Several municipalities in the Free State indebted to Eskom have hastened to capitalise on the debt relief programme to clear their huge debts to the power supplier. These municipalities owe Eskom large amounts of money in overdue and current accounts.
As far as their Eskom account is concerned, only two municipalities are debt-free, while 17 are indebted to the power supplier.
Gadija Brown, Free State MEC for Finance, announced on 21 November during the presentation of the provincial adjustment budget speech that ten municipalities had applied for the National Treasury’s debt relief programme.
The programme was introduced earlier this year to provide support to struggling municipalities that are unable to pay their electricity bills.
“Of these ten applications, three have already been approved by the National Treasury. Basically, it implies that a substantial portion of our province’s historic Eskom debt will be written off, subject to the adherence to the conditions of the debt relief,” said Brown, attributing the process to rigorous negotiations and collaborative efforts.
“The debt relief will provide the necessary breathing space for our businesses, industries, and households, enabling them to thrive and contribute to the prosperity of our province.
“This basically will allow our municipalities to redirect these funds towards critical developmental initiatives,” said Brown.
The two municipalities not owing Eskom are Setsoto, governed by the ANC, and the coalition-run Metsimaholo.
The Setsoto Municipality services Clocolan, Ficksburg, Marquard and Senekal; while Metsimaholo services Sasolburg, Oranjeville and Deneysville.
The remaining number of distressed municipalities still owe billions due to their failure to pay the power utility over several years.
By May this year the 17 defaulting municipalities owed Eskom R18 975 589 308, combined, in overdue accounts. The three with the largest amount of debt are Ngwathe, Maluti-A-Phofung and Matjhabeng.
Brown pointed out that the Eskom debt had put immense pressure on municipalities.
“The crippling effects of the debt have hindered economic growth and placed immense strain on our fiscal resources.”
Regression of the municipalities in the province is further marked by dismal failure to attain clean audits, spanning several years. This time has been characterised by a lack of governance and a collapse in the provision of basic services to residents.
In 2021-’22, eight municipalities’ audits were incomplete by the submission date. The culprits were Mafube, Mohokare, Masilonyana, Tokologo, Maluti-A-Phofung, Mantsopa, Nketoana and Kopanong.
. . .a substantial portion of our province’s historic Eskom debt will be written off, subject to the adherence to the conditions of the debt relief. – Gadija Brown
