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Over the years, arrear debt particularly municipal debt had grown to unsustainable levels. As at end of March 2023, arrear municipal debt was at R58.5 billion, a substantial 30% year-on-year increase from R44.7 billion in March 2022. The top 20 defaulting municipalities account for about 78% of total arrear municipal debt. Eskom continues to make efforts to address the arrear debt, however these have not yielded the desired outcome as the debt continued to escalate. A high-level intervention and continuous, coordinated multistakeholder approach is required, and Eskom pins its hopes on the Municipal Debt Relief programme facilitated by the National Treasury to support municipalities deal with their historical debt challenges. Eskom welcomes the Municipal Debt Relief as it is seen to be improving its cash flow.
A majority of municipalities have applied to National Treasury for the debt relief. Fifty-two (52) of these municipalities have received approval from National Treasury with six municipalities granted conditional approvals. “In as much as an encouraging number of these municipalities taking advantage of the programme this is, there are some that have not yet responded positively, and Eskom continues to engage these municipalities and National Treasury,” said Eskom’s Group Executive for Distribution, Monde Bala.
Eskom has not processed any debt write-offs at this stage as the Municipal Debt Relief has conditions that the municipalities must fulfill over the next three years. Eskom would be required to process the first portion of debt write-off only after municipalities have met the set conditions to the satisfaction of National Treasury, for twelve consecutive months.
The Municipal Debt Relief is applicable to municipalities and does not include any other customer categories. Eskom has mechanisms in place to assist its direct residential customers facing challenges in settling their accounts in full. However, as it is the case with any business, customers who do not pay their monthly accounts and fail to engage leave Eskom with no option but to implement Credit Control Management processes including interruption of services.
Payment for services is critical for the sustainability of any service provider including Eskom, therefore, Eskom urges all South Africans to pay for services they consume.
Issued by Eskom