Tempers are flaring as towns that bore the brunt of electricity interruptions because of non-payment to Eskom by the Dr Beyers Naude Local Municipality await the outcome of a court case to settle the dispute between the electricity provider and the local government.

“Die mense is die moer in [The people are angry],” said councillor Ewald Loock, the head of finance for the municipality. “Businesspeople are exploring the possibility of claiming their losses from the municipality.”

Eskom spokesperson Zama Mpondwana said the electricity had been restored in terms of a high court decision.

“We can also confirm that some payment was received from the municipality this week and negotiations are continuing.”

Eskom started periodic electricity supply interruptions to Dr Beyers Naude Local Municipality on Friday 23 October as a result of non-payment of bulk electricity supply. “We reiterate as Eskom that the implementation of electricity supply interruptions to defaulting municipalities is only done as a last resort,” he said.

The mayor of the Dr Beyers Naude Local Municipality, Deon de Vos, said in a statement published on social media that the application filed by the municipality had been postponed to 14 December.

The court, in a provisional court order, instructed Eskom to restore the electricity supply to the three towns and the municipality to pay the current outstanding amount of R8,522,638.87 by 30 November.

“This includes penalties and interests disputed by the municipality. The municipality reserves its rights to reclaim payment of amounts charged for penalties and interests in the event of these amounts being found to be incorrect, subsequent to the dispute between parties being finally resolved,” De Vos said.

He added that the municipality is owed R101-million in outstanding rates from residents and has an average collection rate of 42%.

Loock confirmed that after a week of six-hour long interruptions the power had been restored to the affected towns.

“The problem is that the municipality does not have any money,” he said. “The Dr Beyers Naude Local Municipality was created by the amalgamation of a number of municipalities and started with a debt of R65-million. The national government undertook to pay this debt but never did. Now the debt has ballooned to R202-million.

“But I think we can legitimately question money spent on overtime, the use of municipal vehicles and we all know that this municipality’s workforce is too big,” he said.

“The amalgamation of all the smaller municipalities caused an unsustainable situation. One of the towns that is part of this municipality, Saaimanshoek, is 300km from Graaff-Reinet and they are all in the same municipality. It is like adding Laingsburg to the City of Cape Town,” he said.

“The other problem is that we have no tax base,” he added.

“I can tell you… I doubt that there is any money to steal in this municipality. The municipality does not have a legal obligation to ring-fence the Eskom money. It has been suggested, but the feeling was that it will limit the municipality’s cash flow.

“We had a meeting with the businesspeople in Willowmore and I can tell you, to say they are angry is an understatement. Some are threatening to claim compensation from the municipality. What I do know is that we cannot afford another series of power cuts like this one.” 

The municipal manager, Dr Edward Rankwana, set out the issues between Eskom and the municipality as follows:

• The Jansenville supply point needs to be upgraded. The municipality cannot afford to pay for the upgrades and is constantly fined for exceeding the maximum demand. 
• The municipality entered into a wheeling agreement with Eskom during March 2018 to allow for the use of municipal infrastructure to provide electricity directly to Eskom clients. The municipality wants its account to be credited for the use of the infrastructure.  “[The municipality] is aware that these wheeling agreements existed for the last 20 years; however, no evidence can be obtained in the municipality’s records that the municipality was repaid for the buyback of electricity. Eskom requires the municipality to solely rely on their word. We received the necessary expert advice and assistance; however, engagements with Eskom as to what is due to the municipality are not being entertained.”

• The municipality must put a repayment plan in place that will be sustainable for the long term. So far, three repayment proposals have been rejected and the current repayment plan is not sustainable.

Rankwana also questioned whether Eskom, in terms of the contract, is allowed to act against the municipality during the Covid-19 pandemic.

“In the master agreement with Eskom there is also a clause indicating that no action can be taken by the power utility in the case of a pandemic. Unfortunately, this clause has never been considered by Eskom as they have implemented bulk electricity interruptions. We were therefore left with no other option but to apply for an urgent court order to prevent Eskom from proceeding with electricity supply interruptions. 

“The legal processes are in progress for a court of law to enforce discussions between Eskom and the municipality on matters unresolved,” Rankwana added. DM/MC

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