HomeAfrica-NewsOut of money and out of power: Maluti-a-Phofung in governance freefall as...

Out of money and out of power: Maluti-a-Phofung in governance freefall as Eskom debt soars

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The residents of Maluti-a-Phofung are suffering without electricity.

  • The Maluti-a-Phofung municipality in the Free State is drowning in financial trouble.
  • Communities have been without electricity for days and the quality of other services worsens.
  • The municipality has consistently ranked among the worst-run councils in South Africa.

The Maluti-a-Phofung township in the Free State is on the verge of total collapse, with no money and no electricity.

Now the electric power company Eskom wants to move and take electricity distribution, which includes revenue functions, out of the municipality.

The move has angered the SA Local Government Association (Salga), which believes the plan will be detrimental to the municipality.

In a statement, Salga said the proposed partnership agreement between Eskom and the municipality was intended to help the council with operational challenges to ensure a revenue stream and enable bulk electricity bill payment.

It is intended to take over the electricity distribution function, including all income related to the functions, outside the municipality, Salga said.

But he added: “Salga believes that the distribution agency agreement is only fueled by the needs of one of the parties and is not sustainable for all parties signing the agreement and neglects the fundamentals that electricity is an important source of income.” financing for local government.

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Tebogo Hlakutse, chair of Salga’s energy and public works task force, said: “We appreciate the challenges some municipalities face in carrying out their role of executive and service authority over electricity.

“Salga supports establishing a sustainable and balanced partnership agreement with Eskom or any entity that has the capacity to provide the electricity distribution services to provide sustainable and reliable electricity services to communities.”

The municipality is made up of towns such as Kestell, Harrismith and QwaQwa.

Salga believes that Eskom’s current distribution agency agreement does not meet the needs of Eskom and the municipality in an equitable and fair manner.

“Of particular concern is the financial sustainability of the municipality once Eskom takes over the electricity distribution function, including all revenues related to the function. The distribution agency agreement also requires the Maluti-a municipality to -Phofung pay off the total debt amounting to nearly R6 billion, as well as additional service fees, Hlakutsa said.

“In addition to this, if Eskom is appointed to be the service provider on behalf of the municipality, it must do so through the process legislated by the Municipal Systems Law, where Eskom, as a service provider or agency, is expected to comply [with] the statutes of the municipality in what refers to the control of credits, surcharges and other matters related to electric power services”, he said.

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Meanwhile, the DA has warned that the municipality’s financial problems have worsened.

He is struggling to pay salaries and communities are left without power for days.

DA Councilor Alison Oates said the township’s budget was accepted on the basis of a promise that all political parties would support a financial recovery plan.

“Sadly, this did not occur. The municipality’s inability to manage its finances has resulted in a collapse in community service delivery, which has deteriorated the area’s infrastructure. As the cost of living has affected millions across the country, it’s ridiculous that mismanagement has led to hardship in the poorest areas of this already struggling country,” Oates said.

Efforts to contact the mayor and officials were unsuccessful.


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