Billions of rand that South African municipalities owe Eskom are hindering the state-owned energy utility’s plan to restructure and separate its distribution unit, in line with chairman Mteto Nyati.
South Africa’s municipalities owed Eskom R95.4-billion by November as they wrestle to gather income from clients and obtainable funds are typically misappropriated after years of mismanagement.
Eskom accomplished the unbundling its transmission enterprise final yr, a serious step within the course of to restructure and break up the utility into three items. Meaning the main target now turns to the separation of the distribution arm.
“The municipal-debt problem has the potential to jeopardise the distribution separation in addition to threaten the monetary viability and sustainability of the long run distribution business,” Nyati stated in Eskom’s 2024 annual report.
Nationwide treasury in 2023 introduced a debt-relief programme to write down off Eskom’s debt, supplied municipalities adhere to set situations. The uptake on that has been sluggish and lots of councils fail to implement the required credit score controls.
“The board is anxious concerning the lack of compliance with the municipal debt-relief programme, on condition that the situations of the programme prohibit Eskom from pursuing motion in opposition to non-compliant municipalities,” Nyati stated.
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Eskom has requested nationwide treasury to interact immediately with non-compliant municipalities to deal with the difficulty the difficulty of non-payment or late funds, chief monetary officer Calib Cassim stated within the report. — (c) 2024 Bloomberg LP
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