MEC Anton Bredell on proposed Eskom price increases

 “The impact of Eskom’s drastic application for a 43.5% price increase to municipalities will go far beyond just making electricity unaffordable for many people. It would also destroy the ability to provide basic services by the few remaining functioning municipalities in South Africa,” Anton Bredell, Western Cape Minister for Local Government, Environmental Affairs and Development Planning said.

Minister Bredell said Eskom needs to focus on improving its operational capacity, and it should not be allowed to make the public pay for its inefficiencies. “Eskom’s mismanagement has directly led to the skyrocketing electricity prices in South Africa in recent years. Examples of wasteful and reckless spending, such as paying R238 000 for a mop, or R26 for a roll of single-ply toilet paper were uncovered in recent years. Eskom at one stage paid R51 for a single black refuse bag that costs R2.99 at retail stores.

Protective knee pads were inflated from R4 025 to a staggering R934 950 by a previous supplier. These examples are mere indicators of huge operational inefficiencies that have been the norm at the utility for many years.

Currently the utility is functioning by the grace of the Eskom Debt Relief Act of 2023, which aims to provide R254billion in debt relief over a number of years. Eskom received R21.9billion in support from the fiscus in 2023, which allowed it to improve its maintenance efforts, but we do not know if it is still overspending on items such as toilet paper and mops. Now Eskom wants overstretched South Africans to pay for its own inefficiencies.

Municipalities in South Africa are struggling, and this is well documented through reports such as from the Auditor General, which found that more than 25% of municipalities in the country are dysfunctional. Only 11.67% of municipalities are considered stable. Out of 257 municipalities, only 34 received clean audits, of which 20 were in the Western Cape.

Over the years, many local authorities have started to cross subsidise essential services such as water, infrastructure maintenance, and waste management through the sale of electricity, which was seen as an easy way to make money. This has led to the current situation where some municipalities have up to 3 different fees it adds to the sale of electricity. Availability fees, Ampere fees, and several new fees to compensate for the loss of sales due to people migrating off the grid to solar systems. 

The result of this is that each time Eskom hikes prices, municipalities are increasingly in a bind, as not only are they loosing electricity sales, but the other services subsidized through electricity sales also suffers. A 43.5% increase in electricity prices will be a death blow for many municipalities in terms of basic municipal services, especially to indigent residents.

Eskom’s proposed increase will affect the poorest of the poor the most. Currently, indigent households are entitled to 50 kWh of electricity per month, 6 kiloliters of water per month and free weekly waste removal. Research commissioned by the Western Cape Department of Local Government and conducted by the University of Stellenbosch in 2023 found that the current 50kWh of free electricity is not enough to secure a dignified existence, and it should be 150kWh per month.

Instead of hiding its operational weaknesses and inefficiencies behind exorbitant price increases, Eskom, and government on a national, provincial and local level, should be seeking solutions to provide adequate free electricity and basic services to our most vulnerable residents.

 As starting point could be to ask whether indigent households should pay VAT on electricity. If we do not readjust our focus towards the dire needs of our poor and vulnerable communities, we are risking the very essence of our democracy and social stability, which is already at a breaking point due to unacceptably high levels of poverty, unemployment and inequality.

For enquiries:
Wouter Kriel
Spokesperson for Minister Anton Bredell
Cell: 079 694 3085
E-mail: Wouter.kriel@westerncape.gov.za