Sixteen Free State municipalities, including Matjhabeng, jointly owe Eskom more than R17 billion for services rendered, as of August 2022.
This is a substantial increase of R2.6 billion since August 2021.
Eskom supplies electricity monthly in bulk to these municipalities, who then sell it at a profit to their customers.
In addition, municipalities receive government grants for Free Basic Electricity (FBE).
Regardless, their current accounts and arrears remain unserviced, bringing Eskom Free State to its knees.
Even in these trying times, Eskom is expected to provide electricity to these municipalities while maintaining its networks and to ensure the demands of the public are met.
The top three owing municipalities are Maluti A Phofung, Matjhabeng and Ngwathe Local Municipalities, who on average consume R200 million (97GWh) worth of energy on a monthly basis. To date, these municipalities’ debt to Eskom have increased to R13.3 billion.
“It is extremely difficult for Eskom to continue absorbing the shortfall and continue infrastructure expenditure to supply these non-paying municipalities. It is unfair and unjust for delinquent Free State municipalities to expect Eskom to provide electricity at no cost to them, especially while the country is facing supply constraints,” says Agnes Mlambo, General Manager CentralEast Cluster (Free State and KwaZulu-Natal).
Municipalities have a constitutional responsibility and a Municipal Finance Management Act (MFMA) compliance obligation and duty, not only to Eskom, but to their customers to fulfil their financial obligations for the bulk supply of electricity for Eskom.
“The Metsimaholo Local Municipality is the only municipality in the Free State that maintains a zero balance, and Setsoto Local Municipality continues to honour its current account. We thank them for prioritising their Eskom accounts and wish that there were more municipalities like them in the Free State,” adds Mlambo.
“Municipal debt puts an immense burden on Eskom’s revenue stream, which negatively affects service delivery. We urge both Eskom and municipal customers to use electricity legally and to pay for all services when due.”
