With Eskom‘s decision to cut powers in seven Mpumalanga municipalities, the Mpumalanga Premier David Mabuza has threatened to pull out of business agreement with the Eskom if it fails to review the payment terms it enforced on the municipality.
The municipalities are said to be owing energy provider more than R1,4 billion but Mabuza said they are willing to pay their debts, but on the terms that Eskom become more reasonable in their payment terms.
“The Eskom payment terms are onerous and untenable for the municipalities, and they need to be reviewed, otherwise we will have no option as a province but to pull out of the business arrangement with Eskom,” Mabuza said while speaking at a Premier’s Coordinating Forum in Mbombela.
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Mabuza also added that the municipalities supplying electricity to the municipalities on behalf of Eskom are incapable of doing so.
Mabuza said the municipalities are not comfortable with the escalated electricity bills presented to them due to interest on arrears and on penalties, especially as the many municipalities which are distributing electricity on behalf of Eskom are incapable of doing so.
“We must negotiate the reasonable terms, failing which will result in the municipalities opting out because they do not have the capacity to run the business of selling electricity,” said Mabuza.
“This is not working, municipalities in the province are not making any profit by selling electricity. People are stealing electricity; some are not paying at all, yet municipalities have to pay. They should hand this responsibility back to Eskom to avert the negative impact on service delivery. Municipalities are now unable to deliver services because (they are) worrying about Eskom debt,” said Mabuza.
Meanwhile, Mabuza has urged all struggling municipalities to return distribution responsibilities back to Eskom as service delivery had been negatively affected due to the debt. He added that municipalities willing to continue in electricity distribution should consider alternative distribution methods and reduce energy consumption.
He however, encouraged the government departments that have facilities in the various municipal areas to pay municipalities for the electricity they owed.