The Select Committee on Agriculture, Land Reform and Mineral Resources has concluded its week-long oversight visit to the Inxuba Yethemba Local Municipality in Cradock. The committee held fruitful engagements with the municipality, various stakeholders and community development workers on a wide range of socio-economic challenges, including long-standing Eskom debt.
Issues raised during engagements included the loss of water service revenue following the consolidation of water and sanitation services into the Chris Hani District Municipality. This consolidation has constrained municipal income, contributed to ballooning Eskom debt, persistent raw sewage pollution of the Fish River, the absence of an electricity master plan, and the dependence of small-scale farmers on a “strategic partner”.
The engagements revealed significant challenges in the provision of municipal services, with civil society reportedly taking over many municipal functions. The committee heard that while core electricity supply has improved over the past six months, businesses and the agricultural sector continue to experience the impact of prolonged electricity outages and water supply challenges.
Eskom and representatives from the Department of Electricity and Energy informed the committee that consistent payment of the current account could lead to interest relief and potentially a reduction of the total Eskom debt, which ballooned from R127 million to R918 million following a 2020 High Court order.
The municipality adopted an unfunded budget for the 2025/26 financial year, as its current liabilities exceed its assets, largely due to Eskom and Auditor-General debts. This led to the freezing of its municipal equitable share on 8 July 2026, although the funds were subsequently released a month later under strict conditions.
While the Executive Mayor acknowledged the debt owed to Eskom, the municipality proposed that Eskom should cease direct electricity supply to three municipal wards and to large businesses within the municipal area, as this practice further undermines the municipality’s revenue-generating capacity.
The committee has recommended an urgent meeting with Provincial and National Treasury, the Auditor-General, the Departments of Cooperative Governance and Traditional Affairs (COGTA) and Electricity and Energy, the South African Local Government Association (SALGA) and Eskom. At this meeting, a summary of actions taken to date by all parties must be presented to the committee.
This engagement should clarify what instructions, court actions or consequence management measures have been implemented in connection with the non-payment of Eskom’s historical debt and current account. It should also lead to the development of an acceptable, binding and final solution to these debts.
The committee has further requested a meeting with the Department of Electricity and Energy, Eskom, National Treasury, the Department of COGTA and SALGA to receive feedback on National Treasury’s request that COGTA and SALGA develop a balanced, standardised distribution agency agreement template.
The Chairperson of the committee, Mr Mpho Modise, expressed appreciation for the cooperation received from all participants during the oversight visit. He emphasised the importance of continued engagement and cooperation between the municipality and its stakeholders, noting that this is where sustainable solutions to the municipality’s challenges lie.
Distributed by APO Group on behalf of Republic of South Africa: The Parliament.
