eBusiness Weekly
Sa’s embattled state power utility Eskom must prioritise collecting the money it is owed by municipalities as a first step toward becoming financially sustainable, says finance minister Tito Mboweni.
In September last year, Eskom reported that municipalities owed it R17 billion in arrears for power purchases, a 25 percent increase from six months earlier. In the February budget, the National Treasury allocated Eskom R69 billion over the next three years to help to keep it afloat.
Mboweni described as “madness” that the government gives municipalities taxpayer money through grants, and then has to assist the power utility because some of those councils don’t pay for the electricity that they have sold.
“It is not rocket science and it is quite simple,” Mboweni said in an interview in Cape Town on Monday.
The arrears “must be collected”, he said.
Eskom hasn’t been selling enough power to cover its operating costs and interest payments. It has been forced to implement rotating blackouts over the past few years to prevent a collapse of the national grid as its fleet of ageing and poorly maintained plants struggled to keep pace with demand.
President Cyril Ramaphosa, who secured a five-year term when the governing ANC won the recent national elections, announced plans earlier this year to split the company into three units to make it easier to manage. — Business Day.
