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Eskom’s Failing Municipal Distribution Agency Agreements

Statement by Kevin Mileham MP – DA Spokesperson for Electricity and Energy:

The Democratic Alliance (DA) will write to the Chairperson of the Portfolio Committee on Electricity and Energy to demand a comprehensive inquiry into the roll-out of Distribution Agency Agreements (DAAs).

With municipal debt to Eskom now stands at a staggering R110.5 billion – and is projected to hit R300 billion by 2031 if left unchecked – the current intervention strategy is failing. While 71 municipalities were enrolled in the National Treasury’s debt relief program, only 10 out of 71 are currently compliant with their payment conditions. This is not a “relief” program. Instead, it is a stay of execution for bankrupt administrations at the expense of the South African taxpayer.

To date, only three municipalities have signed these “Active Partnering” DAAs: Maluti-a-Phofung (May 2023), Emfuleni (October 2024), and Merafong City (December 2025). Despite Eskom’s target to sign 14 such agreements by the end of March 2026, the roll-out is stalled by legal challenges and institutional intransigence.

The DA calls on the Portfolio Committee to:

  • Summon Eskom for a comprehensive Report on DAAs: Eskom must account for the lack of progress in the 11 pending agreements. We need a transparent breakdown of revenue collected versus infrastructure reinvestment in the three “pilot” sites.
  • Solicit Feedback on Municipal Pressure Points: In Merafong, the DAA is already facing legal challenges over a lack of public participation and non-compliance with Section 78 of the Municipal Systems Act. In Emfuleni, Eskom was forced to attach bank accounts to recover R8 billion in arrears. We must determine whether these agreements are technically viable or merely debt-collection tools.
  • Conduct Oversight in Affected Communities: Residents in Maluti-a-Phofung continue to suffer from infrastructure neglect despite Eskom’s technical “oversight.” The Committee must see firsthand how the R25 billion in annual technical losses is being addressed at the street level.
  • Implement Legislative Recommendations: In conjunction with the Portfolio Committee on COGTA, we must finalize a balanced DAA template. National Treasury has already ordered a redraft of the current “skewed” agreement, yet Eskom leadership remains defiant. We cannot allow the “Active Partnering” model to become another layer of state-sponsored bureaucracy that fails to keep the lights on.

The Minister must explain why, after three years of “pilot” programs, the municipal debt mountain continues to grow by R15.9 billion per year. The DA will ensure this inquiry is prioritized to protect the 16% of municipalities that still maintain clean audits from being dragged down by the collapse of the rest.

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