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Infographic: Exploring municipal debt to Eskom

Municipal debt to Eskom currently stands between an impressive nine and ten billion Rands. In June 2017, during a briefing to Parliament, Members were told that Eskom had made payment arrangements with altogether 62 indebted municipalities.

However, only 31 of the municipalities with payment arrangements are currently servicing their debt with the remaining 31 deemed “delinquent”. This situation is estimated by Eskom to result in current debt escalating. In March 2017, the People’s Assembly did a breakdown that showed the extent of municipal debt owed to Eskom in the form of an infographic .

On Wednesday 8 March 2017, Eskom made a presentation on defaulting municipalities to the Standing Committee on Appropriations. Eskom followed the Promotion of Administrative Justice Act process and applied to the High Court to be allowed to cut electricity to municipalities who were owing R10.2 billion to Eskom. On 5 January 2017 the High Court ruled that Eskom may interrupt municipalities for non-payment.

The overdue debt, including interest, had increased to R9.9 billion at the end of January 2017.

According to Eskom top 20 overdue municipalities are overdue by R7.5 billion and 104 municipalities have overdue debt in excess of R500 000. Eight municipalities have been interrupted according to the PAJA process since 16 January 2017. Moving municipalities from post payment to prepaid meters was identified as a sustainable solution.

Total debt owed to Eskom by small power users nationally totals R13.2 billion. Of all the Eskom supplied areas, Soweto has the largest outstanding debt (R12.1 billion), i.e. 91% of small power user debt. Eskom’s debt collection efforts have been focused on Soweto and their year to date Smart meter results show 10 071 meters installed, 10 404 meters converted to prepaid and the disconnection of 17 350 customers.

More interesting facts:

  • Top 10 defaulting municipalities are overdue by R6.2 billion
  • 66 Municipalities are overdue by more than R10 million
  • Free State, Mpumalanga and the North West are responsible for 7.6 billion of overdue debt
  • R8.6 billion of the R9.9 billion debt is overdue by more than 90 days

Please click here to view the full infographic.

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Sharing the common goal of promoting participatory, effective, accountable and pro-poor local governance, the network strives to provide an interface for civil society organisations to network and share information towards strengthening local democracy in South Africa.

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