Why Western Cape municipalities' Eskom debt is likely to increase
The Western Cape's treasury department warned that municipalities, which have outstanding Eskom debt, could see it balloon in the new financial year.
The department briefed the standing committee on local government on Tuesday about late payments to Eskom.
According to the department, it takes numerous steps to ensure municipalities don't drown in Eskom debt.
As of January this year, the Beaufort West, Cederberg, Kannaland and Matzikama municipalities owed Eskom R275-million combined.
This was a 7.27% increase compared to August last year, when the debt amounted to R255-million.
The department's Steve Kenyon told the committee they specifically monitored the payment of creditors, and the payments made by the municipality.
"We have many workshops throughout the year with the municipalities," he said.
Kenyon said the National Energy Regulator of South Africa's decision to grant Eskom an 18.65% tariff increase from the start of April would filter through to municipalities on 1 July - and they were limited on the cost they could pass onto residents.
"Whatever profit municipalities make on their electricity will also subsidise other services because the municipality does not have many areas of revenue, so their revenues are limited to rates, water and sanitation, and electricity," he said.
Kenyon added that more and more customers were becoming indigent.
Indigent households earn a combined income of less than R3 200 per month.
"What we are seeing is that the basket of revenue coming from electricity is reducing, and we will see an increase in the debt owed to Eskom," he said.
The chairperson of the standing committee, Isaac Sileku, said Western Cape municipalities were responsible for only 0.5% of outstanding municipal debt older than 30 days to Eskom.
Comments
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...
VISIT SHOWROOM
Tractor & Grader Supplies (TGS™): Your Trusted, Genuine Source for New Replacement Parts for Earthmoving, Construction and Mining Machinery
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
