By Charles Molele
Public Interest SA has called on Minister of Electricity Dr Kgosientsho Ramokgopa and the South African Local Government Association to take decisive action to hold municipalities accountable for their fiscal responsibilities to Eskom.
This comes after Eskom chief financial officer Calib Cassim warned that municipal arrears were projected to reach R120 billion by 2025/26 if left unchecked because an overwhelming majority of municipalities have failed to comply with Eskom’s debt relief incentive scheme.
“This dismal rate of compliance with Eskom’s debt relief incentive scheme reflects a critical breakdown in financial accountability at the municipal level, further endangering Eskom’s financial sustainability and the national energy grid’s stabilisation efforts,” said Public Interest SA said in a media statement.
“We call upon SALGA to collaborate more rigorously with Eskom to address this urgent matter.”
Public Interest SA said the lack of adherence to payment obligations by municipalities exacerbates Eskom’s operational pressures, amplifies its debt burden, and directly undermines efforts to stabilise and sustain the power grid.
It added that the gravity of this situation was underscored by the fact that the current R254-billion National Treasury bailout will be insufficient if municipal debts continue to escalate.
“Failure to address this burden will not only jeopardise Eskom’s operational viability but will also necessitate additional financial rescues from Treasury, at significant cost to the South African public,” said Public Interest SA, adding that the present municipal debt trajectory poses a direct threat to Eskom’s ability to provide stable, affordable power to the nation.
“Furthermore, to compensate for unpaid bills, Eskom’s proposed tariff hike for 2025/26 includes a 2.5% provision for arrears—a cost unfairly shifted onto compliant customers. This untenable approach risks alienating paying consumers and places an undue financial burden on households and businesses alike.”
Public Interest SA said it would be submitting detailed recommendations to the National Energy Regulator of South Africa as part of its upcoming public hearings.
These submissions will call for structural reforms that ensure municipalities uphold their debt obligations to Eskom.
“This is crucial not only for Eskom’s financial recovery but also to prevent repeated cycles of state bailouts that drain the nation’s fiscal resources,” said Public Interest SA.
“South Africa cannot afford to allow systemic municipal non-compliance to destabilize Eskom further. Public Interest SA urges SALGA, NERSA, and the relevant government authorities to enforce strict accountability measures for municipalities and to support Eskom’s mission to build a sustainable and reliable energy future for all South Africans.”
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