POWER TO THE PEOPLE?

Mushrooming municipal debt, and who is responsible for sorting it out, will come under the spotlight as a business forum takes Eskom to court

Reading the papers for an upcoming case made me fear that rampant municipal debt could be one of the most urgent, yet most neglected, problems for government.

It is a test case, brought by the Harrismith Business Forum against Eskom and various arms of government, about who should intervene to sort out the debt owed to Eskom by municipalities, and how government should fix intergovernmental failures to protect the rights of citizens to basic amenities.

By end-february, the combined arrears of the Free State, Mpumalanga and North West stood at R11.5bn, while the 20 most-indebted municipalities owed Eskom more than R16bn.

SA’S worst-paying municipality, Maluti-a-phofung (Harrismith), owes almost R3bn. Now Eskom has set the date for serious action against it: first a power outage for six and a half hours on weekdays and longer over the weekend; then, in week two, no power for 14 hours daily.

What will this achieve? Eskom says it aims to put a brake on rapidly increasing debt. But it appears at least partly punitive, even intimidatory. Since a switchoff on its own cannot reduce the arrears, Eskom must surely be hoping infuriated residents will “persuade” the municipality to pay — though in the case of bankrupt Maluti, that seems impossible.

The business forum outlines the dire consequences of a switch-off on domestic life, manufacturing and hospitals, causing extensive unemployment as well as health problems following the inevitable collapse of sewerage systems because of the water outage resulting from a power switch-off.

Previous legal efforts, in various parts of SA, tried to delay municipal debt-related switch-offs. But this one is different as the business community expands the parties involved and wants the court to order the various arms of government to intervene. The forum also wants a date by which the various authorities must report back to the judge on progress made.

The forum says Eskom has done nothing about finding a way out of the impasse except to refine and threaten this one weapon — the switch-off. It asks why the regulator has not acted, nor the provincial government, nor national government. Eskom says it is too late and blames the forum for not having come up with these ideas long ago.

The forum also wants an order declaring as unconstitutional and invalid the failure of the various municipal, provincial and national organs of state to act and ensure the electricity supply to the municipality was not interrupted.

The dysfunctional Maluti municipality has been placed under administration, but there seems to be no recovery plan. Bills for electricity have not been sent out to users, and the insolvent municipality has ignored court orders directing it to pay Eskom.

No action

All of this arose during the time

Ace Magashule, now the ANC’S secretary-general, led the province, and the forum asks why he took no action on the enormous municipal debt to Eskom.

The forum also asks why the National Energy Regulator of SA did not intervene. It could have revoked the municipality’s distribution licence and given it to Eskom, so Eskom could directly control power supply and payments. It could even have appointed a third-party administrator. But none of this was even considered.

Without the help of the court there seems no hope of a political solution, says the forum, so the premier must be directed to comply with the law on local government municipal finance dealing with “mandatory provincial interventions arising from financial crises”. Similarly, national government, via the minister of finance, must comply with the law and intervene in the province’s failure to act.

The forum says Eskom has done nothing . . . except to refine and threaten this one weapon — the switch-off