Municipalities given until month end to clear electricity arrears

2017-01-19 23:12
(Gianluigi Guercia, AFP)

(Gianluigi Guercia, AFP)

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WATCH: Eskom threatens to cut power to defaulting municipalities

2017-01-16 17:10

Eskom announced its intention to start of power cuts to municipalities who are in arrears.WATCH

Cape Town - Eskom has been asked to give municipalities with outstanding bills until the end of the month to settle their accounts before switching off the lights, Minister of Public Enterprises Lynne Brown said on Thursday.

"Turning off the power supply does not only impact on individual ratepayers and municipalities, it has potentially disastrous effects on businesses, and therefore jobs," she said.

"One cannot help feeling sympathetic to those who pay their electricity bills in good faith, only for the payments to be consumed by municipalities with precious little income and resources. This is a matter of national importance that I would urgently hope to discuss with the minister of finance."

She urged municipalities who are in debt to clear their accounts as soon as possible.

"In the meantime, the amount of R10.2bn, which grows exponentially, has a potential to undermine the sterling effort undertaken to restore Eskom back to its sound financial footing. The security of future revenue is paramount to Eskom's sustainability. It is critical for all municipalities to institute pre-paid billing to help build a payment culture," Brown said.

"A healthy Eskom does not only meet its social mandate through electrification and other transformational targets, but it also contributes to the positive sovereign rating of South Africa."

Right to disrupt supply

Eskom said in a statement it had noted "encouraging co-operation" and hoped to be able to resolve the matter by the end of the allocated time.

The country could not afford an Eskom whose ability to borrow from financial markets is constrained by the prohibitive interest rates arising from the negative financial position which will result if the matter is not resolved, Brown said.

The judgment handed down on January 5 after AfriForum applied for an urgent interdict in the High Court in Pretoria to prevent Eskom from cutting electricity to five municipalities "emphatically reinforced the principle that Eskom has a statutory and regulatory right to disrupt supply in the event of non-payment by a customer".

"It is heart-warming to observe that even with the relevant laws and mutual agreements which allow Eskom to totally withhold electricity supply, the entity's leadership was considerate enough to adopt a softer approach of scheduled interruptions during pre-announced hours.

"In order to strengthen this approach and secure its rights going forward, Eskom seeks to make any new payment arrangements orders of court."

Read more on:    eskom  |  lynne brown  |  electricity

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