R1 billion ESKOM debt: FS municipalities near total collapse

James Letuka MPL

Free State Provincial Legislature

Free State municipalities face near total collapse under an ever ballooning debt exceeding R1 billion owed to ESKOM. It is evident that Free State municipalities can’t be trusted with the financial management of the public purse.

ESKOM has served notice that it would suspend electricity supply on 4 August 2014 to three Free State municipalities, Ngwathe, Dihlabeng and Maluti-a-Phofung, for a collective debt exceeding R450 million, unless payments are made.

Failure by Free State municipalities to collect more than R5.4 billion in household debt from residents place an added burden on municipalities to meet its financial obligations and negatively affects their capacity to deliver services.

The DA has repeatedly called on COGTA MEC, Olly Mlamleli, to intervene in failing municipalities without success.

We welcome Finance MEC Rockman’s intervention to negotiate an agreement with ESKOM for the payment of outstanding debt. It appears that MEC Rockman increasingly needs to intervene within various departments in order to prevent a total collapse of governance due to financial mismanagement. These interventions are not sustainable.

This situation is exacerbated by the ANC’s inherent factionalism, resulting in a refusal by local government to cooperate between the different spheres of government at provincial and national level as well as public entities, like ESKOM.

I will write to COGTA MEC Mlamleli requesting her to table a comprehensive turnaround strategy before the portfolio committee on COGTA, that would seek to intervene within failing municipalities in the province.