Dear Residents of Makana Municipality, we understand that the notice issued by Eskom on 14 April 2019 has caused great anxiety among residents and businesses alike.
We empathise 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.
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 R12.6m 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 monthly bulk account ranges from R7.5m in
summer to R17m 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
generates adequate revenue from electricity sales to cover the cost of electricity.
The current situation of using the equitable share to pay Eskom is 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 historic 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.
Honourable Executive Mayor Councillor Mzukisi Mpahlwa.
