South Africa: Eskom, Maluti-a-Phofung to Finalise Revenue Collection Agreement

Deputy President David Mabuza says processes are underway to finalise a service level agreement between Eskom and the Maluti-a-Phofung Local Municipality in the Free State, on the collection of debt owed to the power utility.

Responding to oral questions in the National Council of Provinces (NCOP), the Deputy President said the agreement is expected to be finalised by the end of the month.

"While the issue of the reliable provision of water has been one of the pressing issues in the municipalities due to constant interruptions of electricity, we found that the sustainable resolution of this issue will depend on resolving the municipal escalating debt to Eskom.

"In this regard, processes are underway to finalise the service level agreement between the municipality and Eskom, including modalities for collection of revenue as directed by the court on the 8th of June this month," he said on Tuesday.

This comes after a protracted process that has seen Eskom initiating judicial processes with an aim of getting into an active partnership concept with Maluti-a-Phofung, where Eskom would act as an agent to collect revenue for the municipalities.

Prior to this, residents had opted to pay for electricity directly to Eskom as per an earlier court order.

As at 31 March this year, Maluti-a-Phofung owed Eskom R5.9 billion in unpaid debt.

Addressing NCOP delegates, the Deputy President said the process that is currently underway would lead to a sustainable resolution.

"This will result in the sustainable resolution of the municipal outstanding escalating debt, which impacts on the reliable provision of water, sanitation and other basic services.

"The public participation process on the details of this agreement has begun, and we expect this agreement to be signed before the end of the month."

Meanwhile, the Deputy President called on residents to pay for services that they consume.

"We are also calling on our communities to pay for services. Pay for the water that we consume and pay for the electricity that we consume so that we are in a position to maintain the infrastructure," he said.

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