Eskom can turn the lights off, court rules

January 5th, 2017, Published in Articles: EE Publishers, Articles: Energize

 

Eskom may cut off power supply to eight municipalities as a means to recover outstanding debt, the North Gauteng High Court heard on Thursday. Judge Hans Fabricius made the ruling on an urgent matter submitted by civil rights group AfriForum, which sought to stop Eskom from cutting power. The application by AfriForum was dismissed with costs. Fabricius says municipalities ought to be held accountable.

Eskom said on Wednesday that it would delay turning the lights off in the affected areas from Thursday until Tuesday next week. Among the main arguments presented by AfriForum was that there is still an outstanding matter to be heard on 22 and 23 March, relating to Eskom’s authority to cut power supply to municipalities.

The civil rights body claimed that cutting power supply as a means to get municipalities to pay off debt would have unfair consequences for ratepayers. However, Fabricius noted that Eskom does not have an obligation to supply electricity to ratepayers. The obligation to provide basic services lies with municipalities.

Previously, Eskom acting CEO Matshela Koko told Fin24 that rising debt by municipalities was one of the contributing reasons Standard and Poor’s downgraded the power utility’s credit rating, which is now one notch above non-investment grade (junk status).

Eskom’s legal team argued that the parastatal had been trying to settle the debt issue since 2011. Eskom also argued that it was entitled to terminate power supply according to the Electricity Regulation Act of 2006 and its written agreements with municipalities.

Koko added that AfriForum’s decision to submit the interdict was “nonsensical” and politically motivated, adding that the civil rights body are fighting a political fight while his job is to provide power.

Marcus Pawson, head of local government at AfriForum, previously told Fin24 that the electricity cut does not solve Eskom’s debt collection issue because the power utility will not get the money back. Instead, he says, the parastatal should meet with National Treasury to find a means to deal with efficiencies for municipalities to comply with their obligations.

The eight municipalities are Thembelihle (Northern Cape), Moqhaka (Free State), Mailonyana (Free State), Nkentoana (Free State), Mantsopa (Free State), Tokologo (Free State), Nala (Free State) and Dihlabeng (Free State).

Acknowledgement

This article was first published on Fin24 and is republished here by permission.

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