Housing in Southern Africa June 2015

News

Municipalities payment plan

E skomannounced that it hadno- tified all parties who are likely to be affected, as the company contemplates interrupting bulk elec- tricity supply to the top 20 defaulting municipalities across the country with effect as from 5 June 2015. The total municipal debt over 30 days is R4.67 billion. Of this amount, the top 20 defaulting municipalities owed R3,68 billion for bulk supply of electricity. Since the announcement, the debt has been reduced by only R54 million. The 10 municipalities that have entered into payment agreements with Eskom are: • Nama Khoi Municipality, Northern Cape • Nketoana Municipality, Free State • Nala Municipality, Free State • Dihlabeng Municipality, Free State • Thabazimbi Municipality, Limpopo • City of Matlosana, North West • Naledi Municipality, North West • MadibengMunicipality, NorthWest • RandfonteinMunicipality, Gauteng T he National Treasury does not currently have a plan on how it will finance the trillion rand nuclear deal signed by Energy Minis- ter Tina Joemat-Pettersson last year. Minister of Finance, Nhlanhla Nene admitted that the programme is a substantial financial commitment, and that government isundertakingacare- ful and thorough analysis of financing In the dark

Power utility Eskom has entered into payment agreements with 10 out of the 20 defaulting municipalities who owe Eskom for bulk electricity supply.

• Westonaria Municipality, Gauteng The utility said that the bulk electric- ity supplies of municipalities that have entered into an agreement with Eskom will not be interrupted. However, 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. “We are pleased that these 10 municipalities are doing their bit to ensure that they reduce the debt owed to Eskom,” said Eskom Act- ing Chief Executive, Brian Molefe. Meanwhile, Eskom has also issued public notices of impending power interruptions to defaulting munici- palities in Mpumalanga and the Free State Province. The affected munici- palities include: Emalahleni, Govan Mbeki, Lekwa, Msukaligwa, Maluti-a- options to ensure the affordability and long term sustainability. Gordon Mackay, Democratic Al- liance Shadow Minister for Energy said, “It can only be assumed that the South African taxpayer will foot the trillion rand framework agreement.” Questions for the Minister of Fi- nance and the Minister of Energy includes: • Whether Treasury was consulted before this deal was agreed upon and entered into?

Phofung, Matjhabeng and Ngwathe. The utility will implement the power interruptions from 6am to 10am and from 5pm to 9pm Monday to Friday and from 7am to 10am and 5pm to 8pm on Saturdays and Sundays. Eskom recognises that this will cause undue hardship to members of the public and businesses in the affected areas, and also have an ad- verse effect on the delivery of other services. The state owned entity said that disconnections are a last resort when all other options have been explored. “Eskom is working closely with the relevant national and provincial departments through local, national and War Room structures to manage themunicipal financial recovery pro- cess andwe believe that the work be- ing done within these structures will yield positive results,” said Molefe. ■ • If so, to what extent? • If not, what steps did the Ministers take to assess the financial feasibil- ity of the deal ? • Details about the procurement and process? • What date will the procurement process be finalised? Estimates suggest that the Nuclear Build Programme cost will range from R320 billion to R1,4 trillion — exclud- ing costly overruns. ■

June 2015