The SA Local Government Association (Salga) has warned Eskom’s proposed distribution agency agreement (DAA) “risks being perceived as a backdoor takeover” of municipal distribution functions because it converts an operational proposal into an intergovernmental and constitutional test.
The association framed its objection in constitutional and statutory terms, emphasising electricity reticulation was assigned to municipalities in the constitution and any deviation must comply with the Municipal Systems Act and align with integrated development plans (IDPs).
Salga acknowledged the urgency of restoring reliable power and addressing municipal financial strain but set out three principal governance risks if the DAA proceeds without established municipal processes.
The association argued that communities could lose the right to hold elected municipal leaders accountable for electricity delivery; municipalities could be stripped of a core developmental function, weakening their financial sustainability; and local economies could face instability if municipalities could not plan and leverage electricity distribution as part of integrated development.
In a statement, Salga called for transparent engagement between Eskom, national departments, municipalities and communities, and for support to focus on capacity building, financial restructuring and sustainable debt management rather than unilateral imposition. The association reiterated its foundational role: to represent, promote and protect the interests of organised local government and to ensure that the voice of local government is heard and respected in intergovernmental platforms.
Salga president Bheke Stofile placed the DAA debate in the context of municipal balance sheets and intergovernmental arrears. “The R416bn owed to municipalities by households, businesses, state-owned enterprises, and government departments (National Treasury, March 2025) is often overlooked, while the R210bn owed by municipalities to Eskom and water boards is amplified at every turn,” he said, adding “empowerment, not takeover, is the only viable path to restoring financial stability and protecting the dignity of our communities”.
“Rescue tools must not become backdoor takeovers. Strengthening municipalities is the only path to reliable electricity and restored public trust.”
The statement cites National Treasury figures for the sums owed to and by municipalities; Salga’s presentation treats those figures as central to its argument that the policy response should prioritise municipal strengthening and shared accountability for debts across sectors. Salga’s position frames the DAA as a procedural and constitutional concern rather than solely a technical or operational intervention.
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