Civil rights organisation AfriForum has warned of the repercussions of the North Gauteng High Court’s ruling, last week, that certain defaulting municipalities’ electricity supply may be cut by power utility Eskom, saying this will impoverish these rural towns.

The North Gauteng High Court last week dismissed AfriForum's application to prevent Eskom from cutting power to more than seven municipalities that owe the utility about R10.2-billion.

AfriForum and AfriBusiness had sought to interdict Eskom's planned reduction in electricity supply to the defaulting municipalities in the Free State, North West, Mpumalanga and Northern Cape.

AfriForum will apply to the National Energy Regulator of South Africa to revoke the electricity supply licences of municipalities that do not comply with licence requirements.
 
AfriBusiness spokesperson Stefan Pieterse on Tuesday said the court ruling was bad news for small towns’ economies because the selling of electricity was one of the main resources of municipal income.

Electricity is also necessary for towns’ production sectors.
 
“Municipalities will generate less income because businesses will privatise their power supply or move to metropolises. At the end of the day, the man on the street, not the businesses, are thrown to the wolves,” he said.
 
AfriForum local government and environmental affairs head Marcus Pawson noted that each municipality must have a complete Integrated Development Plan (IDP).

“This includes a financial and economic development plan. These documents, if implemented correctly, can play a cardinal role to strategically prevent the cutting off of electricity [and] avoid the economic impact of such a situation,” he said.
 
Pawson further stated that smaller municipalities do not, however, necessarily have experts at their disposal who can compile an IDP.

He added that, without this economic and financial development planning, or where obsolete IDPs were being implemented, municipalities in arrears would not be able to pay Eskom.

Pawson stated that power interruptions would undermine the viability of small and medium-sized businesses and would hinder economic growth.
 
“AfriForum has seen the poor and ill-considered IDPs of many municipalities and we can rightly be concerned about the repercussions of Eskom’s electricity cuts on businesses, medical services and other important sectors,” he noted, adding that Eskom can in no way boast about the court order that ruled in its favour.