Municipality owing R2.3bn to Eskom wants to make interest-free payments
13 March 2020
Gauteng Cooperative Governance and Traditional Affairs (COGTA) MEC Lebogang Maile wants to negotiate an interest-free repayment of the Emfuleni municipality's Eskom debt.
Maile rushed to get a detailed report from the mayoral committee when a sheriff of the High Court on Thursday seized furniture and vehicles after the municipality failed to pay its R2.3 billion Eskom debt.
Maile said a meeting was scheduled for Tuesday with Eskom CEO Andre de Ruyter to review payment arrangements.
Eskom spokesperson Sikonathi Mantshantsha warned that additional assets would be attached if the municipality failed to pay R220 million of its payment arrangement before 9am on Friday.
It is unclear whether Eskom went ahead with its threat.
Can’t afford
Maile said the municipality could not afford the unrealistic and unsustainable 2018 repayment arrangement with Eskom, adding that interest on the debt would have to be reviewed.
He said the Emfuleni wants Eskom to meet them halfway and consider the municipality’s financial situation.
"What the municipality has been paying is a combination of current and historical debt. There has to be a clear agreement which separates the two.
“We are not going to ask Eskom for a waiver, but there is an issue of interest. The debt has been increasing partly because of interest and, therefore, we would want to negotiate an interest-free arrangement," he said.
The municipality, which is also in the red with Rand Water, which it owed more than R420 million to Rand Water in 2019.
Emfuleni generates more than 60% of its revenue from electricity tariffs, most of which is collected from large companies.
In 2018, a court judgment ruled that Eskom could recover R615 million on this debt from the municipality.
