Makana Municipality has approached the South African Local Government Association (Salga) to assist in negotiations between it and power utility Eskom to avoid a total disconnection of power to Grahamstown and surrounding areas.
Makana Municipality has approached the South African Local Government Association (Salga) to assist in negotiations between it and power utility Eskom to avoid a total disconnection of power to Grahamstown and surrounding areas.
Eskom published a notice in a regional newspaper on Wednesday, 7 December warning of an interruption in the supply of bulk electricity to Makana on 3 February next year that would continue indefinitely.
In the notice Eskom indicated that Makana owed the power utility R58.05 million, part of which had been outstanding and escalating since January last year.
According to Eskom Makana's breach of its payment obligation to Eskom undermined and placed in jeopardy Eskom's ability to continue the national supply of electricity on a financially sustainable basis.
In the notice the power utility states that it recognises that the indefinite disconnection of electricity supply may cause undue hardship to consumers and members of the community and may adversely affect the delivery of other services.
In view of this Eskom was contemplating a regulated interruption of electricity supply as opposed to an outright disconnection. The contemplated regulated interruption would allow members of the community and consumers the opportunity to make alternative arrangements for the scheduled periods of interruption, according to the notice.
The interruptions according to Eskom would be between 6am and 8am and again at 5pm until 7.30pm on weekdays. On weekends between 8.30am and 11am and again at 3pm until 5.30pm.
The notice goes on to say that Eskom may give the municipality 15 days notice before disconnecting electricity entirely and indefinitely should the electricity debt situation not improve.
According to Eskom, the municipality owes R58 053, 726.78 including VAT and accumulated interest, compounded monthly from January 2015 to 3 November 2016.
However, according to a statement released by municipal spokesperson Yoliswa Ramokolo yesterday the municipality has already made a payment in accordance with the new plan presented to Eskom on 23 November.
Ramokolo confirmed that the municipality had an initial agreement of bulk supply of electricity with Eskom, but she said due to unstable revenue collection, the municipality was unable to honour its initial payment plan by 5 November.
"This has resulted in the municipality not being able to enjoy the benefits of interest being waived by Eskom as it was initially agreed that, upon honouring and settling the debt, Eskom will waive interest charged on the account," she said.
Ramokolo said a letter of remedy of breach of agreement from Eskom was received instead.
She said the municipality had since proposed a new payment plan to Eskom that would see the total amount on the electricity bulk account paid off only by December 2020, unless the financial situation improved.
"An amount of R14.5m was been paid last week to Eskom already, but the municipality has had no response yet from Eskom on this payment," Ramokolo said.
The municipality had since approached Salga to assist in negotiating with Eskom about the new payment plan, according to Ramokolo. "Another meeting with Eskom, Salga and Makana Municipality with regard to the payment plan is scheduled to take place soon," she said.
Meanwhile there is growing concern within the municipality about the way Eskom is handling the matter. Some officials and councillors believe Eskom is using underhand methods to keep Makana indebted to them. One official who did not want to be named accused the power utility of negotiating in bad faith.
"They are negotiating in bad faith because on the one hand as much as they are negotiating, they are issuing threats."
The official went on to say that some of the debt owed to Eskom should have proscribed because it had existed for more than three years.
Last week DA caucus leader Mlindi Nhanha spoke out harshly against Eskom, accusing them of running their business like a loan shark. He said their attitude is to "suck as much money out your client” regardless of your client’s financial position, as long as you are getting your money back.
"This is very irresponsible on the part of Eskom. They are very much hard at work in raising the R1 trillion required by their masters and friends for the nuclear project."
Acting municipal manager Mandisi Planga has assured Makana residents that the municipality will do all in its power to avoid a blackout. Speaking to Grocott's Mail about the Eskom saga yesterday, Planga said: "We can assure the citizens of Makana that we will do everything we can to ensure that there is no black out."
Speaking to Grocott's Mail yesterday Eskom provincial spokesperson Ntombekhaya Mafumbatha confirmed they had received a payment from the municipality.
"They (Makana) are in current discussions with Eskom in light of the plan that they are putting in place for us to discuss, but we have not reached consensus. Makana is currently in engagement with Eskom with on their payment plan," she said.
The municipality has crafted a new "realistic" payment plan which could see it paying off all its Eskom debt over a period of four years. The plan was submitted to Eskom on 23 November.
According to the item discussed in last week's special council meeting, the proposed payment plan indicates that unless the situation improves, the municipality will only be able to settle the arrears by December 2020.
This reflects the reality that the municipality is facing, according to the item.
The payment plan submitted by the municipality is divided into six instalments starting this month until the final payment in December 2020.
The payments are broken down as follows: R4m this month; R10m in August next year; R15m in August 2018; R15m in August 2019; R11m in August 2020 and a final amount of R3m in December 2020.
