Question NW4004 to the Minister of Finance
11 December 2023 - NW4004
Mthethwa, Mr E to ask the Minister of Finance
Whether, following the pronouncement to write-off Eskom electricity bills of indebted municipalities, he has considered the same approach for the poor people who are deeply indebted to their municipalities to such an extent that some have lived for long periods without electricity because of the confiscated Eskom transformers in their areas?
Reply:
There are two main challenges in terms of arrears owed to Eskom as well as municipalities: first, consumers who do not pay for municipal services delivered; and second, a lack of leadership to ensure that credit control is enforced and Eskom and / or municipal revenue is collected. As a result, a blanket approach to consumer debt write-off is not economically viable, affordable or prudent as it will not address these underlying challenges and will likely further exacerbate the consumer debt owed to Eskom and municipalities.
In this context, it should be noted that the write-off of consumer debt owed to municipalities and Eskom falls within the ambit of Eskom and / or the respective municipalities who are providing the consumer with electricity within the demarcation and cannot be separated from proper indigent management.
Annually the Local Government Equitable Share (LGES), based on the most recent statistical data, provides for a package of free basic services (FBS), including 50 kilowatt hours free electricity to poorer households within the identified municipal demarcations (including Eskom supplied areas). Unfortunately, the National Treasury analysis indicates that many municipalities do not provide all households that qualify with this benefit and many municipalities divert the LGES: FBS component earmarked for poorer households to fund other municipal priorities and salaries. Consequently, they do not pay Eskom the FSB: electricity component.
Both the Eskom and municipal debt relief conditions allows the write-off of consumer debt. However, this is subject to the implementation of pre-paid smart metering for any consumer who is unable to repay Eskom or the municipality coupled with restricting electricity to the national FBS: free electricity policy limit in the case of indigent consumers.
Please refer queries regarding the removal or confiscated transformers to Eskom as they are the appropriate institution to respond to this matter.