City of Joburg faces rates boycott pressure over persistent power failures

After seven years of extended electricity outages, the Kya Sand Association, representing some 60 businesses north of Johannesburg, decided it had enough and threatened a rates boycott.

It was either that or taking the City of Joburg to court and forcing it to invest in upgrading infrastructure to ensure a steady power supply.

“We had about 100 days of power outages over the last year,” says Bruce Turner, chair of the association. “That’s not your regular load shedding. We had periods of four, five and six days without power because of cable theft, lack of maintenance and under-investment in infrastructure.

ALSO READ: ‘Operation Gatvol’: Residents withhold payments amid rates boycott

“That roughly 100 days without power was more than double the 45 days in 2022 and 26 days in 2021. It’s hard to run a business under circumstances like this,” says Turner.

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“There are some large businesses here, but it’s mostly small, three or four people businesses that cannot afford generators and solar power backup systems.

“There’s a bakery that was having to throw away its produce on days when there was no electricity, and at other businesses night shifts had to be cancelled because there was no power.”

Final straw

The final straw was another extended power outage in February, which prompted the association to bring in the lawyers.

ALSO READ: Rates boycott means anarchy is just around the corner

“We are instructed that in the event that power is not restored within the next 24 hours, our client’s members will be embarking on a rates boycott,” wrote VMW Inc to City Power and the National Energy Regulator of SA (Nersa).

“We have explained to our client the implications of this approach, however, our client’s members have reached the end of their patience in circumstances in which they are fighting for their livelihoods.”

The threat of a rates boycott seemed to stir City Power into action.

Within 24 hours, the roughly R22 million needed for cables and infrastructure to fix the area’s power supply had been found, despite previous claims there was no money for the project.

Whether the threat of the rates boycott made the needed R22 million materialise or not is unknown, but the fact is that the problem was solved.

ALSO READ: South Coast communities to initiate rates boycott due to poor service delivery

Kya Sand Association members leapt into action, providing security at R100 000 a month to make sure no one stole the newly arrived equipment, while others offered help in building trenches for the seven kilometres of cable needed to shore up the area’s power stability, and still more offered to cement the trenches.

Local businesses teamed up with City Power to ensure the job gets done. This may be the way of the future.

Fed up, or politically motivated?

Residents associations across Joburg are fed up with deteriorating service delivery but unsure whether to take that fateful leap into the legally murky waters of a rates boycott.

It’s clear that the City of Joburg is rattled by these threats of boycotts, which ramped up in recent weeks as many areas went almost a week without water.

Johannesburg Mayor Kabelo Gwamanda told a media briefing last week that a rates boycott would lead to a complete collapse of the municipality, adding that these were politically motivated attempts to undermine black leadership.

He called for constructive engagement rather than attempting to undermine municipal administration.

Then he pointed to the Westville Ratepayers Association, which last year lost a rates boycott case in the Durban High Court against the eThekwini Municipality in KwaZulu-Natal.

The association attempted to interdict eThekwini from disconnecting services to people participating in a rates boycott over poor municipal management.

The residents presented ample evidence of municipal ineptitude, including claims that 615 million litres of water were lost daily, yet ratepayers were expected to take a 15% increase in water charges on the chin.

Class action lawyer Richard Spoor commented on X (formerly Twitter): “Once a municipality stops providing water it loses all authority and influence over residents. Of course they will stop paying rates and taxes. What is the municipality going to do? Cut off their water?”

Once a municipality stops providing water it loses all authority and influence over residents. Of course they will stop paying rates and taxes. What is the municipality going to do? Cut off their water? https://t.co/PxVZZxx8zf

— Richard Spoor (@Richard_Spoor) March 9, 2024

Rates boycott threats ramp up

Community researcher and activist Tim Tyrrell says municipalities inevitably lean on legislative prescripts whenever confronted with boycotts, no matter how dysfunctional their service delivery is.

“The boycott movement is clearly gathering momentum.

“Municipalities typically fall back on legislation which says you are obliged to pay, even if services are poor,” says Tyrrell.

“Most people feel intimidated by that threat and continue paying. Others are saying they have had enough and refuse to pay.

“I suspect it’s getting to the point where legislation will have to change. The situation cannot continue.”

Strategic approach to boycotts

Residents have adopted different strategies in different parts of the country.

The Umdoni Action Group (UAG) in KwaZulu-Natal has engaged in a multi-year rates boycott over poor delivery of services, having apparently failed to engage the Umdoni Municipality in any meaningful way.

Disgruntled residents generally divert rates into a suspense account under their control until such time as the municipality accedes to their demands.

The UAG provides some legal foundation for its approach, saying that Section 102 (2) of the Municipal Systems Act suspends municipal credit control and debt collection processes when a dispute is declared and until it is resolved.

“To date there has been no attempt by UM [Umdoni Municipality] of a resolution,” says the UAG.

It adds that personal credit ratings are only impaired once there is a court judgment and that a judgment “can only be obtained against you if you ignore a summons issued by UM’s debt collection attorneys, AND the matter proceeds to court, AND your case is lost.

“Our experience since May 2020 is that UM does not proceed beyond issuing summons.”

Court victories

In 2020, residents of Kgetlengrivier in the North West were granted an order forcing the local municipality to hand over control of the area’s broken water and sewage systems to the residents association.

That order was later reversed and is currently before the Supreme Court of Appeal, where residents argue that the local municipality has again allowed infrastructure and services to atrophy – leaving residents exactly where they started in 2020.

In 2022, residents of Govan Mbeki Local Municipality in Mpumalanga were granted an order in the Mpumalanga High Court that forced the municipality to report regularly to the court on progress made in settling its R1.18 billion Eskom arrears bill that resulted in power outages of 10 to 14 hours a day. Another victory for residents.

ALSO READ: ‘Service delivery is a joke’: Gatvol businesses to boycott paying rates in Emfuleni

The Makhanda High Court in the Eastern Cape ordered the dissolution of the local municipal council in 2020 after residents complained of an almost complete breakdown of services.

That does not seem to have had a happy ending, as just this week a group called the Makana Citizens Front (the town of Makhanda is located in Makana municipality) said it wants a forensic investigation into more than R600 million “that has not been accounted for and other shoddy contracts and incompetence related to water and sanitation in Makana”.

“We have given up on asking nicely. We will deliver a huge signature campaign to show that we mean business and will follow up with strong action to secure our constitutional right to clean, safe water,” says Makana Citizens Front leader Lungile Mxube.

Private sector fills the municipal void

Where municipalities have failed, the private sector fills the void. Across the country, private sector operators are doing unauthorised road repairs, refuse collection, water supply and electrical infrastructure repair.

It’s been this way for years in the town of Bethal, another abused child of the Govan Mbeki Municipality in Mpumalanga, where residents rely on their own wits to survive in a town where local governance has become virtually irrelevant.

“People are now having to pay private contractors for services such as refuse collection and fixing broken electricity infrastructure,” says Tyrrell.

“I suspect the courts will have to take a more lenient view of boycotters in the future because municipalities cannot be protected forever from their constitutional failures to provide services and still demand payment from residents.”

This article was republished from Moneyweb. Read the original here