Theft, customer debt heavy burden on Eskom

Carin Smith

Cape Town - Eskom's arrear customer debt has increased across all segments over the past financial year, with approximately 38% of debt being outstanding for more than 60 days.

The most significant increase was seen in arrear municipal debt, according to Eskom's integrated annual results released on Tuesday.

Electricity debtors (before provision for impairment) increased to R22 657m from R20 269m in the previous financial year, while the provision for impairment increased to R7 430m.

"We make every effort to ensure that customers pay their accounts on time. We constantly monitor payments and are willing to enter into reasonable payment arrangements that take into account defaulting customers’ circumstances," said acting Eskom CEO Brian Molefe.

"Considerable effort also goes into building stronger relationships with these customers. Disconnection of supply is a last resort."

Eskom said in its financial report that debt collection from municipalities and small power users, particularly in Soweto, remains a concern.

At March 31 2015 ten municipalities had total overdue debt greater than R100m each. The top 20 defaulting municipalities contributed approximately 80% of the total arrear municipal debt.

Total Soweto debt, including interest was R8 611m at March 31 2015, compared to R7 020m in the 2013/2014 financial year.

After the disconnection of three Free State municipalities due to arrears was suspended following interventions by the Ministers of Public Enterprises and of Cooperative Governance and Traditional Affairs (CoGTA), the outstanding debt of Free State municipalities has increased significantly, according to Eskom.

At March 31 2015, Free State municipalities contributed 39% to total municipal arrear debt, with Mpumalanga municipalities contributing 30% and North West municipalities 14%.

Non-technical losses, which include illegal connections, theft of equipment and vandalism, amounted to between 3 730GWh and 5 968GWh for the 2014/15 financial year.

Installation of split metering with protective enclosures is one of the interventions undertaken by Eskom to reduce these losses.

Specific interventions aimed at reducing energy and revenue losses are being pursued with the support of the social marketing campaign Operation Khanyisa, aimed at promoting the legal use of electricity by customers.

As a result of Operation Khanyisa, over 2 700 tip-offs were received from the public during the financial year.

Eskom also said in its financial report that it is plagued by network equipment theft, like conductor, cable or copper theft.

"The value of material stolen remains a serious concern, as it is indicative of organised, syndicate-driven criminal activity in the conductor theft environment, which is also experienced by other state-owned enterprises," said Eskom.

Fin24 Source