Standing Committee on Appropriations Calls for Urgency in Dealing with Municipal Debt to Eskom

The Standing Committee on Appropriations has urged Eskom to collaborate closely with the National Treasury and the Department of Cooperative Governance and Traditional Affairs to ensure that there is full municipal cooperation in the implementation of the Distribution Agency Agreement (DAA) programme.

The power utility briefed the committee today regarding the Eskom Debt Relief Bill. The committee expressed deep concern over Eskom’s increasing debt levels and that the power utility continues its trajectory towards unsustainable indebtedness.

The Chairperson of the committee, Mr Mmusi Maimane said: “When we examine the various pieces of legislation under consideration by this committee, it is undeniable that Eskom remains a pivotal component. The state of Eskom’s liquidity, along with serious concerns raised by municipalities around debt servicing are critical factors, especially in light of the appropriations made to Eskom.”

Mr Maimane said he feared that Eskom will be heavily indebted despite being in receipt of the Eskom Debt Relief Bill. The committee further said the lack of urgency in addressing underperforming and financially distressed municipalities, many of which are unable to service their debts to Eskom, is a major contributor to Eskom’s debt burden.

The committee also highlighted that Eskom was not doing enough to curb the ‘ghost tokens’ in the pre-paid electricity segment and the failure to address it has contributed to significant revenue losses.

Furthermore, the committee recommended that the power utility needs to ensure that it deals decisively with acts of sabotage carried out by its own employees. The committee cautioned that that the power utility needs to begin exploring ways to harness its own energy sources and not rely on independent power producers as this process can easily be influenced by political forces.

The committee called on Eskom to urgently implement decisive reforms to address inefficiencies, improve governance, enhance revenue collection, and safeguard its infrastructure.

The committee will tomorrow, 11 June receive a briefing from the City of Johannesburg and the City of Mangaung Metropolitan Municipalities on the 2025 Division of Revenue Bill.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.