Eskom is laughing at Joburg
5 October 2021
Thirty years ago I was the attorney for a Natalspruit electricity consumer whose lights were cut off, despite his paid-up account, by the Germiston City Council. Germiston had problems with non-payers. It tried to force payment by cutting off electricity to a large part of the township. In the Supreme Court Judge Ralph Zulman found against Germiston. The next day I claimed in the media that this was a landmark decision. Zulman, passing me in the passage, teased me by saying that if he had realised it was a landmark decision, he might have found against me.
All these years later the Constitutional Court made a similar judgment. Eskom is not permitted to cut off electricity to whole towns, even if they do not pay.
Eskom has major problems collecting payments. Non-payment, illegal connections, stolen power, destruction of equipment, vandalism, theft of power lines and a failure to refurbish and maintain, are major problems. In Johannesburg, Eskom is responsible for Soweto and Orange Farm plus parts of Sandton. Soweto’s debt to Eskom in 2020 was R12.8 billion, representing electricity used but not paid. R5.3 billion was written off because it was uncollectable. Anyone expecting to collect the R7.5 bn balance is deluded.
City Power Johannesburg serves most of the city, with similar problems. For some years I was a non-executive director of City Power, chairing its Audit and Risk committee. Alexandra pays only 15% of the power it uses. Many other problem areas exist, including 186 informal settlements, all wanting electricity, few wanting or able to pay. City Power was the cash cow of Johannesburg, producing significant income and helping to balance the books. Because more and more consumers do not pay and must be subsidised by the payers, the accounts of City Power are becoming problematic, no longer contributing profits.