WeeklySA_AdminCONTROl: South Africa’s worsening municipal debt crisis has pushed Eskom to the brink of decisive action, with the power utility issuing legal notices to 14 municipalities that have failed to settle their electricity accounts. With municipal arrears now exceeding R110 billion…
By Lehlohonolo Lehana
South Africa’s worsening municipal debt crisis has pushed Eskom closer to enforcing electricity supply interruptions, with the power utility issuing legal notices to 14 municipalities that have failed to settle their electricity accounts.
Municipal arrears owed to Eskom have now exceeded R110 billion, raising serious concerns about the sustainability of the country’s electricity distribution system and the effectiveness of the government’s municipal debt relief programme.
The utility confirmed that it had begun issuing notices in terms of the Promotion of Administrative Justice Act (PAJA), giving the affected municipalities an opportunity to make representations before Eskom implements credit control measures that could include interrupting power supply at predetermined times.
The move comes despite a National Treasury intervention launched in 2023, designed to help municipalities reduce their historic Eskom debt through conditional write-offs. However, Eskom revealed that 87% of municipalities participating in the programme have failed to meet the required conditions, with only 10 out of 71 municipalities remaining compliant.
Speaking at the T&D Africa 2026 conference, Eskom Acting Group Executive for Distribution Agnes Mlambo warned that rising municipal debt threatens the utility’s financial recovery and could delay the restructuring of Eskom’s distribution business.
Should municipalities fail to take corrective action, Eskom says it will proceed with credit control measures that may include limiting electricity supply to levels consistent with payments received.
In a statement, Eskom said it had begun the process of issuing notices in terms of the Promotion of Administrative Justice Act (PAJA) to provide an opportunity for affected parties to make representations before further action was taken.
Eskom also invited written submissions on alternative solutions and said it would communicate the way forward once it had considered all representations made through the PAJA process.
While not immediately naming the municipalities, it said they had been selected because they had either not settled their accounts for at least 18 months, had not met the conditions of the National Treasury municipal debt relief programme, or posed a significant financial risk to Eskom.
The 14 municipalities are believed to be among the 71 municipalities that have signed up to the National Treasury’s debt-relief programme, but which are not meeting the conditions.
“We have to address rising arrear debt to protect the operational stability we have restored and the financial discipline we have rebuilt in the first three years of our turnaround to deliver on our developmental mandate,” acting group executive for distribution Agnes Mlambo said.
She warned, too, that escalating municipal debt had wider implications for South Africa’s electricity reform agenda, and was already delaying the legal and operational unbundling of Eskom’s Distribution business.
“Should the municipalities fail to take corrective action, Eskom will proceed with credit control measures, which may include interrupting electricity supply at predetermined times, as permitted by law.
“If defaults persist, Eskom will be compelled to limit supply to levels commensurate with payments received,” the power utiliy said.
The move follows confirmation during the 2026 Budget that the National Treasury would support Eskom in its pursuit of Distribution Agency Agreements (DAAs) with municipalities that owe the utility money, including those that have signed up to the municipal debt relief programme, but which are in default.
According to Eskom and National Treasury data, a handful of municipalities account for a significant portion of the outstanding debt: top municipal Eskom debtors include:
• Emfuleni Local Municipality (Gauteng) – Long-standing debt crisis linked to financial mismanagement and infrastructure collapse.
• Maluti-a-Phofung Local Municipality (Free State) – One of the most indebted municipalities, previously placed under administration.
• Lekwa Local Municipality (Mpumalanga) – Chronic service delivery and governance failures.
• Ngwathe Local Municipality (Free State) – Persistent non-payment and weak revenue collection.
• Ditsobotla Local Municipality (North West) – Political instability and financial distress have worsened debt levels.
• Govan Mbeki Local Municipality (Mpumalanga) – Rising electricity arrears amid growing service delivery pressures.
Eskom has warned that continued non-payment threatens the stability of the electricity supply industry, as municipal arrears undermine the utility’s financial recovery efforts and complicate plans to restructure its distribution operations.
Through the Distribution Agency Agreements (DAAs) proposed by National Treasury, Eskom could assume a greater role in electricity distribution in heavily indebted municipalities, allowing it to collect revenue directly from consumers. – Fullview/Weekly SA Mirror
MIRROR Briefs
ANC IRKED BY DA BILLBOARD ADVERT
The Democratic Alliance (DA) will not be meeting the African National Congress’ (ANC’s) 12-hour deadline to remove the party’s billboard that plays on recent remarks made by Gauteng Premier Panyaza Lesufi.
Instead, the party encouraged Lesufi to rather act against the water crisis in the province with the same level of urgency displayed in opposing its billboard. Last month, Lesufi sparked public outrage after saying he often had to shower at a hotel because of water outages. The ANC has written to the DA demanding the removal of the billboard, which was unveiled in Tshwane this week. The ANC has threatened legal action against the DA if the billboard does not come down in 12 hours.
DA Federal Council chairperson and Johannesburg mayoral candidate, Helen Zille, said the DA’s billboard reveals the “truth” facing Gauteng residents: “The ANC showers in hotels. You have no water. Vote DA to put water in your taps.”
Zille pointed out that the ANC had not cited any legal reason as to why the billboard should be removed and instead merely protested that the image was demeaning to Lesufi and tarnished his reputation. – Fullview.
FORMER MP JAILED FOR CORRUPTION
Government has welcomed the sentencing of former Member of Parliament (MP) Vincent Smith to seven years’ imprisonment on charges that included fraud and corruption related to state capture. Smith was sentenced in the Johannesburg High Court this week after agreeing to a plea and sentence agreement with the State.
Smith was accused of accepting gratifications from controversial security company, BOSASA, in the form of security upgrades to his home.
He also allegedly accepted money transfers – through his company, Euroblitz 48 – in exchange for shielding the company from scrutiny while he was chairperson of Parliament’s Portfolio Committee on Correctional Services.
“This sentencing follows recommendations of the Judicial Commission of Inquiry into Allegations of State Capture, led by Deputy Chief Justice Raymond Zondo, which investigated widespread corruption and fraud.
The Commission played a critical role in uncovering wrongdoing and recommending institutional reforms to strengthen accountability and rebuild public trust’’.
“Smith’s sentencing also reflects government’s commitment, as articulated by President Cyril Ramaphosa in the 2026 State of the Nation Address, to intensify the fight against corruption and ensure that those who abuse public resources are held accountable,” the Government Communication and Information System (GCIS) said in a statement. – SAnews
MINISTER STRIPPED OF VAT POWERS.
The Western Cape High Court has ruled that only Parliament can change the Value-Added Tax (VAT) rate — stripping the finance minister, Enoch Godongwana’s powers.
On 3 April 2025, the Democratic Alliance filed an urgent application in the Western Cape Division of the High Court, challenging the legality of the process in Parliament to adopt the fiscal framework, and Godongwana’s powers under section 7(4) of the VAT Act.
In Part A of its application, the party was seeking orders, first, setting aside the “fundamentally flawed” decisions of both Houses of Parliament to adopt the fiscal framework and sending the framework back to the standing committee on finance and select committee on finance for reconsideration. In Part B of its application, the DA asked the court to declare the finance minister’s authority under section 7(4) of the VAT Act unconstitutional, as it permits the executive to raise taxes without Parliament’s approval.
A full bench of judges, consisting of Western Cape Judge President Nolwazi Mabindla-Boqwana and judges Kate Savage and Andre le Grange, presided over the matter.
In its ruling the High Court has found a section of the Value-Added Tax Act, which empowers finance minister Godongwana to amend the VAT rate, unconstitutional.
The full bench suspended the order for 24 months to afford parliament an opportunity to correct the defect. – Lehlohonolo Lehana.
MEASURES TO PROTECT WATER RESOURCES.
The Special Investigating Unit (SIU) and the Department of Water and Sanitation (DWS) have launched the Water Sector Anti-Corruption Forum (WSACF) aimed at strengthening the fight against corruption and safeguarding the country’s water resources. The establishment of the forum followed findings from 16 SIU proclamations related to the DWS. Of these, nine investigations have been completed, while seven remained active, highlighting what authorities say was an urgent need for a coordinated anti-corruption response in water management.
The WSACF was anchored on Pillar Six of the National Anti-Corruption Strategy (NACS), which focused on protecting vulnerable sectors and strengthened integrity systems. Through a risk-based approach, the forum would support investigations, prevention and enforcement measures designed to protect South Africa’s water resources from corruption and mismanagement.
The initiative also aligned with the goals of the National Development Plan (NDP) 2030, which prioritised water security and sustainable development, as well as the United Nations Sustainable Development Goal (SDG) 6, which aimed to ensure the availability and sustainable management of clean water and sanitation for all. The forum aligned with what the NACS termed as a whole-of-society approach, which sought to enhance and mobilise the inclusive participation of the public sector, private sector, civil society and academia to prevent and combat corruption. – SAnews
