State-owned Eskom has started interruptions in power supply to some defaulting municipalities owing to nonpayment of municipal accounts.

The North Gauteng High Court earlier this month dismissed civil rights organisation AfriForum’s legal bid to prevent Eskom from interrupting power supply to defaulting municipalities.

Eskom intended to start interruptions in power supply to nine municipalities on Monday and one municipality on Tuesday; however, eight of those had reached payment arrangements with the utility by Monday morning.

However, by Monday afternoon, two of the municipalities that had made payment arrangements with Eskom had failed to honour those agreements.

Eskom interim CEO Matshela Koko said the decision to cut power supply to defaulting municipalities is difficult for the parastatal.

“Eskom is in a uniquely invidious position, locked between a deteriorating financial position and running afoul of the Public Finance Management Act. Relevant laws and standards compel us to collect overdue debt and failure to comply has dire consequences for the organisation.”

In a statement, he explained that, to prevent disconnections, Eskom had embarked on an extended Promotion of Administrative Justice Act process, engaged all relevant and affected stakeholders, entered into multiple payment plans and offered the suppression of future interest as an incentive.
  
“Municipalities contribute almost 42% of Eskom’s total sales and almost 41% of Eskom’s yearly revenue. Nonpayment of accounts has a significant impact on Eskom’s cash flow. If Eskom cannot collect its debt, it essentially spells the death knell of Eskom, which will have a devastating impact on the country’s economy,” Koko said.

The utility plans to start interruptions in the supply of power to various municipalities in the Northern Cape and North West on January 18 and six municipalities in Mpumalanga on January 23.

Although Eskom has the right to cut power supply to defaulting municipalities entirely, it has decided to implement power cuts to these municipalities for a few hours a day.
 
Power interruptions to defaulting municipalities will take place from 06:00 to 08:00 and 17:00 to 19:30 on weekdays, and between 08:30 and 11:00 and 15:00 and 17:30 on weekends.