Civil society organisation the Organisation Undoing Tax Abuse (Outa) is, in the wake of a reported agreement between State-owned electricity utility Eskom and the City of Johannesburg, calling for all information related to the city's debt crisis to be disclosed.

It calls on Eskom to disclose any information before proceeding with any process that could result in electricity supply interruptions for paying residents and businesses.

Meaningful participation requires meaningful information, it states.

The public cannot be expected to participate meaningfully without understanding whether the proposed intervention has changed and what implications the agreement has for affected residents and businesses, it says.

The organisation has further called for the public participation period to remain open for at least 30 days after details of the agreement are disclosed to allow affected parties sufficient time to make informed representations.

Eskom must recover the money lawfully owed to it, but debt recovery must be lawful, proportionate and transparent, while protecting residents and businesses that have honoured their obligations, Outa says.

“Recent public statements indicate that Eskom and the City of Johannesburg have reached some form of agreement or intervention plan. If such an agreement exists, it could materially affect the basis on which Eskom initiated the Promotion of Administrative Justice Act consultation process.”

“Residents have paid. Businesses have paid. Yet [the city’s debt to Eskom] has continued to grow. If electricity revenue has been collected, South Africans deserve to know where that money went. Accountability cannot stop at the debt. It must extend to those who managed the revenue.

“The question is whether Eskom can recover the debt without punishing people who have already paid,” says Outa executive manager Julius Kleynhans.

Proposals such as allowing customers to pay Eskom directly may help ring-fence electricity revenue and improve payment certainty.

However, such arrangements must be carefully designed to avoid billing confusion, unintended impacts on municipal finances and uncertainty over responsibility for maintaining local electricity infrastructure.

The failure appears to be revenue management, and not simply revenue collection. If electricity revenue has been collected from consumers, but has not reached Eskom, then the system has failed at the point where public money should have been protected and managed responsibly, he avers.

“Residents and businesses need to understand the payment arrangements, implementation timelines, default consequences, monitoring mechanisms and whether electricity supply interruptions remain under consideration,” says Outa executive director Stefanie Fick.

Outa proposes ring-fencing electricity revenue accounts to ensure Eskom is paid first, and the implementation of independent monitoring of City Power’s electricity revenue and payment flows.

It also calls for mandatory payment of Eskom’s current account and arrears, monthly public reporting on debt repayment progress, and comprehensive metering audits and stronger action against illegal connections and electricity theft.

Any intervention that gives Eskom greater operational oversight of City Power must be lawful, transparent, independently monitored and time-bound. It must protect paying consumers while ensuring accountability for the decisions that created the crisis, says Outa.

“Eskom is entitled to recover what it is owed. But it must do so lawfully, transparently and proportionately. Paying customers should not become collateral damage for municipal failure. Recover the debt, protect consumers and hold those responsible accountable,” says Fick.

Further, the crisis exposes a regulatory failure, which raises concerns about the role of the National Energy Regulator of South Africa (Nersa), says Kleynhans.

“Residents have continued paying more while municipal performance has deteriorated. Nersa should regulate effectively, not simply approve tariff increases while systemic failures deepen,” he avers.

Meanwhile, any long-term agreement reached ahead of the upcoming local government elections should not bind a future administration without transparency, appropriate legal authority, public oversight and clear review mechanisms, Outa adds.