Eskom explains why Emfuleni left them no choice but to attach municipality’s assets

Residents of Emfuleni in the south of Johannesburg could soon bear the brunt of a payment impasse between the embattled local municipality and the power utility Eskom.

This week Eskom announced that it has obtained a judgment of R1.3 billion against the struggling municipality for its continued failure to settle its current account and accumulated arrears.

Following this announcement, the municipality accused Eskom of negotiating in bad faith.

Negotiations

However, in a written reply to questions posed by The Citizen, Eskom spokesperson in Gauteng Amanda Qithi said negotiations with Emfuleni have taken place for years, which led to Eskom deciding in 2018 to interrupt electricity supply to the municipality.

“At that stage (2018) the municipality was in arrears of about R9 million.

“The decision came after the municipality had already consented to a judgment in March 2018, admitting liability towards Eskom in the amount of R614 million,” said Qithi.

She said despite the judgment and an agreement to pay Eskom, the municipality failed to honour their undertaking and obligation in terms of their licence conditions, and continued with their non-payment of the electricity account.

“To date we are still dealing with the municipality’s non-payment of its Eskom account and we continue to engage with Emfuleni management and we have also escalated the matter to the executive mayor with the hope that the municipality will pay what is due to Eskom,” Qithi said.

Meanwhile, the municipality admitted that Eskom’s plan to attach its moveable assets, worth R1.3 billion, will adversely affect service delivery.

The power utility has also served Emfuleni with a summons of R3.4 billion for non-payment of its bulk electricity supply.

Service delivery in Emfuleni already barely existent

This is not the first time Emfuleni has been in the news for all the wrong reasons.

The municipality has for the longest time been rocked by corruption allegations.

ALSO READ: Emfuleni municipality rocked by fresh corruption allegations

Speaking on behalf of the municipality, Makhosonke Sangweni said the delivery of services, ranging from refuse collection and response times in attending to electricity and water issues, will be affected in the event that the municipality’s assets are attached.

“We are calling on the minister of energy to haul the Eskom executives to engage on the resolution of this matter as Eskom decided to rush to court in 2019 instead of following the process set out for the resolution of disputes among government entities.

“We appealed at the Supreme Court of Appeal (SCA) last week and now Eskom has resorted to taking the fight to the media and we strongly condemn these actions by the power utility,” Sangweni said.

Unemployment contributes to municipality’s woes

The municipality’s challenge, according to Sangweni, is to keep up with the payments which is mostly caused by the uncompromising historical debt.

“It must be noted that our region has a huge unemployment crisis which is currently more than 50% as per Statistics South Africa’s latest data and this in turn makes it difficult for the municipality to collect revenue as it should. 

“Large Power Users (LPUs) pay directly to Eskom as part of a court settlement but the challenge here is that their direct payment to Eskom is inconsistent, which then leads to the growth of the municipality debt and as a result, this has also had a huge impact on our revenue collection,” Sangweni said.

Attempts to press Sangweni for further comment on what happens in the event that that they lose the appeal drew a blank.

Council in a complete mess

Eskom is not Emfuleni’s only headache as they also owe Rand Water.

In 2018, Rand Water threatened to reduce the municipality’s water supply to 20%.

ALSO READ: Rand Water threatens to cut Emfuleni supply to 20%

According to Sangweni, Emfuleni owes Rand Water around R700 000 which is 50% of what they owed them in recent months, stressing that they still continue to regularly contribute amounts based on their payment plan.

The municipality is led by the African National Congress (ANC), albeit through a coalition agreement as there was no outright majority winner from last year’s local government elections.

ALSO READ: Local government will never be the same again

Shadow MMC for Public Works in Emfuleni Daddy Mollo says the situation has worsened.

He says the repairing of potholes is still not happening while raw sewage is still running on the streets of the municipality.

“Over 60% of bulk purchase of water from Rand Water continue to be lost in the pipelines due to ailing water infrastructure and reported leaks that are not attended to by the municipality’s water service Metsi-a-Lekoa.

“The municipality has failed to reach an agreement with Eskom due to poor political leadership and attempts to engage Eskom by the municipality continue to collapse due to the arrogance of the municipality,” said Mollo.

He added that due to incorrect billing and the municipality’s incompetence, large power users have opted to pay Eskom directly rather than the municipality, something which is taking a toll on revenue collection in the municipality.

Ward councilor for the Freedom Front Plus in Emfuleni Gerda Senekal says there has not been any improvements in service delivery since last year’s elections which resulted in a coalition government.

However, Senekal is of the view that Eskom’s latest move is unfair and will have a negative effect on locals.

“Eskom, National Treasury and Corporate Governance and Traditional Affairs (Cogta) should have intervened a long time ago the minute they realised the municipality was unable to pay Eskom in full,” Senekal said.

Gauteng Premier Panyaza Lesufi also visited various service delivery sites in the Sedibeng District Municipality on Thursday.

Sedibeng consists of three local municipalities – Midvaal, Lesedi and Emfuleni.

During his visit to the district this year, President Cyril Ramaphosa condemned the worrying state of Emfuleni in particular.

However, his visit at the time was seen as just electioneering.

NOW READ: Ramaphosa’s Sedibeng visit: Has electioneering season started?