Much of Eskom’s losses have been attributed to municipal debt. [Picture: via Pinterest]
State-owned power utility Eskom has reported a five-billion-rand loss for the three months ending June 2023. This was despite revenue growing by early the same amount during that period. Municipal debt is largely blamed for the loss.
An unaudited first-quarter performance report presented by the National Treasury to the Standing Committee on Public Accounts (Scopa) on Tuesday, attributed the loss to outstanding debts owed by municipalities. As of 30 June, this amounted to R63.7 billion.
Said the National Treasure presentation, “What is worrying is the increase in municipal debt, which continues to be a problem in terms of payment to Eskom, which also hinders Eskom’s financial sustainability going forward”.
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Municipal debt
The climbing debts of municipalities across South Africa, among other factors, have brought the national power supplier to its knees. Rolling power cuts have become part of ordinary life as Eskom tries to protect the grid from total collapse.
Almost all of the country’s eight metropolitan cities have outstanding bills owed to Eskom. The only exceptions are eThekwini Municipality (Durban) in KwaZulu-Natal and the opposition-run City of Cape Town in the Western Cape.
According to Eskom’s group executive for distribution, Monde Bala, the City of Tshwane (Pretoria) was in arrears of nearly R1.6 billion a month. The capital city’s repeated failure to settle its debt has prompted Eskom to take the matter to court.
Meanwhile, Eskom’s cash-strapped situation has resulted in the power utility being unable to function optimally and meet growing energy demands. China will soon provide R667 million to address the exacerbating power crisis. Zakhele Madela, an energy expert at South African Energy Forum (SAEF), spoke to Julie Allie on News & Views.
