Merafong City Local Municipality has become the third municipality to enter into a distribution agency agreement DAA with Eskom, marking a further expansion of the model being used to stabilise distressed electricity distributors. The agreement was signed on December 8 at the Merafong Council Chambers, following earlier DAAs concluded with Maluti-a-Phofung and Emfuleni.
According to a joint statement by Eskom and Merafong, the DAA is part of the municipalitys broader turnaround strategy to address deteriorating infrastructure, weakened revenue collection and financial instability. National municipal debt owed to Eskom exceeded R105 billion as at September with Merafong among the municipalities experiencing operational and financial strain.
Under the agreement, certain distribution and retail functions will be jointly managed while billing and revenue collection will be ring-fenced and administered through Eskom systems. Merafong will remain the licensed distributor with Eskom providing technical support, operational expertise and skills transfer. Free basic electricity will be disbursed directly by Eskom to qualifying households.
