Finance
(a) Which municipalities in the Western Cape have outstanding Eskom debt and (b) what steps is her Department taking to ensure that this debt is paid?
a)
The following five (5) municipalities in the Western Cape have persistent outstanding debts to Eskom: Matzikama, Cederberg, Theewaterskoof, Kannaland and Beaufort West.
b)
Four (4) of these municipalities (Matzikama, Cederberg, Theewaterskoof, Kannaland and Beaufort West) have been approved for the Municipal Debt Relief Programme and are eligible to have their Eskom arrears written off if they adhere to the conditions of the programme over three (3) years. Provincial Treasury is responsible for monitoring compliance to the conditions of the Municipal Debt Relief Programme on a monthly basis. Provincial Treasury has also provided grant funding to these Municipalities to assist them to purchase new meters to help them meet the conditions of the Municipal Debt Relief programme. The National Treasury confirmed that all four municipalities met the conditions of the debt relief programme for the first year and approved that the first third (1/3) of their eligible debt to be written off. This aggregates to a R93.1 million write-off for the four municipalities.
Theewaterskloof Municipality’s outstanding debts to Eskom arose after the cut-off for the Municipal Debt Relief programme (31 March 2023). Therefore, these debts are not eligible for the Municipal Debt Relief programme. Kannaland Municipality has not been able to pay its full Eskom account during the 2024/25 financial year and therefore has accumulated new arrear debts that are not eligible for the Municipal Debt Relief programme. In both municipalities, the non-payment of Eskom (and other service providers) is the result of a financial crisis in the municipality. In line with the duties of the Provincial Executive in terms of Section 139(5) of the Constitution, the Province has intervened in both municipalities. National Treasury’s Municipal Financial Recovery Service is currently in the process of preparing mandatory Financial Recovery Plans for both municipalities, as per the process set out in Chapter 13 of the Municipal Finance Management Act (No. 56 of 2003). As an interim measure, while the Financial Recovery Plans are being prepared, Provincial Treasury has facilitated engagements between Eskom and both municipalities on interim repayment arrangements.
Since they qualified to be part of the Municipal Debt Relief Programme, Matzikama, Cederberg and Beaufort West have not had any problems in making timeous payments to Eskom. Provincial Treasury considers these three municipalities to be on track to qualify for a further write-off of another third of their arrear debt at the end of the second year of the programme.
Provincial Treasury continues to support all municipalities in the province to ensure that they adhere to financial governance best practice in order to ensure that they are able to pay all service providers timeously, including Eskom
