This, after the parties reached a consensus on the way forward regarding the metro’s debt following an ultimatum from Eskom. The power utility confirms a payment agreement has been reached with the Free State metro but does not elaborate on what said agreement entails.

The newly announced payment agreement with Mangaung comes on the back of an existing ‘Supply Agreement’, the details of which are already proven to be a serious bone of contention between the parties. The contradicting statements released by both parties following a meeting with the provincial department of Cooperative Governance and Traditional Affairs (Cogta) on Thursday (28 November 2019) can attest to this. The meeting, which was attended by Cogta MEC Thembeni Nxangisa, Cogta department head Mokete Duma, and officials from Eskom Mangaung/Centlec, Mafube, and Mantsopa Local Municipalities, was meant to find solutions to the debt problem.

From the onset it appears Mangaung and Eskom were not on the same page regarding the debt itself, with Mangaung saying in a statement its power utility, Centlec, was merely servicing a current account and not paying the debt from previous months. Eskom refuted this assertion in a later statement, explaining that the utility’s earlier Supply Agreement with Mangaung instructs the metro to pay Eskom within 15 days of receiving an invoice. The power utility says Mangaung hasn’t been doing so since August 2019. “The October 2019 account – amounting to R148 million – became overdue on 16 November 2019. In addition, R21 million is more than 90 days overdue,” says Eskom.

Free State Cogta head, Mokete Duma, weighed in on the matter, siding with the metro. He says the current Supply Agreement which was informed by the inter-ministerial task team that was established by previous Cogta Ministers Des van Rooyen and Zweli Mkhize, to deal with the debt to Eskom by municipalities, is not entirely fair to the metro. It forces the metro to pay off the debt to Eskom within 15 days of receiving an invoice. He says this is an unrealistic expectation for Mangaung because it is a rural metro and does not have a number of industries operating within it. He also raised concerns regarding the interest incurred for late payments.

Eskom does acknowledge these concerns, adding in a statement that they agreed “at the meeting that on formal request from Mangaung Metropolitan Municipality, Eskom would be willing to engage on these matters”.

It appears as if for now the planned power interruptions in Mafube and Mantsopa, which owe Eskom R52 million and R205 million respectively, will go ahead as planned.

OFM News