COSATU is urging the national government to intervene between Eskom and the defaulting municipalities

17 January 2017

The Congress of South African Trade Unions is worried by Eskom’s plans to cut off electricity to all those municipalities with unpaid municipal debt. The federation is calling on the national government to intervene, and to work with Eskom and the defaulting municipalities to find a compromise, instead of cutting off electricity and plunging many communities into darkness.

While, we acknowledge the Pretoria Court’s decision on this matter and also acknowledge Eskom’s attempt at flexibility in dealing with some of these municipalities, we believe that the national government need to intervene.

This decision will have a negative effect on our already struggling economy and contribute to more retrenchments. Cutting electricity may result in businesses like farms and mines retrenching workers ,when we cannot afford to lose a single job.
In the context of our high rate of unemployment at 36%, with more than 50% of South Africans living in poverty, and with the economy having grown by a mere 0.2% in the third quarter of 2016, down from the growth of 3.3%, any decision by Eskom to cut off electricity to all defaulting municipalities would compound this terrible state of affairs. It will destroy prospects for SMEs and forces those communities to resort to dirty energy; increasing deforestation and pollution.

COSATU argues that the national government cannot allow these municipalities to deal with this problem alone; the national has a responsibility of ensuring affordability, especially for poor households. As a result of rising unemployment, incomes for the majority have virtually stagnated in real terms. That makes it hard for households to afford electricity especially at these current prices, where Eskom has been granted ridiculous permission to increase electricity prices by more than 250% over the last couple of years.

The apartheid policies impoverished whole regions and this means that government needs to approach electricity cross subsidisation from a national basis. The richer households and industries in the metropolitan areas must effectively subsidise poorer communities across the country. These communities simply do not have an economic base for internal cross subsidisation.

What we also need to acknowledge is that most electricity consumers have been paying for their electricity usage. Cogta must force those municipalities that have then failed to transfer those payments to Eskom to account. It is unacceptable that some of these very same municipalities have found funds to buy cars worth millions of rands for Mayors. It is also unfair for municipalities to fail to pay Eskom ,while putting a huge mark-up on top of the electricity tariff, making electricity unaffordable for many poor households.
The Dept of Energy should also explain why it has failed to install thousands of solar panels to heat water geysers in RDP homes. These solar panels have been manufactured and have been waiting for months for DOE to get its act together.

We reiterate our call for Eskom to explore genuine and sensitive approaches to recover the debts owed to it by municipalities and businesses.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 17 January 2017