We understand that the notice that was issued by Eskom on 14 April(sic) [March] 2019 has caused great panic and anxiety among local residents and businesses alike.
We empathise with all of you and we would like you to know that we are actively addressing this issue. I would like to take this opportunity to assure everyone that the municipality has acted swiftly to avert an interruption to our bulk electricity services as stated in the notice that was issued by Eskom.
Makana has experienced severe cash flow problems since 2013. Eskom is the biggest creditor of the municipality, being owed R 84,478,288.80 – as per their latest invoice. This includes an amount of R12,666,116.30 which is due on 4 April.
We are planning to pay an amount of R12.6 million to Eskom this month. We will also seek to renegotiate our payment plan to ensure that we can afford to make monthly payments to Eskom. Once this payment is made we don’t expect Eskom to go ahead with bulk supply interruptions.
Our senior officials together with the support of officials from the Department of Cooperative Governance and Traditional Affairs (Cogta) will meet with Eskom in the coming week to review the current payment plan.
Despite all our financial challenges we have been able to pay our Eskom current account.
instalments for the bulk account arrears are being paid on time as it is timed to coincide with the receipt of the equitable share. However the payment plan also requires the monthly account to be paid on time every month. The bulk account ranges between R7.5 million in summer to R17 million in winter.
Some months ago, council resolved that funds received from consumers for their electricity purchases need to be paid to Eskom. The municipality has put in place a plan to ensure that it has generates adequate revenue from electricity sales to cover the cost of electricity.
The current situation of using the equitable share to pay Eskom in not sustainable. Going forward the municipality needs to pay its current account from revenue generated from electricity sales. Various debt collecting and revenue enhancement initiatives are being implemented, but these do not yield immediate results. Short term initiatives to reduce expenditure are also being implemented. Examples of such initiatives include reducing expenditure in overtime and placing a moratorium on filling vacancies.
It is my wish that all the measures that are put in place to address this issue bear fruit so that we can ensure an uninterrupted electricity supply. Once the historical debt is settled we can then focus on all of our service delivery obligations. Let me reassure you once again that we are addressing this issue with the seriousness it deserves.
Hon. Executive Mayor Cllr. Mzukisi Mpahlwa.