No images? Click here
Was this newsletter forwarded to you? Subscribe here.
7 March, 2023
#10 ⚡Municipalities that owe Eskom
One hundred municipalities owed Eskom money at the end of 2022. That’s more than a third of SA's municipalities, and they owed R56.3-billion. It's a problem, because it impacts Eskom’s ability to pay its suppliers and its debts.
If you live in one of the municipalities defaulting on their debts to Eskom, there are actions you can take. More on this below in our Q&A.
The DA's Cilliers Brink (35) was almost elected the mayor of Tshwane, before Cope, with its one seat in the council, won the mayorship, which got us thinking about the age of SA's mayors. Brink would have been among the youngest at 35, joining the 42 mayors in SA under the age of 40.
ICYMI: We have launched some cool tools – an audit tracker showing 11 years of audits for all of South Africa’s municipalities and a tool to check the age of your mayor and their political party.
In today's newsletter we're looking at:
⚡ Worst debt offenders
💡 Load reduction vs loadshedding
💰 The plan to make municipalities pay their Eskom debts
✏️ Q&A: What you can do if your municipality won’t pay Eskom
🎂 Mayors under 40
🚜 Municipality Spotlight: Emalahleni, Mpumalanga
🔢 Local government in numbers
📰 News round-up
📆 Coming up
We'd love to hear from you. If you have suggestions or comments please share them with me. Or complete our quick survey to tell us what you think.
Gemma
⚡ Worst offenders
The Free State owes Eskom the most – 17 of its municipalities owed the power utility R18-billion at the end of 2022.
Maluti A Phofung in the Free State and Emalahleni in Mpumalanga both owe more than R7-billion. Both towns have fewer than 500,000 residents. Maluti A Phofung is governed by MAP16, Emalahleni by the ANC.
11 defaulting municipalities rely on electricity sales for 50% of their total revenue. Of these, four rely on electricity sales for two-thirds of their total revenue. One of these municipalities is Emfuleni in Gauteng, which owes Eskom R5.7-billion.
Note: The Outlier has revenue data on 54 of the 100 municipalities.
Of the eight metros, six owe Eskom. Tshwane owes Eskom almost R1-billion, followed by Mangaung (R305-million), Ekurhuleni (R253-million), Johannesburg (R6-million, 75% of this debt is from Soweto), Cape Town (R2.8-million) and Nelson Mandela Bay (R1.2-million).
💡Load reduction vs loadshedding
Loadshedding is when Eskom switches off electricity in parts of the country to prevent the electrical grid from becoming overwhelmed and shutting down. Load reduction is when Eskom throttles the amount of electricity sent to a municipality that has defaulted on its payments to the power utility. This happened in Dr Beyer’s Naudé municipality in December. It owes Eskom R366-million.
💰 The plan to make municipalities pay
Finance Minister Enoch Godongwana said in his budget speech that the government would be installing prepaid meters, and work with municipalities to “correct the underlying behaviour of non-payment“.
In the meantime, Eskom is negotiating payment arrangements and taking municipalities to court if they renege on their arrangements. In some cases, like North West’s Matlosana and Gauteng’s Emfuleni, Eskom attached the municipalities’ assets. According to its annual financial statement from last year, Eskom is focusing on the top 20 defaulting municipalities.
✏️ Q&A: What you can do if your municipality won’t pay Eskom
If your municipality defaults on its debt to Eskom, there are actions you can take as a resident. We spoke to Dr Peter Twesigye, the research lead for Power Market Reforms and Regulation at the Power Futures Lab, University of Cape Town, to learn more. Here is an extract from our conversation.
What can I do if my municipality won’t pay Eskom?
If your municipality doesn’t pay Eskom, you may elect to (a) engage the [municipal] managers to explain why; (b) seek legal redress; (c) petition the regulator Nersa to demonstrate why it cannot compel the municipality to pay plus penalties; or (d) defect from municipal supply and buy your own rooftop solar PV system or buy power from a private power generation company.
Do you think the municipalities that owe Eskom money will be penalised and not receive power from the emergency energy plans?
Municipalities that owe Eskom money may not necessarily be excluded from benefiting from emergency power plans. However, they may be compelled to clear a portion of their debt before they will be considered to receive power since this will not be free. The government needs to pay for this and should not accept complacent non-commercial behaviour to persist.
🎂 Mayors under 40
South Africa has 42 mayors under the age of 40.
More than 70% of the youthful mayors are from the ANC; five are from the DA, and two from the IFP.
The province with the biggest proportion of young mayors is KwaZulu-Natal (11) followed by the Northern Cape (9), North West (6) and Free State (6). Only one young mayor, 36-year-old Geordin Hill-Lewis, runs a metro (Cape Town).
President Cyril Ramaphosa reshuffled his cabinet on 6 March. His oldest minister, Nkosazana Dlamini Zuma (74), is now minister of women, youth and persons with disabilities. Ronald Lamola (39), the minister of justice and correctional services, is the youngest member of the cabinet.
🚜 Municipality Spotlight: Emalahleni, MP
Council seat: Emalahleni (formerly Witbank)
Population: 455,228 (2016 data)
Audit results: Five years of qualified reports, which means there were problems in the financial statements with little to no evidence for some transactions.
Mayor: Cornelia Ntombikayise Nkalitshana
Mayor’s political party: ANC
Hung or majority run? Majority
Ruling party: ANC
Voter turnout for 2021: 39%
Under administration? Yes, since 2018. We asked experts if section 139 interventions work. This is what they said.
Eskom debt: R7.1-billion.
Electricity sales make up 27% of the municipality’s income. In 2020, Eskom lost a court bid to cut off power to Emalahleni. The Supreme Court of Appeal said Eskom’s decision to cut bulk supply of power was drastic and unreasonable as it did not take into consideration the municipality’s inability to pay previous debts.
🔢 Local government in numbers
Since the local government elections on 1 November 2021, there have been 101 by-elections because:
- 39 ward councillors have died;
- 25 councillors have resigned;
- 16 councillors have had their party membership terminated;
- the Ditsobotla council was dissolved (leading to 20 by-elections); and
- legal action has led to one by-election.
Have political parties held on to the municipal council seats they won in November 2021?
In 79 of the cases (78%), the political parties retained their seats; 22 (22%) didn’t.
📰 News round-up
Appointments, new mayors
Gauteng, Tshwane: Cope’s Murunwa Makwarela became mayor on 28 February after Randall William resigned on 14 February. Cope holds one council seat in Tshwane.
Western Cape, Cederberg: After Patriotic Alliance mayor William Farmer lost a no confidence vote on 1 March, Cederberg Eerste party’s Ruben Richards was re-elected mayor.
KwaZulu-Natal, eMadlangeni: Speaker Mzonjani Johannes Mthethwa has resigned because of ill health.
KwaZulu-Natal, Abaqulusi: The IFP suspended Mncedisi Maphisa as mayor after a recording of him making sexist comments was leaked. It also suspended a councillor in the Alfred Duma municipality allegedly involved in a sex-for-work scandal.
KwaZulu-Natal, Nongoma: The NFP's Clifford Mshangane Ndabandaba was elected mayor after a vote of no confidence in the IFP’s Albert Mncwango succeeded. But Mncwango and his supporters refuse to recognise the process that saw him ousted as mayor.
North West, Madibeng: James Mashigo has been seconded to Madibeng to work as the acting municipal manager.
Western Cape, Kannaland: Morné Hoogbaard has been appointed as municipal manager. He has recently appeared in court on charges relating to defrauding the municipality of R338-million.
Free State: Mxolisi Dukwana was elected premier following Sisi Ntombela's resignation on 21 February.
KwaZulu-Natal, Msunduzi: Former water services manager Mike Greatwood has been asked to stay on for another year as a special technical adviser.
Eastern Cape, Mbhashe: ANC councillor Nomxolisi Nqwena-Maliwa was shot dead in her car while parked outside her business in Dutywa on 17 February.
By-elections
Eastern Cape, Blue Crane Route: After the DA terminated Archer Heynse’s and Cyril Nel’s party membership because they had not paid their candidate fees, a by-election was held on 22 February. Heynse was re-elected, and the DA’s Lorraine Johnson took Nel’s seat.
Northern Cape, Sol Plaatje: On 22 February the ANC’s Ferguson Moses won the seat that became vacant after the death of ward councillor Annie Gallant.
States of disaster, flooding and no water
North West, Madibeng: A local state of disaster has been declared in Ramogodi after severe flooding.
North West, Lekwa-Teemane: Low-lying areas in Bloemhof and Christiana were evacuated after 12 Vaal sluice gates were opened.
North West, Naledi: Despite Premier Bushy Maape’s insistence there is no water problem, residents in Huhudi continue to collect water from the Naledi Waste Water Treatment plant.
Mpumalanga, Lekwa: The Grootdraai dam is 101% full. Three families have been relocated because of the flooding.
Mpumalanga, Nkomazi: Residents say the government has neglected them after heavy rains caused extensive damage.
Mpumalanga, Emalahleni: Heavy rains triggered flood control measures. The Witbank dam is at 99% capacity.
Eastern Cape, Nelson Mandela Bay: Nelson Mandela Bay is still facing a water shortage. The municipality’s combined dam storage is just under 12%.
Cash strapped
North West, Madibeng: Mayor Douglas Maimane says his municipality is bankrupt and is using conditional grants meant to fix potholes and supply services to pay its accounts.
Protests
Eastern Cape, Nyandeni: Ngqeleni residents shut down the town on 20 February to protest against a lack of service delivery and demand their own separate municipality. Nyandeni municipality serves the towns of Ngqeleni and Libode.
Eastern Cape, Enoch Mgijima: Two High Court interdicts prohibit Komani Protest Action from disrupting business and municipal operations until 30 March.
Backlash
KwaZulu-Natal, Alfred Duma: Mayor Zama Sibisi has been criticised for using municipal funds as scholarships for students in the municipality.
Loadshedding
KwaZulu-Natal, Newcastle: ActionSA has written to Eskom to ask that Newcastle be exempt from loadshedding.
Western Cape, Stellenbosch: The municipality proposed a R6.2-million emergency municipal loadshedding relief grant. Opposition parties GOOD, EFF and the Patriotic Alliance voted against it.
Western Cape: MEC Anton Bredell announced R88.8-million loadshedding assistance fund for the province's municipalities to buy generators for water treatment and distribution plants.
KwaZulu-Natal, uMhlathuze: The municipality plans to take over loadshedding from Eskom.
If you enjoyed this newsletter, share it with a friend. And if you like data told in accessible and informative ways, consider signing up for The Outlier newsletter.
If you don't want to continue to receive this newsletter you can unsubscribe by clicking the unsubscribe link at the bottom of this email. We hope you won't, but we understand if you do. Before you do, if you have any suggestions that could improve the newsletter please let us know: info@theoutlier.co.za We'd really appreciate it.
📨 Was this newsletter forwarded to you? Subscribe here.
