SALGA pushes back against Eskom's new power distribution plan for indebted municipalities

The South African Local Government Association (SALGA) has raised the alarm about Eskom's proposed Distribution Agency Agreement (DAA).

It warns that the deal risks being perceived as 'a backdoor takeover' of municipal distribution functions.

SALGA notes that electricity reticulation is explicitly assigned to municipalities in the Constitution, and says bypassing these processes would erode municipal autonomy and compromise democratic accountability.

"While SALGA acknowledges the urgency of ensuring reliable power supply and alleviating the financial strain faced by municipalities, the DAA in its current form threatens to undermine the constitutional mandate of local government."

Energy expert Matthew Cruise (IMPOWER) clarifies that this is the action Eskom is choosing to take with municipalities and councils that have not been paying the money for electricity that's being distributed through them.

"Instead of taking the drastic measure of just stopping all power going through that council or municipality, Eskom are coming through with this DAA... saying, they will take over the ownership of the distribution network in your municipality, and then also take over the collection of the revenue from your municipality to pay down your debt."

Aside from the issue of constitutionality, SALGA's objections include the fact that this function assists with municipalities' revenue collection for then addressing other developmental issues within their jurisdiction.

Cruise notes that the monies collected from electricity represent about 50-80% of the total revenue for a municipality.

The Association is saying that Eskom is not coming to the party and actually helping with a solution to increase the delivery of revenue from electricity purchasers, he goes on.

At the same time, Eskom customers do typically pay less for their power than if they get it through their municipality.

Another point SALGA talks to, is that if this Agreement is implemented,residents won't have an elected official to hold accountable for electricity delivery.

Electricity so often does not work in some areas, says Joburg resident Stephen Grootes, that he thought SALGA could actually not be serious with this last point.

To listen to energy expert Matthew Cruise in conversation with Stephen Grootes on 702's The Money Show, click on the audio link below: