Eskom-municipal debt: Salga declares dispute with Treasury

TheNewAge_20150508The South African Local Government Association (Salga) declared a dispute on Wednesday with the Treasury in a bid to force the release of about R1 billion to 39 municipalities whose funding is being withheld because of outstanding debt to Eskom.

“We have sent a notice to National Treasury today to notify them that we are declaring a dispute,” Salga chairman Thabo Manyoni, also the mayor of Mangaung, told Parliament’s standing committee on appropriations.

Manyoni said last month’s decision to withhold the equitable share of 59 municipalities with outstanding water and electricity bills was short-sighted as it painted all defaulting municipalities with the same brush, ignoring the fact that some could never be viable.

“The manner in which Eskom has been acting, it leaves much to be desired,” he added and went on to cite last week’s 10-hour long blackouts in Soweto’s Orlando neighbourhood.

“You can’t have hospitals there running on generators for 10 hours, magistrates’ courts running on generators for 10 hours…. The manner in which this is being handled, it is making it difficult for service delivery.”

Eskom ascribed the outages to loadshedding, followed by a tripped transformer.

But the ANC-led City of Johannesburg has cried foul and accused Eskom of showing utter disregard for residents of Soweto and attempting to “sabotage” the ruling party in the run-up to next year’s local government polls. Soweto owes Eskom R8 billion, of which half is overdue.

A Treasury official who asked not to be named said the net effect of declaring a dispute would be an obligation on Treasury to immediately release the remainder of R2.2 billion being withheld from municipalities, because of the legal prescript that inter-governmental disputes be resolved at a political level, rather than through adversarial litigation.

It has already in recent weeks released some R1.2 billion to 20 municipalities who have entered into payment agreements with Eskom. The cash-strapped utility is owed about R9 billion in arrears by municipalities.