Friday, 13 September 2024: Eskom and Maluti-a-Phofung local municipality (MAP) in the Free State are progressing a collaborative venture aimed at restoring the sustainability of electricity provision in the municipality.
This unique eight-year agreement aims to restore the municipality’s technical and financial sustainability, enabling MAP to pay for bulk electricity from Eskom and continue providing electricity to its customers as a basic service.
The agreement, extendable to 15 years, has the objective of collecting revenue, settling MAP’s outstanding debt to Eskom, ensuring reliable electricity supply, knowledge and skills transfer and helping the municipality regain its footing in electricity provision.
Post-paid customers will be billed and will make payments directly into Eskom’s bank account. MAP staff will also be trained and upskilled to maintain and operate the network.
This collaborative initiative, which establishes a precedent for future agreements between state-owned entities, originated as a Distribution Agency Agreement (DAA) between Eskom and MAP. This followed an Order from the North Gauteng High Court concerning MAP’s outstanding debt of R8 billion to Eskom as of the end of July 2024.
On 8 June 2021, the North Gauteng High Court appointed Eskom as the Service Delivery Agent for Maluti-a-Phofung Municipality’s electricity business. Since the DAA was signed on 31 May 2023, significant strides are being made behind the scenes to achieve the goal of restoring the municipality’s technical and financial health. Eskom is collaborating with the municipality to address business and operational challenges in the short, medium, and long term.
“Since the DAA was signed, a joint Project Management Office (PMO) chaired by the Department of Cooperative Governance and Traditional Affairs (COGTA) has been successfully established,” said Brenda Cebekhulu, Eskom’s Senior Manager for Asset Creation and Chairperson of Eskom’s Project Management Office for the MAP DAA.
“All streams have been identified and are continuously meeting to address stream-related activities. Technical teams are on the ground assessing the work needed and developing solutions for the network issues faced by the Municipality. Retail streams are working on enhancing revenue collection, customer interaction, and implementing interim solutions to improve systems while transitioning to permanent solutions. Materials are being sourced to repair installations, and the first batch of customers has been linked to the Eskom system for revenue collection,” concluded Cebekhulu.
The next step in implementing the DAA is to migrate MAP prepaid customers to the Eskom vending platform, allowing them to purchase electricity directly from Eskom.
“This past week, we conducted a three-day joint operation where Eskom and MAP officials audited meters in Kestell to ensure a smooth migration to the Eskom vending system. A meeting with community members was held on 5 September 2024, to expedite this process. This migration should be completed in the next two weeks, enabling all Kestell electricity users to buy electricity directly from Eskom. Harrismith and QwaQwa will follow soon thereafter,” said Amos Goliath, Acting Municipal Manager of MAP.
About Eskom and Electricity – Skills Development: Eskom invests in skills development programs for local communities.
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Anton Rupert – Dr. Anton Rupert founded the Rembrandt Group in the 1940s. After initially focusing on the tobacco industry (Peter Stuyvesant), his company soon moved into industrials and luxury goods. Rembrandt has since been split into Remgro (an investment company with financial, mining and industrial interests) and Richemont (a Swiss-based luxury goods group). Rupert was also a founding member of the WWF (World Wildlife Fund) in the 1960s. His son Johan has since turned Richemont into one of the largest luxury goods companies in the world.