#Eskom threatens power cuts to FS municipalities

Residents in the Free State might have to brace themselves for a festive season without Christmas lights.

This, as Eskom threatens to interrupt power supply to three municipalities due to non-payment. The utility’s spokesperson in the Free State, Stefanie Jansen van Rensburg, says they have issued a notice to Centlec, which supplies power to the Mangaung Metro Municipality, Mafube and Mantsopa Local Municipalities. She says the planned interruptions are a result of the municipalities’ failure to honour their payment arrangements as a means to reduce their escalating debt.

Municipalities in the province collectively owe the power utility over R9.8 billion, making the Free State the province with the highest Eskom debt countrywide. Municipalities in the province, including the infamous Maluti-A-Phofung, which alone owes Eskom nearly R4 billion, are also in the red with their water boards. Jansen van Rensburg says their planned power interruption will take effect from 3 December, should the municipalities fail to make payment arrangements.

“Should these municipalities not pay Eskom or fail to enter into payment arrangements, Eskom will stop electricity supply services to the municipalities. This will result in scheduled withdrawal of electricity supply,” said Jansen van Rensburg.

The Mafube and Mantsopa Local Municipalities are amongst the municipalities placed under administration and fall under the Treasury MEC Gadija Brown’s list of highly distressed municipalities.

The Mangaung Metro has, on the other hand, recently been downgraded by Moody’s Investors Services. The municipality was placed three notches deeper into junk territory by the rating agency and is said to reflect a metro that is in a rapidly declining liquidity position.

In August, the rating agency confirmed it had downgraded the long term rating of the municipality from Ba3 to B3 with a negative outlook that it will be able to fulfil its obligations.

It is stated that at the end of June 2019, the metro was owed more than R4 billion, of which 36% was owed by business and government while 64% was owed by residents and other debtors.