For an audio clip of the Chairperson of the Portfolio Committee on Electricity and Energy, Ms Zama Khanyase, please click here: https://iono.fm/e/1682693
For an audio clip of the Chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs, Dr Zweli Mkhize, please click here: https://iono.fm/e/1682697
Parliament, Thursday, 4 June 2026 – The Portfolio Committee on Cooperative Governance and Traditional Affairs, and the Portfolio Committee on Electricity and Energy on Wednesday expressed support for the establishment of an inter-ministerial committee to assess and intervene in distressed municipalities, particularly those owing significant amounts to Eskom.
The committees received briefings from the Department of Electricity and Energy, Eskom, the Department of Cooperative Governance and Traditional Affairs, the South African Local Government Association, and the National Treasury on the implementation of Distribution Agency Agreements (DAAs) between Eskom and municipalities.
The Chairperson of the Portfolio Committee on Electricity and Energy, Ms Zama Khanyase, said the multi-billion-rand debt municipalities owe to Eskom has the potential to reverse the positive gains Eskom has made in dealing with its operational and financial issues. In an effort to arrest the ballooning debt, Eskom introduced the DAAs to improve revenue collection, build municipalities' capacity to become more sustainable, and support them in providing a sustainable electricity supply.
The Chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs, Dr Zweli Mkhize, said the municipal electricity debt crisis calls for a coordinated government-wide response, not isolated actions by individual departments and institutions. He said the inter-ministerial committee must deal with the complexities of the current debt, correct governance failures and deal with corruption and dysfunction. He said it must also address the structural viability of some municipalities, as some lack a sufficient revenue source. “I think we need to face the reality that some municipalities are in situations where they cannot resolve these issues on their own.”
Dr Mkhize also emphasised the need for everyone to cooperate to find one solution to a very complex situation. “What we are therefore saying is that this problem must not be viewed in isolation, where everyone becomes defensive. From Eskom’s side, the message is ‘pay or else’. From the municipalities’ side, the message is ‘we cannot pay’. That kind of situation is a problem,” he said. “We need an intergovernmental and cooperative ownership of the problem, as well as cooperative ownership of the solution. If one team looks at this issue, it may be able to develop a better solution,” he said.
The committees also acknowledged sentiments that the DAAs are not a silver bullet. It emphasised that any intervention, such as DAAs must be legally sound and must not undermine municipalities' constitutional authority over electricity reticulation. However, Members also warned that constitutional authority over electricity reticulation cannot be used to excuse poor performance or diverting funds.
The committees noted that municipalities continue to owe Eskom more than R110 billion – up from R89 billion reported at a previous meeting. Members were also concerned that many municipalities are owed significant amounts by consumers, which they said reflects municipalities’ troubling inability to collect revenue and pay what is due to Eskom. They further stressed that municipalities must still pay for their current electricity consumption and improve their billing systems. Among the other improvements needed are updating indigent registers, protecting free basic electricity allocations and strengthening credit control.
Ms Khanyase said the committees are aware that policy and reform processes are underway. She said the committees note the ongoing review processes for the electricity pricing policy and the draft White Paper on Local Government. According to her, however, it will take time and interim measures such as DAAs are needed to address rising municipal debt. “What is clear is that action is needed from both sides. Eskom and municipalities need to act in concert with each other and with government support. Without mutual understanding, the problem cannot be resolved.”
She said that, as a way forward, the committees will have to keep monitoring the implementation of the DAAs and the performance of municipalities. The committees resolved that the relevant stakeholders should return within three months with concrete interventions, including an intergovernmental plan that moves beyond crisis management and sets out a structured strategy to address the debt, revenue, governance and infrastructure challenges affecting municipalities.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE, DR ZWELI MKHIZE AND THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON ELECTRICITY AND ENERGY, MS ZAMA KHANYASE.
For media inquiries or interviews with the Chairpersons, please contact the Media Officer:
Name: Alicestine October
Cell: 083 665 4345
E-mail: aoctober@parliament.gov.za
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