KLCBT responds to ESKOM’s advertisement of Bulk Power Interruptions in Mbombela City

The ratepayers of Mbombela City were shocked as news broke of an advertisement placed by Eskom of their intention to cut bulk power supply for 2 x 2 hours per day in key areas of Mbombela City as from 26 January 2017.  The reason for this is Mbombela City’s account with Eskom is currently not in good standing and the electricity provider had been lashing out against municipalities nationwide in order to collect outstanding amounts.

Should Eskom execute this bulk power interruption, the impact on business and tourism will be devastating, not to mention the traffic congestions and traffic accidents that will result during peak hours when electricity will be off, i.e. 06h00 – 08h00 and 17h00 – 19h30.

The KLCBT has been in close communication with Mbombela City and Eskom since the end of November 2016, to monitor the situation and to assist where they can, mostly to inform the public of the current status.

During a meeting with the CFO at Mbombela this morning KLCBT’s chairman, Pastor TJ Mare, established that R100 million was paid to Eskom during early December, against the R113 Million in arrears at the time.  This was after the first notice from Eskom was received.  Only R13 Million is still outstanding from this arrangement.  Another month passed and the total amount in arrears is currently R70 Million.

Mbombela City has asked for an extension to pay the outstanding amount, based on the fact that very little, if any, credit control is done during the holiday season and they need time to recover their cash flow.  As motivation for their request, they also offered that Mbombela has been progressively catching up on the amount in arrears and will be in a position, according to current cash flow projections, to settle the full amount by the end of March 2017.  Eskom acknowledged receipt of the request and is expected to respond by 17 – 20 January 2017.

The KLCBT requested Mbombela City to keep them informed on the outcome as well as payments in order for them to keep the public informed.  The communications officer at Mbombela City is currently on leave and no press releases can be issued by the City, which explains the unintended silence on their part.

Meanwhile the business community is furious because only the Nelspruit CBD and White River will be affected, while those areas typically comprise the ratepayers who are up to date with their utility accounts, while the outlying areas will not be affected.  They also demand that the Municipality should publish which areas are in arrears or which big account holders are in arrears and force them to pay their accounts, if not, their electricity should be cut, not the ones who are paying.  KLCBT undertook to monitor progress in this regard and assist the City where appropriate.

Latest media release from Eskom:   Media Statement_Eskom continues with its revenue collection efforts against non-paying municipalities 18-01-2017

From Mbombela’s side:  An urgent council meeting was called for Wednesday morning 10h00 to approve the necessary resolutions and plans to put forward to Eskom, as well as to approve contingencies to make further payments if necessary.  Mbombela will issue a press release immediately after the meeting which will be forwarded as a special newsflash to KLCBT members.  KLCBT is positive that the situation will be resolved successfully.  The requirements from Eskom are:

• A cash payment as negotiated with each municipality;
• A written undertaking in the form of a Council Resolution that current accounts will be honoured going forward;
• A payment plan for the arrears supported by a Council Resolution.

It is important to note the following quote from the Eskom media release:

“In spite of the fact that both the provisions of the Electricity Regulation Act 4 of 2006 and supply agreements (with the municipalities) empower Eskom to disconnect electricity completely, Eskom has opted for a softer approach of interrupting electricity during certain hours of the day.

We will be monitoring the strict adherence to the payment plans and the payment of current accounts of these municipalities and any defaults will result in the interruption of supply without further notice.

Municipal customers are encouraged to engage with their supply authorities to get updated information on their municipalities’ arrears situation.”