City of Tshwane’s electricity debt ‘worsening Eskom’s cash-flow crisis’

The City of Tshwane’s R1.4bn debt is worsening Eskom’s cash-flow crisis, says the power utility.

Eskom said the city’s electricity debt has compounded to R1.4bn as of January 25 2023 due to its short payment and non-payments spanning several months in the recent past.

Last year Eskom was considering disconnecting the city to secure outstanding payment of its huge electricity bill.

“The city short paid its November 2022 bill of R660m and also failed to pay its December 2022 account of R780m, negatively affecting the liquidity, financial performance and sustainability of the power utility,” Eskom said.

According to the power utility, despite several engagements with the city to encourage it to settle its November 2022 account by December 31 2022, the bill remains outstanding.

Eskom said it approached the department of co-operative governance & traditional affairs (Cogta) to mediate.

“The Public Finance Management Act requires that institutions recover what is owed to them, hence Eskom sought the intervention of Cogta in the matter. The mediation process was in line with the Intergovernmental Relations Framework Act after Eskom declared a dispute.”

The power utility has previously reported on the city’s erratic payments of its bulk account.

“On January 5, the power utility again made the same plea to the City of Tshwane to settle its long outstanding invoice of November 2022 in a meeting between the two entities, but to no avail.

“Eskom does not have the financial capacity to finance the operations and calls on the city to do right by its residents and pay the bulk electricity account to enable Eskom to continue supplying electricity to the city.”

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