Engineering News Online Audio Articles

Former Eskom interim chairperson Professor Malegapuru Makgoba believes there would have been no reason for former CEO André de Ruyter to pursue a privately funded intelligence investigation of corruption and sabotage at the State-owned utility had the law enforcement agencies done their jobs.

Some of the contents of the intelligence report were raised by De Ruyter in a bombshell television interview in February, in which he claimed that senior political figures had direct links to coal cartels operating in Mpumalanga.

Following the interview, it was agreed that he should depart the utility immediately rather than serve out his notice to the end of March, having already resigned in December.

Questions subsequently emerged about the credibility of the investigation, which was conducted by George Fivaz Forensic & Risk and whose lead investigator, Tony Oosthuizen, had been identified in News24 media reports as having been an apartheid military intelligence operative and assassin.

Speaking during a Standing Committee on Public Accounts (Scopa) meeting on Wednesday, Makgoba confirmed that he knew of the investigation, but indicated that it had been treated as an operational matter and was, thus, never board-sanctioned.

The investigation, which Business Leadership South Africa has admitted it supported with R18-million in funding, was also conducted without the knowledge of the rest of the Eskom executive.

“When [De Ruyter] decided to gather this intelligence, he decided really to do it on his own without involving his executive and I can confirm that when they [the executive] say that they didn't know, [that is correct].

“He told me he wasn't going to because of the leaks and because of the low trust that existed and because some Eskom people were going to be involved in being, I think, investigated in the matter.

“So that is how it happened: the board did not sanction a particular request, because this was an operational matter, and he had the authority to deal with it as Group CEO.”

He said the decision to pursue an intelligence investigation came amid deep frustration over the slow pace at which the law-enforcement authorities were responding to information being passed to them by Eskom at a time when the utility was “being besieged with corruption and being besieged with sabotage”.

“If the South African Police Service (SAPS) and the Hawks had done their work effectively and efficiently, we wouldn't be meeting here as a committee today.

“The Hawks were not doing what they're supposed to be doing, not that they were not investigating but they were just taking too long [and were] almost lackadaisical about what needed to be done when Rome was burning,” he said, adding that the law enforcement authorities “let us down”.

Defending the decision to gather intelligence, Makgoba said that it seemed like the SAPS and the Hawks had “only woken up after they had this intelligence-related information”, highlighting that, in his State of the Nation Address (SoNA), President Cyril Ramaphosa announced that 43 arrests had been made as a result of an “intelligence-driven” operation.

He even suggested that Eskom’s shareholder Minister, Pravin Gordhan, had prompted De Ruyter to gather intelligence and insisted that Gordhan, as well as other government leaders and the law-enforcement authorities had been made aware of the intelligence.

However, he denied having ever seen a report, saying that he had become aware of the intelligence by “word of mouth” and had subsequently insisted that De Ruyter inform the shareholder Minister, the law-enforcement agencies and The Presidency in line with his obligations under the Prevention and Combating of Corrupt Activities Act.

“I can also confirm that I know that on 5 July 2022, Mr De Ruyter did inform [National Security Adviser] Dr Sydney Mufamadi and Gordhan and that, on the 16 July 2022, De Ruyter took Minister [Bheki] Cele, Minister Gordhan and Minister [Gwede] Mantashe to Tutuka for them to have first-han...

Mineral Resources and Energy Minister Gwede Mantashe reports that an updated version of the Integrated Resource Plan (IRP) for electricity will be released imminently for public consideration.

Responding to a question posed by the Democratic Alliance’s Kevin Mileham during a Portfolio Committee on Mineral Resources and Energy as to why the revised IRP had not been released by the end of March as promised, Mantashe said the “rough IRP framework has been completed, it is going to be opened for discussion”.

“We’re late, as we said the end of March . . . it is going to happen now.

“We are pushing very hard on it,” Mantashe said, labelling the new document “IRP 2023” and arguing that the revision from IRP 2019 was in line with the call for regular updates to the plan.

“It will come, it’s not out yet, Honourable Mileham, my apologies, but we are working on it.”

Mantashe did not offer any indication as to the nature of the revisions, but speaking during a meeting convened specifically for lawmakers to receive an update on the Koeberg nuclear power station’s Long-term Operation (LTO) application, he again made the case for additional nuclear.

“You will know that we are working on a request for proposals for 2 500 MW of nuclear and sites have been identified . . . therefore we are hoping that at a point we will have more nuclear power around us.”

He even argued that nuclear should be considered to be part of the “green transition”.

KOEBERG LIFE EXTENSION

Meanwhile, Eskom used the briefing to offer technical, safety and timing assurances regarding the LTO, which would involve extending the life of the two reactors by 20 years.

The Koeberg licence is valid until 21 July 2024, unless amended for subsequent licensing stages including LTO.

The 21 July 2024 date is 40 years after the date that Unit 1 entered commercial operation, with Unit 2 having entered into commercial operation on 9 November of the following year, and Eskom has, thus, requested that the National Nuclear Regulator (NNR) change the licence to reflect a separate date for Unit 2.

“Eskom has confidence that the timelines will be met, and resources are provided to implement the remainder of the projects and commitments made in the LTO safety case that has been submitted to the NNR,” Eskom’s Sadika Touffie told the committee.

He also insisted that the Koeberg life-extension budget remained in line with the R20-billion announced in 2010, despite significant contract delays as well as indications from senior Eskom executives that the budget would far exceed that level. However, Touffie did acknowledge that Koeberg was dealing with more than 400 contractor compensation claims, 138 of which were in dispute.

“The main risks are associated with completing the large volume of work prior to LTO start.

“There are currently no technical challenges, and the activities are being closely project managed,” he said, but added that some actions might not be completed prior to LTO and would become commitments for completion during LTO.

Generation head Bheki Nxumalo also stressed that the current delay to the steam generator replacement project, under way on Unit 1, did not impact the LTO programme, which was running in parallel, with NNR to make the final licence determination.

NNR nuclear power plants executive Orion Phillips reported that Eskom had submitted the safety case and a preliminary report was being drafted for submission to the NNR board in July.

By law, Eskom is required to submit a safety case that justifies that the plant can operate safely for an additional 20 years, until 2044 for Unit 1 and until 2045 for Unit 2, should a separate end date be confirmed for the unit.

Phillips reported that public consultation on the LTO was planned for completion in January 2024, whereafter an LTO recommendation would be made to the NNR board for consideration in March ahead of a final decision by July 2024.

“Because it is a very dynamic project . . . we have determined that by January 2024 ...

The domestic new-vehicle market saw a surge in imports from India and China last year, with buyers increasingly opting for cheaper imported cars than those made in South Africa.

India led the import market in 2019, with 106 000 units coming to South Africa, with China at number six, at 11 443 units.

Nine of the biggest-selling cars and light commercial vehicles in South Africa were made locally in 2019.

The newly released 2023 Automotive Export Manual, published by the Automotive Industry Export Council (AIEC), shows that imports from India surged to 165 910 units last year, ensuring it remains in the top spot as South Africa’s biggest vehicle import market by volume.

Last year also saw China jump into second spot in terms of vehicle import markets, at 34 939 units, eclipsing Germany, which took the silver medal in 2019.

Also, only seven of the top-ten selling cars, bakkies and vans sold in South Africa in 2022 were made locally.

These numbers are proof of a strong and continued buying-down trend in the South African market as struggling consumers increasingly opt for lower-cost vehicles from Asia.

While not all vehicles imported from India are entry-level vehicles, the country is known as a production hub for more affordable cars.

The only more affordable vehicles made in South Africa are the Volkswagen Polo and Polo Vivo, with the other models largely premium cars and one-ton bakkies.

China has made inroads into the South African market on the back of more affordable sports-utility vehicles – a very popular vehicle type locally – offering higher specs at lower prices than traditional competitors.

In total, the percentage of light vehicles imported into South Africa has increased from 55.7% of the total new-vehicle market in 2018, to 64.8% in 2022.

The AIEC also notes that South Africa’s share of the African market in terms of production has shrunk from 57.2% in 2019, to 54.4% in 2022, as other, northern, markets pick up steam in terms of manufacturing.

In terms of component exports, the report notes that catalytic converters remained the top automotive component exported from South Africa, comprising 48.3% of total component exports, followed by engine parts, tyres and radiators and parts.

Automotive component exports reached a record R70.3-billion in 2022.

Germany and other developed markets have been the South African automotive industry’s top export destinations for component exports over the past three decades.

However, as Europe is rapidly switching to battery electric vehicles (EVs), South Africa will urgently need to find new markets for its two top-selling parts exports, which are linked to traditional internal combustion engines (ICEs), or move to diversify its offering.

Three out of every four vehicles – ICEs and hybrids – exported from South Africa were destined for the European Union (EU) and the UK in 2022.

New-energy vehicle (NEV) sales comprised 0.88% of total new-vehicle sales in South Africa in 2022 – or 4 674 units from 15 brands. In contrast, EVs had a 12.1% market share in the EU car market in 2022, jumping from 1.9% in 2019.

AIEC director Dr Norman Lamprecht says the Department of Trade, Industry and Competition has indicated that it should announce its policy on NEVs, which includes EVs, by the end of March next year.

South Africa currently has no EV-specific support programme in place to move its auto industry from ICE vehicles to EVs, both in terms of production and consumer demand.

“The imminent demand for eco-friendly vehicles in traditional markets means that the transition to NEVs is inevitable for the export-oriented domestic automotive industry, and it will need to commence with making significant investments in innovation and NEV technology,” says Lamprecht.

The automotive industry is the country’s largest manufacturing industry.

A new public-private initiative has been launched in an effort to support the growth and development of South Africa’s manufacturing sector, whose recovery from the Covid lockdowns is currently being undermined by intense daily loadshedding.

Known as the Localisation Support Fund (LSF), the non-profit company is being funded by the private sector, but has a board that includes government, labour and business representatives, including Trade, Industry and Competition Minister Ebrahim Patel, who is LSF chairperson.

The venture has already received funding support worth R340-milllion from Coca-Cola South Africa and Air Liquide, with former Coca-Cola South Africa CEO Bruno Pietracci having been a key initial driver of the initiative. Pietracci has since been appointed president of the beverage giant’s Latin American operating unit, but attended the LSF launch in Sandton on May 9.

Well-known business personality and LSF deputy chairperson Grant Pattison explained at the launch that the LSF’s goal was to help reduce imports, increase exports and promote industrial competitiveness in line with a localisation pact concluded at the National Economic Development and Labour Council in 2021.

The mandate, he added, was to support manufacturing as a whole and the LSF was, thus, not confining itself to any particular manufacturing subsector.

“The funds that we have will be spent and they are not invested for financial return, but we are looking for a manufacturing production return.

“That money will be invested in technical expertise and to assist in the identification of manufacturing opportunities and the customers who need to purchase those goods.”

LSF executive head Thami Moatshe reported that the organisation’s initial projects were geared towards opportunities in the renewable energy and electricity transmission sectors, as well as furniture manufacture.

In the electricity sector the LSF is funding specialist research to confirm what renewables manufacturing capacity already exists in an effort to provide greater market visibility for domestic consumers, as well as to map the transmission and distribution value chains to provide a summary of in-country capabilities.

In furniture, the LSF will be appointing a specialist to introduce lean manufacturing principles to the sector, as well as to provide targeted technical resources to selected manufacturers.

Patel said the localisation concept was akin to industrialisation and that the LSF was geared towards addressing both the demand- and the supply-side constraints to industrialisation.

He said there were powerful social, economic, and commercial arguments in favour of localisation, including that the growth of manufacturing provided a sustainable way to address job creation and promote prosperity.

“The economic argument is about expanding the size of the South African economy . . . [while] the commercial arguments have become more important as corporations recognise the price they pay for disruptions in supply and, conversely, the advantages of a more flexible supply chain.”

However, the Minister acknowledged that the prevailing electricity crisis represented a threat to greater localisation and added that focused and expeditious resolution of the crisis was “critical for industrialisation”.

Business Unity South Africa CEO Cas Coovadia said that business was at one with government and labour on the benefits of localisation, which if done properly, “will be not just a catalyst, but a significant game changer”.

The National Treasury has confirmed that the one-off independent review of Eskom’s 14 coal fired power stations is under way and should be concluded by July.

The review was announced by Finance Minister Enoch Godongwana during his February Budget when he also unveiled the R254-billion Eskom Debt Relief plan.

It is being undertaken by an international consortium led by VgBE that also comprises Dornier Power, KWS Energy, RWE Technology and Steag Energy.

At the time of the Budget, the National Treasury indicated that the review would determine which plants could be resuscitated to original equipment manufacturer standards, following which Eskom would concession the stations with clear targets for the electricity availability factor and operations.

Since then, the review has also been integrated into a proposal that the decommissioning schedule be updated to take account of South Africa’s acute electricity supply deficit.

The National Energy Crisis Commission (Necom) secretariat reports that the evaluation – which will involve a technical assessment of the feasibility and cost of refurbishing and/or repowering each power station ­– will be one of three inputs used to inform any revision to the schedule.

Another input will arise from a modelling exercise, to be undertaken by Necom, to estimate the projected future capacity from various sources compared with existing capacity and projected growth in demand.

The third input will involve a modelling of the impact on South Africa’s decarbonisation trajectory, taking into account the reduced utilisation of the existing fleet and an updated decommissioning schedule. This exercise will be conducted by either the project management unit for the Just Energy Transition Investment Plan, or the Presidential Climate Commission.

The Necom secretariat adds that the cost of refurbishing older coal-fired power stations should also be compared with the cost of investing in other sources of replacement capacity.

In a briefing note on the Eskom debt relief plan, the National Treasury reported that the independent review will be used to advise government on the operational efficiencies to be implemented to improve Eskom’s operations.

“Eskom is then expected to implement all relevant recommendations emanating from this independent assessment, after approval by the Minister of Finance, and to formally incorporate these additional conditions into its corporate plan for the 2024/25 financial year,” the note states.

The National Treasury reports that the work has commenced, and the outcome of the independent assessment will be shared with Necom.

A procurement and funding strategy empowering Eskom to proceed with a five-year emergency procurement programme has been finalised and will be presented to the State-owned utility’s board for approval during May.

National Energy Crisis Committee (NECOM) secretariat head Rudi Dicks said on Friday that a Ministerial determination opening the way for the Load Shedding Reduction Programme (LSRP) had been published by Mineral Resources and Energy Minister Gwede Mantashe and was currently awaiting the concurrence of the National Energy Regulator of South Africa (Nersa).

Nersa will host virtual hearings on May 19 ahead of it providing concurrence with three determinations, including one that opens the way for the procurement of up to 2 000 MW of new generation capacity under the LSRP.

The other two determinations relate to the procurement of up to 1 000 MW of cross-border capacity from a range of energy producers and up to 800 MW of new generation capacity from a range of energy technologies in accordance with the ‘Emergency Generation Procurement Programme’.

On February 15, Nersa published consultation papers ahead of it providing concurrence with the determinations and set March 16 as the closing date for written comments. The regulator also intends hosting a public hearing, which will take place between 14:30 and 17:00 on May 19.

During a briefing, Dicks also confirmed that preparations were under way for Bid Window Seven of the renewables procurement programme during which 5 000 MW of wind and solar would be allocated for provinces with available grid capacity.

“This will be followed by the sequenced release of further bid windows to bring the total new capacity procured to 15 000 MW.”

During the most recent bid window, not a single wind project advanced to preferred-bidder status after Eskom indicated that the grid capacity on which the projects were premised had been absorbed by private projects.

Dicks reported that NECOM had established new workstreams to focus on transmission and distribution capacity and that 25 priority transmission projects had been identified, which could together unlock grid capacity to facilitate 12 000 MW of additional generation.

It was also confirmed that the “use it or lose it” principle would apply should projects that had been allocated capacity not proceed as advertised.

Dicks also announced that further requests for proposals for 1 200 MW of battery storage and 3 000 MW of gas were being prepared in line with new Ministerial determinations and were expected to be released in June.

The battery procurement would be in addition to the procurement already under way for battery energy storage systems with a combined capacity of 513 MW and a minimum of four hours of storage, or at least 2 052 MWh.

Efforts were also under way to progress a further seven projects procured under Bid Window Five of the renewables programme to financial close, with six having achieved that milestone to date, as well as the six solar projects that advanced to preferred bidder status under Bid Window Six.

Should all the projects reach financial close a total of 2 800 MW will be added to the grid over the coming two years.

In addition, Dicks indicated that government was keen for the five “hybrid projects” selected under the risk mitigation bid window to reach financial close, but made no mention of the powerships also selected during that controversial procurement round.

Electricity Minister Dr Kgosientsho Ramokgopa reports that “open and frank” discussions have been held with those countries that have agreed to extend $8.5-billion in concessional funding to support South Africa’s transition from coal to renewables about the possibility of delaying the decommissioning of certain coal-fired power stations in light of ongoing loadshedding.

Speaking during a briefing on the implementation of the Energy Action Plan, Ramokgopa reported that meetings with representatives of the International Partners Group (IPG) that make up the Just Energy Transition Partnership (JETP) had included himself, as well as Public Enterprises Minister Pravin Gordhan and Forestry, Fisheries and the Environment Minister Barbara Creecy.

He said South Africa had explained its position regarding the review of the decommissioning schedule in light of intense power cuts, as well as the fact that some of the units that were approaching their dead-stop dates were performing better than some of Eskom’s newer plants.

The Minister again made specific reference to the Camden power station, arguing that there was potential to sustain 420 MW of capacity for a longer period by delaying the decommissioning of three 140-MW units, which were approaching retirement.

“As we speak, we are short of megawatts, and if you look at Camden, it is consistently within the top five performing power stations, so I don't think that it helps us to decommission those high-performing units.”

He stressed that the decision would be made only after an assessment had been made regarding the cost and emission implications, as well as how the delay could be implemented without deviating from the overall decarbonisation commitment South Africa had made through the Nationally Determined Contributions that triggered the JETP in the first place.

During the meeting with the IPG representatives, the South African Ministers reportedly reaffirmed the country’s commitment to decarbonising its coal-heavy electricity industry without increasing the intensity of loadshedding in the short term.

“The emphasis was that, as we decarbonise, we decarbonise in an environment where the lights are on,” Ramokgopa said.

He reported that he had also had a separate meeting with Germany’s special envoy for South Africa’s JETP, Rainer Baake, where the country’s position regarding decommissioning was again outlined and where an offer of specific technical support had been made by Baake.

The Presidency’s Rudi Dicks, who heads the National Energy Crisis Committee (NECOM) Secretariat highlighted that any update to the decommissioning schedule would be made only following a “careful and thorough process” that would include a cost comparison of refurbishing older coal stations with that of investing in replacement capacity.

He said any revision would be informed by the following:

A technical assessment, which was currently under way by a team appointed by the National Treasury, of the feasibility of refurbishing and/or repowering the stations;

A NECOM modelling of projected future capacity compared with existing capacity and expected demand growth; and

A modelling of the impact on the country’s decarbonisation trajectory, which would involve the Presidential Climate Commission.

“This exercise is expected to be completed by July 2023 and the outcome will be presented to Cabinet,” Dicks reported, adding that no units would be decommissioned until the assessment was complete.

Engineering News editor Terence Creamer discusses the longstanding and growing problem of municipalities' outstanding debt to power utility Eskom: the National Treasury's engagement with municipalities on a scheme to potentially write off their debt to Eskom; and the conditions that may be placed on municipalities wanting to participate in the scheme.

Business Leadership South Africa (BLSA) CEO Busi Mavuso has defended the organisation’s decision to respond to a request by former Eskom CEO André de Ruyter to fund a private investigation into crime and corruption at the State-owned utility and has also confirmed that BLSA provided R18-million to support the initiative.

However, she insists that BLSA had no role in the appointment of George Fivaz Forensic & Risk, nor in vetting the lead investigator Tony Oosthuizen, who has been identified in media reports as having been an apartheid military intelligence operative who allegedly claims to have killed 20 anti-apartheid activists.

A News24 exposé describes some of the allegations arising from the investigation, including one implicating Cabinet Ministers directly in criminality at Eskom, as “wild and untested”.

De Ruyter alluded to some of these allegations during a bombshell interview on eNCA earlier this year, which led to his early departure from Eskom, as well as a recent Parliamentary hearing organised by the Standing Committee on Public Accounts (Scopa) on April 26.

At that hearing De Ruyter reiterated that corruption, criminality and sabotage remained a significant problem at the utility and drew a direct link between such acts and the current loadshedding crisis.

He also defended the efforts made to investigate acts of criminality and reported that the intelligence gathered was shared with various senior government officials, as well as with the law-enforcement authorities, which he believed had acted on some of the findings.

De Ruyter highlighted that President Cyril Ramaphosa announced in his State of the Nation Address that an intelligence-led operation had led to 43 arrests.

The former Eskom CEO claimed that it also led to the deployment of soldiers at four power stations and the raiding of four ‘black sites’, where coal purchased by Eskom was being diverted to other markets.

De Ruyter confirmed that the investigation was funded privately, but he did not name BLSA or Mavuso, who was a board member of Eskom when the funding was approved.

However, when questioned on the intelligence report at the Scopa hearing De Ruyter said Eskom was not the contracting party and that he was not aware of the terms of the contract,

“The appointment of a private intelligence organisation was not done by Eskom, it was not done by using Eskom funds, so no public funds were expended and Eskom was not the client or the beneficiary of such an appointment.

“I was aware of the contract, but not the terms of the contract that had been concluded,” De Ruyter said, adding that because no public funds were involved the issue fell “outside of the Scopa purview”.

It has been reported that up to R50-million was raised to fund the investigation, but Mavuso said she was aware only of the R18-million provided by BLSA, which had been extended on an arms-length basis.

The funding, she added, did not require BLSA board approval, as it was extended in terms of an approved operational budget to support government in combating crime and corruption, as well as to bolster the capacity of the State to tackle the crisis at Eskom.

“Our overriding objective is obviously the enhancement of the South African economy with an intention of creating a conducive trading environment.

“Not only is Eskom central to South Africa's economy, but it is the single biggest threat that we face as a country and therefore a resolution to its problems is critical for business, for the country, for the economy and for South African citizens.”

Mavuso said De Ruyter had approached BLSA directly to fund the intelligence operation, which was intended to augment and complement the efforts of law enforcement authorities to root out corruption and criminal activity at the utility.

“It was therefore Eskom and André in particular, who brought in George Fivaz Forensic & Risk to conduct the investigation.

“BLSA obviously had no say in the matter of this appointment, as this was not a BLSA repo...

The National Treasury is embarking on provincial roadshows to communicate the 14 conditions under which the debt owed to Eskom by municipalities can be written off over the coming three years.

As of March 31, Eskom was owed a whopping R57-billion by municipalities and the municipal debt issue has continued to worsen despite several previous attempts to address the problem.

The latest debt relief package for municipalities is coupled with the R254-billion debt relief announced for Eskom in the February Budget, itself aimed at improving the financial sustainability of the debt-laden State-owned utility. The Eskom package has 33 conditions, including ones associated with facilitating Eskom writing-off the municipal debt, along with interest and penalties.

The National Treasury’s Sadesh Ramjathan and Marli van der Woude say that the debt owed by some municipalities has left them “financially gridlocked”.

Therefore, the package being pursued enables municipalities to apply to participate in a 36-month scheme under which Eskom can progressively write-off the debt if a municipality is able to comply with conditions, including a three-year restriction on any municipal borrowings, as well as a stipulation that the invoice for the Eskom current account is paid within 30 days.

When pursuing the relief, a municipality will also agree to voluntarily apply to the National Energy Regulator of South Africa for a revocation of its distribution licence should it fail to meet the conditions.

Should the conditions be met for 12 consecutive months, one-third of the Eskom arrear debt, interest and penalties will be written off with a full write-off requiring that such compliance be sustained for 36 months.

Besides the restrictions on new borrowing, paying new Eskom invoices within 30 days and the possible revocation of its licence, the other conditions include:

The municipality making a formal application for the relief that includes the provision of all the minimum information required by the National Treasury;

A motivation by the municipal manager and the CFO that is supported by a Council resolution;

The tabling and adoption of a funded Medium-Term Revenue and Expenditure Framework;

A demonstration that by-laws and budget policies are supportive of electricity and water being used as collection tools;

A demonstration, over time, of the completeness of the revenue base;

A commitment to cost-reflective tariffs that can be phased-in over three to five years;

The collection of revenue and the maintenance of a minimum average quarterly collection rate of 80% in the first 12 months, rising to 95% from April 1, 2025;

Monitoring and reporting to prove that the budget is funded, or that there is a plan to fund the budget;

Securing an exemption to ringfence electricity, water and sanitation revenue and prioritise the Eskom and bulk water payments ahead of other payments;

The issuance by the Office of the Accountant General of an instruction on how the municipality must account for the Municipal Debt Relief; and

The municipality must commit to a progressive installation of smart meters and refuse consumer debt write-offs in the absence of smart pre-paid metering.

Van der Woude argues that the majority of the conditions represent sound financial management and credit controls but admits that adhering to the collection rates outlined could prove challenging for some municipalities.

The conditions, including those dealing with cost-reflective tariffs and potentially forfeiting licences, is likely to be heavily debated by provincial and municipal officials when it is canvassed during the upcoming roadshows.

While 165 municipalities are technically eligible for the relief, Ramjathan says those municipalities with low Eskom arrear debt levels are unlikely to pursue the package.

However, he insists that the benefits to those with large backlogs could be significant in helping to address their debt spirals.

Meanwhile Parliament’s Standing Committee on Appropria...