South African Public Enterprises Minister Lynne Brown has instructed State-owned power utility Eskom to give delinquent municipalities until the end of this month to clear their outstanding arrears before switching off their electricity supply.

Brown said in a statement here that turning off the power supply would not only impact on individual ratepayers and municipalities, but had potentially disastrous effects on businesses and jobs.

One cannot help feeling sympathetic to those who pay their electricity bills in good faith, only for the payments to be consumed by municipalities with precious little income and resources. This is a matter of national importance that I would urgently hope to discuss with the Minister of Finance, Brown added.

She urged municipalities in arrears to move with speed to clear their debt. In the meantime, the (outstanding) amount of 10.2 billion Rand (746 million US dollars), which grows exponentially, has a potential to undermine the sterling effort undertaken to restore Eskom back to its sound financial footing,” she noted.

The security of future revenue is paramount to Eskom’s sustainability. It is critical for all municipalities to institute pre-paid billing to help build a payment culture.”

She said a healthy Eskom would not only meet its social mandate, through electrification and other transformational targets, but would also contribute to the positive sovereign rating of South Africa.

Brown said South Africa could not afford an Eskom whose ability to borrow from financial markets is constrained by the prohibitive interest rates arising from the negative financial position, which will result if we don’t resolve this matter.

The Minister said she was inspired by the co-operation o f some municipalities. I am particularly humbled by the intervention of the respective (provincial) Premiers and communities’ willingness to join hands with the relevant stakeholders in an effort to find a lasting solution in our country’s interest, said Brown.