Court bid to stop power dis­con­nec­tions re­jected

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

ESKOM could this month dis­con­nect the power sup­ply to a group of mu­nic­i­pal­i­ties in the Free State, North West, Mpumalanga and North­ern Cape af­ter the North Gaut­eng High Court yes­ter­day dis­missed AfriFo­rum’s ap­pli­ca­tion to in­ter­dict the dis­con­nec­tions.

Eskom said yes­ter­day that the mu­nic­i­pal­i­ties owed R10.2 bil­lion.

In the last five years, the over­due debt has in­creased ten­fold, with the March 2017 fore­cast be­ing in ex­cess of R12bn, Eskom said.

Eskom’s in­terim chief ex­ec­u­tive Mat­shela Koko said yes­ter­day that while ap­pro­pri­ate leg­is­la­tion al­lowed Eskom to com­pletely ter­mi­nate sup­ply to the de­fault­ing mu­nic­i­pal­i­ties, the power util­ity had opted for “less in­va­sive” sched­uled in­ter­rup­tions for cer­tain hours of the day.

“We did not take this path lightly as a com­pany. We ag­o­nised on this mat­ter end­lessly.

“Be­sides the Pro­mo­tion of Ad­min­is­tra­tive Jus­tice Act (PAJA) process, with which we fully com­plied, we em­barked on a wide community-aware­ness ini­tia­tive,” said Koko.

Eskom said it had em­barked on var­i­ous in­ter­ven­tions at pro­vin­cial level with af­fected mu­nic­i­pal­i­ties and rep­re­sen­ta­tives from the Depart­ment of Pub­lic En­ter­prises, Na­tional Trea­sury and the De­part­ments of Co-op­er­a­tive Gov­er­nance and Tra­di­tional Af­fairs to ad­dress the non-pay­ment of the Eskom ac­counts.

“To en­tice de­fault­ing mu­nic­i­pal­i­ties, Eskom of­fered to sup­press fu­ture in­ter­est on the over­due amounts pro­vided they ad­hered to the pay­ment plans,” said Koko.

“At an in­ter­est rate of prime

amount owed to Eskom by mu­nic­i­pal­i­ties

plus 5 per­cent, this is a huge in­cen­tive and could save the mu­nic­i­pal­i­ties mil­lions of rand. Sadly, only two of the pay­ment ar­range­ments en­tered into are still be­ing hon­oured.”

The Elec­tric­ity Sup­ply Agree­ment, the Eskom Dis­tri­bu­tion Li­cence Con­di­tions and the Elec­tric­ity Reg­u­la­tion Act em­pow­ered Eskom to dis­con­nect the cus­tomers for non-pay­ment af­ter hav­ing given the cus­tomer 14 days writ­ten no­tice.

Koko said mu­nic­i­pal­i­ties con­trib­uted al­most 42 per­cent of Eskom’s to­tal sales and al­most 41 per­cent of Eskom’s rev­enue an­nu­ally.

“Fail­ure to act ren­ders Eskom in breach of the Pub­lic Fi­nance Man­age­ment Act and its li­cence con­di­tions, as Eskom is obliged to col­lect all rev­enue due and en­force the con­di­tions of the elec­tric­ity sup­ply agree­ment with mu­nic­i­pal­i­ties,” said Koko.

Eskom spokesman Khulu Phasiwe said yes­ter­day that the power util­ity had given the mu­nic­i­pal­i­ties un­til Jan­uary 16 to make ar­range­ments.

“We had al­ready started dis­cus­sions with some of them in De­cem­ber. These are likely to re­sume next week,” said Phasiwe.

Speak­ing af­ter the court de­ci­sion, AfriFo­rum’s head of lo­cal gov­ern­ment Mar­cus Paw­son said yes­ter­day that the or­gan­i­sa­tion was dis­ap­pointed with the court out­come.

He blamed the mu­nic­i­pal­i­ties for mis­man­age­ment.

“It is sad that or­di­nary cit­i­zens, busi­nesses and hos­pi­tals will bear the brunt of mu­nic­i­pal­i­ties’ fail­ure to pay Eskom. Un­for­tu­nately, the court did not see it that way,” said Paw­son.

He stopped short of ac­cus­ing Eskom of dou­ble stan­dards. He said Eskom had not taken a sim­i­lar stance in re­la­tion to the Soweto elec­tric­ity debt.

Yes­ter­day’s court de­ci­sion is a pre­cur­sor to AfriFo­rum’s other le­gal chal­lenge of the con­sti­tu­tion­al­ity of Eskom’s ac­tions. That mat­ter is sched­uled to go to the High Court in March.

“Much of that has been dealt with in the past few days. Given what has been de­cided, we will have to go back and re­think our ap­proach. We need to look at what has been said,” said Paw­son.

He said the mu­nic­i­pal­ity debts re­quired a po­lit­i­cal so­lu­tion. “It is a po­lit­i­cal de­ci­sion that must be taken be­tween two or­gans of state. For in­stance, the eq­ui­table share al­lo­ca­tion from Na­tional Trea­sury could be paid di­rectly to the mu­nic­i­pal­i­ties. Prov­inces can also in­ter­vene and send an ad­min­is­tra­tor to (strug­gling) mu­nic­i­pal­i­ties,” said Paw­son.

Over­due mu­nic­i­pal debt to Eskom has in­creased ten­fold over the last five years.

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