AfriForum takes steps to have Eskom-Merafong power distribution agreement reviewed
AfriForum has instituted legal proceedings against the Merafong Local Municipality, Eskom, and the National Energy Regulator of South Africa (NERSA) about the legality of a Distribution Agency Agreement (DAA) concluded between Eskom and the municipality.
Earlier this year, Eskom announced in a media statement that it had entered into a DAA with the Merafong Local Municipality due to the municipality’s failure to settle a substantial outstanding debt. In response, AfriForum submitted a formal letter of demand to the municipality requesting clarity on alleged procedural irregularities surrounding the conclusion of this agreement at the end of 2025.
AfriForum specifically raised concerns about whether the agreement complied with the required legislative framework. The organisation requested proof that all statutory requirements had been met, including the publication of public notices, the undertaking of feasibility studies, and the adoption of council resolutions, as well as the necessary approvals from the National Treasury and NERSA. Despite these requests, the Merafong Local Municipality failed to provide any response.
As a result, AfriForum has now approached the court seeking an order declaring that NERSA has failed in its duties as custodian and enforcer of the regulatory framework provided for in the Electricity Regulation Act.
In addition, AfriForum is asking the court to declare the DAA between Eskom and the Merafong Local Municipality unlawful and invalid and to set it aside.
“This court case is of critical importance,” says Morné Mostert, Head of Local Government Affairs at AfriForum. “While it is well known that many municipalities across the country are failing in their core functions – including the payment of bulk service providers such as Eskom – it cannot justify bypassing the law.”
AfriForum warns that attempts by Eskom and National Treasury to force municipalities into DAA arrangements without adhering to the prescribed legislative framework set a dangerous precedent. “Allowing unlawful processes to take root undermines the rule of law and opens the door to further governance failures,” Mostert states.
AfriForum further emphasises that Eskom itself has a troubled track record, including concerns about financial management, procurement processes and tender execution. “Placing a struggling municipality under the control of an already failing power utility known for corruption, and financial mismanagement is unlikely to resolve the underlying issues,” Mostert adds.
AfriForum maintains that NERSA should instead fulfil its mandate by identifying non-compliant municipalities, after following necessary processes revoke their electricity distribution licences where necessary, and initiating a transparent process that allows capable service providers – of which there are many in the country – to tender for the management of these licences.
AfriForum remains committed to ensuring that lawful, transparent, and sustainable solutions are implemented to address the country’s municipal and electricity crises.
