'Disconnections to go ahead unless payments are made'

Johannesburg – Municipal disconnections will go ahead next week unless payments are made and agreed arrangements are concluded on arrear debt balance, says electricity parastatal Eskom.

"Eskom hereby notifies all parties that may be materially and adversely affected by the interruption of supply to some municipalities in the Eastern Cape, Northern Cape, North West, Mpumalanga, and Free State provinces that Eskom will proceed with the interruption of supply to identified municipalities, as per Eskom’s final decision notice communicated through different media platforms.

“Eskom is in a uniquely invidious position, locked between a deteriorating financial position and running afoul of the [Public Finance Management Act] PFMA.

Relevant laws and standards compel us to collect overdue debt and failure to comply has dire consequences for the entity,” Eskom interim CEO Matshela Koko said in a statement.

"While this remains an agonising decision for Eskom, we take solace in the fact that we spared no effort to collect amicably. Eskom inter alia embarked on an extended Promotion of Administrative Justice Act 3 of 2000 (PAJA) process, engaged all relevant and affected stakeholders, including the department of co-operative governance and traditional affairs (cogta) and National Treasury, entered into multiple payment plans, and offered the suppression of future interest as an incentive," Koko said.

In spite of the fact that both the provisions of the Electricity Regulation Act and supply agreements with the municipalities empowered Eskom to disconnect electricity completely, Eskom had opted for a softer approach of interrupting electricity between 6am and 8am, and 5pm and 7.30pm Monday to Friday; and 8.30am and 11am, and 3pm and 5.30pm Saturday and Sunday.

“Municipalities contribute almost 42 percent of Eskom’s total sales and almost 41 percent of Eskom’s revenue annually; non-payment of accounts has a significant impact on Eskom’s cashflow. If Eskom cannot collect its debt, it essentially spells the death knell of Eskom, which will have a devastating impact on the country’s economy,” Koko said.

Eskom’s decision had also been confirmed by the High Court in Pretoria when it dismissed AfriForum’s application against the scheduled interruptions.

Judge Hans Fabricius emphasised in his ruling that it was necessary to appreciate the context in which Eskom operated in the national economy, seen against the background of its constitutional rights and obligations.

The court also emphasised that the duties of municipalities to honour their obligations to Eskom were important in the present context.

“We still hope that the impacted municipalities will honour their outstanding debt in the interest of the residents and businesses in the impacted areas,” Koko said.

To avoid supply interruptions, the municipalities needed to meet three requirements – a cash payment as negotiated with each municipality; a written undertaking in the form of a council resolution that current accounts would be honoured going forward; and a payment plan for the arrears supported by a council resolution.

Should the municipalities meet these requirements, their supply interruptions would be suspended. Should they fail to honour their payment arrangements, Eskom would not start PAJA from the start but would interrupt their supply at seven days’ notice.

The affected towns are:

Free State:

Reitz, Petrus Steyn, Lindley, Bothaville, Kgotsong, Wesselsbron, Boshof, Dealesville, Hertzogville, Seretse, Bethlehem, Fouriesburg, Rosendal, Paul Roux, Fateng-Tse-Ntsho, Panorama, Groenvoerlande, Theunissen, Brandfort, Winburg, Verkeerdevlei, Excelsior, Ladybrand, Tweespruit, and Dawiesville, all effective from January 16.

Northern Cape:

Victoria-West, Richmond, Van der Kloof, Petrusville, and Phillipstown, effective from January 18.

North West:

Ventersdorp, Tshing Township, Appledraai, Buffelsvlei, Boikhutso, Toevlug, Doornkop, Schweizer-Reneke, Vryburg, and Stella, effective from January 16. Bloemhof, Christiana, Wolmaransstad, Britstown, Industrial Area, Letlhabile, Oukasie, Damonsville, Elandsrand, Priminidia, Koster, and Swartruggens, effective from January 18.