Masina weighs in on Ekurhuleni's alleged R544m Eskom debt — ‘We never defaulted on bulk purchases’

01 March 2022 - 14:00
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Former Ekurhuleni mayor Mzwandile Masina has weighed in on the municipality's R544m Eskom debt.
Former Ekurhuleni mayor Mzwandile Masina has weighed in on the municipality's R544m Eskom debt.
Image: Gallo Images/Sharon Seretlo

Former Ekurhuleni mayor Mzwandile Masina has weighed in on the municipality’s alleged R544m Eskom debt, claiming that under his mayorship the city never defaulted on bulk purchases as they were its “strategic priorities”.

The power utility said in a statement on Monday the City of Ekurhuleni owed it R544m, which continues to escalate. This was despite the partial payment of R530m of its bulk account towards a debt of more than R1bn.

Eskom said its attempt to resolve the matter with Ekurhuleni mayor Tania Campbell had proved unsuccessful as she referred it back to the city’s management.

It said the late payment had resulted in interest of R86m. 

“This is in breach of the electricity supply agreement between Eskom and the city and it places a significant strain on the utility’s financial performance and sustainability.

The city denied it failed to service its account with Eskom and urged the company to withdraw its statement. 

“To protect the reputation and integrity of the City of Ekurhuleni, the city shall not hesitate to initiate litigation against Eskom over the non-compliance with the provisions of municipal finance legislation and has already written to Eskom to publicly withdraw its statement.

“This action is also intended to ensure that electricity supply to residents is not unlawfully disrupted. A crucial aspect to the dispute, and which was already addressed with Eskom, is the incurring of interest charges of approximately R86m. This amount is strenuously defended. The City of Ekurhuleni still believes that an amicable conclusion can be reached between itself and Eskom to end the impasse,” said the city. 

Responding to Masina's claims, Ekurhuleni mayor Tania Campbell said Masina should have “been less busy with his own interests and more focused on the interests of City of Ekurhuleni ratepayers during his tenure as mayor”.

“He would then have realised the city’s management had already been frustrated by Eskom for two years in trying to get them to align their unlawful 15-day payment terms for bulk electricity supply to the 30-day terms required by the MFMA. He would also have realised the city has not stopped paying Eskom.

“Out of appreciation for the utility’s liquidity concerns, it pays in 50% instalments at 15-day intervals until such time as the dispute is finalised,” she said.

Campbell claimed Eskom's statement was “disingenuous”.

“The City of Ekurhuleni has under legal advice requested a retraction and apology. Further legal steps will follow should Eskom persist with its strong-arm tactics.

“Our multiparty coalition fully supports paying on time for services rendered, but it needs to be done according to fair and lawful payment terms. We will not undermine the finances of the City of Ekurhuleni just because Eskom management is struggling to stabilise their entity. We owe our residents and ratepayers that much.”


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