Residents of the Northern Cape must stand together against Eskom’s tariff increases now or run the risk of rapidly deteriorating municipal services.
While the Northern Cape’s equitable share is projected to grow by an average of 4.8% over the next three years, Eskom is demanding an increase of 40% in its tariffs just for one year alone. If NERSA gives in to this greed, government departments that already owe municipalities millions of rands will take even longer to pay their municipal bills as the Northern Cape Provincial Treasury will not be able to give departments 40% more for electricity.
When departments fail to pay their bills, municipalities face cashflow constraints that make it difficult to fund adequate service delivery and residents must bear the consequences. As the Northern Cape Department of Roads & Public Works alone owes Sol Plaatje more than R570 million, for example, the municipality in turns owes Eskom just over R1 billion. Approximately 98% of the debts owed by this department to Sol Plaatje is outstanding for more than 90 days and the longer any department takes to pay its bills, the less likely it is that the municipality will receive every cent owed to it.
No wonder that the Auditor-General confirms that 67% of debts owed to Northern Cape municipalities is deemed irrecoverable, with municipalities effectively receiving only R1 out every R3 owed to them. Rates of irrecoverable debt are even higher for some municipalities, as 94% of debts are deemed irrecoverable in the Khâi-Ma Local Municipality while 86% are deemed irrecoverable in the Ubuntu Local Municipality and 89% are deemed irrecoverable in the Tsantsabane Local Municipality.
Eskom’s demands will worsen this situation and will inflict further harm on consumers. We urge residents of the Northern Cape to sign our petition against unjustifiable tariff increases at StopPowerGrab.da.org.za and to participate in upcoming public hearings, scheduled for November in the Northern Cape.