2019
The culture of defaulting among electricity consumers in Soweto is probably the single greatest reason why Eskom has been forced to its knees.
According to a report of the Gauteng Department of Cooperative Governance and Traditional Affairs (COGTA) that was presented to the Gauteng Legislature's COGTA Committee, Soweto owes Eskom more than R17 billion, which amounts to half of the entire country's debt to Eskom.
Soweto has been defaulting for years and politicians have tried to convince electricity consumers to at least pay part of their debt, but without much success. Threats to cut off their power supply also serve no purpose. Residents maintain that the ANC promised them free electricity and water. This culture of non-payment has become the heritage of the ANC struggle.
In the meantime, the national electricity supplier is struggling to survive after experiencing a severe low in 2018. The situation is made worse by defaulters, fiscal irregularities, fraud and mismanagement.
It also seems as if Eskom has no workable plan to collect the R34 billion that is owed by underperforming municipalities.
In addition, Eskom's operational capacity is not up to standard and unwarranted tariff hikes over the years have not brought any relief.
The pressure on paying middle class citizens is rising as they have to carry the debt burden and responsibilities of defaulters and underperforming municipalities in an environment in which municipalities' debt burden has increased with a staggering 80% over the last 18 months.
Even though the ANC government has given the debt-ridden Eskom yet another financial lifeline, the fiscal and operational damage is already great and there is very little hope that a sustainable financial turn-around strategy will be successfully implemented. A plan of action to urgently collect Soweto's outstanding debt seems bleak.
The issue is causing headaches for the Department of Cooperative Governance, but strict measures must be put in place to offer households alternative sources of power in an environment where consumers are becoming increasingly impoverished.
Issued by Amanda de Lange, FF Plus MPL: Gauteng Legislature, 26 September 2019