COSATU is alarmed at the failure of municipalities to pay Eskom
17 October 2024
The Congress of South African Trade Unions (COSATU) is deeply alarmed at the rising number of municipalities failing to pay their Eskom bills. It is extremely concerning that despite Treasury offering a debt relief programme of R80 billion to 72 struggling municipalities in exchange for them honouring future payments owed to Eskom, that already 56 of these assisted municipalities have once again fallen into arrears.
This crisis of municipal debt owed to Eskom is currently at R85 billion and expected to rise to R100 billion by the end of the financial year and could reach R200 billion by 2028. This is a ticking time bomb and threatens the collapse of Eskom and in fact the entire economy.
Continuing along this path with some of Eskom’s customers and municipalities paying their bills and others refusing to do so is untenable and immoral. As is Eskom’s long-standing practice of writing off delinquents and outsourcing their bills to those who do pay.
We cannot continue to use Eskom to bail out municipalities who are happy to collect payments from households and businesses and then pocket the money. This is exactly why the Eskom Social Compact initiated by COSATU called for all customers to pay Eskom directly to ensure it receives monies due to it and that it depends upon to provide reliable and affordable electricity.
This will necessitate a new funding model for local government which depends upon electricity tariffs to cross-subsidise other municipal services. Treasury and Cooperative Governance and Traditional Affairs (COGTA) must craft a plan that resolves this. The situation will collapse the excellent work done by Eskom to end loadshedding in addition to threatening its survival, if not addressed as a matter of urgency.
It is critical the Medium-Term Budget Policy Statement due to be tabled at Parliament on 30 October by the Minister for Finance, Mr. Enoch Godongwana, provides a clear package of interventions to halt this pending disaster.
Issued by Matthew Parks, COSATU Parliamentary Coordinator, 17 October 2024
