Committee calls for permanent solution to municipal electricity debt problem

18th January 2017

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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The Select Committee on Cooperative Governance and Traditional Affairs on Wednesday said it was concerned about Eskom’s plans to cut electricity to certain municipalities that were defaulting on payments and that it would hold a meeting with all the affected parties to find a lasting solution to this challenge.

“Preparations are under way to ensure the committee convenes an urgent meeting during the first week of February with all affected and relevant stakeholders to solicit their views towards a long-term solution to this disturbing situation,” said committee chairperson Jihad Mohapi.

The meeting will be attended by representatives of the Department of Cooperative Governance and Traditional Affairs, Eskom, the defaulting municipalities, MECs from the affected provinces and the South African Local Government Association (Salga), as well as the Portfolio Committee on Cooperative Governance and Traditional Affairs, the Portfolio Committee on Public Enterprises and the Select Committee on Finance.

“It is encouraging to see that [some of] the affected municipalities have now entered into a memorandum of agreement and have payment plans with Eskom on honouring their outstanding and cumulative debts.

“We will, however, still press ahead with our envisaged session where we will discuss, share and debate ideas that will help us arrive at a collective solution to the problem of municipalities that are unable to honour their Eskom debts,” added Mohapi. 

While he acknowledged that the power utility was duty-bound to tackle the problem, Mohapi added that it was equally important to recognise that the municipal power cuts would have an inherently prohibitive and detrimental effect on the country’s economy.

“[This] poses a stifling effect on the economic growth and development of these municipalities, rendering them unable to attract local industry growth, development and investment,” said Mohapi.

Further, Mohapi called for closer monitoring of each municipality’s electricity revenue management plan, as part of measures to ensure revenue generated from electricity sales is used to finance operational activities of the electricity department in a municipality.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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