Africa-Press – South-Africa. South African households and businesses are increasingly footing the bill for decades of mismanagement at public companies and the state through increased prices for basic services.
In particular, South Africans have had to pay more for electricity, water, and refuse removal, while property rates have skyrocketed over the past decade to make up for state mismanagement.
This has created what University of Johannesburg Professor Dr Trevor Ngwane terms the ‘Vulture state’, which milks ordinary South Africans to cover up its corruption and mismanagement.
Ngwane explained to Newzroom Afrika that the cause of illegal electricity connections, refuse dumps, and sewage running into rivers can be traced back to corruption and mismanagement at the top.
These are the only alternatives poor South Africans have at their disposal to avoid the high cost of basic services and the increased unreliability of their delivery.
Mismanagement at public companies and local governments has seen their operations become less efficient, wage bills rise sharply, and debt surge.
The bill for this is coming due, with state-owned enterprises (SOEs), such as Eskom, increasing their prices to cover surging costs, much of which relates to financing its debt.
“Corruption, mismanagement, the failure to contain costs, and huge debt are all pressures on Eskom to increase prices relentlessly,” Ngwane said.
“On the ground, the people are unemployed, the people are poor. One response of theirs is to stop using electricity or to use less.”
This may take the form of illegal connections or alternative sources of energy, such as burning wood, coal, or paraffin to cook food and heat homes.
Apart from elevated prices for electricity and other services, South Africans also have to foot the bill through taxes, which have been used to bail out SOEs and other parts of the state.
“It is the result of a state that is failing to deliver the promise of a better life for all. If you look at the cost of living, the biggest drivers of a higher cost of living are public entities, from municipalities to public companies,” Ngwane said.
“Basically, we have a state which is acting like a vulture. It is milking ordinary South Africans and all those it can get its tentacles around so that it can make money.”
Eskom and municipalities caught in a spiral
Energy expert Vally Padayachee
Municipalities find themselves in a similar situation to public companies such as Eskom, albeit largely due to rising wage bills that require additional revenue to cover.
As both municipalities and Eskom increase their respective tariffs, an increasing number of South Africans look to alternative sources of electricity.
In some cases, this is perfectly legitimate, with households and businesses investing heavily in rooftop solar to reduce their exposure to Eskom’s tariffs and municipal charges.
However, it is also taking the form of illegal connections, where households or businesses use electricity from the grid without paying.
Energy expert Vally Padayachee explained that this exaggerates the problem, as it results in less revenue for municipalities and Eskom.
This, in turn, pushes them to increase prices and tariffs to cover their rising costs from a smaller base of paying customers, creating a feedback loop that pushes prices higher and results in less demand for electricity from the grid.
“There are many reasons for illegal connections. Some steal for the sake of stealing, while others just cannot afford electricity through legitimate channels,” Padayachee said.
“This does not justify them illegally using electricity and not paying for it, but it is something that needs to be addressed and can only be addressed through lower prices.”
Padayachee said that illegal connections are rampant in most municipalities and among customers supplied directly by Eskom.
He further explained that these illegal connections are one of the main drivers behind load reduction in South Africa.
These connections place unplanned stress on the grid, putting pressure on infrastructure not designed to handle that level of demand.
To combat this, Eskom limits supply to particular areas to reduce the potential for its infrastructure to be overloaded and damaged.
“Load reduction is purely about overload on the grid. It is not about Eskom not having enough electrons, it is about the transmission infrastructure being able to cope with demand,” Padayachee said.
The combination of load reduction and illegal connections results in lower revenue for municipalities, which then cannot pay Eskom for their power.
The initial response to this has been to increase tariffs and levies charged on electricity usage, which only exacerbates the issue by making it more economical to use alternatives to grid electricity.
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