22 February 2017

South Africa: Electricity Disconnections Go Against NDP's Vision for 2030 - MPs Tell Eskom Leadership

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The debt problem of municipalities to Eskom indicates the non-implementation of the Department of Cooperative Governance and Traditional Affairs' (CoGTA's) Back to Basics programme. If the wheels of the programme were moving, some of the challenges - including this culture of non-payment of electricity bills - would have been removed, that is what the Chairperson of the Portfolio Committee on CoGTA, Mr Mzameni Mdakane, told Minister of CoGTA Mr Des van Rooyen and senior officials of CoGTA at Parliament recently.

"All the questions that the members of the Portfolio Committee on CoGTA and the Portfolio Committee on Public Enterprises (who were invited to attend the meeting) had asked would not have been asked had the Back to Basics programme been implemented," said Mr Mdakane.

He said in certain areas such as Soweto in Gauteng the people must be mobilised by their leaders to pay the services they get from the municipality. "Perhaps the culture of the non-payment that was promoted during the struggle days is at the heart of the problem, on top of the weaknesses of the municipalities to collect payments for electricity," he said

Mr Mdakane said the leaders, including Members of Parliament (MPs), must assist using their constituency offices to promote the culture of payment of electricity. According to Mr Mdakane, the old culture of boycotting the payment of apartheid municipal services before 1994 is still alive. "We must mobilise our people to pay the municipal services they enjoy from the municipalities and the government at large," he said.

The Departments of Cooperative Governance and Traditional Affairs and Treasury appeared before the Portfolio Committees on CoGTA and Public Enterprises to brief the Committees on the debt owed to Eskom by municipalities. Also appearing before the Committees to brief the Committees on its role on the issue of debt of electricity by municipalities, was an official from the South African Local Government Association.

In briefing the Committees, the Chairperson of Eskom's Board Dr Ben Ngubane said that Eskom is considering using the pre-paid system than the one currently being used, that is, postpaid one. He said they have noted that people who use the pre-paid electricity method plan their usage properly. "The people who use the pre-paid electricity method properly plan their use of electricity," said Dr Ngubane.

He said Eskom has made debt payment arrangements with municipalities that owe but the same municipalities failed to keep those arrangements and that increased their debts.

As part of the strategies to recover the monies owed by municipalities, according to Eskom's Acting Chief Executive Officer Mr Matshela Koko, Eskom disconnected some of the municipalities in November 2016. He told the Committee that 50 of the top 64 municipalities have payment arrangements with Eskom and the remaining 14 are also negotiating payment arrangements with Eskom.

He said the Minister of Public Enterprises, Ms Lynne Brown, made a pronouncement to Eskom to suspend disconnections until the end of January 2017 to allow municipalities to make payment arrangements with Eskom. According to Mr Koko, the total amount owed by municipalities in electricity debt was R12bn but because of payment arrangements, that amount has gone down to R10bn.

Members of the Committees criticised the leadership of Eskom and the Department of CoGTA for allowing the debt owed to Eskom to escalate to the amount it has reached. They told Eskom and CoGTA that they were supposed to have acted earlier and came up with strategies to deal with the debt problem. They condemned disconnections, arguing that they contradict the 2030 vision that is enshrined in the National Development Plan (NDP).

Members of the Committees told Mr Van Rooyen to ensure that the vacancies of Municipal Manager and Chief Financial Officer are filled in all the municipalities that don't have those senior officials. "As long as those vacancies are not filled, there is no hope that those municipalities will operate normally," stressed the members of the Committees.

Although members of the Committees heard about Eskom's pre-paid method to all the clients, they voiced their reservations about the method, arguing that the method is going to disadvantage the municipalities as they also generate revenue through electricity bills. But Mr Koko told the members of the Committees that a plan will be developed to ensure that municipalities retain their share from electricity payments.

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