South africa: The Select Committee on Agriculture, Land Reform and Mineral Resources has concluded its week-long oversight visit to the Inxuba Yethemba Local Municipality in Cradock. The committee held engagements with the municipality, stakeholders, and community development workers on socio-economic challenges, including Eskom debt.
According to African Press Organization, issues raised during engagements included the loss of water service revenue following the consolidation of water and sanitation services into the Chris Hani District Municipality. This consolidation has affected municipal income, contributed to rising Eskom debt, raw sewage pollution of the Fish River, the absence of an electricity master plan, and the reliance of small-scale farmers on a strategic partner.
The engagements highlighted significant challenges in municipal services, with civil society reportedly taking over many functions. The committee heard that while core electricity supply has improved over the past six months, businesses and the agricultural sector continue to face electricity outages and water supply challenges.
Eskom and the Department of Electricity and Energy informed the committee that consistent payment of the current account could lead to interest relief and a reduction of Eskom debt, which increased from R127 million to R918 million following a 2020 High Court order.
The municipality adopted an unfunded budget for the 2025/26 financial year due to liabilities exceeding assets, mainly from Eskom and Auditor-General debts. This led to the freezing of its municipal equitable share on 8 July 2026, though the funds were later released under strict conditions.
While the Executive Mayor acknowledged the Eskom debt, the municipality proposed that Eskom should stop direct electricity supply to three municipal wards and large businesses, as this undermines revenue-generating capacity.
The committee recommended an urgent meeting with Provincial and National Treasury, the Auditor-General, COGTA, the Department of Electricity and Energy, SALGA, and Eskom. This meeting should present a summary of actions taken to date by all parties.
This engagement should clarify instructions, court actions, or consequence management measures related to the non-payment of Eskom's historical debt and current account. It should also lead to a final solution to these debts.
The committee requested a meeting with the Department of Electricity and Energy, Eskom, National Treasury, COGTA, and SALGA to receive feedback on National Treasury's request that COGTA and SALGA develop a standardised distribution agency agreement template.
The Chairperson of the committee, Mr Mpho Modise, expressed appreciation for the cooperation received during the oversight visit. He emphasised the importance of continued engagement and cooperation between the municipality and its stakeholders for sustainable solutions to the municipality's challenges.