Makana Municipality's payment plan to Eskom is still being evaluated.
Makana Municipality's payment plan to Eskom is still being evaluated.
The power utility confirmed this today, after they published a list on Wednesday 29 April of 10 municipalities that have entered into payment agreements with them. Grahamstown residents and businesses expressed alarm when they noted that Makana Municipality did not appear on this list.
"The 10 municipalities mentioned [in the list]are the ones that have paid a portion of their debt and have in addition to that, made arrangements in settling the outstanding debt," Eskom said in reply to questions earlier today.
"Any of the top defaulting municipalities not mentioned therein has neither paid nor made arrangements to pay."
Makana Municipality owes Eskom R66.76 million.
On 10 April 2015 Eskom announced that it would cut off bulk electricity supply to the top 20 defaulting municipalities across the country with effect from 5 June 2015.
Following that announcement, municipal officials assured residents of Makana that the city was not in danger of being cut off by Eskom, as it had negotiated a payment plan with Eskom.
On Monday 13 April, Makana Municipality's acting municipal manager Mandisi Planga told Grocott's Mail, "As reported at the Council meeting, we will be making payment plans with Eskom.
The first payment was done on 7 April 2015.
"We have made our first payment as planned," Planga said.
"Eskom has acknowledged and confirmed that we are up to date with our payment plan.
"Citizens should not worry about the power cut-offs. We are above board."
According to their media statement on Wednesday 29 April, Eskom has entered into payment agreements with 10 of the 20 defaulting municipalities which owe Eskom for bulk electricity supply.
Following this statement, Grocott's Mail asked Eskom whether Makana Municipality's absence from the list meant it was still in line for a bulk supply cut-off.
Eskom's emailed reply was as follows: "Kindly note that Makana has submitted a payment proposal to Eskom and the proposal is in the process of being evaluated.
"There is additional information that has been requested from them as part of the evaluation.
"The payment agreement will only be finalised once both parties agree on the terms of the proposal."
Makana officials could not be reached by phone, or at the City Hall, for comment this week, as they were attending workshops.
Recovery plan
At a special council meeting on 31 March, plans were announced to pay millions of rands owed to the power utility.
It involved securing part of the municipality's equitable share for this purpose.
In the 31 March meeting, it emerged that Council representatives had visited National Treasury offices to negotiate the release of Makana Municipality's withheld equitable share.
Makana's equitable share was being withheld because the municipality hadn't signed an agreement to pay Eskom an outstanding R66.76 million.
Makana had last paid Eskom in January.
The Local Government Equitable Share is a distribution from national tax based on a formula that balances various demographic data.
Makana's withheld portion amounted to R1 955 000.
At an urgent meeting on Monday 30 March between Makana and Eskom it was agreed that R4m would be paid immediately, while the remaining R13 852 201.92 in respect of the January and February amounts would be paid as soon the equitable share is received by the municipality. The municipality agreed to make a payment of R6 939 773.16 towards its March debt.
Meanwhile, Planga said he had followed up on Premier Phumulo Masualle's promise during his State of the Province address earlier this year to financially assist Makana and other municipalities.
A payment of between R15m and R30m will be made to Makana to be spent only on paying the municipality's Eskom debt, Planga said at the meeting.
Masualle said R290 million would be spent on pumping up performance in Makana, Inkwanca and KSD, and in helping pay their Eskom debt.
Makana was placed under administration in August last year after the collapse of its finances and administration.
In April Eskom said that the total municipal arrears debt greater than 30 days was R4.67 billion. Of this amount, the top 20 defaulting municipalities owed Eskom about R3.68 billion for the bulk supply of electricity.
Since the announcement, the total municipal arrears debt has been reduced by R54 million.
The following 10 municipalities have entered into payment agreements with Eskom:
Nama Khoi Municipality in Northern Cape
Nketoana Municipality in Free State
Nala Municipality in Free State
Dihlabeng Municipality in Free State
Thabazimbi Municipality in Limpopo
City of Matlosana in North West
Naledi Municipality in North West
Madibeng Municipality in North West
Randfontein Municipality in Gauteng
Westonaria Municipality in Gauteng
Eskom said the bulk electricity supplies of municipalities that have entered into a payment agreement with Eskom will not be interrupted.
However, municipalities have to comply consistently with payment agreement terms on a monthly basis.
If these conditions are not met, interruptions of supply will be implemented without further notice.
Eskom Acting Chief Executive Brian Molefe said, “Eskom has reached a point where it can no longer continue to provide power without receiving payment in return.
"We are pleased that these 10 municipalities are doing their bit to ensure that they reduce the debt owed to Eskom and we encourage all defaulting municipalities to do the same,” he said.
