Secunda and surrounding areas may soon get a new electricity distributor
AfriForum welcomes the Govan Mbeki Local Municipality’s announcement that it will initiate a Section 78 process in terms of the Local Government: Municipal Systems Act to investigate the future of electricity distribution in the municipal area.
A Section 78 process enables a municipality to consider alternative service delivery mechanisms to determine whether a service can be delivered more cost-effectively, sustainably, and efficiently by an external service provider. In this instance, the process focuses on electricity distribution.
According to AfriForum, this is a step in the right direction after residents of the Govan Mbeki Municipality have for years suffered under poor service delivery, increasing financial mismanagement, and a dilapidated electricity network.
“The municipality’s financial and operational performance clearly demonstrates that the current model is not sustainable. It is therefore essential that all possible alternatives be investigated to ensure a reliable electricity supply for residents,” says Hennie Bekker, AfriForum’s district coordinator for the Highveld.
The extent of the municipality’s problems is evident from its own financial statements. The Govan Mbeki Municipality’s debt to Eskom currently stands at approximately R6.58 billion. Furthermore, the municipality’s audited annual report for 2024/25 reveals that 255,067,057 kWh of electricity was lost during the financial year—equivalent to 47.98% of all electricity purchased. These exceptionally high losses place further strain on the municipality’s finances and undermine sustainable service delivery.
The municipality also participated in the National Treasury’s municipal debt relief programme but was removed from the programme after failing to pay its current Eskom accounts on time and in full. Earlier this year, Eskom further warned the municipality that it could restrict or interrupt its electricity supply if the municipality did not settle its outstanding debt and enter into a Distribution Agency Agreement (DAA) with Eskom.
“AfriForum warned earlier this year that Eskom’s practice of forcing municipalities to sign distribution agency agreements is inconsistent with the Section 78 process of the Municipal Systems Act,” says Deidré Steffens, Advisor for Local Government Affairs at AfriForum.
“Eskom’s bullying tactics completely shut out public participation and turn a process that ought to be open and objective into a closed one, devoid of any public buy-in. The Section 78 process ensures that all service delivery options are objectively assessed, that the public is consulted, and that any decision is taken in accordance with the law,” concludes Steffens.
“The residents of the Govan Mbeki Municipality deserve an electricity service that is efficiently managed, financially sustainable, and reliable. If an alternative service delivery model can contribute to improving service delivery, it must be considered seriously and without political interference. However, what must be beyond doubt is that any decision must be taken in accordance with the law and not under duress,” concludes Bekker.
