Samwu opposes Eskom takeover of municipal electricity distribution
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The South African Municipal Workers Union (Samwu) formally rejected Eskom’s takeover of electricity distribution in financially distressed municipalities through Distribution Agency Agreements (DAAs). The union demanded a review of existing agreements in Maluti-a-Phofung, Emfuleni, Merafong, and Ditsobotla, citing concerns over potential job losses and the erosion of municipal technical capacity. This opposition followed a court application by AfriForum challenging the legality of the Merafong agreement and occurred as National Treasury pressured 14 municipalities to sign DAAs before September 1 or face power cuts and financial sanctions. These agreements, currently affecting a R119 billion debt burden, involve Eskom assuming distribution functions and redirecting consumer payments to address municipal arrears.
Consequences
If the 14 targeted municipalities fail to meet the September 1 deadline, they face imminent risks of electricity supply cuts, the freezing of bank accounts, and the loss of government grants. Meanwhile, the legal challenges and union opposition create significant uncertainty regarding the sustainability and administrative implementation of Eskom's debt-recovery strategy.
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