Power utility Eskom says that nine municipalities have agreed to sign Distribution Agency Agreements
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Power utility Eskom says that nine municipalities have agreed to sign Distribution Agency Agreements following a nationwide consultation process, as part of efforts to recover unpaid electricity bills.
This comes as the debt owed to the utility continues to mount nationally, currently standing at R111.6 billion, despite interventions by the National Treasury through the municipal debt relief programme.
IOL previously reported that the utility had announced that it had begun a legal consultation process that could lead to electricity supply being interrupted to about 14 municipalities that have failed to pay their electricity bills.
According to Eskom, "the municipalities were selected because they had not settled their accounts for at least the last 18 months, had not met the conditions of the National Treasury municipal debt relief programme, or posed a significant financial risk to Eskom".
In a statement, Eskom said the agreements will allow the utility to assist municipalities with billing, infrastructure maintenance, and debt collection.
"Nine municipalities have received council resolutions to sign the Distribution Agency Agreement (DAA), and engagements are ongoing on the implementation," Eskom said.
"The municipalities are: Nketoana Local Municipality, Mpofana Local Municipality, Masilonyana Local Municipality, Nala Local Municipality, Ngwathe Local Municipality, Renosternberg Local Municipality, Thembelihle Local Municipality, Govan Mbeki Local Municipality and Kgetlengrivier Local Municipality".
The utility added that it had also reached a payment arrangement with the City of Ekurhuleni and implemented pre-payment arrangements with Inxuba Yethemba Local Municipality.
“It is encouraging to see that some municipalities have already made commitments towards their debt through payment arrangements and intention to sign the Distribution Agency Agreements, where Eskom partners for a defined period, with municipalities to assist through expertise and skills transfer in areas such as billing, maintenance of electricity infrastructure and debt collection strategies,". Agnes Mlambo, acting Group Executive for Distribution said
"Rising municipality debt remains one of the main challenges we face as a business, and we need all hands-on deck to ensure services are paid, for the ultimate benefit of the South African economy,”.
The utility, however, warned that three municipalities, Dr Bayers Naude, Kai Garib, and Mamusa, have not presented solutions to settle their debt.
"Eskom has since issued a final notice to interrupt electricity supply, with the interruption scheduled to commence on Friday, May 8, however the engagements remain ongoing.
"Initiating the PAJA process ensures that Eskom complies with legal requirements while taking the necessary steps to maintain the stability of the electricity supply system".
mthobisi.nozulela@iol.co.za
IOL Business