30 November 2001
Your Worship, the Mayor
Mr Amos Masondo
The Chairman of Eskom, Mr Reuel Khoza
The CEO of Eskom, Mr Thulani Gcabashe
The Provincial Secretary of SANCO, Mr Siphiwe Thusi
Distinguished Councillors
Ladies and Gentlemen
Electricity plays an important role as an input sector to various economic activities in South Africa. It is critical to our industries realising their production targets and efficiencies. Electricity is one of the areas where South Africa has a comparative advantage, and therefore a key strength for us. This suggests that in our attempts to transform our economy, we should build on the strength represented by this great institution hosting us today, Eskom.
Electricity also plays a direct role in the lives of many of our communities. It enables many of our other institutions - homes, schools, clinics, hospitals, sports clubs, churches, universities, etc, to fulfil their important social functions. Most importantly, the availability of electricity impacts on the quality of life of people. For example, it is access to electricity that has enabled many rural women to redirect their energies towards more productive activities. It is because the availability of electricity creates the environment where people could realise their full potential.
Government recognises the potential that is unleashed by better access to electricity. Government regards electricity as a basic service that should be accessible to all the people. It is for this reason that Government is committed to universal access to electricity, alongside other basic services such as water, public transport and telecommunications. Therefore, Government is committed to making these basic commodities accessible to all South Africans in order for all our people to lead decent lives.
We are aware that the majority of South Africans, whether in Soweto, Bethlehem, Nongoma or Ogies, share a common problem among themselves. This is the fact that the majority of poor, black South Africans, despite their willingness, are faced with the challenge of inability to pay for these basic services. It is this recognition that resulted in the Government committing itself to a programme of providing a basic amount of free water and electricity.
Government at various levels is involved in various initiatives aimed at giving meaning to this commitment. We will not move away from this fundamental commitment of ensuring that affordable services are provided to all.
The electricity situation in Soweto is a microcosm of problems throughout South Africa. The inability to pay is part of the problem we seek to resolve today. There are thousands of pensioners and poor households who are unable to meet their obligations. The solutions we seek to develop in Soweto will naturally contribute to the efforts of Government and its social partners to find genuine solutions to our problems.
In this regard, I would recommend to my colleague, the Minister of Minerals and Energy Affairs, to include Soweto among the pilot projects to be undertaken as part of the free electricity process. I believe that this will go a long way towards providing relief to this community.
However, the problems in Soweto and the greater Central region (Vereeniging, East Rand) have their specificities, in regard to electricity distribution. Most of these problems could not be generalised to other townships around the country. Therefore, we will not be setting any bad precedence by developing solutions that address themselves to the specific problems that have developed in Soweto.
I visited Soweto more than a month ago to have a clear sense of the problems affecting this community. I addressed community meetings full to capacity in townships such as Orlando East, Jabavu, Phiri, and Jabulani as well as speaking at the Itekeng Primary School in Jabavu. It was in these direct interactions with our people that I came to appreciate the real nature of the problem in Soweto.
I had the opportunity to listen to the cries of our pensioners, who felt distressed by the electricity situation in their community. I must confess that I was personally upset with this state of affairs. I came to the conclusion that some of the debt is neither repayable nor collectable.
There are multiple causes to the situation that has developed in this community. The debt owed to Eskom by Soweto residents is estimated at R900 million, with the total for the Central region as whole stands at R1, 8 billion. The problem could not be reduced to any single cause, which could be resolved through a single intervention. An integrated approach is key to resolving the problem.
The information available to me, from Eskom briefings to visits to the community, indicates that unless we solve the problems created by a lack of credible billing systems and functioning metering systems, we are far from resolving the problem. The fact is that a significant amount of the bill in Soweto is inaccurate. The current bill is based on estimations of the previous consumption by a particular customer, which defines the parameters of the debt owed to Eskom.
Eskom has itself characterised the situation as affecting the "credibility of the bill". Because of this estimated bills, residents are unwilling to accept bills from Eskom.
I was concerned about this situation, which had the potential to degenerate into chaos, resulting in unnecessary loss of life and destruction to property. It was in this context that I instructed my officials in June 2001 to interact with the responsible managers in Eskom. This was with a view of developing, as a collective, an alternative approach. I was strongly of the view that amicable solutions could emerge in discussions between the community and Eskom.
The residents of Soweto have legitimate grievances against estimated bills and service delivery standards. They have a right to organise themselves and call for a redress of these grievances. Our collective failure to respond has allowed an opportunistic element to "hijack" the situation for its political and criminal agenda.
The so-called Soweto Electricity Crisis Committee, through its Operation Khanyisa, has become part of this criminal culture. Its campaign has resulted in the destruction of Eskom's assets as well as properties of Councillors. Part of this criminality is inspired by an anti-ANC propaganda, suggesting that the problems are due to what it calls "the privatisation of Eskom".
The representatives of this committee have proven themselves that they will do anything, including telling lies to the community, in order to realise its political ends. Such people cannot be regarded as the genuine representatives of our people.
Alongside this opportunism has developed a criminal element bent on making money out of Eskom and the community. I must add that this fraudulent activity includes some of the contractors who are in the employ of Eskom. It was pensioners illegally connected by Eskom contractors who reported this to me during my visit to Soweto.
It is Eskom contractors, and not only "Operation Khanyisa", who cut-off electricity during the day, only to reconnect it in the evening after having demanded money from desperate pensioners. There is no place for such contractors in this public company. I have instructed Eskom to terminate the contracts of those contractors who are found to be involved in criminal activities. Some of the contractors clearly do not respect themselves and our communities.
In this context, I must insist that the criminal activities of "Operation Khanyisa" will be dealt with severely. There is no way that Government could cooperate with people who are breaking the law on a daily basis. Eskom will immediately lay charges against the destruction of its assets by "Operation Khanyisa". I call on Councillors whose houses were vandalised, to do the same.
When we visited Soweto in October this year, we made an undertaking that a solution will be found by the 30 November 2001. I am pleased that today we are able to offer solutions to some of the problems identified earlier. We have something tangible to offer to the pensioners and residents of Soweto.
Our immediate objective should be to normalise the electricity situation in Soweto. This means that we need to take measures that will ensure that the majority of our people return to the formal, Eskom system. They should be persuaded and made to understand the extreme dangers of illegal electricity.
In this regard, we will grant an "amnesty" to residents for a period of a month. This will allow members of the community to report illegal connections and to reapply for reconnection on the Eskom system. Failure to register within the specified period will result in people being prosecuted. I therefore encourage residents to take advantage of this proposal, and ensure that their electricity supply is legalised without delay.
I endorse the Service Delivery Framework presented earlier by Mr Jacob Maroga, Executive Director: Distribution. I endorse the work because the taskteam consisting of stakeholders has identified, for the short, medium and long-term, clear solutions to be explored. We recognise the fact that such a process will have different phases and moments, where elements of a solution will be developed. The taskteam does not have the luxury to develop a complete solution at once. We should accept therefore that it has put forward elements, some of which will require further research and debate among the various players.
As the Minister responsible for Eskom, I welcomed the framework and the concrete proposals presented to us this morning. I am satisfied that the taskteam has, in real terms, begun to address the problem of the "credibility of the bill". The proposal that 100% of the debt owed by pensioners, including the disabled, as well as 50% of the arrears owed by residents will be set aside into a suspense account, is indeed a good start. The latter will be expected to make arrangements in settling the other 50% of the arrears as well as begin to service the current account.
It is important that we create the necessary conditions for this sorry situation not to develop again. In this regard, the proposal for an audit of the metre system with a view of ensuring that Eskom installs a metering system and infrastructure that will ensure reliability of our billing systems has my full support.
I must remind you that my twin responsibilities is to protect the interests of the community, whilst at the same time ensuring that Eskom does not lose its value. It is important that the community should understand that a bankrupt Eskom would not be able to generate and supply electricity for us all. Eskom should be able to recover its money or else there will be serious problems. I must also add that those who are in a position to pay must service their accounts timeously instead of hiding behind the legitimate problems of those who are unable to pay. In this regard, an improvement in the payment levels should be one key objective of the Service Delivery Framework.
I have instructed my Director-General to make sure that any of the proposals developed will be taken through to the Electricity Council, under the able chairmanship of Mr Reuel Khoza. It is important that proper corporate governance processes are followed in finalising these matters. It is the Electricity Council that should determine what is affordable to Eskom, and not the Minister of Public Enterprises.
Finally, I wish to endorse the proposal that a team consisting of the key role- players be established to monitor the implementation of the Service Delivery Framework. The team should follow up on the outstanding medium to long-term issues identified in the framework.
In conclusion, I wish to restate the Government's position in regard to electricity distribution. Cabinet has already decided on the future model for the electricity distribution.
The long-term solution lies in the rationalisation of electricity distribution through the establishment of Regional Electricity Distributors (REDs). Therefore, in our attempts to find solutions to immediate problems, let us not lose sight of the overall objectives as adopted by the Cabinet.
I have attempted to highlight the defining elements of the solution, which needs to be taken to the community without further delays. This is key to turning the situation around.
I thank you.