Tebello Radebe
All electricity users will ultimately pay for the more than R1,3-billion apartheid rent boycott power bills at some point, says Kevin Morgan, legal adviser to the electricity regulator, following the agreements reached by Eskom and debt-ridden local authorities.
“Eskom, being a state-owned enterprise, can only write off the debts against income from what all other electricity users are paying,” says Morgan.
Non-payment would retard the electrification programme, he says, since less money would become available to extend electricity to those who do not have it. In addition, prices are 2% higher than necessary to compensate for the non-payment.
However, Morgan commended Eskom for having devised a method that can ensure prompt payment. At the time of going to press, Springs City Council was expected to pass a resolution accepting Eskom’s plan to normalise payment. This follows a deal between the electricity body and the North East Rand Metropolitan Council (NERMC), which could see the utility write off more than R800-million in unpaid power bills if other local authorities follow suit.
“We hope the agreement will help other local authorities that are also seeking a way out of a very tricky situation,” said Thom Peters, acting chief executive of the NERMC, which includes Kempton Park and Tembisa, after the deal was signed with Eskom senior general manager for sales and customer services Joe Matsau.
“We have been talking to local authorities about ways to resolve the non-payment issue since before 1990, so it is particularly pleasing to see such a protracted discussion reach a productive end,” said Matsau.
East Rand sales and customer services manager Laetitia van Staden added that the accumulated debts will be written off after 70 months unless any of the local authorities that signed the latest rounds of debt repayment agreements with Eskom default for any reason.
“If at the end of 70 months the local authority in question has performed satisfactorily, then the balance of the debt can be overlooked,’ said van Staden.
Eskom is owed more than R1,3-billion by several local authorities and individual consumers. The largest debtors are in Gauteng. The NERMC (which includes Kempton Park) owes about R290-million, largely related to Tembisa township. Springs City Council owes R150-million, mainly related to Kwa- Thema township.
The main elements of the terms of the NERMC/Eskom deal are:
l Full monthly payments for the next 70 months; and
l NERMC to repay about R55-million of its accumulated debt in instalments with interest.
In return, Eskom has agreed to “write-back” the balance of their debt of R247-million to the end of the 70-month repayment period. Eskom will also withdraw the court action order to seize some of the assets of Kempton Park in return for the debt.
Eskom has since taken over the ownership of the electricity infrastructure of several other townships which owe it over R500-million. These include, among others, Soweto, Katlehong and Lekoa townships. In areas such as Vosloorus, Eskom has agreed to hold the debt in a suspense account while leasing the assets to supply the area.
When asked if Eskom would be seen as having different policies for the same problem, Van Staden said in the long run the solution will finally be the same for all areas after the restructuring of the electricity supply industry.