Addressing municipal arrears to Eskom on bulk electricity

SALGA meets with municipalities in arrears

Salga meets with municipalities in arrears
Municipal arrears on bulk electricity

The SA Local Government Association (SALGA) met this week with the 20 municipalities reported to be in arrears on their Eskom bulk electricity accounts. The affected municipalities are in the Eastern Cape, Free State, North West and Northern Cape. Power utility, Eskom, has to this end announced that it plans to disconnect these municipalities should the overdue accounts not be settled.

The objective of convening this meeting with the said municipalities was to find concrete solutions and to explore alternative avenues in dealing with the challenges faced by the affected municipalities in servicing Eskom’s bulk electricity account and, moreover, to propose strategic interventions that will lead to a long-term resolution – noting that municipalities themselves are owed more than R81 billion for services rendered.  

In addressing this matter of bulk electricity debt, SALGA is of the view that other concomitant issues relating to finances have to be addressed. This includes the development of cost recovery strategies, reviewing credit control policies, addressing indigent policies in line with free basic services and, where a municipality is under severe financial stress, lobbying for financial support from other spheres of government. 

As the representative voice of local government, SALGA will engage with Eskom on behalf of these municipalities to find a mutually beneficial solution that will see the debt under review serviced by municipalities and electricity services to communities not disrupted. In terms of its long-term objective, SALGA will continue to support and encourage local government to improve financial management. 

SALGA supports measures that are within the legal framework and that are implemented with the objective of improving financial management practices and good governance. This is in light of the fact that both the administrative and political leadership of municipalities are accountable for what happens at a local level and, as such, SALGA acknowledges that Eskom’s warning is in accordance with its own financial challenges.

 The association calls on the leadership in municipalities to increase efforts in improving revenue collection and financial management practices and to implement early warning systems to detect weaknesses in in financial systems and controls to assist municipalities to take corrective action decisively.

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Issue 68