Eskom and CoJ back away from punishing paying residents

The Organisation Undoing Tax Abuse (OUTA) says the reported agreement between Eskom and the City of Johannesburg to avoid electricity supply interruptions while addressing the City’s growing debt suggests a retreat from an approach that would have unfairly punished paying residents and businesses.

OUTA says the development follows growing public concern over the possibility that residents and businesses could face supply interruptions despite continuing to pay for electricity through their municipal accounts.

“The reality is that Johannesburg residents and businesses cannot continue becoming collateral damage for years of municipal financial mismanagement and governance decline,” says Julius Kleynhans, OUTA Executive Manager. “The fact that government is now publicly acknowledging that paying residents cannot carry the consequences of municipal failure marks an important shift.”

OUTA notes comments by Minister of Electricity and Energy Kgosientsho Ramokgopa, who acknowledged that many residents continue paying for electricity and should not unfairly carry the consequences of failures within the City’s administration.

“There are a lot of customers who are paying and I think it would be particularly unfair for those customers to be collateral damage, so we need to find a solution,” Ramokgopa said following the agreement discussions.

OUTA says the agreement reflects growing pressure on Eskom and government to find alternatives to broad supply interruption threats.

Earlier this week, OUTA proposed that Eskom should consider mechanisms to recover its portion of electricity revenue directly from municipal billing streams until the debt situation stabilises, rather than implementing broad supply interruptions that would affect compliant customers.

“We have consistently argued that Eskom has every right to recover money owed to it, but that this must happen in a manner that protects residents and businesses who are already paying,” says Kleynhans. “There now appears to be movement toward a more practical solution that focuses on accountability and revenue recovery rather than punishing residents.”

OUTA says the details of the agreement will now be critical.

“The details of this agreement are absolutely critical,” says Kleynhans. “South Africans have heard many announcements and turnaround plans before, yet the financial and governance position within Johannesburg has continued deteriorating.”

OUTA says it is formally requesting sight of the agreement to assess the proposed debt recovery, revenue management and accountability measures.

“There needs to be transparency around how this process will work, what safeguards will be put in place, how revenue will be managed going forward, and what consequences will apply if obligations are not met,” says Advocate Stefanie Fick, Executive Director of OUTA’s Accountability Division.

OUTA says the situation reinforces long-standing concerns raised by National Treasury, residents and civil society organisations over Johannesburg’s worsening financial position and declining service delivery.

“Ultimately, this is not just about Eskom debt,” says Fick. “It is about restoring financial discipline, accountability and public confidence in the City’s ability to manage essential services responsibly.”

“Johannesburg’s financial and governance decline did not happen overnight, and it will not be resolved through vague, political intervention announcements alone,” adds Fick. “The intervention by Eskom needs to be binding and have consequences for those working for the City who fail to adhere to its conditions.”​

Supporting Documents

• A soundclip from Julius Kleynhas, OUTA Executive Manager, is available here in English and here in Afrikaans.