Municipalities who owe Eskom could soon be sitting in the dark
Last week, the lights of a sixth defaulter, Mpofana Local Municipality, went out for a few hours because of arrears.
Monde Baka, Eskom’s group executive for distribution, said the power utility was entitled to disconnect the electricity supply of defaulting municipalities.
“Eskom is under a statutory obligation to generate and supply electricity to the municipalities nationally on a financial sustainable basis,” said Baka. “In order to protect the national interest in the sustainability of electricity supply, it becomes necessary for Eskom to exercise its right to disconnect the supply of electricity to the municipality when other means of collecting debt prove ineffective.”
Though Eskom refused to indicate whose lights would go out next, it said the minimum overdue debt was at R36m with the maximum being Mpofana Local Municipality at R123m. Out of the six municipalities, Eskom has payment arrangements with only four. The remaining two, included Mpofana, which Eskom said defaulted on an arrangement in July, 2018.
The sixth municipality is in the process of an application for a payment arrangement and has approached the Department of Co-operative Governance and Traditional Affairs and the provincial Treasury to support the application. However, Eskom was still waiting for the supported payment arrangement.
A notice of intention to cut electricity in Mpofana by July 8 was published by Eskom and the power utility followed through with the plan last Wednesday. Mpofana Municipal Mayor Xolani Duma sought legal action and was granted an urgent interdict preventing the power utility from leaving residents in the dark.
Lwandle Madlala, secretary of the Mpofana Mooi River Business Forum, said Eskom’s plan was to start off with short intermittent cuts for the first week, followed by longer periods without electricity in the following weeks and, eventually, a complete cut of supply.
“If Eskom sells the municipality electricity worth R10m at the value of R6m, why is the municipality failing to pay back?,” asked Madlala. “This amount could be paid over in instalments to ensure power, but the municipality is not doing that.”
Co-operative Governance and Traditional Affairs spokesperson Lennox Mabaso said MEC Sipho Hlomuka was aware of all the issues related to the non-payment of Eskom.
“The MEC has commissioned an assessment of all the municipalities in the province and that assessment is complete,” he said.
“The MEC will in his budget policy speech make pronouncements that are going to be comprehensive, touching on this very issue of municipalities that are owing Eskom millions of rand.”