Emfuleni local municipality has recently made significant strides in addressing its substantial debt to Eskom as it paid R2,9m — the first time it has paid in months. Finance MMC Hassan Mako spoke to Sowetan and said the payment marks a turning point for the municipality, which has historically faced challenges in paying its electricity account.
Sowetan: How does this payment affect the municipality’s eligibility for further debt relief?
Mako: In October, the Treasury will review our compliance with all necessary conditions. I’m confident that we will qualify for a second debt write-off of R1.9bn. This progress indicates that we are effectively reducing our municipal debt, leading to a more balanced financial sheet.
Sowetan: Can you elaborate on the Distribution Agency Agreement deal Emfuleni signed with Eskom in October 2024?
Mako: The agreement appointed Eskom as the service delivery agent for the municipality’s electricity business. This collaboration has led to increased payment levels and marginal improvements in the reliability of the electricity supply, reducing disruptions and enhancing maintenance of infrastructure.
Sowetan: There have been varying reports about the total debt owed to Eskom, with figures ranging from R5.9bn to R8bn. Can you clarify the current debt situation?
Mako: After a joint assessment by both the national and provincial Treasuries, it was confirmed that we met 86% of the conditions of the debt relief programme. Consequently, the National Treasury instructed Eskom to write off R1.9bn of our debt. This reduced our debt from R5.9bn to R3.6bn.
Sowetan: What strategies have been implemented to achieve this?
Mako: Besides Eskom acting as our service delivery agent, we’ve enforced aggressive credit control measures. These efforts have resulted in increased payment levels and improved reliability of electricity supply, ensuring a stable network for our residents.
Sowetan: What challenges remain for the municipality in managing its electricity business?
Mako: While the progress is commendable, there is still much to be done. We must continue to meet our current bill payments consistently and work towards further reducing our debt to Eskom. Sustaining this performance is crucial for the municipality’s financial independence in electricity management.
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