How will Eskom ever recover Soweto’s R17bn debt?

Johannebsurg – The solution to Soweto’s R17 billion debt to Eskom is much more complex than disconnecting defaulters and installing prepaid meters.

Experts suggest solving the historical, political and economic causes as key to finding a lasting solution. The country’s biggest township debt has been identified as one of the municipalities’ major contributors to the power utility’s R420bn debt.

Activist and a leader of the 1976 Soweto uprising Seth Mazibuko pointed to a lack of consultation and put the debt in historical context.

“Poor people are not talked to when they are asked to vote. But when Eskom is in a mess they are the first to be blamed. The culture of non-payment has its history as a tool to bring down apartheid.

"People need to be galvanised in a proper way that they need to pay and that must be done by talking to them, and not threatening them. How much is Brian Molefe (former Eskom CEO), his board, the Guptas and former public enterprises minister Lynne Brown owing Eskom if Soweto is owing R17bn? How are they going pay back the money?” asked Mazibuko.

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A Soweto resident shows the newly installed prepaid meter at his home.

Political analyst Dr Somadoda Fikeni said the debt was a product of many factors.

“Politically it (Soweto) has a muscle which other townships do not have, and some people are aware of that and they take advantage of it,” said Fikeni.

But SA Institute of Race Relations (SAIRR) chief economist Ian Cruickshanks said Sowetans cannot afford to pay electricity for as they were promised free service delivery.

“It was a political decision to do this and it’s now hard to get out it. And Eskom also can’t afford to give people free electricity indefinitely. It’s hard because if they cut them off then what will be the reaction with an election just a couple of months away.”

Meanwhile, SA National Civic Organisation (Sanco) Gauteng chairperson Chris Malematja said a suspense account should be created for residents to settle the amount.

“They will have to make arrangements and tell how people will pay that money because what we cannot allow is to see a situation where people don’t have electricity on the basis of whatever that is owed. It was not their fault but a responsibility of Eskom as an institution to ensure that they’ve got all measures that will ensure there is no default,” said Malematja.

Eskom has been installing prepaid meters in Sandton, Midrand and parts of Soweto from 2014 to address the debt collection problems, but this put the utility on a collision course with some residents.

An Eskom media representative, who declined to be named, acknowledged problems in debt collection.

“Soweto has always been volatile A decision was made to write off debt of R1.3bn incurred in 2003 and a portion was moved to suspense debt. Several attempts to collect the debt have proven a challenge throughout the years,” he said, adding that intimidation of Eskom employees in the area compounded the problem.

In the same breath, SA Local Government Agency (Salga) executive director for municipal infrastructure and services Jean de la Harpe said Salga was working with the Department of Co-operative Governance and Traditional Affairs (Cogta) and National Treasury to address this problem.

DA shadow minister of public enterprises Natasha Mazzone echoed sentiments on the problem being multi-layered.

“Collection in Soweto is problematic for a number of reasons such as the culture of non-payment, poor collections and credit control by Eskom, and slow rollout of prepaid partly because of lack of consultation with the residents,” said Mazzone.

ANC acting spokesperson Dakota Legoete also acknowledged the historical problem, saying the party had engaged Eskom on finding lasting solutions. “The challenge in the main is historic (pre-democratic dispensation era). Those solutions include the green box (tamper-resistant meters) programme and prepaid meters which are yielding positive results.”

The Sunday Independent

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