Inter – ministerial task team meeting to discuss electricity reticulation and supply

Posted: 18 May 2017

Share:

Tweet

The Inter – Ministerial Task (ITT) on Constitutional matters relating to electricity reticulation, distribution and supply met in Cape Town on Thursday, 11 May 2017 to, among others, discuss and agree on its Terms of Reference.

SALGA is of the view that the matters relating to electricity and Eskom cannot be viewed in isolation and need to be dealt with holistically as a collective in the spirit of Intergovernmental Relations.  The discussion on the Terms of Reference is important because it is meant to outline how the ITT will deal with matters relating to the Constitutional aspects, the supply of electricity in municipal areas and structural issues regarding the provision of lights, among other issues.

The ITT composes of Ministers of Cooperative Governance and Traditional Affairs, Public Enterprise, Finance and Energy and Eskom Chairperson and will provide a progress report on the resolutions between Eskom and SALGA.

Successes for far

Since 14 February 2017, SALGA has been engaging with Eskom and sector related departments on issues of energy and electricity.

SALGA has successfully raised systematic and structural challenges underlying the debt owed to Eskom and the debt owed to municipalities, as well as Constitutional challenges in terms of executive authority for electricity distribution and related operational challenges. It hoped that the ITT will find a sustainable solution to these challenges and report progress to the Cabinet.

SALGA has maintained that Eskom credit control measures need to be reviewed and the excessive penalty regimes which include compounded prime plus 5% be changed. Eskom has so far agreed to lower the prime plus to 2.5% and interest that is charged on invoices not paid after 15 days has now been extended to 30 days. The problem has been that municipalities’ revenue collection and financial management systems are not aligned with the Eskom 15 days credit control measure and this translates into high interest accrued on the Eskom bills which are a huge component of the historical debt by municipalities.

Eskom has also agreed to write-off the interest that has been accumulated due to these discrepancies.

Furthermore, Eskom has agreed that municipalities owing them can now negotiate for realistic, affordable, reasonable and sustainable payment plans. In the past municipalities found themselves at the receiving end with the power utility where they agreed to unaffordable payments plans. This was not sustainable and many municipalities continued to default despite the payment agreements.