Eskom may be back in profit, but the electricity utility is still being dragged into another blackout by SA’s municipalities.
By the end of July, municipalities owed Eskom R120.26bn in overdue electricity debt.
This is up from R111.6bn at the end of March.
Without decisive action, electricity and energy minister Kgosientsho Ramokgopa says the debt could reach R358bn by 2031.
That should terrify every household, business and municipality in the country.
The debt is no longer a technical accounting problem to be shuffled between Eskom, the National Treasury and dysfunctional councils.
It threatens Eskom’s financial sustainability and the economy.
Now, Eskom has reported a R30.3bn profit after tax.
Yet it did not recognise R15.8bn in revenue in the past financial year because the risk of never collecting it was too high.
In other words, electricity was generated, transmitted and consumed — but the money never hit their bank account.
The system is broken when municipalities buy power, sell it and fail to pay Eskom.
Too often, the problem is obscured by references to historic debt, poverty and the limits of municipal revenue.
These are real pressures. But they cannot explain away the chronic failures of billing, revenue collection, financial controls and political leadership that have allowed arrears to become a national crisis.
A debt-relief programme was meant to offer a way out.
Municipalities that met conditions, including paying their current accounts in full, could have historic debt written off over three years.
Yet only 10 of the 71 participating municipalities have fully complied. Again, that is a system failing.
Rescue plans cannot keep being an answer to the problem.
Eskom’s distribution agency agreements, prepayment arrangements, smart-meter grants and tighter credit management are sensible interventions.
But it shows municipalities can no longer be trusted to run their electricity units.
Ring-fencing the electricity function and placing billing and collection under stronger control should not be seen as a punishment.
It is an urgent measure to protect supply, residents and the businesses that keep local economies alive. The alternative is far worse.
Eskom can limit supply to what a municipality can afford or disconnect it altogether.
When that point is reached, the people who suffer first are not the councillors and officials who allowed the debt to accumulate.
It is residents facing darkness, small businesses losing income, clinics and schools under strain, and workers whose jobs depend on reliable electricity.
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