KZN municipalities reduce Eskom debt thanks to CoGTA

The debt of KZN municipalities has been significantly reduced thanks to Eskom KZN and the support given by the KZN Department of Cooperative Governance and Traditional Affairs (CoGTA).

In a statement, Eskom acknowledged the significant role played by KZN CoGTA MEC, Sipho Hlomuka and his team after they released their substantial report on the progress that has been made.

Municipal debt took centre stage when efforts by Eskom to collect revenue from owing municipalities were met with several challenges and were generally unsuccessful. Negotiations for payment arrangements mostly faltered or if successful, they were not followed through. This put an immense burden on Eskom as its revenue was constrained.

KZN COGTA HELPS CLEAR MUNICIPAL ARREAR DEBTS

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“In the past three years, CoGTA has played a huge role in facilitating negotiations between Eskom and owing municipalities to the extent that one of them, Abaqulusi Municipality, cleared its R52.5m arrear debt in December 2020. The Abaqulusi Administrator and his management team assessed how the debt would be settled and committed to ensuring that the current account would be settled simultaneously. The municipality diligently made progress and cleared the debt over the agreed period.”

FOUR OTHER KZN MUNICIPALITIES COMMIT TO SETTLING THEIR ESKOM DEBTS

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Eskom said it has noted progress in the other four municipalities that have committed to settling their debts. These are Msunduzi Municipality, which has cleared its arrear debt, Inkosi Langalibalele Municipality, which will be making its last payment this month, Newcastle Municipality, which is adhering to the payment arrangement and has reduced its arrear debt by R38.3m, and Mpofana Municipality which has started honouring its payment arrangement. Eskom acknowledges the roles played by both CoGTA and the municipalities’ leadership in this regard.

In a letter of appreciation of the work done by the KZN CoGTA MEC Sipho Hlomuka and his team, the Eskom Distribution Group Executive, Monde Bala, said, “Eskom would like to recognise the efforts of the MEC Hlomuka together with his management team, for their perseverance and unfaltering assistance in ensuring that the Municipalities discharged their obligations. Eskom remains of the view that this collaborative approach between Organs of State and Local Government (municipalities) leadership is key in dealing with the challenges that we face as a country.”

Eskom also said that it looks forward to continuing and cementing this relationship with CoGTA (KZN) in the hope that other municipalities who face a similar challenge could be encouraged and empowered to successfully settle their overdue debts with Eskom.