Eskom cuts ‘will damage business’

Eskom’s decision to cut power to debt-defaulting municipalities will badly affect local businesses, says the South African Chamber of Commerce and Industry. It has called on the power utility to find another way to recoup the unpaid bills.

Eskom this week followed up on its threat to take drastic action against defaulting municipalities because of spiralling municipal electricity debt, currently totalling R10-billion.

Eskom spokesperson Khulu Phasiwe said the utility had cut power during morning and afternoon peak times to defaulting municipalities that had not signed payment agreements or when the agreements were not honoured.

The utility had threatened this action since April 2015.

Eskom said it could not continue to show leniency to the detriment of its balance sheet.

“Eskom is not the Vatican, meaning even though we are expected to be compassionate, which we are from time to time, you cannot expect Eskom to just write off the debt or continuously give grace periods,” Mukoki said.

Municipalities in the Free State, Mpumalanga and the North West are Eskom’s biggest defaulting customers, he added. “The Free State owes Eskom R4-billion; Mpumalanga is next, with nearly R3-billion; then the North West owes just less than R1-billion.”

The municipalities that owe Eskom the most are Nala with a bill of R155-million, Thaba-Chweu with R282-million, Govan Mbeki with R181-million and the Naledi municipality with a bill of R143-million.

Just hours after the first power cuts to towns, provincial governments scrambled to negotiate payment agreements with the utility. By Thursday afternoon, 21 of the 34 municipalities had agreed to pay up.

But the chamber of commerce said it was wrong that businesses that had paid their bills were being cut off.

“The technology exists that allows Eskom to cut only certain areas or businesses. Principally it’s wrong,” the body’s chief executive, Alan Mukoki, said this week.

“Eskom and local business councils need to meet urgently so that businesses who are in good standing are not affected.

“Because there is an intermediary in these cases and there are many businesses who have paid but are still affected, cutting everyone’s power equates to throwing the baby out with the bathwater,” Mukoki said.

The power interruptions will take place from 6am to 8am and 5pm to 7pm during the week.

Weekend power will be cut from 8.30am to 11am, and 3pm to 5.30pm.

Eskom said none of the emergency services in the affected municipalities would be affected by the disruptions. The power utility confirmed that it had met representatives of hospitals, clinics and fire departments before instituting the power cuts, to ensure each had back-up generators.

On Monday, the Ventersdorp municipal council passed an urgent resolution committing the local North West municipality to finalising a payment plan, but two municipalities in the Free State and another in the North West reneged on an agreement to pay.

Referring to these three, the acting chief executive of Eskom, Matshela Koko, said: “Time has come for the outstanding overdue debt to be honoured in full. Eskom is bent on ensuring that this happens for the sole benefit of not only Eskom but the entire South African economy.”

Despite the warnings and the temporary power cuts, Koko said he is empowered by law to go much further than the temporary interruptions.