Do not cut off businesses who pay for electricity

Disrupting the electricity supply to businesses paying their bills on time will lead to greater socio-economic challenges, especially in rural areas. This is according to Afrikaanse Handelsinstituut (AHI) CEO Christo van der Rheede.

Recent reports suggest that Eskom may cut the electricity supply to 20 defaulting municipalities as a way to force them to pay their bills.

The total municipal debt older than 30 days stood at R4.6 billion as of March 2015, Eskom said in a statement.

Of this amount, the top 20 defaulting municipalities currently owe Eskom R3.68 billion for the bulk supply of electricity.

Eskom said it was “contemplating” a regulated interruption of electricity. Such an intervention would affect both paying and non-paying clients.

Van der Rheede said their members who have business interests in these municipalities are paying their bills on time. “However, it is clear this money is not paid over to Eskom.”

He said Eskom’s proposed reaction to the predicament is understandable. “However, disrupting the electricity supply to businesses paying their bills on time will lead to greater socio-economic challenges, especially in rural areas.”

“Businesses are already confronted with a range of factors undermining growth and sustainability. Consequently, these planned disruptions will be disastrous for many of them.”

During the AHi’s last meeting with Deputy President Cyril Ramaphosa and Minister of Energy Tina Joemat-Pettersson in Pretoria, representatives of Business Unity South Africa (Busa) and other role players were assured of the government’s commitment to open and regular communication about the situation at Eskom.

Eskom’s latest announcement about its plans to interrupt the electricity supply to defaulting municipalities does not reflect the letter and spirit of this commitment to the business sector, van der Rheede said.

“The AHI, on behalf of small business in South Africa, appeals to Busa to take this issue up with Eskom as a matter of urgency.”

“In addition, businesses operating in the jurisdiction of municipalities which are defaulting on payments to Eskom must be given the opportunity to purchase electricity directly from Eskom.”

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Do not cut off businesses who pay for electricity