Govt To Help Municipalities In Debt Settlement, Deputy President Mashatile Says

Deputy President Paul Mashatile revealed that the government will help Eskom, South Africa's primary electricity supplier, and other municipalities to settle the debt.

"A key assumption considered in the debt relief determination is the implementation of the recent tariff increase approved by the regulator," Mashatile said Thursday, according to SA News. "Without this increase, debt relief arrangement is not sustainable."

National Energy Regulator of South Africa (NERSA) revealed in January that there will be an 18.65% increase in electricity tariffs with effect from April 1.

These remarks by Mashatile came as the deputy president answered questions in the parliament about municipal debt to Eskom and water entities, illegal electricity connections, critical economic infrastructure sabotage and animal vaccine shortages.

Addressing Eskom's debt, he said by the end of last year the municipalities owed Eskom R56.3 billion and that this debt will continue to rise due to which the government has introduced a debt relief package for the energy company.

"Government has introduced a debt relief package for Eskom to improve the utility's balance sheet whilst proposing that Eskom writes off some of the municipalities' debts under strict conditions with guidance from National Treasury," he explained.

He continued, "This relief is aimed at correcting underlying behavior and operational practices in defaulting municipalities. As the government, we cannot overemphasize the need to enforce the culture of payment for services rendered."

The deputy president noted that municipalities and water boards are responsible for 65% of the debt to the water trading entities, of which R10.9 billion is overdue by more than three months.

"The government has put in place the measures to strengthen billing and revenue collection to address the escalating debt of municipalities to water entities," Mashatile added, noting that the "success of all these relief measures is dependent on coordination across all spheres of government."

He further explained, to build sustainable economic activities in municipalities, the government will continue working with all sectors of society. He also said it will help in "creating viable tax bases to develop revenue for social and economic development."

Responsible for providing electricity throughout South Africa, Eskom often comes under fire for load-shedding. The energy company said it was forced to implement all-day stage 6 load shedding indefinitely Friday after four of its power stations lost units.

"This pattern will be repeated until further notice," the official website of the company stated. "Eskom will publish a further update as soon as any significant changes occur."

Last week, Eskom disclosed that there have been unplanned breakdowns leading to 14,940 megawatts of generating capacity. Meanwhile, the generating capacity out of service for planned maintenance is now at 7,215 megawatts.

Electricity Minister Kgosientsho Ramokgopa addressed the electricity crisis earlier this month, noting that he was "more than confident" that South Africa's load-shedding problem will be resolved despite all the challenges at Eskom.