Eskom writes off R3.6b in Soweto debt despite projecting R20b loss

Image credit: Wikimedia Commons licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

State power utility Eskom has written off R3.6 billion of interest on Soweto’s outstanding debt to it despite projecting a full-year loss of R20 billion.

The debt write-off is revealed in Eskom’s interim results for the six months ending 30 September presented by the utility’s top officials on Thursday.

Soweto’s debt now stands at R16.1 billion after the write-off. The township has a payment level of just 16%.

Municipal debt rises to R25.1 billion

Overall, municipalities across the country, excluding metros, have a payment level of 78% on amounts billed.

Image credit: Eskom

Municipalities also owe Eskom a total of R25.1 billion including interest, an increase of R5.2 billion since March 2019.

Although Eskom made a profit of R1.39 billion in the first half of its financial year, it has projected a R20 billion full-year loss.

Chairman and acting CEO Jabu Mabuza cited a number of reasons for the projected loss, including lower sales usually experienced in summer, unplanned breakdowns, and increased employee benefits in the second half of the year.

R150 flat rate proposed

Eskom is unable to stay afloat without billions of rand in government bailouts. Municipal debt is among the biggest revenue constraints it faces.

President Cyril Ramaphosa and Finance Minister Tito Mboweni have repeatedly urged municipalities, and especially Soweto residents, to pay for services.

Recently, an African National Congress (ANC) councillor in Soweto proposed a R150 electricity flat rate for residents of the township.

Mpho Sesedinyane told Fin24 that the flat rate could help foster a culture of payment among Sowetans to reduce their Eskom debt.

However, Eskom spokesperson Dikatso Mothae told IOL earlier in November that it is the National Energy Regulator of South Africa (NERSA), not Eskom, that has the power to regulate electricity tariffs.

He added that Eskom is therefore unable to “negotiate” separate tariffs for Soweto and that a flat rate “could lead to wasteful usage of electricity.”

6 Comments

      • The ANC created a culture of getting everything for free so the majority of their supporters wants that we are doomed we will end up worse than Zimbabwe

  1. Eksdom what happen to the money people paid for ekectricity in Gauteng. In the Western Cape none of the Municipalities owe Eskom money. Seems to me the Da run the province better than the Anc. I’m a coloured I only voted for the Anc since 1994. But it was better in the apartheids years.

  2. I think a flatrate would be a good thing. Will learn people to use electricity wisely. If you use it all up in 2 days it’s your prolem and not escom’s.

  3. I cannot afford to farm with electricity anymore. Farmers pays the highest amount per kilowatt. Sorry if you don’t have food next year.

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