Ver­dict on Eskom’s power cut plan to­day

Eight mu­nic­i­pal­i­ties in­volved

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

THE NORTH Gauteng High Court will to­day de­liver its or­der on AfriFo­rum and AfriBusi­ness’ ur­gent court in­ter­dict to stop Eskom from cut­ting power sup­ply to eight de­fault­ing mu­nic­i­pal­i­ties in var­i­ous provinces, AfriFo­rum said yes­ter­day.

The or­gan­i­sa­tions on Mon­day said the power util­ity planned to cut power sup­ply to res­i­dents of sev­eral mu­nic­i­pal­i­ties in the North­ern Cape, North West and Free State “be­cause cer­tain mu­nic­i­pal­i­ties ne­glected to trans­fer funds that were col­lected from res­i­dents for elec­tric­ity sup­ply to Eskom. Bil­lions of rands in elec­tric­ity funds are owed to Eskom by mu­nic­i­pal­i­ties.”

Eskom is grap­pling with bal­loon­ing mu­nic­i­pal­ity debt. In the year ended March 31, 2016, the util­ity’s to­tal mu­nic­i­pal ar­rear debt, in­clud­ing in­ter­est, was R6 bil­lion, up from R5bn in the pre­vi­ous fi­nan­cial year.

In its 2016 an­nual re­port, Eskom said the top 20 de­fault­ing mu­nic­i­pal­i­ties con­trib­uted R4.8bn to mu­nic­i­pal ar­rear debt, or ap­prox­i­mately 80 per­cent of the to­tal ar­rears. It said 82 per­cent of the mu­nic­i­pal ar­rear debt was con­cen­trated in the Free State, Mpumalanga and North West mu­nic­i­pal­i­ties, con­tribut­ing 47 per­cent, 24 per­cent and 11 per­cent, re­spec­tively. “At year end, 11 of the top 20 de­fault­ing mu­nic­i­pal­i­ties had to­tal over­due debt greater than R100 mil­lion each,” Eskom said.

In 2015, Eskom in­formed de­fault­ing mu­nic­i­pal­i­ties of its in­ten­tions to in­ter­rupt power sup­ply. But AfriFo­rum and AfriBusi­ness are chal­leng­ing the le­gal­ity of the move. In March this year, the Pre­to­ria High Court will hear the or­gan­i­sa­tions’ ap­pli­ca­tion to de­ter­mine the con­sti­tu­tion­al­ity of Eskom’s ac­tions. The or­gan­i­sa­tions blamed poor man­age­ment at the var­i­ous mu­nic­i­pal­i­ties for the elec­tric­ity ar­rears.

Ur­gent help

Wil­lie Spies, le­gal rep­re­sen­ta­tive of AfriFo­rum and AfriBusi­ness, said that Eskom had pre­vi­ously said it would not pro­ceed with power cuts be­fore the con­clu­sion of the court ap­pli­ca­tion in March. “The plan to cut the power of eight mu­nic­i­pal­i­ties is in con­tra­dic­tion with Eskom’s ear­lier un­der­tak­ing. There­fore, we are now ap­proach­ing the court for ur­gent help,” said Spies.

AfriFo­rum and AfriBusi­ness this week said that Eskom, as a state-man­aged en­tity, had other le­gal mea­sures at its dis­posal to re­cover its fees.

“To pun­ish pay­ing and law-abid­ing cit­i­zens and in­sti­tu­tions for the neg­li­gence of in­com­pe­tent mu­nic­i­pal ad­min­is­tra­tions does not make sense. The ap­proach of Eskom to threaten with the sum­mary power cuts of full mu­nic­i­pal ar­eas is a dra­conic and un­con­sti­tu­tional mea­sure, which boils down to col­lec­tive dis­ad­van­tage of pay­ers, as well as non-pay­ers,” they said.

Eskom is grap­pling with bal­loon­ing mu­nic­i­pal­ity debt. The power util­ity plans to cut power sup­ply to res­i­dents of sev­eral mu­nic­i­pal­i­ties in the North­ern Cape, North West and Free State.

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