WC govt supports municipalities in managing Eskom debt

28 February 2023

Attention broadcasters: English audio clip from MPP Isaac Sileku attached.

Western Cape Provincial Treasury has revealed that it takes numerous steps to ensure municipalities in the province don’t drown in debt to Eskom.

As of January 2023, Western Cape municipalities were responsible for only 0.5% of outstanding municipal debt older than 30 days to Eskom, despite representing 16.1% of electricity sales at this point.

Eskom is already falling apart, and municipal debt is a compounding factor that eventually harms residents, as Eskom demands huge tariff increases to cover the shortfall.

Provincial Treasury has numerous systems in place to ensure municipalities do not fall into arrears, including:

- Actively monitor payment of creditors via in-year-monitoring processes.
- Guidance on setting cost-reflective tariffs (including pursuing grant funding to support cost-of supply studies) to safeguard payment of bulk purchases.
- Support towards debtor management to ensure timeous collection of electricity service charges.
- Assistance to manage cash flows for Eskom payments as part of Budget Funding Plans.

MPP Isaac Sileku says, “The DA has seen what is happening to municipalities in other provinces, and will not allow service delivery in this province to be compromised because of bad financial management and debt service costs.

By offering support to our municipalities who need it, the Provincial Government is making sure that that our residents are put first. Money meant for services should provide just that, and not be wasted on useless interest costs.”

Issued by Isaac Sileku, DA Western Cape Spokesperson on Local Government, 28 February 2023