EDITORIAL | Nothing should be off the table when it comes to resuscitating municipalities

The business model of municipalities is neither complex nor dynamic. Yet it must be. Since their establishment after the dawn of democracy, there has not been a revision to test if they should not change with a mutating economy.

Our municipalities buy electricity from Eskom, water from mostly Rand Water, then add surcharges to generate more revenue from hard pressed consumers. They then charge residents and businesses property rates and add a raft of smaller taxes like waste collection while hoping the national and provincial governments will chip in.

The tragedy, though, is that while this appeared to work earlier in our democracy, we’ve reached a precipice. Rand Water appealed to residents of Gauteng and other provinces to use water sparingly, noting the arrival of spring has coincided with increased use which puts pressure on its ability to provide.

The national government, which undergirds operations at other spheres of government, is technically broke. The Sunday Times has published a series of articles that depict a government struggling to keep up with payments. Government is considering whittling down departments, a move which, to the extent it doesn’t affect the quality of services, especially to the poor, must be welcomed. Worryingly, government is considering cutting down a number of services, including visible policing. The signs of a government teetering on the brink of a calamitous collapse are evident.

Eskom, meanwhile, has perpetually been on its knees, relying on load-shedding to obviate a potential system collapse. Its inability to provide electricity undermines the very business model municipalities use to generate more from consumers, while also fast-tracking infrastructure collapse. It’s a toxic mix.

What is to be done?

If you ask the bright sparks at the Joburg Metro, they will say increase property rates at levels that reek of robbery. They do it to avoid the city falling apart because of bankruptcy — not because they believe the rates are fair and due to the city. Yet that’s no strategy.

While green energy is desirable, we ought not to rush to it at all costs. The national emergency we face relates to our powerlessness. Where we are able to get green, dependable energy quicker and cheaply, that’s even better.

If you ask Tshwane mayor Cilliers Brink, the municipality must sell off two moribund power stations that cost it R300m for maintenance per year while yielding limited power. Private business, otherwise referred to as independent power producers, must be contracted with a view to generating green energy of about 1,000MW of its total required 2,600MW. It seems a no-brainer, right?

Well, not quite.

First, we must ask ourselves what the right thing to do is. This is not the same thing as what is possible within limited means. Put differently, the fact that something is possible and convenient doesn’t translate to it being the putative best.

Second, to the extent that the city could generate green energy, this should be pursued. But if it’s cheaper for the private sector to resuscitate the power stations in their current design and extract sizeable additional megawatts of power, while relying on coal, this option too must be considered. Nothing should be off the table.

While green energy is desirable, we ought not to rush to it at all costs. The national emergency we face relates to our powerlessness. Where we are able to get green, dependable energy quicker and cheaply, that’s even better.

But we must learn from the big economies around the globe. The US is, to date, exporting coal to the world’s biggest emitter, China. The latter has told the world it will not plunge its cities into darkness and risk its economic development while pursuing green energy. It places its economy above everything else. And so is the US.

Third, Eskom and energy regulator Nersa are, in any case, expected to give Tshwane the thumbs down. Eskom needs municipalities who can pay to continue relying on it. Otherwise, it becomes impotent and will eventually collapse as those who can afford (business, residents and cities) go off the grid. It surely won’t facilitate its own collapse. Yet it struggles to provide power.

Lastly, it is apparent there is a general lack of investment in infrastructure across the board. This is anathema for our economy. Our municipalities are becoming desperate to increase revenue to avoid bankruptcy.

It is at times like these when we need cool heads to think through the various models to help municipalities stay afloat. The old models are dying as every sphere of government struggles to provide service. The centre must hold. But alas residents are left to the vicissitudes of each council as it tries to survive.