Pow­ers cuts for de­fault­ing towns

The Star Early Edition - - NEWS - MASEGO PANYANE

POWER out­ages in mu­nic­i­pal­i­ties that still owe vast sums to power util­ity Eskom were set to be­gin to­day.

The 22 mu­nic­i­pal­i­ties in the North­ern Cape, East­ern Cape, Free State, North West and Mpumalanga will have in­ter­rup­tions in their power sup­ply un­til the mu­nic­i­pal­i­ties make plans to pay back the money owed.

The power util­ity said yes­ter­day it had not reached the de­ci­sion to do these sched­uled power cuts lightly.

“Eskom is in a uniquely in­vid­i­ous po­si­tion, locked be­tween a de­te­ri­o­rat­ing fi­nan­cial po­si­tion and run­ning foul of the PFMA (Pub­lic Fi­nance Management Act). Rel­e­vant laws and stan­dards com­pel us to col­lect over­due debt and fail­ure to com­ply has dire con­se­quence for the en­tity,” said Eskom in­terim chief ex­ec­u­tive Mat­shela Koko.

The util­ity said that as an in­cen­tive for mu­nic­i­pal­i­ties to set­tle their debts, it had of­fered the sup­pres­sion of fu­ture in­ter­est to them.

The power in­ter­rup­tions will take place be­tween 6am to 8am and 5pm to 7.30pm on week­days and be­tween 8.30am to 11am and 3pm to 5.30pm dur­ing week­ends.

Eskom has, how­ever, said the power in­ter­rup­tions would be sus­pended if mu­nic­i­pal­i­ties met three re­quire­ments: ne­go­ti­ate a cash pay­ment; pro­vide a writ­ten prom­ise in the form of a coun­cil res­o­lu­tion that ac­counts will be hon­oured; and sub­mit a pay­ment plan for the ar­rears sup­ported by a coun­cil res­o­lu­tion.

AfriFo­rum, which had ap­plied to have the power in­ter­rup­tions sus­pended but lost this chal­lenge in the high court in Pre­to­ria ear­lier this month, said they would be ap­ply­ing to the Na­tional En­ergy Reg­u­la­tor of South Africa to have the li­cences of these mu­nic­i­pal­i­ties re­voked in or­der for in­di­vid­u­als in these mu­nic­i­pal­i­ties to buy their power di­rectly from Eskom.

The group’s Mar­cus Paw­son said the power in­ter­rup­tions would un­der­mine the growth of small- and medium-size busi­nesses.

“Power in­ter­rup­tions will hin­der eco­nomic growth. This has the po­ten­tial to eco­nom­i­cally de­stroy South Africa’s ru­ral towns and elim­i­nate the pros­per­ity of peo­ple in these ar­eas,” he said.

Koko noted: “Mu­nic­i­pal­i­ties con­trib­ute al­most 42 per­cent of Eskom’s to­tal sales and 41 per­cent of Eskom’s rev­enue an­nu­ally. Non-pay­ment of ac­counts has a sig­nif­i­cant im­pact on Eskom’s cash flow. If Eskom can­not col­lect its debt, it es­sen­tially spells the death knell of Eskom.”

PIC­TURE: REUTERS

Eskom’s coal-burn­ing power sta­tion at Sa­sol­burg in the Free State. The power util­ity is owed bil­lions of rand by mu­nic­i­pal­i­ties.

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