Media Statements

CoGTA Minister Zweli Mkhize Meeting with Salga and Advisory Panel Briefing of the Inter-Ministerial Task Team on Bulk Electricity Reticulation and Distribution

Cooperative Governance and Traditional Affairs (CoGTA) Minister Dr Zweli Mkhize chaired a joint executive committee meeting of CoGTA and the South African Local Government Association (SALGA) earlier today, a platform that provides opportunity for organised municipalities to engage the minister directly on municipal institutional issues that require his immediate attention.

The leadership of both institutions noted that municipalities were buckling under the pressure from non-payment for municipal services which has resulted to dwindling municipal revenues that threatens delivery of quality service to communities.

Municipalities are currently owed billions of rands in unpaid municipal services which Minister Zweli Mkhize committed to request the assistance of the President’s Coordinating Council to get defaulting government institutions to service their municipal accounts.

The SALGA leadership briefed the Minister that the government departments’ debt analysis that the municipalities have conducted was a reliable basis for engaging defaulters by CoGTA. The meeting has also resolved to look into household debt and embark on a joint national campaign to change the general culture of lacklustre payment for government services.

Meanwhile, Minister Zweli Mkhize also chaired a meeting of the Inter-Ministerial Task Team (IMTT) on Bulk Electricity Reticulation and Distribution, accompanied by the Minister of  Water and Sanitation Mr Gugile Nkwinti, CoGTA Deputy Minister Mr Andries Nel and SALGA President Mr Parks Tau.

The meeting received a briefing from the panel of advisors on Eskom debt and debt owed to water boards.

The Advisory Panel was appointed by the IMTT to look into the municipal debt owed to Eskom and the entire electricity distribution industry as well as water boards to advise the ministers on the sustainable solution to eradicating the debt.

In its update, the panel told to the IMTT that resolution of the municipal debt to Eskom required an intervention to the entire electricity distribution industry which they said is characterised by uncertainty in terms of authority and structure.

The Advisory Panel said the industry was fraught with multi-billion rand electricity distribution infrastructure backlog, unsustainable distribution model and  a fragmented tariff model which could further thwart the efforts of government to resolve the municipal debt to Eskom.

Minister Mkhize said the IMTT would  engage all the involved stakeholders to strengthen their relationship and see how they could together explore amicable ways of restructuring the debt without compromising the interest of the country.

He said Eskom would need to explore how reviewing the electricity billing elements, determining the cost of electricity supply, ring-fencing old debt and introducing pre-paid system for bulk electricity could minimise the escalating debt owed by municipalities.

The IMTT noted that the distribution of electricity to final customers was an important source of revenue for municipalities but municipalities could not fulfill this function alone which provided a motivation for CoGTA to look at standardising revenue management in local government and establishing regional billing competences.

Eskom and municipalities were encouraged to continue finding solutions together without litigations and counter-litigations which could derail the progress that the parties have made thus far.

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