Plethora of reasons why municipalities struggle to pay Eskom
Cooperative Governance and Traditional Affairs Minister Des van Rooyen says there are a "plethora of reasons" why some municipalities struggle to pay Eskom.
He says an inter-ministerial task team has identified three main reasons why municipalities default on payments for electricity.
"In most cases there are some unacceptable inconsistencies and discrepancies between what they pay to get electricity from Eskom and what they charge in the form of their municipal tariffs. There is an imbalance there," says Van Rooyen.
This comes after Eskom cut power supply to several defaulting municipalities.
Van Rooyen was briefing the media on the Governance and Administration Cluster's programme of action for the year.
He says there are also structural issues.
"If you look at how Eskom has been managing the credit, it left a lot to be desired. This has been an issue we have raised. Eskom charges interest from the 15th of every month. Municipalities use the municipal finance management provision of 30 days. In a way that created a vicious cycle of municipalities' debt increasing as a result of that disparity."