The Organisation Undoing Tax Abuse (Outa) has welcomed State-owned entity Eskom’s decision to extend, by 30 days, the public participation process relating to its proposed reduction, interruption and/or termination of electricity supply to certain City of Johannesburg (CoJ) and City Power bulk supply points.

The consultation process is being conducted in terms of the Promotion of Administrative Justice Act (PAJA), which requires public bodies to follow a fair process before making decisions that may materially affect people or businesses.

In this case, Eskom is required to consider public representations before deciding whether to proceed with electricity supply interruptions to the CoJ, Outa explains.

The extension follows concerns raised by stakeholders that public statements about an agreement between Eskom and the CoJ may have given the impression that the threat of electricity interruptions has lifted, the organisation points out.

However, Outa warns residents and businesses that “Johannesburg’s electricity crisis has been delayed rather than resolved”.

“Johannesburg residents and businesses have effectively been given a second opportunity to influence a decision that could have significant consequences for the city’s economy, public safety and daily life.

“However, nobody should mistake this extension for a resolution of the problem. Eskom has made it clear that the process remains active, the debt remains substantial and the possibility of electricity interruptions has not been removed,” Outa states.

According to Eskom, the CoJ and City Power owed about R5.28-billion as of June 11.

While payments equating to about R1.2-billion have been made since Eskom issued its PAJA notice in late May, the utility says the current account due on June 5 was not paid, leaving an overdue balance of about R2.7-billion.

“The extension itself confirms that the matter remains unresolved. Had the underlying dispute been settled, there would have been little reason for Eskom to continue with a public participation process to assess the impact of electricity interruptions. Residents and businesses should therefore not assume that the risk has passed,” Outa posits.

Outa acknowledges that Eskom cannot be expected to continue supplying electricity indefinitely without payment.

It also questions how debt of this level managed to accumulate while City Power continued to collect electricity revenue from residents and businesses.

Outa says evidence points to this being a failure of revenue management rather than revenue collection, stressing this distinction as critical, as it reinforces that the consequences of the failure should be directed at those responsible for managing the revenue stream, instead of the consumers who continue to pay.

Outa calls for queries into why regulatory and oversight mechanisms failed to intervene long before the debt reached crisis levels.

It maintains that any long-term solution must prioritise protection of paying consumers and businesses, transparency and public accountability, financial discipline and sustainable payment arrangements, improved revenue collection and reduced electricity losses, independent oversight and reporting and consequence management for governance failures.

Outa says it will continue engaging with Eskom, government and affected stakeholders.