Urgent court bid launched against Eskom cuts*

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An urgent High Court application by Makhanda (Grahamstown) business and civil society entities to counter Eskom’s threat to cut off electricity to Makana is a last resort, says business forum chairperson Richard Gaybba. The application, warning of catastrophic effects on the town should the cuts proceed, is filed by the Grahamstown Business Forum, Grahamstown Residents Association, Beer Properties and Pinzon Traders 8. Beer Properties is the largest property owning company in Makhanda, and Pinzon owns Pick n Pay, the largest supermarket in the city. Makana Mayor Mzukisi Mpahlwa says the municipality is urgently addressing the Eskom threat, will not be opposing the application and would meet Eskom to review Makana’s current payment plan. Eskom is taking legal advice.

Eskom on 14 March 2019 advertised the planned cuts starting on 2 April, which from 8 April would be every day from 6am to 8pm. Eskom said this was their response to Makana Municipality’s failure to stick to its payment plan. Mpahlwa said on Wednesday 20 March that as per Eskom’s latest invoice, Makana owes Eskom R 84 478 288.80. This included an amount of R12 666 116.30 due on 4 April.

Certifying that the matter be heard urgently, High Court advocate Gavin Brown says such cuts would have dire consequences for hospitals, schools, emergency services, travel and tourism, business operations and industry in Makana and that this would lead to financial losses, closure of businesses and job losses.

“The short-term costs of alternative power supply are prohibitive and will not solve the problems which the suspension of electricity will cause,” Brown writes.

The suspension of electricity would have substantial repercussions for the provision of municipal services such as water and sewage disposal, Brown writes. “This, in a municipal area already crippled by drought and poor municipal management, will undoubtedly affect the health and welfare of the population.

“The suspension of electricity… will almost certainly, as a result of the above, lead to civil unrest as has been manifested recently in other areas of the Eastern Cape,” Brown writes. For this reason, it was necessary for the applicants to bypass normal High Court protocols and deadlines to obtain urgent relief and the application is requested for Thursday 28 March.

Eskom is named as the first respondent, the National Energy Regulator of South Africa (NERSA) the second and Makana Municipality the third. The Mayor and Municipal Manager are also named in their official capacity. They are given until 10am on Monday 25 March to notify the applicants’ attorneys, Wheeldon Rushmere and Cole, if they intend to oppose and to file answering affidavits by midday on Tuesday 26 March. The applicants’ replying affidavits would then be filed by 4pm on Wednesday 27 March.

Devastating and irreparable effect

The Notice of Motion asks for Eskom to be interdicted from interrupting or terminating Makana’s electricity supply. Alternatively, that Makana Municipality is ordered within three days to pay all outstanding amounts to Eskom and Eskom is ordered to supply electricity on an uninterrupted basis to Makana Municipality. The third option offered is for Eskom and Makana to agree within three days to a new payment plan to ensure uninterrupted supply.

The applicants have asked the court to order Makana Municipality to comply with the conditions of a new payment plan, and not to deviate it without approaching the Court for permission to do so. In addition, they have asked that Makana Municipality:
* Reports to the court on their compliance, by the end of each month;
* Complies with the 24 November 2017 Council resolution by ensuring electricity revenue and a portion of the equitable share be ring-fenced for electricity payments;
* Nominates a responsible person to ensure this compliance.

The proposals by Eskom would have a devastating and irreparable effect on Makana Municipality and those who work in it, the application states.

“Not only will the interruption threaten the very fabric of society, it will threaten inter alia Rhodes University, the various government schools, businesses and the tourism industry,” the application states.

“An interruption, as proposed by Eskom, will also disrupt, possibly irreparably, the water supply to Grahamstown as this relies entirely upon the pumping of water from the various reservoirs and dams that supply the Grahamstown Municipality, which are considerably lower than the height of Grahamstown, and which needs to be pumped up, in bulk, to Grahamstown and its reservoirs.”

Grahamstown Business Forum Chairperson Richard Gaybba, in an interview Tuesday 19 March with Grocott’s Mail, said the coalition had not gone into the matter lightly.

“This is a last resort,” Gaybba told Grocott’s Mail. “No business can survive first the threat of loadshedding and the uncertainty that causes, nor secondly the 14-hour cuts threatened from 8 April. This would destroy Grahamstown’s economy.”

In addition the denial of water to residents would most severely affect the poor majority, who couldn’t afford to buy bottled water for drinking.

Gaybba said while the GBF’s relationship with the municpality was generally supportive and constructive, for the Forum not to act on the denial of basic services would be doing their constituency a disservice.

The papers had been signed and would be served on the various respondents this week, Gaybba said.

In a telephone interview on Thursday 21 March, Mpahlwa said, “We are not going to oppose the action by the groups. We are of the view that Eskom ought to have engaged the municipality before the threat.”

In his weekly report to residents, ‘From the Mayor’s Desk’, published in Grocott’s Mail, Mpahlwa said, “We are planning to pay an amount of R12.6 million to Eskom this month. We will also seek to renegotiate our payment plan to ensure that we can afford to make monthly payments to Eskom. Once this payment is made, we don’t expect Eskom to go ahead with bulk supply interruptions.”

Mpahlwa said Makana’s senior officials, supported by officials from the Department of Cooperative Governance and Traditional Affairs (Cogta), would meet with Eskom in the coming week to review the current payment plan.

“Despite all our financial challenges, we have been able to pay our Eskom current account,” Mpahlwa said.

Eskom on Monday 25 March replied to Grocott’s Mail’s query as to whether they would oppose the application. Eastern Cape spokesperson Zama Mpondwana said, “We have referred the matter [to]our legal advisors.”

News24 recently reported that three chambers of commerce in Mpumalanga recently succeeded in having set aside Eskom’s interruptions in the Thaba Chweu Local Municipality. The supply interruptions were because of unpaid accounts. In November 2018, Eskom was interdicted from cutting or interrupting the power supply to Musina because of non-payment. This was also reported in News24.

  • Article updated at 7.30pm on Thursday 21 March to include comments from Makana Municipality.
  • Article updated on Tuesday 26 March to include comment from Eskom.

WHAT ABOUT THE EXISTING LOADSHEDDING?

Grocott’s Mail asked Grahamstown Business Forum Chairperson what effects the current extensive loadshedding was having on local businesses and institutions.

“The uncertainty and the threat is very damaging to institutions,” Gaybba said. “It puts off investors and potential home buyers and unsettles residents.”

Very worrying was that the loadshedding reduces a water supply that is already severely under pressure.

“To be honest, the mood among many is hopeless. The city’s psychological state is stressed, with the strikes and service delivery failures and the drought. The loadshedding adds to that.”

During the recent regular 9am-11am loadshedding, Gaybba said, most CBD retailers were closed.

“In an already very difficult trading environment, local businesses can’t afford that,” he said.

Generators were prohibitively expensive, Gaybba said.

“The only businesses thriving in this environment are those supplying pumps and generators, or drilling boreholes.”

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