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Towns face dark Christmas

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Five local municipalities will be affected unless they make arrangements to pay the power utility.

SEVERAL towns in the Northern Cape face a dark Christmas after Eskom threatened to cut their electricity due to the non-payment of outstanding debt.

According to notices published in the DFA yesterday, five local municipalities will be affected unless they make arrangements to pay the power utility.

These include Tsantsabane, Dikgatlong, Magareng, Phokwane and Thembelihle local municipalities.

According to the notices, Eskom has warned that their bulk electricity supply to the affected municipalities would be cut on December 19 and would continue indefinitely.

In the first week (December 19 to December 25) electricity will be from 6am to 9am and 5pm to 8.30pm on Mondays to Fridays and from 8.30am to 12 midday and again from 3pm to 7pm on Saturdays on Sundays.

In the second week (December 26 until an agreement is reached), electricity will be interrupted from 6am until 8pm both on weekdays and on weekends.

Tsantsabane Local Municipality (Postmasburg) owes Eskom R129.3 million, which has been outstanding and in escalation since April 2016.

Dikgatlong (including Barkly West, Delportshoop and Longlands) owes R97.3 million since April 2014, while Magareng (affecting Warrenton and Warrenvale) owes R54.2 million. Phokwane (Hartswater, Jan Kempdorp and Ganspan) owes R97.6 million, and Thembelihle (Hopetown and Strydenburg) owes R69.5 million since September 2012.

Eskom pointed out in the notice that the municipalities’ breach of their payment obligations to the power utility undermined and placed in jeopardy Eskom’s ability to continue the national supply of electricity on a financial sustainable basis.

It added that in terms of both the provisions for the Electricity Regulation Act and the supply agreement with the various municipalities, Eskom was entitled to disconnect the supply of electricity to defaulting municipalities on account of non-payment of electricity debt.

“Eskom recognises that the indefinite disconnection of electricity supply may cause undue hardship to consumers and members of the community, and may affect the delivery of other services. In view of this, Eskom is contemplating a regulated interruption of electricity supply as opposed to an outright disconnection. The contemplated regulated interruption will allow members of the community and consumers the opportunity to make alternative arrangements for the scheduled periods of interruption.”

Eskom has also invited all affected parties to submit written representations, comments and submissions indicating why Eskom should or should not proceed with the contemplated interruption.

The closing date for public representations, submissions, comments or requests for further information will be end of business on November 28, 2019.

“Please take note that comments received after the closing date will not be considered,” the power utility stated.

These will be considered by Eskom, and the final decision will be published in a notice on December 8, 2019.

Meanwhile, a government bailout of Eskom has been slammed by opposition parties.

ANC MPs and Finance Minister Tito Mboweni this week defended the Special Appropriations Bill and said it was necessary.

Mboweni had announced the R59 billion bailout early in the year and the standing committee on appropriations had to process it.

The chairperson of the appropriations committee, Sifiso Buthelezi, said the bailout of Eskom was necessary because if Eskom defaulted on its loans it would cause a cross-default on all state-owned enterprises (SOEs).

SOEs owe creditors billions of rand. However, Buthelezi said the protection of Eskom was important for the country.

But EFF deputy leader Floyd Shivambu said giving money to Eskom was like throwing money into a bottomless pit.

He said in 2015 then finance minister Nhlanhla Nene gave Eskom a bailout of R23bn. Nene later converted Eskom’s R68bn debt into equity, but the problems at the power utility remain intractable.

“You are now asking us to transfer R59bn to Eskom. The EFF does not agree to the withdrawal of money from the National Revenue Fund and throw it to a sieve called Eskom,” said Shivambu.

Ashor Sarupen of the DA said Eskom has incurred massive losses and the government continues to give it bailouts. He said the power utility was holding government to ransom.

He said the problems at Eskom will continue.

“In its present form, this one-page bill will hand R59bn in ransom money over from the fiscus to Eskom over two years, in addition to the R23bn a year already allocated to Eskom for the next decade. I call it ransom because it is unconditional – the bill allows the Finance Minister to transfer money to Eskom without any pre-conditions to be met,” said Sarupen.

He said the DA had proposed amendments to the Special Appropriations Bill that Eskom executives not be paid bonuses.

Steve Swart of the ACDP said 15 years ago Eskom was the best utility in the world. At the time Eskom’s cash reserves were between R20bn and R40bn, said Swart. He added that 15 years later Eskom was a debt-laden utility struggling to stay afloat. It cannot survive without government bailouts. Swart said Eskom was bankrupt.

Nqaba Kwankwa of the UDM said Eskom was in deep financial crisis. He said the unbundling of the power utility “comes out of the manuals of the International Monetary Fund and the World Bank for the privatisation of Eskom.”

Kwankwa said unions had every right to be afraid that the company will be privatised.

President Cyril Ramaphosa has insisted that Eskom will not be privatised. This is despite proposals to unbundle it into three separate entities for generation, distribution and transmission.

Ramaphosa is expected to release a paper on Eskom soon.

Eskom chairperson Jabu Mabuza told Parliament three weeks ago that they will decommission some of the power stations because they were more than 37 years old and had reached their lifespan.

But he said there was a plan for the transition from the shutting down of these plants.

Minerals and Energy Minister Gwede Mantashe said last week, during the launch of the Integrated Resource Plan, that coal would remain the key source of energy in the country.

Government is pursuing a mixed energy policy including coal, hydro, nuclear and renewable energy.

Cope deputy leader Willie Madisha said the country was facing an energy crisis. The bailout of Eskom comes as the country was facing load-shedding last week. This was due to some of the units being out of service.