Why Soweto residents do not owe Eskom R18-billion
Aisha Bahadur | Mail and Guardian |8 March 2019
Eskom is shamelessly harassing Soweto residents for R18-billion; residents are angry — and rightly so. This R18-billion debt — if it is R18-billion — should be deemed a subsidy, an external cost that the government must bear for inadequate service delivery.
In the newly democratic South Africa, the shamefully low level of electrification of black households was seen as an apartheid wrong that needed to be righted. Not only would electrification mean modernisation, and stimulate local economic development and consumerism in black communities, but it would also address energy poverty, as it would be cheaper, safer and less labour intensive than coal, firewood and paraffin. Electrification was a service that could be rapidly rolled out because in the 1990s, South Africa had surplus electricity — and it was cheap.
Electrification was used by Eskom to prove that the state-owned utility was committed to service delivery under the new government. It was an early success story: that the government, through Eskom and the municipalities could electrify previously excluded households. But the provision of other services did not follow at the same speed, particularly housing. There was ever-increasing pressure in urbanised and serviced areas to house more and more people. In response to this demand, adding backyard rooms to rent became a source of income for people with homes in Soweto, as in other townships.
In addition, informal housing sprung up in urban areas that were mostly not suitable for housing, including in flood plains and along servitudes. These backyard and informal dwellings were not included in the electrification programme and promoted self-connections that create complications when calculating the actual consumption of the electrified household that is being billed. Such billing errors have been chronic. So, although usage in Soweto amounts to billions of rand, it is unlikely that the debt belongs only to those households that are registered on Eskom’s billing system.
Electrification after apartheid
But there is more to the story. In the 1980s at the height of apartheid, there had been a boycott of payment for services in the townships provided by Black Local Authorities, including electricity. The Electricity for All campaign was pushed by Eskom during the political transition phase before South Africa’s first democratic elections because Eskom knew that its image needed to change in the townships and wished to be seen as part of the transformation by addressing energy poverty. The campaign was then incorporated into the reconstruction and development programme from 1994.
Connections increased rapidly in the years up to 2000; there were no plans for cost recovery, because these connections were not viewed as needing to be commercially viable, but were considered important for South Africa’s development path. During his time in office, former president Thabo Mbeki promised universal access to electricity for all citizens by 2012, but the programme got stuck at 70% by the mid-2000s because homes within easy access of the grid had been connected. However, informal dwellings continued to be excluded from the figures and these households were forced to self-connect or remain energy impoverished. The outstanding connections on the government’s books required investment to extend the grid into unserviced rural areas, and the development imperative that had been more important than cost recovery in the past was falling away.
In about 2000, the electrification programme was transferred to the department of mineral resources and energy, which had embarked on a programme to commercialise Eskom, as a preparatory stage for privatisation. At the time, Eskom management was raising alarm bells that it would run out of generation capacity by 2007 and needed to build new power plants but this was blocked by the government, which stuck to its plans for restructuring. The government’s plan was that independent power producers should install new generation capacity. However, even if sufficient investor interest had been secured, long lead times would be required to establish such capacity; excess capacity while restructuring would have helped to protect consumers and contain price increases.
The restructuring was opposed by several quarters, labour in particular. Trade union federation Cosatu’s position was: “If it ain’t broke, why fix it?” Eskom was seen as a successful utility providing consumers with electricity at good prices by global standards. It had made good progress on the electrification programme, and targets had been exceeded. The restructuring was seen as a threat to Eskom’s universal service obligations and cross-subsidisation across customers. It could also lead to price increases for electricity and job losses. And this is exactly what happened.
In line with commercialisation at Eskom, the power utility began to examine debt it was owed and cutting off electricity in poor households, which led to a defiance campaign in Soweto. Self-reconnections were done openly and people associated the commercialisation of Eskom with a shift away from redistributive policies. As the electricity crisis grew, when the country began facing shortages in 2007, the price of electricity became even more unaffordable, entrenching the culture of nonpayment. Many people viewed paying for electricity amid poor overall service delivery overall. A new defiance campaign arose, with people doing self-connections and reconnections. This became so widespread that there was no politically tidy and cost-effective way to deal with the issue, so Eskom, the municipalities and the government looked away.
Today, this retrospective attempt at recovering R18-billion from Soweto is probably going to lead to more defiance because — let’s be real — it is a hypothetical debt, and it is unclear who the actual debtors are. This R18-billion represents redistribution claimed by people, aided by Robin Hood-styled electricians that Eskom once tried to demonise in an advertising campaign.
With this debt claim, Eskom is targeting low-income households, implying that it is because of their nonpayment that the power utility is in trouble. No doubt this is part of the problem but it is not going to be addressed by trying to impose cost-recovery in poor communities. This is not the situation only in Soweto; municipalities across the country have debt claims from Eskom running into billions. The government and Eskom should be writing off these debts and working on developing a better, more inclusive relationship with communities that could lead to a culture of payment. But that cannot be expected to happen overnight. After all, it is workers, through their trade unions, that are now offering to bail out Eskom with their pension funds. At the very least, Eskom should relieve these working-class communities of their debt burden.
The universal access to electricity promised by Mbeki was not achieved by 2012. The target was revised under former president Jacob Zuma to 90% by 2014, which has still not been achieved today. In 2012, the government finally acknowledged the permanence of informal housing and extended electrification plans and targets to include what is estimated to be between one and two million households, home to at least 10% of South Africa’s population. However, the electrification of informal housing is an enormous, seemingly insurmountable challenge. In the meantime, those people most disenfranchised cannot be expected to sit passively in the dark.