In the verdant valleys and bustling towns of our municipality, an invisible force undermines the very fabric of our local governance. This force is not nature nor is it the global economy; it is Eskom, South Africa’s state-owned power utility.
As the mayor of the uMngeni Municipality, I witness first hand the challenges our local government faces, exacerbated by Eskom’s monopolistic grip on electricity generation and distribution.
The consequences of this stranglehold are far-reaching, impacting our ability to generate income, maintain infrastructure and serve our communities effectively.
Municipalities across South Africa are haemorrhaging billions of rands, a direct result of our incapacitation in generating income from areas supplied electricity by Eskom.
This enforced reliance on a single supplier stifles competition and innovation, leaving us at the mercy of Eskom’s pricing structures and operational inefficiencies.
The monopoly held by Eskom not only contravenes the spirit of economic freedom, but also places an unsustainable financial burden on municipalities.
The insidious effects of prolonged and persistent load shedding have pushed many businesses and households towards alternative energy sources, such as solar power. While this shift may offer a semblance of relief from the erratic power supply, it exacerbates the fiscal woes of local governments.
The decrease in income from electricity sales is stark, and the increasing cost of living has propelled lower-income households towards illegal connections, further diminishing our revenue streams.
These households, unable to afford solar installations, find themselves trapped in a cycle of energy poverty and desperation.
Compounding these challenges is our inability to enforce credit control effectively where Eskom dominates electricity supply.
Municipalities powerless
Municipalities are rendered powerless – unable to disconnect services for non-payment of property taxes or other municipal services. This undermines our financial stability and erodes the principle of responsible citizenship.
Perhaps most disheartening is Eskom’s abandonment of street light infrastructure, following years of neglect and under-maintenance.
Despite having billed local governments for these services, Eskom’s withdrawal has left municipalities to shoulder the responsibility of street lighting without the corresponding revenue from electricity sales.
This situation is untenable and reflects a broader disregard for the well-being of our communities.
Efforts by the South African Local Government Association (Salga) to address these issues have been met with resistance and apathy from Eskom, the Department of Energy, the Department of Cooperative Governance and Traditional Affairs and the Department of Public Enterprises.
The lack of political will, particularly within a Salga dominated by the ANC, has stymied any meaningful dialogue or reform.
The Constitution clearly mandates electricity reticulation and street lighting as functions of local government. Yet, the monopolistic practices of Eskom effectively strip municipalities of these critical responsibilities.
The Municipal Systems Act provides a pathway to resolution through the possibility of service agreements between local governments and Eskom. Such agreements, if crafted to be mutually beneficial, could alleviate many of the challenges we face.
However, the will to pursue such solutions seems absent.
The time has come for a concerted effort to challenge Eskom’s monopoly and advocate for a more equitable, competitive and sustainable model of electricity supply.
Only through genuine collaboration, innovation and a recommitment to the principles of local governance can we hope to overcome the adversities presented by the status quo.
The future of our municipalities, and indeed the well-being of our citizens, depends on it. DM
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@Chris Pappas just a small tip. I was also feeling really down, but then I read @Mahlengi Bhengu-Motsiri’s uplifting piece on Tintswalo!
I now realise we are completely wrong to concern ourselves about having no electricity, poisoned water, broken roads, broken rail infrastructure, massive unemployment, rampant crime, starvation, and an imploding economy.
I know this now as her joyous article explains clearly that South Africa is in great shape, and the ANC are doing an absolutely wonderful job.
Can’t finish sorry electricity about to go of
Agreed. But Eskom.
Well, I guess the ineffectiveness of ESKOM has led citizens and business to source our own energy generation, which is in effect the privatisation of energy generation, albeit on a small scale. As we saw with Frankfort in the FS, ESKOM’s monopoly stands in the way of innovative social progress. Not only are they unable to provide electricity, they are impeding the economy by thwarting any effort to by-pass them on a larger scale. The regulatory framework is just not aligned to the current reality.
Is this guy not one of the sharpest, most impressive politicians in SA?
Then why are you so anti-DA? the DA makes the Western Cape seem like a different world from the rest of South Africa. Yes, the DA supporters are normal human beings and may well have their faults but I would much rather live in a province that works rather the shambles that exists in those governed by the ANC.
He most certainly is, however the bar is VERY VERY low. But he is a most impressive leader, and young to boot.
In an OECD international symposium on competition law and SOE’s in November 2018, the contribution from South Africa regarding the restrictive and anti-competitive behaviour of Eskom was as follows:
“Short of intervention by the [Competition] Commission and government, IPPs [independent power providers] have limited recourse. An Independent Systems and Market Operator (ISMO) Bill was released more than six years ago [i.e. 2012] with the intention to promote competition, particularly at the generation level. The ISMO Bill proposed the establishment of an independent state-owned entity that would become the sole purchaser of electricity from both Eskom and IPPs and would assume responsibility for system operation though the Bill was unclear about whether Eskom or the ISMO would own the transmission grid. The Bill envisaged that ISMO’s pricing would be done in a transparent manner and that access to the grid would be regulated in the interest of more competitive prices to consumers. The Commission was broadly in favour of this proposal, with the caveat that further information would be required to assess efficacy and cost savings at each level. The ISMO Bill has not progressed beyond the comments stage.”
More than 12 years on and the anti-competitive abuse of Eskom persists with tacit and explicit ANC government support. The ANC’s supporters are the big sufferers – but ignorance is bliss, I guess.
In my opinion, this unhappy state of affairs is the result of the majority of voters repeatedly preferring it to the offered alternatives. So it is not a tragedy in the traditional sense, rather the uncomfortable transition phase from unsustainable socialism to a more liveable model. It is not up to Chris or us, to protect voters from the consequences of their choices and the more we attempt to do so, the longer we have to tolerate this phase.
It’s no different here in the USA. Our black citizens repeatedly vote for Democrats even though their policies hurt blacks the most. They never learn.