Eskom Signs Agreements with 10 Non-paying Municipalities

South Africa's power utility Eskom said on Wednesday it had reached agreements with 10 out of 20 municipalities which owe the cash-strapped 3.68 billion rand ($314 million) in unpaid bills.

 

The utility, which is getting a 23 billion rand cash injection from government this year, said earlier in April it would cut power to the top 20 defaulting municipalities from June 5.

 

Eskom said in a statement electricity supplies to the 10 municipalities that entered into pay agreements with the utility would not be cut but districts have to pay consistently or face regular disruptions.

 

Eskom is struggling to keep the lights on in Africa's most advanced economy due to a lack of maintenance of its aging power stations and suffers delays in bringing new plants on stream.

 

"Eskom has reached a point where it can no longer continue to provide power without receiving payment in return," newly-appointed Chief Executive Brian Molefe said.

 

The utility is desperately trying to plug a funding shortfall of about 225 billion rand, partly caused by selling its electricity too cheaply.

 

Weary South Africans are subjected to frequent controlled power cuts which Eskom implements to prevent the grid from being overwhelmed.