Pretoria – Power utility Eskom has postponed cutting power to eight municipalities with outstanding debt until January 10, the North Gauteng High Court heard on Wednesday.
This was disclosed as Judge Hans Fabricius heard the urgent application submitted by civil rights group AfriForum.
AfriForum wants to block Eskom from cutting power to eight municipalities, which was scheduled for Thursday. Fabricius said the postponement was sufficient for “affected persons” to make some arrangements.
The affected municipalities are Thembelihle (Northern Cape), Moqhaka (Free State), Mailonyana (Free State), Nkentoana (Free State), Mantsopa (Free State), Tokologo (Free State), Nala (Free State) and Dihlabeng (Free State).
AfriForum pleaded with the court to make a decision in the interests of residents. It also argued that Eskom should hold off on cutting power supply as there is still an outstanding matter to be settled. The organisation is challenging Eskom’s authority to cut power supply to municipalities, and this matter is scheduled to be heard in March.
In the affidavit submitted by Eskom, the parastatal noted municipal debt increased from R6bn in March 2016 to R10.2bn eight months later. This is a growth of 70%. The top 10 defaulting municipalities owe R6bn, and the top 20 owe R7bn. Eskom argued that its decision to cut electricity supply was a means of debt collection.
Eskom’s acting CEO Matshela Koko told Fin24 that Eskom’s capital expenditure for municipalities was at R70m and the outstanding debt by municipalities at R12bn. This was one of the reasons rating agency Standard and Poor’s downgraded the power utility over uncertainties.
Marcus Pawson, head of local government at AfriForum, told Fin24 that the electricity cut does not solve anything. “Eskom does not get the money back.”
AfriForum’s legal team argued that, given that municipalities do not have the capacity to administer their affairs, Eskom has the obligation to turn to National Treasury. This will be part of a wider measure taken by organs of state to deal with efficiencies for municipalities to comply with their obligations.
Eskom also argued that its obligation to supply electricity was “misconstrued”. The obligation lies with municipalities.
Fabricius said there is no issue between Eskom and the ratepayer, and that the issue lies with the municipality. There is no “constitutional obligation” that the consumer is entitled to electricity from Eskom, said Fabricius.
“[You are] entitled to electricity from the municipality, if you pay your rates. Nowhere does it say you are entitled to electricity from Eskom.” He also added that this argument is part of the matter to be settled in March.
Fabricius asked why Eskom could not hold off two months until the pending matter was settled in March. Eskom argued that the issue has been coming along for years. Fabricius acknowledged this, previously stating that Eskom’s notice to cut power supply did not simply “come out of the blue”.
Eskom has been trying to settle “billions” of debt from municipalities since 2011. “A few billion is involved," he said. "Not a million, a billion.”
The court will announce its decision on Thursday at 10:00.
AUDIO: Eskom acting CEO Matshela Koko on the interdict submitted by AfriForum