Eskom has commended the Enoch Mgijima Local Municipality’s efforts to honour its National Treasury Municipal Debt Relief Programme obligations.
The municipality, which is located in the Eastern Cape, is one of more than 60 municipalities that have applied for the debt relief arrangement, which is aimed at assisting the ailing municipalities to pay their electricity bills.
“After a long history of indebtedness, protracted court cases, and power interruption, Eskom is pleased with Enoch Mgijima Local Municipality’s current account payment.
“Through this monthly payment, Eskom believes that the municipality is demonstrating its commitment to the National Treasury Debt Relief Programme, which will enable the municipality’s Eskom debt to be written off over a three-year period,” Eskom said in a statement on Thursday.
By August this year, municipal Eskom debt had snowballed to an estimated R63 billion and the power utility said this is contributing to the financial health challenges it faces.
“Arrear municipal debt remains a significant challenge for Eskom due to continued escalation to unsustainable levels. This poses serious risks to Eskom’s long-term financial sustainability. It also contributes significantly to the liquidity challenges currently facing Eskom,” Eskom said.
Enoch Mgijima municipal manager, Ayakha Ntengenyane, said the municipality is committed to paying and maintaining its Eskom bulk current account.
“Since we are implementing the Financial Recovery Plan, we expect revenue to increase and this will enable the municipality to improve its performance. We are also cracking down on illegal electricity connections, which are a hindrance to reliable power supply. We are also working hard to generate adequate funding to sustain operations,” Ntengenyane said.
