Cutting defaulting municipalities off isn’t the answer, Eskom

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Eskom made headlines (yet again) last week when it announced it would start cutting bulk electricity to 20 of the worst defaulting municipalities in the country. But that’s not the answer, says the South African Local Government Association (SALGA).

According to Eskom, the 20 municipalities located in Gauteng, Mpumalanga, Free State, Eastern Cape, Northern Cape, Western Cape and North West are in debt for a total R3.68 billion of the current R4.6 billion owed to the national utility.

“Non-payment for electricity undermines Eskom’s statutory obligation to generate and supply electricity to municipalities nationally on a financially sustainable basis,” interim Eskom CEO Zethembe Khoza said at the time.

But the main reasons behind the non-payments are structural, financial and capacity problems, said SALGA.

“This deliberate interruption of electricity supply has major impacts, not only for the municipalities concerned but also for the economy, essential services such as hospitals, clinics, schools, businesses and communities, including those who have paid their utility bills. The ripple on effects should not be ignored, that of unemployment, poverty and the inability of communities to pay for services,” SALGA said in a statement.

SALGA said it has worked together with the National Treasury to identify these municipalities for support and help with credit control so they collect revenue owed to them by residents and pay creditors.

“Continuing to penalize them will not solve the root causes of the problem… We call upon government, business and households to also play their part and pay for the services they use,” said SALGA.

SALGA urged Eskom to offer municipalities fair payment terms to avoid high non-payment and having to cut bulk supply.

“Mindful of the strategic nature of Eskom as a national asset, SALGA will continue working with Eskom based on our Active Partnering Agreement to find long term solutions,” it said.

[Image – Eskom]



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