South African deputy president David Mabuza has pointed out a few reasons why the electricity supplier, Eskom, is struggling as it is owed about R5 billion in just four months.
Mabuza believes the fact that the municipalities owe the power generator staggering amounts of money in their bills is a major concern.
It is reported that Eskom has a savings target of R61.8bn by 2023 aimed at helping the provider to absorb the increase in diesel costs and the wage bill, but Mabuza has issued a stern warning to municipalities to pay their bills.
The parliamentarian says municipalities owe Eskom billions of rands in outstanding debt, are further crippling the struggling power utility’s financial position.
“Debt owed by municipalities to Eskom remains a major challenge to the entity’s financial stability,” Mabuza said as per IOL.
“Debt owed by municipalities by Eskom has since grown from R44.8 bn to R49.1bn between March and July 2022. This is not a desirable state of affairs for Eskom and municipalities.”
Answering oral questions from Members of Parliament in the National Council of Provinces (NCOP) this week, Mabuza said the embattled power generator is struggling because of consumers who don’t pay.
The former Premier of Mpumalanga was also updating the legislature on progress by the government’s National Energy Crisis Committee.
Mabuza said while successful debt recovery from municipalities would help Eskom reach its savings target of R61.8bn by 2023, they would not necessarily reduce electricity tariff increases.
“Eskom is suffering because consumers are not paying for electricity and there are many illegal connections. We need to encourage people to pay for the services they receive, for the sustainability of Eskom,” Mabuza added.
“As part of internal cost efficiencies and equity conditions, a cost savings target of R21.4bn for the 2023 financial year, and a cumulative R61.8bn over the medium-term of 2020 to 2023, has been set by Eskom.”
‘DD’ also promised the house that the government was taking every step to make sure that Eskom was supported in its bid to stabilise the national grid.
“The political task team was also seized with expanding the correction of plant defects at Medupi and Kusile power stations in order to ensure that the grid has an additional 1000MW of baseload capacity to address the load shedding problem,” he said.
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