Deputy President David Mabuza gives up on Maluti-a-Phofung Eskom deal

13 May 2022 in Press Statements

Note to Editor: Please find English and Afrikaans soundbites by Leona Kleynhans MPL

Deputy President Mabuza has now abandoned all pretence at being able to enforce the Eskom deal which was negotiated over two years by the Eskom Task Team of which he was the Chairperson. In the NCOP question session on 12 May, in reply to a question from the DA, Mabuza said government has done ‘everything possible’ to get the municipality to comply.

The committee came as a result of a Bloemfontein High Court order in October 2018 to find a solution to the exploding debt to Eskom in Maluti-a-Phofung municipality. Various Ministers, MEC’s, government departments, Eskom, Nersa and representatives of the Harrismith Business Forum spent two years negotiating a way to address the crisis and repay the debt.

With great fanfare, and media interest, Mabuza announced in December 2020 that a settlement had been reached which entailed Eskom taking over the electricity function in Maluti-a-Phofung. This included revenue collection, a capital investment into infrastructure upgrade, and the repayment of the now R 7 billion debt over the term of the agreement.

The previous ANC council vehemently resisted the deal, despite numerous visits by Mabuza and Eskom’s Andre de Ruyter. The Gauteng High Court in June 2021 ordered Maluti-a-Phofung to implement the deal. The newly elected MaP16-led council has equally resisted the deal, because the revenue would be paid straight into the Eskom bank account, thus by-passing the municipal coffers.

In his reply Mabuza said that MaP and Eskom had reached a ‘breakthrough agreement’ on 22 April, in which MaP acknowledged the debt, and agreed to pay the monthly current account to Eskom. Clearly the Deputy President is either overly optimistic, or is being misled, because by the end of April the municipality had already failed to pay the required amount.

The fact is that it is impossible for this municipality, despite the best will in the world, to repay the R 7 billion debt and still be able to function. This is precisely why the Bloemfontein High Court ordered the establishment of this committee in 2018. Deputy President Mabuza chaired this committee, but has clearly given up on trying to enforce it or the court order of June 2021. The Deputy President who was responsible to find a solution is now a lame duck.

The Democratic Alliance will continue to put pressure on the MEC of Cogta in the Free State to persuade the MaP council to comply with the year old court order in the interests of the beleaguered residents and businesses of Maluti-a-Phofung who are the victims of this bankrupt municipality. Indications are that council is now seriously considering the adoption of the agreement, but is yet to finally resolve on the matter.