(Photo: Dirk Hermann/Facebook)
The DA is going to ask the parliamentary portfolio committee on electricity and energy for a comprehensive investigation into Eskom’s rollout of agency agreements for power distribution (Distribution Agency Agreements, or DAAs), which according to the party do not produce the intended outcomes.
According to the party, these agreements, which are meant to solve the crisis in municipal power supply, are failing, while debt levels are soaring.
Maroela Media reported earlier that Eskom disclosed in a notice that municipalities’ overdue debts to it now amount to more than R110 billion. This causes an existential crisis for the power giant. Eskom has also already exhausted the intergovernmental process that the courts must follow before Eskom can cut off the power supply.
Kevin Mileham, the DA’s spokesperson on electricity and energy, says the situation has reached a critical point.
“With municipal debt to Eskom estimated to rise to R300 billion by 2031 if not tackled, the current intervention plan is failing.
“Although 71 municipalities are enrolled in the national treasury’s debt relief program, only 10 out of 71 currently meet their payment conditions.”
According to Mileham, this is not a relief program, but rather a “deferral of execution for bankrupt administrations at the expense of the South African taxpayer”.
So far, only three municipalities have signed these agreements for “active partnerships”, namely Maluti-a-Phofung in May 2023, Emfuleni in October 2024 and Merafong in December. This was far below Eskom’s own target of having 14 such agreements in place by the end of March this year.
Mileham believes lawsuits and resistance within various institutions are delaying the rollout of the programs. The DA is now demanding that Eskom appear before the portfolio committee to account for the lack of progress with the 11 pending agreements.
“We need a transparent breakdown of how much revenue has been collected and how much of it has been reinvested in infrastructure in the three pilot areas,” he says.
The viability of the DAAs is also being questioned due to legal disputes. In Merafong, the agreement is already being contested in court due to a lack of public participation and non-compliance with art. 78 of the Municipal Systems Act. In Emfuleni, Eskom even had to seize bank accounts to try to recover R8 billion in arrears.
Mileham questions whether these agreements are really technically viable or whether they merely serve as debt collection tools. He further emphasized that the committee itself must investigate the affected communities.
“Residents in Maluti-a-Phofung continue to suffer from defective infrastructure, despite Eskom’s so-called technical supervision. The committee must observe first-hand how the R25 billion annual technical losses are handled in this area.”
The DA calls on the committee to finalize a balanced standard framework for DAAs in collaboration with the portfolio committee on cooperative governance and traditional affairs.
Although the treasury has already instructed that the current problematic agreements be reformulated, according to Mileham, Eskom’s leadership is taking a defiant stance. .
“We cannot allow the ‘active partnership’ model to become another layer of state-supported bureaucracy that fails to keep the lights on. The minister must explain why the municipal debt mountain continues to grow by R15.9 billion per year after three years of ‘pilot programmes’,” he says.
He says the DA will ensure that this investigation is prioritized to protect the 16% of municipalities that still maintain clean audits against the collapse of the rest.