Tshwane’s electricity debt climbs to just below R1.9bn

The City of Tshwane’s debt to Eskom has escalated to just below R1.9bn as of Friday last week.

Eskom said Tshwane has once again defaulted. 

“As Eskom’s cash flow challenges and the provisions of the [Public Finance Management Act] dictate, Eskom is accordingly exploring all avenues available to it to recover this debt including, but not limited to, approaching the courts for relief”, said Mpumelelo Mnyani, senior manager for customer services in Gauteng.

Mnyani said the March 2023 invoice, which was payable on April 19, was short-paid by R179m, while the April 2023 invoice of R776m — which was payable on May 18 — remained unpaid.

“Eskom has issued the May 2023 invoice of R904m payable on June 17 2023.

Eskom has engaged with the city on numerous occasions regarding its failure to settle the debt it owes Eskom.

“The power utility has appealed to the city to immediately settle the March and April 2023 invoices and to pay its monthly accounts on the due date,” he said.

Mnyani said Eskom does not have the financial capacity to continue supplying bulk electricity to the city without payment.

He said Eskom had in the past escalated such matters to the National Treasury and the co-operative governance and traditional affairs department. Despite these efforts, the situation was worsening.

In response, Tshwane said it was no secret that it had financial and cash flow difficulties, including long-standing issues with debt collection and credit control.

Tshwane mayoral spokesperson Sipho Stuurman said as the findings of the 2021/22 audit have confirmed, systems and controls essential to the city’s long-term financial sustainability were woefully inadequate.

He said the city’s mayoral committee did not deny it owed Eskom and that it would have to pay.

“The mayor has said that getting control of the city’s finances, and responding to the findings of the AG constitute the city’s number one political priority.

“To this end, the National Treasury has deployed resources to Tshwane and has had direct input into the budget adopted by the city for the 2023/24 financial year.”

Stuurman said difficult measures had been taken , including the decision not to budget for salary increases for employees and councillors.

“As the mayor announced in his state of the city address, far more rigorous attempts are being made than in the immediate past to strengthen the city’s revenue value chain. A target has been set of doing 1,000 credit control disconnections per week, and then ensuring that payment is received on these accounts,” he said.

Stuurman said MMC for finance Peter Sutton and MMC for utility services Themba Fosi had been appointed to ensure that every possible measure was being taken to achieve the target.

“In the process, the systems and controls along the city’s revenue value chain is being rebuilt. Tshwane looks forward to engaging Eskom about these attempts, as the city manager Johann Mettler has been doing in the past few months,” Stuurman said.

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