(Archive photo: Du Preez de Villiers/Maroela Media)
AfriForum has taken legal action against the Merafong local municipality (Carletonville), Eskom and the National Energy Regulator of South Africa (Nersa) regarding the legality of a distribution agency agreement concluded between Eskom and the municipality.
Eskom announced in a media release earlier this year that they entered into an agreement with the municipality due to the municipality’s failure to settle a significant outstanding debt.
In response to this, AfriForum submitted a formal reminder letter to the municipality in which clarification is requested regarding alleged procedural irregularities surrounding the conclusion of this agreement which was signed in December 2025.
AfriForum specifically expressed concern about whether the agreement complied with the required legislative framework. The organization requested evidence that all statutory requirements had been met, including the publication of public notices, the execution of feasibility studies, the adoption of council resolutions, as well as the necessary approvals from the National Treasury and Nersa.
Despite these requests, the municipality failed to provide any response.
As a result, AfriForum has now approached the court to request an order declaring that Nersa has failed to fulfill its duties as custodian and enforcer of the regulatory framework provided for in the Electricity Regulation Act.
In addition, AfriForum asks the court to declare the distribution agency agreement between Eskom and the Merafong municipality illegal and invalid and to set it aside.
“This court case is of critical importance,” says Morné Mostert, head of local government affairs at AfriForum. “Although it is well known that many municipalities across the country are failing in their core functions – including paying bulk service providers such as Eskom – this cannot justify circumventing the law.”
AfriForum warns that attempts by Eskom and the National Treasury to force municipalities into distribution agency agreements without complying with the prescribed legislative framework create a dangerous precedent.
“Allowing illegal processes to take root undermines the rule of law and opens the door to further failures in government,” says Mostert.
AfriForum further emphasizes that Eskom itself has a questionable track record, including concerns about financial management, procurement processes and the execution of tender procedures.
“Putting a struggling municipality under the control of an already failed power supplier known for corruption and financial mismanagement is unlikely to solve the underlying problems,” adds Mostert.
AfriForum believes that Nersa should instead fulfill its mandate by identifying municipalities that do not meet the requirements and, after the necessary processes, revoke their electricity distribution licenses where necessary. After that, a transparent tender process must follow so that competent service providers can take over the management of these licences.
AfriForum remains committed to ensuring that legal, transparent and sustainable solutions are implemented to deal with the country’s municipal and electricity crisis.