ATC170517: Report of the Portfolio Committee on Public Enterprises on the oversight visit to the community of Soweto, dated 17 May 2017

Public Enterprises

Report of the Portfolio Committee on Public Enterprises on the oversight visit to the community of Soweto, dated 17 May 2017

 

1.         Introduction

 

The Portfolio Committee on Public Enterprises (the Committee) undertook an oversight visit to the community of Soweto, particularly residents of Diepkloof phase 1 and 2, Orlando East and Soweto pensioners from 22 – 24 March 2017. The Committee received petitions from these communities, and the main purpose of the visit was to interact with Eskom in order to get a solution on the issues raised by the community.  Furthermore, the Committee wanted to interact with representatives of the community to give a report on how the petition has been processed.

 

1.1        Delegation

The Committee delegation included the following members:  Ms D Letsatsi-Duba (Chairperson of the Committee, ANC), Mr M Tseli (ANC), Ms G Nobanda (ANC), Ms Z Rantho (ANC), Ms N Mazzone (DA), Mr N Singh (IFP), Mr N Kwankwa (UDM). The delegation was accompanied by the following parliamentary officials: Mr D Mocumi (Committee Secretary), Mr R Mnisi (Content Advisor), Ms Y Cele (Committee Assistant) and Ms L Bramwell (Researcher).

 

1.2        Background    

The Committee received three petitions submitted to the National Assembly by Mr Tshepo Mhlongo, MP, on behalf of the communities of Soweto. On the 14 September 2015, a petition was lodged by residents of Diepkloof Phase 1 and 2, Soweto, calling on the National Assembly to prevent Eskom from proceeding with the installation of prepaid electricity meters without the consent and participation of the community and to demand an explanation for its failure to respond to a petition delivered to it. The petition stated that prepaid electricity was forcefully installed without their consent and public participation; Eskom failed to respond to the community’s petition, delivered to Eskom on 29 July 2013; request Parliament to intervene to stop the project and process public participation. The petition contained 51 signatures of mostly elderly persons, over the age of 60 years.

 

On 2 November 2015, a further petition was tabled by Honourable Mr T Mhlongo, from the residents of Orlando East, calling on the National Assembly to determine why Eskom failed to respond to a petition delivered to it by the residents nor conducted a public education and participation drive before installing prepaid electricity meters in the area.

 

On 26 April 2016, Parliament once again received a petition on behalf of pensioners of Diepkloof and Orlando demanding that Eskom grant senior citizens 100 per cent rebates on their electricity. They also requested accurate billing; cancellation of debts after three years for pensioners; and rebates given to senior citizens.

 

2.         Meeting with Eskom and the representatives of petitioners

The meeting sought to understand the nature of the petition and get a clear understanding of the underlying issues that have prompted the community to petition Parliament. The meeting was attended by the Committee, Mr T Mhlongo, MP (representing petitioners), and representative from Eskom in the Gauteng region. The meeting further sought to find interventions to the issues raised in the petition.  The Committee allowed Mr Mhlongo to summarise some of the key concerns raised by the community, which included amongst others:

• The consultation regarding the installation of prepaid meters was not fair and transparent as the information was not clear, and not broadly representative. The implementation is not fairly and equitably distributed.
• There is a lack of clarity on the management of indigents accounts, lack of uniformity across municipalities on the implementation thereof, as municipalities such as Ekurhuleni gave 100 free units to indigents compared to 50 units offered by other municipalities.
• Lack of clarity on how the historical debt will be handled, and what is the likelihood of the recovery of R8 billion debt.
• Customers were not given monthly statements.
• Community was not given an option to choose between conventional or prepaid meters, however they were forced to convert to prepaid meters.
• Concerns that that the installation was overseen by law enforcement agencies and some were installed in the evening.
• Whether the principle of suspending the debt after installation of prepaid meters would be effected across the country.

 

2.1        Responses from Eskom

The representatives of Eskom, led by Mr Naidoo informed the Committee that Eskom has consulted broadly and extensively.  Consultations were held with the MMC, councillors and community leaders but not with the general community. The main cause of the resistance was due to the fact that the community was against the principle of prepaid electricity. The debt of Soweto was rising monthly and was standing at R8bn with interests, the money was required to build infrastructure and maintain existing plants. However, Eskom has proposed the following interventions to ease the transition: customers were given a once off 200 units at installation stage, the debt of the customer would be suspended for three years with the aim of erasing it if the customer has not bypassed or tempered with the meter, the customer should only buy electricity from accredited vendors.

 

The Committee was informed that there was also a problem of electricity outages and people who get electrocuted due to illegal connections. Eskom has only managed to install 49 000 prepaid meters in Soweto while the target is 180 000 prepaid meters. The project has been disrupted and opposed by the community. Community members were demanding a flat rate due to socio-economic conditions, however the challenges have been that a flat rate could not be implemented only for Soweto. Soweto residents used to receive 100Kwh of free electricity offered by the municipality as indigents. However Eskom did not have that service. Eskom has since developed a system to ensure that all indigents be registered so that they qualify for the free basic electricity.

 

Eskom reported that was no forceful installation of prepaid meters, but there was resistance from the community for the prepaid meters. Eskom installed the prepaid to each property in one ward before moving to the next ward, and the conversion would only be done when all the houses have been installed. Eskom also conducted a door to door campaign and partnered with the community to train consumers on how the meters worked, and inform them of the advantages and disadvantages of the prepaid boxes. Prepaid meters will enable the community to manage their electricity accounts.

2.2       Interaction with Pensioners

The Chairperson of the Diepkloof Pensioners Forum informed the Committee that as senior citizens they submitted a memorandum to Eskom, but they were disheartened with the fact that Eskom never responded to the petition. The Chairperson of the Pensioner’s Forum, Mr Maboya summarised the concerns of the pensioners and the petition, which included amongst others: no consultation, forceful installation of prepaid meters, pensioners not benefiting from social package, Soweto has 52 wards, while only a few wards were consulted and most residents complained about the attitude of Eskom employees and poor services rendered by Eskom officials.

 

Eskom informed the pensioners that the municipality of Johannesburg had a social package in the form of the indigent policy, but Eskom did not have one.  According to Eskom they did not receive any information from the municipality as to who should be on the social package. However, the utility undertook to engage with the municipality in order to consolidate the list of eligible customers to ensure that they are listed as indigents.

 

Furthermore the pensioners opposed the installation of prepaid meters and demanded a flat rate as the price of electricity was too expensive. They complained that most were staying with youth that was unemployed, orphans and members of extended family. They made the following demands and complaints: pensioners should be exempted from paying for electricity, the debt should be erased, most elderlies cannot use the prepaid box, broken meter boxes are not fixed on time, allegations that Eskom demands money before the installation of electricity prepaid meters, request that Eskom should separate the accounts of the legal occupant from the tenants and should install meter boxes for the tenants.

 

Eskom responded to the concern and stated the following: Eskom clarified that it does a statement every three months, however the statement is based on an estimate of the average consumption over a three month period. The meter is read over three month period. Eskom agreed that pensioners will not be able to pay for the historical debts. It encouraged pensioners to allow the installation of prepaid, the bill will be suspended for three years, should resist from buying from illegal vendors. There is an expanded social package that caters for the elderly and those who can’t afford. Those who are unable to convert immediately, will be subsidised with electricity of R200.

3.        Meeting with Community of Soweto

The Committee also had a community meeting at the Orlando Communal Hall, the intent of the meeting was to establish the concerns of the community regarding the installation of prepaid meters. The Community raised the following concerns:

• Lack of consultation and there was no communication regarding conversion to prepaid;
• Concern regarding lack of choice for customers and lack of enough legal vendors;
• Inconsistent tariff rate from different vendors of Eskom;
• Poor customer service – and lack of empathy and understanding for child headed households, and households of people living with disabilities;
• Lack of response from Eskom regarding petition submitted by the community;
• An allegation regarding the inconsistent manner in which the prepaid programme were implemented;
• The one meter box per household will push the customers to high tariff level because of the amount of electricity used per household.

 

The General Manager for Customer Services at Eskom, Ms Ayanda Noah, clarified that Eskom does not accept cash on the purchase of electricity, all that was done through the vendors. The Committee was also informed that Eskom would investigate the complaints about the unsatisfactory and unprofessional conduct of Eskom employees. It was also informed that Eskom had in the past erased the Soweto debt on two occasions.  There is a need to investigate a different tariff for the poor, unemployed and those who do not afford.

 

4.         Recommendations

The Committee recommended that the Minister of Public Enterprises should ensure that:

 

1.      Eskom develops a communication and consultation strategy and should revisit   

     communities to clarify the intent of the prepaid meters, the advantages and  

     disadvantages of the prepaid electricity.

1.      Eskom meets with City Power and the municipality and consolidate and

     update the indigent register for all pensioners and qualifying customers.

1.      Eskom explores and investigate the possibility of installing multiple meter

          boxes in one property to deal with the illegal connections and backyard

          dwellers.

1.      All stakeholders including the Members of Parliament, Councillors, community

          leaders, and civil society in general, must take responsibility to educate, raise

          awareness and play oversight where necessary.

1.      Explore with the Ministry of Finance means to recover the R8 billion Soweto

     debt without negatively impacting the livelihoods of the residents.

 

The Minister of Energy should consider:

1.      Installing solar geysers for the aged and the unemployed in Soweto.
2.      Investigating environmental sustainable subsidies for needy households.

 

The Minister of Co-operative Governance and Traditional Affairs should consider:

1.       investigating the issue of uniformity of the Extended Social Package across

      municipalities, so that the free basic electricity quota is uniform across

      municipalities.

1.       investigating situations where there are different suppliers of electricity in the

      same community and the lack of uniformity in the implementation of the

      indigent policy across municipalities.

 

5.         Conclusion

 

The Committee encouraged community members who could afford to pay for electricity and those who are indigent to be registered and be given a subsidy. The Committee will further conduct public engagement with Soweto to provide feedback to the community.

 

Report to be considered.