Johannesburg households and businesses that had been basking in their load-shedding-free city suddenly faced the prospect of being in the dark again last week when Eskom threatened to cut off the city for nonpayment.
Joburg may be SA’s largest economic hub, with its largest revenue base, but its management can’t seem to manage to pay bills on time, if at all. It has run up arrear debt to Eskom of more than R4.9bn for bulk electricity, not counting the current bill of R1.4bn due at the end of November.
All Eskom’s efforts to get it to pay outstanding amounts had failed and last Thursday the power utility issued a notice of its intention to interrupt power to the city. Had power cuts gone ahead the good people of Joburg would no doubt have been furious. Hopefully, they would have remembered at whom their rage should be directed. And it wasn’t Eskom.
In the event, electricity minister Kgosientsho Ramokgopa met the two sides and brokered a deal. Eskom agreed not to go ahead with “load curtailment”. City Power agreed to pay the R1.4bn due at the end of this month. The remaining amount would be subjected to an independent evaluation: City Power had been claiming Eskom was overbilling it.
The evaluation will have to see if the city can offer any evidence. Perhaps the issue can be resolved, but more likely not. This is, after all, a city government riven by petty politics, factionalism and rent-seeking in the past few years.
The electricity billing system is said to be “broken” and lengthy power and water outages are increasingly common because the city administration is incapable of maintaining or uninterested in fixing its infrastructure. A financial and operational solution to Joburg’s Eskom problem must be found. But at root, it is a political problem that must be addressed, and by the ANC in particular.
That goes too for the much bigger crisis of nonpayment in SA as a whole. Defaulting municipalities collectively owe Eskom R90bn, a number which has increased 18-fold over the past decade and continues to climb each month. They collectively owe the water boards R22bn. In Gauteng, whose municipalities owe a big chunk of that, there’s a looming water crisis because the municipalities’ failure to fix leaks and prevent illegal connections means almost half of the water is not paid for.
Municipalities’ outstanding debt to Eskom has continued to climb rapidly over the past year despite the municipal debt relief programme that the Treasury facilitated as part of the Eskom debt relief package agreed in February 2023. Unless a sustainable solution can be found to the municipal debt crisis, it will be all but impossible to make Eskom itself financially sustainable — at least not without ridiculous tariff increases. Likewise, the water boards, some of which already face bankruptcy.
Municipalities face crippling shortages of skills and capacity, and a difficult economy. But ultimately tackling the problem requires the political will to put the right people in the right jobs and cut the corruption and pettiness.
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