Eskom debt update

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Legal action by local business people has been put on hold after evidence that Makana Municipality is back on track with its payments to Eskom. However, litigation would remain an option should things change.

In a letter sent to its members Thursday 1 November, the Grahamstown Business Forum said Makana Municipality had, to date, settled all amounts outstanding longer than 60 days and had committed to making the remaining payments to Eskom before 19 November 2018.

The settlement was contrary to the statement issued by Eskom’s Media Desk to Grocott’s Mail on 29 October and reported on Grocott’s LIVE that day.

The Forum was poised to take legal action until Wednesday night; however, scrutiny of documents from Council and Eskom indicated discrepancies in the amounts paid.

“The minutes of the council meeting grossly overstated the outstanding debt as at 30 September 2018 as R85.1m. The correct amount was in fact R50.9m,” the GBF said.

“Makana Municipality has to date, settled all amounts outstanding longer than 60 days, contrary to the press statement issued by Eskom on 29 October. The statement was released prior to acknowledging a significant payment made, by Makana, to Eskom on the same day.”

The Forum said it had engaged successfully with the Office of the Premier and Eskom.

“Makana Municipality has committed to making the remaining payments to Eskom before 19 November 2018. This is the deadline set by Eskom before a final decision is made to shut off power to the city,” the GBF said.

Legal process

In her introductory remarks at a drama-filled Special Council Meeting on Monday 29 October, the Mayor said that Eskom had been paid and that the cut-off was no longer a threat.

However, Grocott’s Mail on the same day sent a query to Eskom and received the following response from the Media Desk: “Eskom confirms that Makana Local Municipality made minimal payments early in October. The two amounts paid are nowhere near to what the municipality owes. Eskom continues to follow the legal process as advertised.”

Grocott’s Mail has received no response to a subsequent request to the municipality to comment on the contradiction.

As the temperature soared toward the day’s 42C maximum, a heated exchange in the Council Chamber Monday 29 October, saw the DA caucus walk out, forcing an adjournment of the Special Council Meeting. The party was protesting against the failure to include an item on Sun City informal settlement in the agenda.

In their statement issued later on Monday, the DA cited the municipality’s failure to pay Eskom and the resulting threat that the supply to the town would be cut on 4 December. They said the Mayor should resign and have voiced their support for the call by some residents to dissolve the council and for fresh elections to be held within three months.

“In 2017 council adopted a DA sponsored resolution that all revenue generated from the sale of electricity be ring-fenced and used to service the Eskom debt,” said caucus leader Mlindi Nhanha. “It is the Mayor’s responsibility to ensure that council resolutions are implemented without fail. The Mayor has failed the residents of Makana and failed to steer an ad hoc committee that was set up to develop a strategy to save the Municipality from collapse.”

Dissolve

Nhanha said the party supported the call by concerned residents to dissolve the council and that fresh elections be held within three months.

A petition campaign by a group of residents calling for the dissolution of Council stood at 12 750 signatures as of 29 October. Organiser Daphne Timm said they would do a final tally on Monday 5 November, the day before an 11am march from two meeting points – Fingo Square and the Drostdy Arch – meets outside the City Hall to hand over a petition to the MEC for Co-operative Governance, Fikile Xasa, between 1pm and 2pm.

The petition and the march call for the dissolution of the Makana Council in terms of Section 139(1)(c).

The GBF said, an application to the court based on urgency was no longer warranted so they had decided to not pursue litigation.

“However, there are no guarantees that we won’t be faced with a similar crisis in future. The GBF will to monitor the situation closely and such legal action remains an option should the need arise.”

In the Makana Council, the EFF has two councillors, both PR. The ANC has 11 ward councillors and 6 PR councillors. The DA has 8.

The DA caucus walkout left 13 of 27 councillors in the Council Chamber and no quorum. Four ANC councillors absent means they were missing their usual two-thirds majority.

The Special Council meeting was adjourned to Wednesday 7 November at 9am.

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