Fear not, Eskom is keeping the lights on.
Eskom, who threatened to interrupt the electricity supply to the municipality on May 3, has come to an agreement with the Emalahleni Local Municipality to not carry out their threat.
An in principle agreement between the municipality and Eskom has been reached, but still needs to be finalised early next week. This agreement allows for the repayment of the outstanding capital arrears to Eskom over a period of two years and contains a very important clause whereby interest will be suppressed. Interest on that amount over two years is estimated to reach R115 million. The agreement is that that money will not be payable if the agreement is correctly executed, and will be used towards improving the electrical network and management.
In addition the municipality and Eskom will meet on a monthly basis to discuss progress and specifically to manage programmes as set out in a strategy as well as other technical matters. Eskom will become part of the team ensuring solutions to the problems are not only initiated but also tailor-made as circumstances may change. Monthly monitoring to allow for corrective action timeously will also take place during these meetings.
To ensure that this agreement becomes a reality the municipality must still pay a further R30 million outstanding from April, only then this agreement between the two entities will come into affect.
Mr Theo van Vuuren, Municipal Manager said there is no room for error anymore, nor is there room for some to avoid paying for electricity at the cost of the broader community.
“I need everyone involved, whether it is municipal staff or businesses or households, to assist that we use electricity efficiently, execute the strategy and pay our accounts,” Van Vuuren said.
The reasons for the municipality’s problems to fully settle the total account due to the electricity giant are more complicated than just non-payment by some customers.
Van Vuuren explained that network inefficiencies, blatant sabotage, vandalism, outdated networks leading to inefficiencies and an extremely high maintenance cost as well as high cost generators such as insufficient supply at inlet points, resulting in penalties when maximum demand is exceeded. All of the above is resulting in close to R40 million a month under recovery on the municipality’s account.
The strategies to address the above matters are also multi-focused and are slowly starting to pay off. However, it takes time to show results and there is no quick fix.
There are a few important elements in this strategy, to keep Eskom happy, that needs highlighting.
Firstly, increasing the inlet capacity points such as at Phola and Doornpoort to allow fewer interruptions due to high demand and to reduce penalties.
“In respect of Phola/Ogies we are far advanced already with the solution, in respect of Doornpoort we still have some way to go,” Van Vuuren said.
Then there is the replacement of meters and installation of protective structures to reduce tampering. The municipality is busy with a process to replace prepaid meters and throughout May and June this will get a jump start with the installation of 4 000 new meters and protective structures
Energy efficiency of buildings and streetlights is also on the list. This process requires significant capital.
Improving data accuracy and correcting of billing is fourth on the list. In the same breath it is worth mentioning the incorporation on the data base of large areas which have somehow managed to stay off it and therefore have not paid for services. A project funded by provincial government is attending to this and progress is positive.
It is not only households that are guilty of not paying for services; there are also government, parastatals (owned or controlled wholly or partly by the government), institutions and businesses that are blameworthy. Attention is given to the recovery of the more than R2 billion or part of it outstanding from these institutions and the public.
“Progress with some of these are positive and we managed during 2015 to recover close to R100 million from government alone.”
“Given the current economic situation and the fact that many have for years managed to get away without servicing the arrears, the recovery of debt must be and is dealt with, with care and proper legal diligence. As from May a new service provider will be taking over debt collection. This company is perhaps the leading company in respect of municipal debt collection in the country and we hope to make significant inroads on the outstanding debt over than three months. This will place us on a sound financial footing,” said the man at the helm of the municipality.
Van Vuuren encourages the 20 000 households and businesses that are in arrears on their payments to approach the municipality to make arrangements before you may be facing legal steps by the appointed company which may not be as accommodating.
By the end of June new software will be installed to run the prepaid system with the ability to detect any abnormalities. This will assist to prevent further electricity losses. Currently there is close to 35 000 prepaid meters which are not fully complying.
The municipality plans to formalise and assist with the electrification of current areas to enable them to link the supply of services to accounts to recover costs. Township developments which will be able to house 18 000 families who are currently staying in informal areas where services are limited and either obtained illegally or at high cost are in process of development and will be completed over the next two years.
“The above are some but not all of the measures in place. We have experienced an increase in payment but since December payment rates were not good, mainly caused by businesses experiencing financial difficulties and an estimated 16 000 households been affected by unemployment recently,” Van Vuuren said.
The Eskom problem cannot be solved by only the municipality. It is everyone’s responsibility to ensure that their municipal accounts are paid in full and on time. This community has on many occasions showed that they can stand together in stormy weather, and Eskom is a Tsunami caused by years of neglect in many spheres of this municipality.
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