ANC gets serious with freeloaders

The announcement by National Treasury that the R254 billion allocated for Eskom debt relief is to be leveraged to help municipalities out of the debts they owe to the power utility is a hopeful sign that the government is getting serious with our country’s electricity freeloaders.

Municipalities owing money to Eskom will be able to write off all their arrears over a period of three years. This is conditional on them cutting off the electricity and water supply to nonpayers.

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The ANC’s lack of action up to now on the freeloaders has resulted in the culture of nonpayment spreading across the country.

Moneyweb reports today that, by the end of December last year, the debt owed to Eskom by about 100 municipalities totalled R56.3 billion. Just 15 months prior, at the end of September 2021, the figure stood at R40.9 billion. That’s an increase of nearly 40% in little over a year.

That is not sustainable and is one of the major reasons – along with looting and incompetence – why our national load shedding levels are so high.

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Estimates are that, if all the defaulters are removed from the Eskom grid, there will be no need for the power cuts for all the paying customers. Municipalities will be required to install prepaid meters, prices for which will be set through a central tender system and will have to show a payment level of at least 80% to qualify for the write-offs.

Defaulting municipalities that fail to apply for the debt write-off will see National Treasury taking over their electricity business and National Energy Regulator (Nersa) revoking their distribution licence and awarding it to someone else. That’s revolutionary.

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But, it remains to be seen whether the ANC stands firm or backs down, as it often does, in the face of popular protest, which will undoubtedly follow the cut-offs.