City of Tshwane reaches agreement with Eskom to settle R6.67bn historical debt

The City of Tshwane has announced it has agreed with Eskom to settle the R6.67bn historical debt owed to the utility. 

Tshwane mayor Nasiphi Moya said the agreement, formalised as a court order on November 26, is a significant milestone in the city’s financial recovery and stability journey.

According to Moya, the arrangement outlines a five-year structured repayment plan with the first payment of R400m scheduled for December. The city has paid R425m for arrears for October. 

Moya said a critical condition of the agreement is the timely payment of accounts within 30 days of billing. 

“This settlement signals a turning point, ending years of costly litigation and redirecting our focus on improving service delivery and enhancing revenue collection systems,” she said.

“My administration is fully committed to honouring the arrangement in full. We will adopt stronger financial governance practices to ensure this never happens again, safeguarding the city’s resources and financial health.”

Eskom said if Tshwane defaults on the payment arrangement and current accounts, the payment arrangement will be terminated, and the full amount owing will become due and payable to Eskom immediately.

“We are pleased to have worked collaboratively with the City of Tshwane to reach this outcome. The agreement plays a part in maintaining the sustainability of Eskom to drive economic growth and reduce our burden on the taxpayer,” said Monde Bala, Eskom group executive, distribution.

Meanwhile, the city has decided to write off the R600m Hammanskraal residents' water debt. Moya said this was a vital step towards restoring dignity and fairness.

“On the operational front, progress is underway with the commissioning of the Magalies water package plant, a crucial component of our efforts to supply clean water to the region,” she said.

She said key developments include:

• the installation of valves to separate areas where contaminated water from Temba plant and Klipdrift Plant were mixing; and
• systematic flushing and scouring of pipelines to improve water quality. 

Moya said about 80% of the area has been flushed, with only Kekana Gardens in progress due to insufficient water supply by Magalies.

Regular water quality testing ensures compliance with SANS 241:2015 standards.

On spaza shop regulation, she said the city has so far inspected more than 400 spaza shops, issued fines and shut down non-compliant operations. 

"The efforts highlight our commitment to ensuring residents have access to safe and healthy food options. To strengthen the interventions, the city has introduced an online registration portal for spaza shops, streamlining compliance processes and enhancing oversight.

"Additionally, a draft Informal Trading and Township Economy by-law has been approved by council for public consultation. The by-law proposes stricter licencing requirements, enforces health and safety standards and outlines penalties for noncompliance."

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