South African parliamentary committees have united behind a proposal to establish an inter-ministerial body tasked with resolving the mounting financial pressures facing municipalities that owe substantial amounts to the national power utility, Eskom.
The endorsement came during a collaborative session of the Portfolio Committees on Cooperative Governance and Traditional Affairs and on Electricity and Energy, held this past Wednesday. During the meeting, representatives 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 provided progress reports on Distribution Agency Agreements (DAAs) currently in place between Eskom and various municipalities.
A focal point of discussion was the sharp rise in municipal debt owed to Eskom, which has now climbed beyond R110 billion—marking a substantial increase from the R89 billion figure cited in prior briefings.
Zama Khanyase, who chairs the Portfolio Committee on Electricity and Energy, cautioned that this expanding debt load could jeopardize the stability improvements Eskom has worked to achieve in both its operations and financial standing.
“Eskom introduced Distribution Agency Agreements to improve revenue collection, strengthen municipal capacity and support a sustainable electricity supply,” Khanyase explained.
Despite the potential benefits of these agreements, committee participants agreed they represent only one piece of a much larger puzzle.
Zweli Mkhize, Chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs, argued that resolving the crisis demands synchronized action across all levels of government rather than siloed efforts by individual departments.
“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 asserted.
He pointed out that certain municipalities contend with entrenched structural barriers—including constrained revenue streams and minimal local economic activity—that complicate any path toward fiscal recovery.
“We need to face the reality that some municipalities are in situations where they cannot resolve these issues on their own,” Mkhize observed.
Mkhize also highlighted the importance of fostering collaborative relationships, warning that antagonistic postures between Eskom and municipal leadership only deepen the impasse.
“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 reiterated that while municipalities retain constitutional authority over electricity reticulation, this mandate cannot be invoked to excuse service delivery shortcomings or the redirection of funds earmarked for electricity services.
Several priority areas were flagged for immediate intervention: upgrading municipal billing infrastructure, bolstering revenue collection practices, refreshing indigent household registers, ensuring protection of free basic electricity allocations for qualifying residents, and reinforcing credit control frameworks.
Particular attention was drawn to the challenge many municipalities face in collecting payments from end-use consumers—a shortfall that directly feeds into their growing arrears with Eskom.
Khanyase acknowledged that broader policy reform efforts, such as the ongoing review of electricity pricing policy and the development of the draft White Paper on Local Government, hold long-term promise but will not yield immediate solutions.
“What is clear is that action is needed from both sides,” she stated. “Eskom and municipalities need to act in concert with each other and with government support. Without mutual understanding, the problem cannot be resolved.”
Moving forward, the committees have committed to sustained oversight of DAA rollout and municipal performance indicators.
They have further directed all relevant parties to reconvene within a three-month timeframe with specific, actionable proposals—including a coordinated intergovernmental strategy designed to tackle outstanding debt, enhance revenue recovery, address governance deficiencies, and prioritize critical infrastructure needs.