There seems to be no end in sight for the City of Tshwane’s financial troubles with Eskom, which this week said it was owed a whopping R4.2 billion by the municipality for bulk power supply.
In June the City’s outstanding debt was sitting at R1.4 bn, but it went up to about R3.2 bn in August because of erratic payments.
On Tuesday, Eskom called out the municipality for failing to settle its outstanding bills amounting to R3.1 bn for August, September, and October 2023 with a total debt of R4.2 bn and a current account of R1.1 bn that is due on December 28, 2023.
Previously, the City said its financial problems with Eskom could be attributed to a number of factors such as the municipal salary bill that increased from R700m per month to about R1.2bn per month because of a benchmarking exercise.
Yesterday, Finance MMC Peter Sutton could not comment on the latest astronomical debt that kept soaring despite promises by the municipality to pay it in instalments.
In a media statement Eskom expressed concern that the escalating electricity debt owed by municipalities in Gauteng poses a significant challenge to the entity's running.
“The accumulating debt not only strains Eskom's financial stability but also threatens the reliability of electricity supply across the province,”it said.
According to Eskom its financial stability was exacerbated by Tshwane’s accumulation of unpaid bills and Ekurhuleni Municipality’s late payments.
The utility said the situation could affect the residents and businesses that rely on a stable power supply.
“If left unaddressed, the situation could lead to service interruptions, hindering economic activities. Despite continuous efforts to address the inconsistent and late payments, the debt, specifically that of the City of Tshwane, continues to grow and hinders Eskom's ability to invest in essential infrastructure, maintenance, and the development of sustainable energy solutions,”it said.
On the other hand, the utility said, Ekurhuleni continued to settle its account late even after the payment terms were extended to 30 days. The municipality currently has arrears of R146 million.
Eskom said: “All municipalities are urged to prioritise settling current accounts and outstanding electricity payments to Eskom. Eskom remains committed to working with municipalities to find viable solutions and mitigate the potential repercussions of the mounting debt.”
The utility previously said the payment patterns by both municipalities have deteriorated to concerning levels that further threaten Eskom’s liquidity, financial performance, and sustainability.
“The erratic payments by the City of Tshwane dating back to 2022 are alarming; also of serious concern is the entrenched practice by the City of Ekurhuleni of settling its account late over the past six months. Despite all the avenues that Eskom has explored to recover what is due to the organisation, both municipalities have failed to fully honour their payments and to comply with their electricity supply agreements,”said Eskom.
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