The Lekwa Municipality is grappling with a severe financial crisis, exacerbated by its failure to collect revenue from electricity services, leaving it unable to settle a massive R3 billion debt to power utility Eskom.
The crisis is driven by a combination of faulty infrastructure, illegal connections, and the failure of a service provider to complete a prepaid meter installation project. According to the Democratic Alliance (DA), the municipality collects only about 30% of the revenue owed from the sale of electricity.
A DA representative outlined the scale of the problem, stating that while there are approximately 38,000 to 40,000 households in Lekwa, only 20,000 prepaid meters have been installed. Of those, a mere 8,000 customers are regular purchasers of electricity, leaving a delinquency of roughly 12,000 meters.
“The issue with that is that it’s a serious loss of revenue. It’s also a lack of law enforcement. The municipality is facing a huge financial crisis,” the DA representative said. They directly linked the failure to collect revenue to the municipality’s dire financial state, a finding also highlighted by the Auditor-General. “Basically the municipality just manages to pay salaries at this stage and some of the creditors,” they added.
The municipality has acknowledged the challenges. A municipal spokesperson confirmed the crisis and detailed efforts to combat the problem through a revenue collection program.
“We acknowledge that we are having that crisis,” the spokesperson said. The program has identified numerous illegal connections, with businesses and residents bypassing meters or using illegal vendors to purchase electricity.
“We have embarked on a revenue collection program where we have found that there are business people [and] residents who have illegally connected to municipal infrastructure who have breached their meters,” the spokesperson explained. “What we have done… if they are found we are cutting off those residents and businesses.”
So far, the municipality has disconnected 1,493 bridged meters from both households and businesses. Before being reconnected, those found to be in violation must come to the municipality and pay fines.
The core of the financial distress, however, remains the unpaid bulk electricity services owed to Eskom, which now stands at a staggering R3 billion, a debt that continues to mount as revenue collection fails.
