File image: IOL.
File image: IOL.

Salga backs water and electricity prepaid meters to recoup billions

By Siyabonga Mkwanazi Time of article published Nov 16, 2019

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Cape Town - The South African Local Government Association (Salga) is backing a proposal to install prepaid meters for electricity and water to recoup billions owed to municipalities.

Thakare Lekhare, Salga’s senior adviser for revenue enhancement, told the Parliament’s joint committees on appropriations yesterday this was a workable solution to the financial woes of the country’s municipalities.

Municipalities are owed R165 billion by households, departments and businesses; and they have been struggling for years to recover the debt.

The National Treasury has said it would not be possible to recoup all the monies owed to municipalities.

Lekhare said the inter-ministerial task team on municipal debt had recommended that work streams be set up to deal with the issue of the debt.

Part of the solution was to install prepaid metres.

“The inter-ministerial task team is finalising the implementation of the work streams that will be submitted to Cabinet for approval,” said Lekhare.

This would force consumers to buy electricity and if they failed to pay, they will be cut off.

She said out of the debt of R165bn owed to municipalities R10.2bn was from organs of state and departments.

Lekhare said the municipal debt has more than tripled in the last decade.

Salga’s chairperson of its finance committee, Mpho Khunou, said they did not believe that Eskom should supply electricity to municipalities.

He said the constitution was clear that municipalities were allowed to distribute electricity in the country.

Khunou said despite some of the MPs arguing that municipalities did not have capacity to supply electricity, municipalities can develop it over a period of time.

Khunou said Eskom was also unable to collect its debt from residents in Soweto.

Soweto owes Eskom more than R19bn and the debt has been accumulating over the years.

“What we believe is the solution is the roll-out of smart meters. If people don’t pay we will switch off,” said Khunou.

He also warned that as National Treasury was planning to cut its allocation to municipalities significantly, this would have a detrimental effect on service delivery.

“When you consider what is proposed, now we are reducing the equitable share by R3bn and R14bn on conditional grants, you can imagine the impact,” said Khunou.

Chairperson of the select committee on appropriations in the National Council of Provinces Dikeledi Mahlangu questioned whether Eskom should not be allowed to supply electricity.

Some of the metros and municipalities in the country have come under fire in the past few years over their billing systems, with some of the people charged thousands of rand for electricity.

Mahlangu also said municipalities would not have the capacity to supply electricity to all the households across the country.

Khunou said Eskom has not been able to collect some of the money owed to it.

But he maintained that municipalities would develop capacity over time.

Finance Minister Tito Mboweni has been calling on all residents and consumers to pay for services rendered by municipalities.

He said the country would not be able to fix some of the things because of the “culture of non-payment”.

The government expected people to get proper services after they have paid what is due to municipalities, he said.

Politics Bureau

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