Zodidi Mhlana and Solly Makganoto
JOHANNESBURG- More work should be done to deal with the issue of municipalities owing Eskom billions of rands, Cooperative Governance and Traditional Affairs minister Zweli Mkhize said on Thursday.
“Just this week, the Standing Committee on Public Accounts heard that municipal debts owed to Eskom stands at R30billion. This is a very huge amount that is lost into the system and therefore we hope that we are going to be able to go into the details of where and how these issues are falling into the cracks. Municipalities are also experiencing cash flow problems which have resulted in them defaulting on their bulk electricity accounts with Eskom. The reasons for non- payment have also been compounded by a number of factors,” he said.
Power utility Eskom has recently told Scopa in parliament that it needed the government to step in addressing the fact that it is owed R30billion by several entities including municipalities.
Mkhize made the remarks during the second day of the South African Local Government Association (Salga) Energy Summit held in Sandton Johannesburg.
Eskom said that the issue of defaulting municipalities was negatively affecting its finances.
Mkhize said that municipalities should come up with new ways of creating revenue.
“The South African constitution guarantees every citizen access to services such as water, refuse removal and electricity and this places municipalities under a lot of pressure to generate their own revenue to supplement the funds that they receive from the national fiscus. Electricity is one of the major revenue sources for municipalities. In recent years, that revenue source has seen a decline in profits due to high cost of bulk electricity. In addition, municipal debts have been increasing at an alarming rate,” he said.
Mkhize urged municipalities to embrace emerging technological advancements within the energy sector in order to deal challenges.
“The issue of energy supply is not a theoretical matter, it’s a practical day to day thing of how people live. Rather than feeling threatened by technological advancement, we should be able to embrace them. We should be thinking about how we can do things better,” he added.