(Bloomberg) -- South African municipalities’ debt to state-owned power utility Eskom Holdings SOC Ltd. rose almost 10% since March to 49.1 billion rand ($2.9 billion) by the end of July, Deputy President David Mabuza said.
“This is not a desirable state of affairs for both Eskom and municipalities,” Mabuza told lawmakers in a briefing on Thursday. “For that reason, Eskom forms part of a multi-disciplinary revenue committee which is meant to address payment of debt to the utility by municipalities and organs of state.”
South African city councils struggle to collect payments for services such as water and electricity from consumers and in turn can’t pay their suppliers or maintain infrastructure. That has resulted in Eskom threatening to off electricity until it’s paid, and some towns being left without water for weeks as pipes leak and pumps break down.
“Municipalities have been ordered to collect their debts and pay Eskom,” Mabuza said.
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