Economic crisis looming in local municipalities

AfriBusiness is stepping in to avert economic crises in local municipalities countrywide facing looming power cuts by Eskom. It is the contention of AfriBusiness that the utility, notwithstanding municipalities being in arrears, is in effect unjustifiably threatening to withhold electricity from businesses and other end users on prepaid and with fully paid-up accounts.

AfriBusiness invites its members and the public to submit evidence of Eskom’s intention to cut power, including notices and short descriptions of the situation, on our website.

Towns and municipalities potentially affected include, among others, Koster and Swartruggens (Kgetlengrivier Local Municipality), Naboomspruit/Mookgophong (Modimolle Local Municipality), Barkly West (Dikgatlong Local Municipality), Vryburg (Dr Ruth Segomotsi Mompati District Municipality) and Secunda (Govan Mbeki Local Municipality).

Piet le Roux, CEO of AfriBusiness, says that Eskom’s actions appear administratively flawed, unjust and counterproductive. “Eskom is a monopoly, protected by government regulations preventing free competition that would provide businesses and other consumers with alternative sources of electricity. Moreover, people are forced to pay Eskom via delinquent local authorities that essentially act as Eskom’s agents to collect revenue, yet fail to transfer the money to Eskom. Now Eskom wants to cut electricity not only to consumers who are up to date with their accounts, but even to those who have purchased prepaid electricity.”

The harm to local economies will be extensive and will plunge such municipalities into a downward spiral. “And this not even considering the humanitarian consequences when hospitals, schools, sewerage works, traffic lights and other public benefit infrastructure lose power,” Le Roux concludes.