Although the Ekurhuleni Metro is compelled by a court order to settle its debt with Eskom, the Metro’s financial crisis runs far deeper than the ANC-led administration is willing to admit.
According to a joint statement by Ekurhuleni and Eskom on 13 March, the Metro owes Eskom approximately R3,4 billion, of which R1,7 billion was settled in March.
The remainder of the amount will be paid off over a period of 18 months.
This agreement follows Eskom’s threat on 5 March to reduce or suspend bulk electricity supply to Ekurhuleni if the Metro failed to settle its debt.
The root of the problem is that residents faithfully pay their electricity bills, but the money is not passed on to Eskom. It underscores the need for more stringent financial discipline within the Metro.
The Freedom Front Plus (VF Plus) has warned on several occasions that the Metro is facing other financial challenges that urgently require attention as well:
• Only 63% of valid invoices are paid within 30 days, in contravention of the Municipal Finance Management Act (MFMA).
• The Metro’s cash reserves have dropped to only fifteen days, far below the prescribed requirement of 25 days.
• There are currently 67 ongoing legal actions against the Metro instituted by unpaid service providers.
The Freedom Front Plus will closely monitor the situation to ensure that the Metro fulfils its obligations and that residents’ right to reliable electricity supply is safeguarded.
