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ESKOM at this point in time needs more than R 250 billion to pay for its operational costs and expenses to keep it afloat, and government has to sell off some of its state owned assets to acknowledge and be able to honour the pledge of the Minister of Finance in his Budget Statement in February that it would advance to ESKOM R 25 billion, whose shares have been downgraded to ‘junk status’ that makes it impossible for ESKOM to get any foreign loans.
ESKOM is 100% State owned, and at this point in time the State in respect of its building and many official residences, owes ESKOM R 4.6 billion for the supply of service, which include the supply of electricity.
What makes the situation even worse is that in South Africa there are more than 21 Municipalities that cannot pay their liability to ESKOM, whose supply of power will be discontinued soon as these Municipalities owe ESKOM in excess of R 100 billion.
What is amazing about the debt of Municipalities is that it buys Electricity from ESKOM at a reduced and discounted price, and then sells it to consumers at a mark up, which amounts consumers then pay, yet the relevant Municipalities then use this money that was paid in respect of services (including Electricity) to pay for its operational expenses (salaries, benefits, etc.) which is not meant to be.
Treasury even give Municipalities financial grants that are meant and supposed to be for the upgrading and or service delivery to its residents and the citizens of this country, but then once again Municipalities uses these grants to pay their operational expenses that is not meant to be.
The 248 Municipalities in the country is awarded proportional finances in each and every annual budget, which is taxes collected in the country, yet Municipalities are so badly managed that it cannot even survive on all of these grants, and financial assistances that it gets, as it salaries alone in many cases amount to more than 60% of its operational budget and cost, in other words, more is paid on salaries than on service delivery and if consumers do not pay their service accounts, the money received from grants is misappropriated and used for operational expenses.
Municipalities are and extended arm of government that has an obligation to the residents in the area, yet a lot of municipalities fail dismally in providing any of the services that it is meant and mandated to do, all at the extravagant expense of those that are earning millions each and every year, which in essence means that government is subsiding those luxurious, extravagant, sumptuous life styles of the individuals at the cost of the residents being the ‘sacrificial lambs at the altar’!
Now the question remains – ESKOM is 100% State owned, it financially assists Municipalities with grants for service delivery which is then misappropriated, and Municipalities not having the capacity and or capability to pay ESKOM in that it used the money that it received for the sale of the Electricity for other purposes, and now ESKOM is owed more than R 100 billion by them!
It therefore is safe to say, that Municipalities as the extension of government within local society actually owes itself R 100 billion and then that does not include its own bill of R 4.6 billion that it owes for the supply of electricity to government buildings, official residences, etc.
And then the Board of ESKOM (four of its Executive Members are suspended on full pay you might add) replaced with a temporary CEO for 12 months, that Lynn Brown claims to have turned TRANSNET around, and the suspension of those four Executives expire in three months. Where and at what cost to taxpayers will they then be redeployed in ESKOM and in what positions? We at this rate might even have the lady that serves tea in the office earning R 1 million a year in the very near future at the rate at which government redeploys suspended and then reinstate officials in positions other than that for which they were suspended for in the first instance.
