By Levy Masiteng
Nine municipalities across South Africa have taken a step towards resolving their electricity debt crisis after adopting council resolutions to sign Distribution Agency Agreements (DAAs) with Eskom following a consultation process initiated earlier this year.
The move comes as Eskom revealed that outstanding municipal debt has ballooned to R111.6 billion nationally, despite repeated interventions by National Treasury and support measures offered by the power utility.
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In a statement issued this week, Eskom said the agreements followed consultations after notices were served in March to 14 municipalities in terms of the Promotion of Administrative Justice Act (PAJA).
“The municipalities were identified for failing to settle electricity accounts for at least 18 months, not complying with the National Treasury municipal debt relief programme, or posing a major financial risk to Eskom,” the utility said.
The nine municipalities are:
- Nketoana Local Municipality
- Mpofana Local Municipality
- Masilonyana Local Municipality
- Nala Local Municipality
- Ngwathe Local Municipality
- Renosterberg Local Municipality
- Thembelihle Local Municipality
- Govan Mbeki Local Municipality
- Kgetlengrivier Local Municipality
Eskom said engagements on the implementation of the agreements were continuing.
“Eskom partners for a defined period with municipalities to assist through expertise and skills transfer in areas such as billing, maintenance of electricity infrastructure and debt collection strategies,” said Agnes Mlambo, Eskom’s acting group executive for distribution.
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The utility also confirmed that it had concluded a payment arrangement with the City of Ekurhuleni, resulting in the withdrawal of Eskom’s intention to interrupt power supply to the metro.
Meanwhile, Inxuba Yethemba Local Municipality has entered into a prepayment arrangement with Eskom.
“Under the deal, the municipality will only receive electricity equivalent to the amount it has paid upfront,” Eskom said.
However, three municipalities remain at risk of electricity interruptions after Eskom said it did not receive satisfactory representations to justify the continuation of supply.
These municipalities are Dr Beyers Naude Local Municipality, Kai !Garib Local Municipality and Mamusa Local Municipality.
Eskom warned that electricity interruptions to the three municipalities are scheduled to begin on Friday, although discussions are continuing.
“Recovering municipal debt enables Eskom to deliver a consistent electricity supply and invest in our infrastructure, enable businesses to protect and create jobs, assist Eskom to play its part in supporting strategic industries to remain competitive, and contribute to reducing Eskom’s dependence on the fiscus,” said Mlambo.
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Eskom added that initiating the PAJA process was necessary to ensure legal compliance while protecting the stability of the national electricity supply system.
“Rising municipal debt remains one of the main challenges we face as a business, and we need all hands on deck to ensure services are paid for, for the ultimate benefit of the South African economy,” Mlambo said.
