OUTA: Disclose Joburg debt agreement before proceeding with electricity supply interruptions

The Organisation Undoing Tax Abuse (OUTA) has called on Eskom to disclose the reported agreement reached with the City of Johannesburg before proceeding with any process that could result in electricity supply interruptions for paying residents and businesses.

The call forms part of OUTA’s submission to Eskom’s public participation process on the proposed reduction, interruption or termination of electricity supply to parts of Johannesburg arising from the City of Johannesburg and City Power’s growing debt.

OUTA makes it clear that it does not excuse the municipality’s failure to pay Eskom. Eskom has every right to recover money lawfully owed to it. However, debt recovery must be lawful, proportionate and transparent, while protecting residents and businesses that have honoured their obligations.

Recent public statements indicate that Eskom and the City of Johannesburg have reached some form of agreement or intervention plan. If such an agreement exists, it could materially affect the basis on which Eskom initiated the Promotion of Administrative Justice Act (PAJA) consultation process. OUTA argues that the public cannot be expected to participate meaningfully without understanding whether the proposed intervention has changed and what implications the agreement has for affected residents and businesses.

“No one is arguing that Eskom should write off the debt,” said Julius Kleynhans, OUTA Executive Manager.

“The question is whether Eskom can recover that debt without punishing the very people who have already paid.”

Kleynhans said the central question is no longer simply whether the city owes Eskom money.

“Residents have paid. Businesses have paid. Yet Eskom’s debt has continued to grow. If electricity revenue has been collected, South Africans deserve to know where that money went. Accountability cannot stop at the debt. It must extend to those who managed the revenue.”

OUTA argues that the real failure appears to be revenue management, not simply revenue collection. If electricity revenue has been collected from consumers but has not reached Eskom, then the system has failed at the point where public money should have been protected and managed responsibly.

OUTA also raises serious concerns about the transparency of Eskom’s public participation process. If an agreement has already been reached, Eskom must disclose its key terms before expecting meaningful public comment.

“If Eskom and the City have reached an agreement, the public has a right to know what it contains,” said Advocate Stefanie Fick, OUTA Executive Director.

“Meaningful public participation is impossible if the most important information is withheld. Residents and businesses need to understand the payment arrangements, implementation timelines, default consequences, monitoring mechanisms and whether electricity supply interruptions remain under consideration.”

Although Eskom has already extended the consultation period by 30 days, OUTA argues that meaningful participation requires meaningful information. The organisation has therefore called for the public participation period to remain open for at least 30 days after the agreement is disclosed, allowing affected parties sufficient time to make informed representations.

OUTA notes that proposals such as allowing customers to pay Eskom directly may help ring-fence electricity revenue and improve payment certainty. However, such arrangements must be carefully designed to avoid billing confusion, unintended impacts on municipal finances and uncertainty over responsibility for maintaining local electricity infrastructure.

OUTA warns that interrupting electricity supply should remain a measure of last resort.

Johannesburg is South Africa’s economic engine. Interrupting electricity supply would affect far more than households. It could disrupt businesses, hospitals, schools, water and sanitation systems, traffic management, telecommunications and public safety, with significant consequences for the broader economy.

“This is not simply a debt crisis,” said Kleynhans.

“It is a governance crisis. Years of weak financial management, poor oversight and a lack of consequence management have left paying residents carrying the burden.”

The submission also raises concerns about the role of the National Energy Regulator of South Africa (NERSA).

OUTA says the crisis exposes a regulatory failure. Municipal electricity debt did not accumulate overnight, yet tariffs continued increasing while infrastructure deteriorated and payment discipline collapsed.

“Residents have continued paying more while municipal performance has deteriorated,” said Kleynhans.

“NERSA’s role is to regulate effectively, not simply approve tariff increases while systemic failures deepen.”

Rather than penalising paying consumers, OUTA proposes practical measures to restore financial discipline, including: 

• Ring-fenced electricity revenue accounts to ensure Eskom is paid first.

• Independent monitoring of City Power’s electricity revenue and payment flows.

• Mandatory payment of Eskom’s current account and arrears.

• Monthly public reporting on debt repayment progress.

• Comprehensive metering audits.

• Stronger action against illegal connections and electricity theft.

• Consequence management against officials and political office bearers responsible for allowing the crisis to develop. 

OUTA also cautions that any long-term agreement reached ahead of the upcoming local government elections should not bind a future administration without transparency, appropriate legal authority, public oversight and clear review mechanisms.

Any intervention that gives Eskom greater operational oversight of City Power must be lawful, transparent, independently monitored and time-bound. It must protect paying consumers while ensuring accountability for the decisions that created the crisis.

“Eskom is entitled to recover what it is owed,” said Fick.

“But it must do so lawfully, transparently and proportionately. Paying customers should not become collateral damage for municipal failure. Recover the debt, protect consumers and hold those responsible accountable.” 

Supporting Documents

OUTA's Submission is here 

Sound clip from Julius Kleynhans, OUTA Executive Manager is here in English and Afrikaans.

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