South Africa’s parliamentary oversight bodies have formally backed the establishment of a cross-ministerial task force to confront the deepening financial crisis facing municipalities struggling with massive electricity debts to Eskom.
During a joint sitting of the Portfolio Committees on Cooperative Governance and Traditional Affairs and on Electricity and Energy held Wednesday, legislators heard comprehensive briefings from the Department of Electricity and Energy, Eskom, the Department of Cooperative Governance and Traditional Affairs (COGTA), the South African Local Government Association (Salga), and National Treasury regarding progress on Distribution Agency Agreements (DAAs) between the power utility and local authorities.
Committee members voiced serious alarm over the escalating debt burden, which has now surpassed R110 billion—a significant increase from the R89 billion recorded at earlier briefings.
Zama Khanyase, Chairperson of the Portfolio Committee on Electricity and Energy, cautioned that this growing liability risks reversing the operational and financial stability gains Eskom has recently achieved.
“Eskom introduced Distribution Agency Agreements to improve revenue collection, strengthen municipal capacity and support a sustainable electricity supply,” Khanyase noted.
Yet committee participants recognized that these contractual arrangements, while valuable, cannot single-handedly resolve the systemic challenges at play.
Zweli Mkhize, Chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs, emphasized that tackling this crisis demands a unified, whole-of-government strategy rather than fragmented efforts by individual entities.
“The municipal electricity debt crisis calls for a government-wide response. The inter-ministerial committee must deal with the complexities of the current debt, correct governance failures and address corruption and dysfunction,” Mkhize stated.
He acknowledged that certain municipalities grapple with deep-seated structural obstacles—such as limited economic activity and narrow revenue bases—that hinder financial recovery.
“We need to face the reality that some municipalities are in situations where they cannot resolve these issues on their own,” Mkhize added.
He underscored the necessity of collaborative engagement among all parties, cautioning against confrontational dynamics between Eskom and local councils.
“From Eskom’s side, the message is ‘pay or else’. From the municipalities’ side, the message is ‘we cannot pay’. That kind of situation is a problem. We need intergovernmental and cooperative ownership of both the problem and the solution.”
Committee members reaffirmed that while municipalities hold constitutional mandates over electricity distribution, this authority must not serve as justification for service delivery failures or the misallocation of funds designated for power services.
The committees identified several priority areas requiring immediate intervention: modernizing municipal billing infrastructure, enhancing revenue collection mechanisms, maintaining accurate indigent registers, protecting free basic electricity provisions for vulnerable households, and strengthening credit control protocols.
Particular concern was expressed regarding municipalities’ difficulties in collecting payments from end-users—a key factor exacerbating their accumulating debt to Eskom.
Khanyase pointed to ongoing policy reform initiatives, including the review of electricity pricing frameworks and the draft White Paper on Local Government, as important longer-term measures, though she acknowledged these would not deliver immediate relief.
“What is clear is that action is needed from both sides,” she said. “Eskom and municipalities need to act in concert with each other and with government support. Without mutual understanding, the problem cannot be resolved.”
The committees resolved to maintain active oversight of DAA implementation and municipal performance metrics.
They have directed all relevant stakeholders to reconvene within three months with actionable proposals, including a comprehensive intergovernmental action plan targeting debt reduction, improved revenue collection, governance reforms, and infrastructure investment.
