Salga urges Eskom not to cut power to debt-owing municipalities during lockdown

Struggling power utility Eskom should suspend all electricity disconnections during the nationwide lockdown  and review the interest payable on arrears linked to the national state of disaster, the SA Local Government Association (Salga) said on Tuesday.

In March 2020, consumers owed Eskom about R27bn, and this number was expected to continue increasing on a monthly basis.

While municipal revenue collection was already depressed before the national lockdown, the situation is likely to worsen as all economic activity in SA came to a halt during the lockdown — which was imposed to curb the spread of the novel coronavirus.

The virus has infected more than 4,996 people in SA and killed more than 93.

Lance Joel, chief of operations officer of the local government association, told parliament’s portfolio committee on co-operative governance and traditional affairs that they had instructed municipalities to not suspend services during the lockdown.

Suspension of services is one of the debt-collecting techniques used to ensure that residents pay their bills.

But just as municipalities have suspended cutting services, Joel said Eskom should be engaged to suspend  “all electricity disconnections for the duration of the lockdown  and review the interest payable on arrears caused by and linked to the national state of disaster and the lockdown.”

He said that while municipalities have embraced this suggestion, Salga has not been able to get Eskom to the party.

“We are hoping Eskom will come on board and not worsen things” he said.

The portfolio committee also heard that collection rates of municipalities for the services they render to residents will be significantly affected by the Covid-19 pandemic as far forward as the end of the next financial year, in June 2021.

Municipalities, which render direct services to SA residents, have had their huge revenue generating capacity curtailed by a number of factors.

A 5% drop in the payment of  rates would cost an estimated R15bn.

Salga CEO Xolile George told the committee that the pandemic was a “perfect storm” for municipalities.

He said the implementation of the regulations under which the lockdown was enforced places a “huge financial burden” on municipalities.

Some of the additional duties which weighed heavily on municipalities’ bills included the more frequent levels of services in informal settlements and water constrained communities, monitoring social gatherings and extraordinary cleaning of public facilities and taxi ranks.  

The additional financial pressures come as residents face job losses and are unable to pay for rates and services.

The additional pressure on revenue collection is as a result of consumption being reduced during this time. George said other streams of income, such as renting out municipal conference centres and community halls, have also been brought to a halt.