Eskom Targets Enoch Mgijima in R62bn Municipal Debt Crackdown

Eskom has initiated a public consultation process, targeting 14 municipalities, including Enoch Mgijima Local Municipality, that owe the power utility a staggering R62 billion in debt.

The move comes as nationwide municipal debt surpasses R110 billion, threatening Eskom’s financial stability.

Enoch Mgijima Local Municipality, based in Komani, owes Eskom R1.8 billion.

Other major debtors include Emalahleni LM (R11.4 billion), Matjhabeng LM (R6.9 billion), and Govan Mbeki LM (R6 billion).

Eskom spokesperson Daphne Mokoena stated that the utility has exhausted all reasonable avenues to rectify the situation, adding that supplying electricity without payment is unsustainable.

She noted that these municipalities will be given an opportunity to make representations before further action is taken.

According to Mokoena, the fourteen municipalities have been selected because they have not settled their accounts for at least 18 months, have failed to meet the conditions of the National Treasury’s municipal debt relief programme, or pose a significant financial risk to Eskom.

“Initiating the PAJA process ensures that Eskom complies with legal requirements while taking the necessary steps to maintain the stability of the electricity supply system.”

Eskom will determine the way forward once all representations submitted through the PAJA process have been fully considered.

“While Eskom empathises with affected communities, the utility is left with no option but to initiate this process unless municipalities urgently regularise their accounts. Supplying electricity without payment is unsustainable,” Mokoena added.

She said should the municipalities fail to take corrective action, Eskom will proceed with credit control measures.

“These may include interrupting the electricity supply at predetermined times, as permitted by law. If defaults persist, Eskom will be compelled to limit supply to levels commensurate with payments received,” Mokoena said.

Under the proposed Distribution Agency Agreements (DAAs), Eskom will take over municipal electricity services temporarily to help with bill collections and revenue raising.

Mokoena said successful municipalities could see some of their debts written off, but Eskom won’t hesitate to cancel the DAAs if payment obligations aren’t met.

Eskom’s acting group executive for distribution, Agnes Mlambo, emphasized that addressing rising debt is crucial to protecting the utility’s operational stability and financial discipline.

“Through this turnaround, we are enabling businesses to protect and create jobs while supporting strategic industries to remain competitive, which in turn enables communities to thrive,” Mlambo said.