HomeIndustry SectorsFinance and PolicyEskom clamps down on Soweto’s ZAR4bn unpaid electricity bill

Eskom clamps down on Soweto’s ZAR4bn unpaid electricity bill

Residents of Soweto, South Africa’s largest township, owe Eskom ZAR4 billion in unpaid electricity bills

In Johannesburg, state-owned power utility Eskom said it will pursue unpaid electricity bills totalling ZAR4 billion in Soweto, South Africa’s largest township.

Eskom spokesman Khulu Phasiwe said Soweto was not being let off the hook and the households concerned would have to pay their debt.

The township has a population estimated at five million of which 180,000 households are serviced directly by Eskom, according to Phasiwe.

The balance are serviced by the City of Johannesburg metropolitan council, reported local media Business Report.

Phasiwe said: “What people need to know is that Soweto may be the biggest township in South Africa but that does not make it a municipality. We are going after those households that owe us and there is no way people can simply consume electricity for free.”

Political backlash

The announcement follows news that Soweto residents had fought an attempt by Eskom to implement prepaid meters in the township, according to the newspaper report.

A political party leader from the African National Congress, who declined to be named, said that the Soweto debt was not easy to deal with given the potential backlash that might follow if Eskom cuts electricity due to non-payment.

The source said: “There is a deep-rooted culture of not paying in Soweto that needs to be dealt with in the first place.

“You have to convince the people that the government cannot afford to supply free electricity as other people are making residents believe”, the source said.

According to the South African Department of Energy, the amount of free basic electricity is “50kWh per household per month for a grid-based system for qualifying domestic consumers, and 50Wp [Watt-peak] per non-grid connected supply system for all households connected to the official non-grid systems.”

Last month, former Eskom board chairman Zola Tsotsi told the Business Report that the debt in Soweto needed a political solution to resolve.

“You need to get councillors and political leaders to work with Soweto residents in addressing the culture of non-payment. You can come with every measure but unless you get a political buy-in from the residents, those measures would not work,” Tsotsi stated.

Defaulting municipalities

Late last month, Eskom announced that it had signed payment agreements with half of the 20 indebted municipalities that have defaulted on their payments for bulk electricity supply.

This follows the power utility’s public announcement last month that it would interrupt bulk electricity supply to the top 20 non-paying municipalities on June 5, 2015.

Eskom claims that on March 31, 2015, the total municipal arrear debt greater than 30 days was ZAR4.67 billion. Of this amount, the top 20 defaulting municipalities owed Eskom about ZAR3.68 billion for the bulk supply of electricity. Since the announcement, the total municipal arrear debt has been reduced by ZAR54 million.

Non-interrupted power supply unless in breach

According to Eskom, the municipalities that have entered into payment agreements will not be affected by the bulk electricity interruptions.

However, Eskom stressed that municipalities have to comply consistently with payment agreement terms on a monthly basis. If these conditions are not met, interruptions of supply will be implemented without further notice.

Eskom acting chief executive Brian Molefe said: “Eskom has reached a point where it can no longer continue to provide power without receiving payment in return. We are pleased that these 10 municipalities are doing their bit to ensure that they reduce the debt owed to Eskom and we encourage all defaulting municipalities to do the same.”

Eskom has also issued public notices of impending power interruptions to defaulting municipalities in Mpumalanga and the Free State Provinces, effective from June 5, 2015.

Molefe added: “Eskom is working closely with the relevant national and provincial departments through local, national and (Deputy President Cyril Ramaphosa’s) war room structures to manage the municipal financial recovery process and we believe the work being done with these structures will yield positive results.”

Nicolette Pombo-van Zyl
Nicolette is the Editor of ESI Africa print journal, ESI-Africa.com and the annual African Power & Energy Elites. She is passionate about placing African countries on the international stage and is driven by the motto "The only way to predict the future is to create it". Join her in creating a sustainable future through articles and multimedia content.