Jozi not taking over, says Eskom

CONFUSION: CITY CLAIMS DEAL, UTILITY SAYS NO DEAL – YET

‘Possible’ transfer of power distribution on the cards.

Eskom has denied claims it has entered into a power supply transfer agreement with the City of Joburg, saying the possibility of a transaction or transfer was still a long way off – if it happens at all.

Spokesperson Sikonathi Mantshantsha confirmed the utility had signed a memorandum of understanding (MOU) for a possible transfer of electricity distribution to City Power, but said there was no agreement yet.

“The MOU is not an agreement that the distribution areas would be transferred to the municipality. It is an agreement to work on the topics to be covered in the negotiations,” he said.

Energy expert Clyde Mallinson said there appeared to be quite a lot of confusion over the specific agreement – and even the handover from the power utility.

According to Mallinson, while he could not speculate on what the agreement meant for consumers and the Soweto debt, there was no clear understanding or access to any actual deal – and how exactly it would work – or if, in fact, there even was a deal.

“It would rather depend on the nature of the deal – if there was one. Currently, Eskom distribution clients pay less than City Power clients so, technically, it should result in an increase of their tariffs,” he said.

Mantshantsha said an agreement for Eskom to sell the business would only be made when all the issues had been addressed.

“Then the processes would kick in where the customers affected will have to be heard, regulators have to give their approval,” he said.

In a joint statement, City Power and Eskom said the MOU was for a possible transfer of Johannesburg electricity distribution.

City Power’s Isaac Mangena said the MOU will set in motion a process to explore the possible handover of electricity supply to Soweto, Orange Farm and Ivory Park. He admitted the process was phased because of the complexities involved and would not be done overnight.

“This includes issues around Soweto’s debt and Eskom’s assets in those areas,” Mangena said.

He said Soweto residents claimed their debt was exaggerated.