Emfuleni Local Municipality petition

Meeting report

Presentation by the petitioners

As the sponsor of the petition, Mr D Ryder (DA, Gauteng) remarked that the issues around the non-attendance at this, and the last meeting, by the invited stakeholders, were disappointing. It showed the priorities of the leadership in dealing with the issues of the Emfuleni Municipality.

He noted that the municipality was the worst run in both Gauteng and the country. The petition before the Committee was signed by the people who resided in the municipality, because of their troubles with electricity provision. The situation involved a dual distribution arrangement, where the municipality buys electricity from Eskom and then sells it to customers, and in some areas, Eskom provides the service directly to residents.

Emfuleni owed a huge debt to Eskom, part of which was a legacy debt. As a result, the municipality was not making any profit, and running at a loss when it came to electricity distribution. The area from which the petition emanated, the Vaal, received its supply directly from Eskom. This was an area that had been underdeveloped and underserviced because of historical apartheid spatial planning, and had seen huge population growth over the years, placing a burden on the services network. Transformers and reticulation systems had been capacitated to meet the required demand. There was also vandalism and theft of infrastructure in the area. Eskom had become frustrated at the number of times they have been called out to fix transformers and to replace some due to the reported reasons. In some instances, this burden had fallen on residents, who had to absorb the cost of these incidents related to the transformers in the area. Customers were being asked to sign acknowledgements of debt to pay for this over time, which many could not afford to do, leaving them without electricity for prolonged periods.

When the petition was initiated, Mr Kingsol Chabalala (DA, Gauteng Provincial Legislature) was originally approached by the residents. He confirmed that there was a serious crisis with electricity supply in areas supplied by both the municipality and Eskom. The community was seeking assistance with broken and faulty transformers, as their lives and businesses in the area were affected. They wanted the support of the Committee to ensure that in instances where a transformer was broken, it would be fixed within 30 days, and 14 where it was faulty. He reported that a practice emerged where some Eskom employees offered to assist communities independently and asked for payment. The residents also wanted the National Council of Provinces (NCOP) to hold public hearings in the area on these issues, and ensure the attendance of the municipality, Eskom and the provincial Department of Cooperative Governance and Traditional Affairs (COGTA).

Presentation by the Gauteng COGTA

The presentation covered the following areas:

• The Premier announced the interventions in terms of Eskom and municipality-supplied areas in the municipality. These included transformer replacement, which went hand-in-hand with smart meter installation to ensure revenue protection for municipalities, so they were able to fix transformers when problems arose. This also included the replacement of transformers that had come to the end of their life, and those that had been out of service for extended periods.
• COGTA interventions from the infrastructure and finance perspectives.

(See presentation)

Presentation by Emfuleni Municipality

Mr April Ntuli, Municipal Manager, Emfuleni Municipality, informed the Committee that the municipality had applied for debt relief from the National Treasury, which had been approved from 1 June 2023. They continued to work with Eskom, in line with a recent court ruling against the municipality, which directed that Eskom be appointed as the agent for electricity revenue collection, and an agreement to this effect was being finalised. They were hopeful that this would resolve the revenue challenges. On Rand Water, the account of the municipality was currently being partly uplifted after the attachment, but parties had signed a Memorandum of Agreement (MoA) to create a special purpose vehicle (SPV), to keep the money collected to pay the debts.

Mr Ernie Strydom, Acting Executive Director: Public Works, Emfuleni Municipality, led the presentation. It covered the responses to the issues of the challenges in areas that were supplied by the municipality. He outlined the process undertaken by the municipality to refurbish the infrastructure.

(See presentation)

Response by Eskom

Ms Amanda Qithi-Baanyang, Manager: Communications and Stakeholder Relations, Gauteng Eskom, informed the Committee that the infrastructure audit done by the organisation had shown that one of the main causes for the transformers to falter regularly was the overloading on the system, mostly by illegal connections. Eskom had embarked on education campaigns with communities around these issues. Illegal connections to transformers were identified and transgressors issued fines of R6 000. However, they had entered into deferred payment arrangements with customers, starting with R500 payments.

She confirmed that Eskom had continued working with the municipality to recover the debt owed and implement the court judgment. They had also engaged the large power users through the Business Forum, to urge them to pay what they owed to ensure the continued provision of services.

Discussion     

Mr Ryder remarked that the presentations showed that some nice plans were in place, but the reality was that they did not deal with the key problems on the table. People did not have electricity, in some cases, for protracted periods. The responses did not give much to report back to the petitioners on their challenges.

He responded to Ms Baanyang, noting she had mentioned that Eskom was engaging with councillors regularly. In his experience, and those of many councillors, this was not true. Better communication strategies must be devised. He also disputed the submission that only identified illegal connectors and those who bypassed connections were fined, arguing that this was not the experience of the residents on the ground. Many had been billed for this, without a proper explanation provided.

He also noted the admissions by both COGTA and the municipality of the failure to provide services due to the attachments of the municipal account for long periods of time. Section 139(5) of the Constitution addressed this, and recommended that certain steps must be taken to amend that situation, and he believed that those steps must now be triggered and applied accordingly.

Mr Chabalala wanted to find out from COGTA the timeline for replacing transformers, and whether this would be between January and March 2024. The issue of overloading of transformers could not be blamed solely on illegal connections, but also on the migration of residents whose transformers had been out of service for long periods, to those that worked. He enquired what would happen with the payments of the R500 instalments towards fines by households.

Mr C Dodovu (ANC, North West) said that the Committee had visited Emfuleni Municipality just over two and a half months ago to check on the state of affairs. It had engaged a number of stakeholders and the community, and was fully aware of the situation. The visit followed a bleak report of the affairs of the municipality from the Auditor-General of South Africa (AGSA).

He felt that the three presentations had failed to outline the provincial government's role, prior to the municipality getting into this crisis. The Committee was also not privy to a close-out report by the administrators on how those processes had been concluded. He felt that the contribution at the meeting had been inadequate. The presentations also did not address the interventions of the municipality on ageing infrastructure and other matters. The attachment of the accounts could not be excused. A series of events had led to this, and a court ruling that could have been avoided.

It was alarming that the municipality spends only about 2% of its budget on infrastructure, so it should come as no surprise that it now faced the challenges it did. The municipality also loses about R3 billion a year on electricity revenue. He noted that the Eskom debt relief had its own conditions and clauses that the municipality must fulfil, but with the rate at which the municipality was performing, there were concerns. The municipality and the province must understand the situation the people of Emfuleni found themselves in because of their inaction.

Mr E Mthethwa (ANC, KwaZulu-Natal) submitted that the presentations should be appreciated, in that they had enlightened the Committee on the challenges that existed there, as had the plans presented. It was important to emphasise the need for these plans to be fast-tracked. The Committee must sit and discuss these matters further, and come up with its own recommendations.

Mr R Badernhost (DA, Western Cape) proposed that the matter be referred to the Select Committee of COGTA for further investigation and a way forward.

Dr Darion Barclay, Head of Department: COGTA, Gauteng, responded that the presentation by the Department was centred only on the issues raised by the petition. The replacement of transformers, where required, was already underway, but Emfuleni Municipality was indeed earmarked for the January-March 2024 period. The Department continued to support the municipality, even during the administration period.

He said there was a close-out report, and should the Committee wish, its information could be made available in a different setting. There was an engagement process with communities that the provincial government would undertake before the replacement of the transformers. The petitioners would be informed of this.

Closing remarks

The Chairperson commented that the Committee would discuss the matter and formulate a report that would be tabled before the NCOP for adoption. The recommendations would be shared with all the stakeholders.

The meeting was adjourned.