With Eskom scrambling to come up with funds, recouping outstanding debt owed by municipalities has become increasingly critical for the state-owned entity. Soweto in particular has contributed a staggering portion to the total amount. But is it half the national debt? Briefly.co.za investigates.
State-owned entity, Eskom, currently is looking down the barrel of a grim situation.
The power behemoth is currently R419 billion ( 2018/2019 interim results) in debt and 'technically bankrupt'.
Both fiscal and operational irregularities have left the enterprise running at extreme losses and, with government denying the R100 billion proposed bailout, the entity has had to look elsewhere for its funding.
One of the most obvious places struggling companies turn to for funds is attempting to recoup outstanding payments from clients.
Although the total outstanding amount for municipal debts, which the latest figures say stand at R34 billion, won't alleviate the situation at Eskom completely, it should provide some relief in the meantime.
Soweto specifically has received attention for being the area with the highest outstanding amount for electricity. Currently at R17 billion, the Gauteng city currently constitutes 57.8% of the total municipal debt.
This large amount has been attributed to non-compliance from residents who have resisted the installation of prepaid meters.
Eskom's plan to combat the ever-rising debt is a 'no pay, no lights' approach, with areas of the Free State already experiencing black outs to put the pressure on non-paying consumers.
Thys Möller, Eskom’s general manager responsible for customer services, recently commented on the situation saying:
“Municipal debt continues to rise, and this has become unsustainable. Municipal debt is no longer just an Eskom problem, it is a national problem. Eskom continues to participate in the inter-ministerial task team process with a view of finding lasting solutions together with other stakeholders.”
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