Eskom says a debt payment of some R127 million by the Newcastle Local Municipality is a “significant milestone” for the power utility as it battles to receive bulk electricity payments from municipalities.
By December last year, municipalities owed Eskom at least R56 billion for bulk electricity supply.
“This was no ordinary payment. It marked a significant milestone for Eskom, the Newcastle Municipality, the Department of Cooperative Governance and Traditional Affairs [CoGTA] and KZN [Kwa-Zulu Natal] Treasury.
“In making this payment as full and final settlement of the [R342 million] overdue debt, the municipality successfully discharged the conditions of the payment arrangements signed between the two organisations as facilitated by the Chief Director – CoGTA KZN and the Office of the KZN Treasury.
“Newcastle Municipality not only settled their overdue debt, but for Eskom, this marked the largest settlement of overdue municipal debt by a considerable margin,” the power utility said.
Eskom Central East Cluster General Manager, Agnes Mlambo, acknowledged the “dedication and commitment” of the municipality’s leadership in “resolving the various challenges of the past three years” as it worked to settle its debt.
“The municipality communicated any concerns and challenges proactively to Eskom and this in turn allowed for further discussions to keep the payment arrangements intact. Critically, the promises made were followed through with concrete actions.
“Without this physical discharge of the commitments made, the conditions of the payment arrangement would have lapsed and Eskom would not have been able to fulfil its side of the equation,” Mlambo said.
The power utility said the municipality serves as an example for other municipalities on how to settle their debt.
“The settlement reflects the potential for success in South Africa when different people and organisations work together towards a common goal. Critically for Eskom, it allows for the costs of electricity generation, transmission and distribution to be recovered, allowing Eskom, as one of the largest power utilities in the world, to be self-sustainable.
“Eskom looks forward to other municipalities, who are in a similar position, to take a leaf from the Newcastle Municipality book and similarly discharge their obligations. Eskom would like to place on record its gratitude to the Office of the Chief Director CoGTA KZN and her staff, the Director of Municipal Finances KZN Treasury and his staff as well as Eskom staff who worked tirelessly to ensure the success that we now celebrate,” the power utility said.
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