David Mabuza concerned about rising municipal debt owed to ailing Eskom

Deputy President David Mabuza says rising municipal debts pose a serious risk to power utility Eskom.

In a statement on Friday, Mabuza, who had seemingly gone to ground since the beginning of the lockdown, said municipal “arrears debt levels” remained very high.

This comes amid concerns about municipal debt collection due to the economic slowdown during the nationwide lockdown.

Mabuza issued the statement after a meeting of the political task team on Eskom, which he chaired on Friday.

“The meeting focused on the proposals dealing with the management and recovery of municipal debts to Eskom, with a specific focus on how to resolve the issue of outstanding debts to Eskom.

“Rising municipal debts pose serious risks to Eskom’s long-term financial sustainability, and contribute significantly to liquidity challenges facing Eskom,” said Mabuza.

He said the meeting had noted that current arrears debt levels reached R28bn in March this year, an increase of R8.2bn over the past 12 months.

“The meeting agreed on urgent and drastic measures to ensure that municipal debts to Eskom are addressed. Among others, these include [that] defaulting municipalities are supported to structure, and enter into, debt repayment arrangements with Eskom, and ensure that terms of debt repayment are honoured and adhered to,” he said.

“The issue of non-payment cannot go on unaddressed as it impacts negatively on the long-term sustainability of Eskom, which inadvertently contributes to deindustrialisation of our economy.”