Eskom owed R4.7 billion by the City of Tshwane and Ekurhuleni Municipalities

  • In a press statement, Eskom has revealed that the City of Tshwane and the City of Ekurhuleni collectively owe the power utility R4.7 billion.

The City of Tshwane outstanding debt is R3.2 billion while the the City of Ekurhuleni owes R1.5 billion. Eskom said that the  payment patterns of the municipalities have deteriorated to concerning levels which hreatens 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,” said Eskom. “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, ” they added.

Related news: South Africa has unsustainable and growing muniscipal debt owed to Eskom skywards of R56 billion

In May this year, the South Africa’s Deputy President, Paul Mashatile, introduced a debt relief package that writes off historic municipal debt to Eskom to help free up revenue at municipalities to provide reliable basic services. Municipalities are required to meet strict requirements in the form of 33 conditions to qualify.

“These conditions include maintaining a minimum average revenue collection targets for electricity and water services; ring fencing all electricity, water and sanitation revenue collected; and paying the Eskom current account first and the bulk water current account second before any other monthly payments,” Minister in the Presidency, Khumbudzo Ntshavheni said.

National Treasury said the Eskom debt relief will improve Eskom’s sustainability – facilitates the condition that Eskom write-off the municipal debt, interest and penalties under strict conditions. It does not seem like the case.

Author: Bryan Groenendaal

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