The following speech was delivered in Parliament today by Kevin Mileham MP – DA Shadow Minister of Co-operative Governance & Traditional Affairs.
Chairperson,
Even when there isn’t loadshedding, many of our citizens face dark, cold nights without hot water or cooked food. It’s not because they haven’t paid their bill, or because there are power outages. It’s because their local municipality has racked up debt to ESKOM that they are unable to service.
The worst offender is Maluti-a-Phofung, which owes in excess of R2.8 billion to ESKOM. The municipality is unlikely to ever be able to settle this bill, as the interest far exceeds the revenue they generate each month. Others, like Emahlahleni, Matjhabeng and Thaba Chweu, are also in dire straits and owe hundreds of millions of rands.
At the end of March 2014, total municipal debt to Eskom was R2.6 billion. By the end of March 2017, this debt had increased to R13.6 billion and by September 2018, it had reached a staggering R17 billion. Soweto debt, which is separate from municipal debt as it is a direct ESKOM supply area, also rose to R17-billion during the same period. This combined debt is now increasing at a billion rand a month!
This is not something that has crept up on us. The Democratic Alliance has been warning of this financial crisis since 2014. At that time, Minister Gordhan assured us that an Inter-Ministerial Task Team, would deal with it. This is the same Task Team that the President and Finance Minister announced over the past few days as if it were something new. Well, here we are, 5 years later, and the situation is far, far worse! It is now a crisis! And solutions from the Inter-Ministerial Task Team seem to be missing in action.
Minister Jeff Radebe’s announcement at the Africa Energy Indaba that municipalities need to become more self-sufficient with regard to the production of electricity is to be welcomed. In fact, it is a key platform of our Independent System Market Operator private members bill, which Hon. Mazzone tabled earlier this year. The key issue, however, which Minister Radebe has failed to address is the ability of municipalities to manage this process. But many SA municipalities don’t even have the capacity to install, maintain and accurately read their customer’s electricity meters, let alone ensure the accurate billing thereof. In our proposal, municipalities MUST have the financial and technical capacity before they are permitted to generate or manage their own electricity supply.
A huge part of ESKOM’s troubles arise from the money that they are owed. So how can we fix it?
The first thing that needs to happen is that an assessment needs to be done of which municipalities are in a position to (a) pay ESKOM what they owe and (b) manage, finance and control their own electricity supply. Then we need to clean up municipal financial management, and more specifically, municipal billing. We can do this by deploying the right experts – auditors, accountants and managers with integrity – to help municipalities get their systems sorted out, and accurate bills sent to customers. We need to ensure that they collect all the revenue they are entitled to, and that their budgets are fully funded and cost-effective. Thirdly, we need to ensure that municipalities have control of ALL the electricity supply in the areas they control. So the City of Johannesburg, for example, would take over areas like Soweto and Sandton, both of which are directly supplied and billed by ESKOM. Not only will this give the municipalities credit control over these areas, but it also increases revenue to the municipality (who mark up the electricity they purchase). Lastly, we need to address the cost of electricity. 25 years ago, this country prided itself on having the cheapest electricity in the world. Now, we are pushing to become the most expensive. It is unconscionable that ESKOM has increased electricity tariffs by 356% over the past 10 years. It is reprehensible that we will pay significantly more for electricity produced by Medupi and Khusile than we would for solar or wind generated electricity purchased during the Round 4 IPP bidding.
With regard to the Soweto debt, ESKOM undertook, in 2016, to write off the debt on installation of prepaid meters in all the households of the area. Progress in this regard has been slow and inconsistent. The common complaint from residents is not the installation of meters, but the process that has been followed. ESKOM technicians arrive at all hours of the day or night, with no notice or consultation. And the culture of non-payment, which is so prevalent in this community, needs to be addressed from a national, provincial and local perspective. We need a massive public awareness campaign to let people know that if they don’t pay their bills, the lights might go off permanently!
Chairperson, by now it should be obvious: government is failing to provide basic services for its residents. This electricity crisis can be laid firmly at the feet of a corrupt and inept ANC. The various ministers of COGTA and Public Enterprises, and our president, Cyril Ramaphosa, from the time when he was deputy president until now, have failed dismally to address the challenges in ESKOM and our municipalities.
Where the DA governs, we are miles ahead in providing energy security for our citizens. More than 8 out 10 municipalities in the Western Cape already have laws in place to allow for independent electricity generation, and many of them are ready to sell electricity back to the grid. Because where we govern, we govern better! So on the 8th of May, vote to keep the lights on. Take back the power! Vote DA!
Alan Straton
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