South Africa

UNCOOPERATIVE GOVERNANCE: Karoo towns Willowmore, Steyterville and Jansenville in the dark as municipality can’t pay R12-million electricity bill

Klipplaat is one of the towns in the Dr Beyers Naude Local Municipality that has been hit by extensive electricity outages due to the municipality's failure to pay its bills. (Photo: Donna van der Watt)

Eskom has implemented extensive power cuts in three Karoo towns falling under the Dr Beyers Naudé Local Municipality after the municipality failed to adhere to a payment plan to cover R127-million in debt to the power utility. The municipality was expected to go to court this week to ward off even longer power cuts, lasting up to 14 hours a day, as Eskom plans to ramp up pressure.

Three Karoo towns are facing daily power outages of more than six hours after the Dr Beyers Naudé Local Municipality failed to adhere to a payment plan to cover its R127-million debt to Eskom. The municipality cannot afford the R12-million monthly payment, according to the mayor, Deon de Vos, who was locked out of his office in Willowmore on Monday by angry residents. Earlier this year the municipality stated in a presentation to Parliament that its monthly bill for salaries was R13-million.

Willowmore, Steyterville and Jansenville are now without electricity daily from 6am to 9am and again from 5pm to 8.30pm, with cuts of 14 hours at a time to be implemented by next week if no agreement can be reached.

In a statement, De Vos said the municipality had experienced financial difficulties since its establishment in August 2016. One of its main creditors is Eskom, which it owes R127,891,352.

De Vos was involved in a scuffle with apparent EFF supporters on Monday morning after they barred him from accessing his office at the municipal buildings in Willowmore. They were unhappy about the extensive power outages due to the non-payment of Eskom. In the video, De Vos is seen grabbing one man around his neck. “Vat ’n video, vat ’n video… hier gaan nie oopgemaak word nie (take a video, take a video, we are not going to open this door),” some of the people shouted. After a few minutes of trying to access his office, De Vos left the building, shouting and gesticulating at those barricading the door. 

“Eskom and the municipality have been battling for a long time to find common ground. Efforts were made to enter into payment arrangements with Eskom which are suitable to both Eskom and the municipality, but to no avail,” De Vos said.

He explained that they wanted Eskom to change the bulk supply tariff for Jansenville. He said the supply point needs to be upgraded from 1MVA (Megavolt Amperes) to 2MVA. 

“Various penalties were being implemented by Eskom due to the maximum demand being exceeded. From August 2017 to October 2018, penalties amounted to R585,105, which cannot be collected from [what] consumers were levied for overuse against the municipality.” 

De Vos added that Eskom had requested a sizeable deposit for the upgrade to be done, but due to financial constraints, the municipality could not afford it.

“Eskom refuses to enter into discussions on the write-off of penalties and interests accumulated since the inception of the Dr Beyers Naudé Local Municipality in August 2016,” he added.

He added that the municipality had reached an agreement with Eskom over the provision of electricity to uMasizakhe and Lotusville using municipal infrastructure. 

“These agreements existed for the last 20 years, however no evidence can be obtained from the municipality’s records that the municipality was repaid for the buyback of electricity. Eskom requires the municipality to solely rely on their word. We received the necessary expert advice and assistance, however engagements with Eskom as to what is due to the municipality is not being entertained,” De Vos added.

“There is no clarity on what we are supposed to bill Eskom, as this was never formalised. Therefore, Eskom is at liberty to charge whatever they desire, knowing we are in no position to verify their actions,” he added.

He said that the long-term repayment plan drawn up to cover the municipality’s debt of more than R127-million to Eskom must be sustainable and “a plan that we will be confident will not be defaulted on”. 

“Three repayment proposals since inception of the municipality were made to Eskom, but were rejected. A repayment plan was eventually entered into, but due to our financial position could not be attained. A redrafted plan has been provided by Eskom, which is unaffordable to the municipality, and is not incorporating or resolving the disputes at hand,” he said. 

On 28 August 2020, Eskom issued a notice of intent to interrupt bulk electricity supply to areas within the municipality’s jurisdiction. It came as a surprise, as everyone has been affected by the impact of Covid-19 including the municipality whose revenue had decreased notably during the national lockdown months, however the municipality acted swiftly to schedule engagements with the power utility, and the interruption was discontinued, he said. 

“Eskom has now again issued a notice of interruption of bulk electricity supply to be affected from 23 October 2020, in Willowmore, Steytlerville and Jansenville. The municipality has attempted to intervene, but no positive response has been received.  We are therefore left with no other option but to apply for an urgent court order to prevent Eskom from proceeding with electricity supply interruptions.”

The municipality’s application will be heard on Thursday, 29 October.

“The municipality is acutely aware of its financial obligation and not disputing payment to Eskom, as their service is being utilised. The municipality has not stopped making payments to Eskom, thus from the monthly R12-million due, R10.5-million was paid over to Eskom in the month of September 2020,” De Vos added.

Eskom’s Eastern Cape spokesperson, Zama Mpondwana, said the issue of the wheeling agreement, which allows Eskom to use the municipal infrastructure to deliver electricity, is separate from the bulk supply.  

He said the power cuts started on Friday, 23 October in Steytlerville, Jansenville and Willowmore and will continue until either the debt is paid or an acceptable payment agreement has been reached. 

“Eskom reserves the right to effect credit control measures as stipulated in the supply agreement between Eskom and the municipality. Eskom is obliged to collect all revenue due to it, as required by the Public Finance Management Act. The interruption of bulk electricity supply to the municipality will continue until the debt is paid in full or an acceptable repayment arrangement is reached,” he said. 

“It is important to note that all Eskom direct customers have to meet their contractual obligation as per the supply agreement. If a customer exceeds the contracted notified maximum demand, penalties are levied against that customer. Eskom remains mindful of the impact supply interruptions have on the consumers and the local economy, this is done as a last resort for non-payment.”

The Democratic Alliance’s spokesperson on cooperative governance, Vicky Knoetze, said that the residents of the municipality feel “that they have been thrown to the wolves, as they are yet again being punished for the failures of their uncaring municipality”.

“Residents of the town are bearing the brunt of maladministration by the municipality. Businesses are facing significant losses as they will either be forced to close their doors, or spend significant sums of money on alternatives, such as generators and the fuel to run them. Residents’ lives are also being severely disrupted, children are unable to attend schools, hospitals and clinics may not be able to operate, and simple things such as the safe storage of perishable foodstuffs in a refrigerator are no longer viable options.

“These power cuts will have a drastic impact on residents’ basic human rights, as water to all three towns is supplied from boreholes, which rely on electrical pumps. Sewerage will also be impacted as the pumps utilised for this are electrical,” she said.

She has written to the Department of Cooperative Governance and Traditional Affairs, asking for an intervention. She said the Camdeboo and Baviaans Local Municipalities, which are part of the amalgamated Dr Beyers Naudé Local Municipality, had settled their Eskom debts and that the Ikwezi Local Municipality (Jansenville) was mostly responsible for the Eskom debt. Knoetze said the municipal manager and the chief financial officer should be suspended.

According to a presentation made by the municipality to Parliament in August 2020, it was running at a deficit of R68-million with an annual salary bill of R163-million – around R13-million a month.

Spokesperson for the MEC for Cooperative Governance and Traditional Affairs, Makhaya Komisa, said the question was if the Dr Beyers Naudé Local Municipality had approached the provincial government for help. MC

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