Municipal debt to Eskom: 2009-18

Municipal debt to Eskom has reportedly reached R17 billion. The rate of growth has however shifted from exponential to linear.

A persistent failure by a municipality to pay for bulk services is a financial crisis and grounds for mandatory provincial intervention in terms of section 139 of the Constitution and the imposition of a recovery plan in those municipalities.  Our research shows that provinces have failed to act when under an obligation to do so, and this unconstitutional omission requires a rational explanation.

This second issue of PFW looks at the issue of  persistent non-payment to Eskom affecting many municipalities.

Our research tries to understand three main issues:

  1. How much do municipalities owe Eskom?
  2. What is being done about this financial crisis?
  3. What have provinces done?

The results so far highlight the fact that the absence of a consistent pattern of provincial mandatory intervention raises the question whether provinces have the capacity for overseeing municipal functions (like electricity) where they have a power to intervene but no constitutional role in delivery.

Public Finance Watch (PFW) aims to bridge the gap between the public and a subject that affects everyone but may seem technical and remote to many people.

The state manages billions of rands of taxpayers money, much of it meant for spending on social justice and development programmes.

A system of public finance set in law governs how national, provincial and local governments should manage our public finances. 

South Africa has one of the most transparent systems of public finance in the world, but that has not put paid to corruption, mismanagement, non-compliance with the law, and weak enforcement. These problems will  only corrode and  endanger the project of building a capable developmental state, if  not addressed.

© 2016 Dullah Omar Institute
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