South Africa 17.5.2018 08:23 am

Economic crisis looming in local municipalities over powercuts – Afribusiness

Steam rises at sunrise from the Lethabo Power Station, a coal-fired power station owned by state power utility Eskom near Sasolburg, South Africa, March 2, 2016. Picture: Reuters

Steam rises at sunrise from the Lethabo Power Station, a coal-fired power station owned by state power utility Eskom near Sasolburg, South Africa, March 2, 2016. Picture: Reuters

Afribusiness says administrative flaws mean that customers are forced to pay Eskom via delinquent local authorities that fail to transfer the money to Eskom.

An economic crisis is looming in local municipalities countrywide who face power cuts by state-owned electricity company Eskom even though they do not owe it money, lobby group Afribusiness said on Thursday.

Eskom board chairman Jabu Mabuza told members of parliament on Wednesday that the cash-strapped utility was now owed R13.8 billion by municipalities in unpaid tariffs, up from  R9.5 billion last year.

But Afribusiness said Eskom was unjustifiably threatening to withhold electricity from businesses and other end users on prepaid and with fully paid-up accounts.

“AfriBusiness invites its members and the public to submit evidence of Eskom’s intention to cut power, including notices and short descriptions of the situation, on our website,” it said.

Towns and municipalities potentially affected included Koster and Swartruggens in the Kgetlengrivier municipality, Naboomspruit/Mookgophong in Modimolle, Barkly West in Dikgatlong Local Municipality, Vryburg in Dr Ruth Segomotsi Mompati and Secunda in Govan Mbeki.

Afribusiness CEO Piet le Roux said administrative flaws meant that customers were forced to pay Eskom via delinquent local authorities that essentially act as the utility’s agents to collect revenue yet failed to transfer the money to Eskom.

“Now Eskom wants to cut electricity not only to consumers who are up to date with their accounts but even to those who have purchased prepaid electricity,” he said.

This would plunge such municipalities into a downward economic spiral and cause a humanitarian crisis when hospitals, schools, sewerage works, traffic lights and other public benefit infrastructure lost power, Le Roux warned.

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