In light of all the recent battles to keep the lights on, residents want Eskom to provide them with electricity.
Unfortunately this will not happen in the near future.
The utility giant said its supply license as granted by the National Electricity Regulator of South Africa precludes it from supplying customers and to areas for which a local municipality is licensed to supply.
In the latest developments, Eskom and Emalahleni Local Municipality reached an agreement to suspend power interruptions and allow the municipality to develop a long-term sustainable plan to settle its debt.
Part of the agreement is that the municipality should pay R22-million on its current account by the end of March.
The two parties met in Nelspruit on Wednesday, March 1.
Eskom General Manager, Phil Khumalo, said they agreed that power disruptions will be suspended following an in principle agreement addressing the requirements set out by Eskom to Emalahleni.
Talks facilitated by the Minister of Cooperative Governance and Traditional Affairs (COGTA), Des Van Rooyen, COGTA MEC Refilwe Mtsweni and Mpumalanga Premier, David Mabuza later also took place.
Mabuza has dismissed the ‘quick-fix’ agreements entered into by the municipalities and the electricity public utility company, but demanded sustainable long-term solutions in paying the overdue Eskom debt.
Mabuza rejected the agreements on the payment arrangements to Eskom, saying it was not sustainable.
The payment arrangement is subject to Eskom board’s approval of the issues the municipality has raised, such as proposing the rationalization of municipal tariffs to reduce tariff options, decreasing of the interest rates charged on overdue balances from prime plus five percent to prime plus two and a half percent.
Mpumalanga Premier David Mabuza listens as Cooperative Governance and Traditional Affairs Minister Des Van Rooyen is making the point at a meeting on Wednesday, March 1 to address the status of municipal debt owed to Eskom.
Further, Eskom is requested to change its payment period on municipal bulk accounts from 15 days to 30 days, and that Eskom will change its payment allocation policy to allocate payments to capital first then interests. Eskom is also expected to allow municipalities to pay connection charges over a 20-year period at relevant interest rate of cash up front.
“I am aware that there have been engagements and agreements between our owing municipalities and Eskom. I am not going to agree on these agreements, and I am not going to stand surety to step in when they renege on the commitments, there have been so many of these agreements and I don’t know how many times these municipalities have defaulted. I don’t have trust in them with regards to settling the Eskom debt. Just before they went to the councils after the elections, I spoke to them about this, and four months down the line we are here. I don’t know why I should keep certain people in their jobs because someone didn’t do his or her job. This quick-fix thing won’t help; our municipalities do not have the capacity to sell electricity and to collect revenue,” said Mabuza.
He said the municipalities should settle the debt and consider handing back to Eskom the function of selling electricity.
Some of the payment plans by the two municipalities include utilizing the equitable share, as well as selling some of their properties in an effort to raise more money to pay the Eskom debt. He said the equitable share was not meant to settle the Eskom bill only, but to deal with other services rendered by the municipalities.
“I want a sustainable solution, let us introduce a culture of paying for the services, we need to improve our billing systems as well as our revenue collection capacity. We cannot afford to sell the land, which we would probably have to buy back at an expensive amount at a later stage when we need to settle our people,” said Mabuza.
The selling of land forms part of the proposal to Eskom where the municipality will redirect the money, they get for selling the land, to the power house.
In eMalahleni
The piece of land in question is situated at Corridor Hill and was sold for R250-million.
Mr Kingdom Mabuza, municipal spokesperson said the land forms part of non productive assets.
“We followed the supply chain processes and placed an advertisement calling on potential bidders to make an offer. The tender was closed on February 1.”
The Executive Mayor, Clr Lindiwe Ntshalintshali, convened a special council meeting on Friday, March 3, where the Eskom account payment arrangement plan was tabled and the selling of the land was discussed.
Cllr Ntshalinsthali said the buyers intend to build a hotel on the land.
The Democratic Alliance and the Economic Freedom Fighters (EFF) voted against this proposal because it does not offer a long-term solution to the municipality’s Eskom debt.
“It contravenes the municipality’s own Disposal and Acquisition of Immovable Property Policy which in section 3.3.1.3 states that property must be alienated at a market-related value but this land’s latest market-related value is unknown as it was last valued at R188 million in 2013,” said DA Caucus Leader Cllr Narita Naidoo.
Cllr Sam Zandamela from the EFF asked why the land could not be leased instead of sold.
“We are against the selling of land to individuals. Our policies are clear about that. We understand it is prime land and can not be used for low cost housing. However leasing it would provide a long term solution as the municipality would be getting money for it every month instead of a once off lump sum,” Zandamela said.
“The EFF’s suggestion of leasing will not assist in the development or will not realise upfront cash,” said the municipal spokesperson.
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