POWER PLAY
Eskom seeks help to make Tshwane ‘do right by its residents’ and pay R1.4bn debt
However, the City of Tshwane’s ballooning bill is but one among many heavily indebted municipalities that the embattled power utility is chasing.
Eskom has requested the intervention of the Department of Cooperative Governance and Traditional Affairs (CoGTA) in its efforts to recover R1.4-billion in unpaid electricity debt from the City of Tshwane.
The power utility said on Wednesday that Tshwane’s electricity debt had compounded to that bulky figure as of 25 January, “due to its short payment and non-payments spanning several months”.
“The City short-paid its November 2022 bill of R660-million and also failed to pay its December 2022 account of R780-million, negatively impacting the liquidity, financial performance and sustainability of the power utility,” it said.
City of Tshwane’s R1.4 billion debt exacerbates Eskom’s cash flow crisis pic.twitter.com/LeS9SeLPli
— Eskom Hld SOC Ltd (@Eskom_SA) January 25, 2023
“Despite several engagements with the City of Tshwane to encourage it to settle its November 2022 account by 31 December 2022, the bill remains outstanding.”
On 5 January 2023, Eskom reiterated its plea to the metro to settle its debt in a meeting between the two entities, but to no avail.
As a result, Eskom has approached the CoGTA to mediate in the resolution of the City’s poor payments that, the utility says, “continue to spiral out of control”.
In 2022, Daily Maverick reported that, as of 31 July 2022, total municipal debt to Eskom stood at a staggering R49.7-billion.
At the time, the City of Tshwane was among the top 10 municipalities in debt to Eskom, owing R967,840,102.
In August of that year, Tshwane committed to paying R1.6-billion in debt after Eskom threatened to cut its power. That move would have affected critical functions of the city and its more than 2.7 million residents.
Debt piling up
In response to questions from Daily Maverick about heavily indebted municipalities, on 19 January 2023, Eskom said it had seen a “significant increase” in the overdue debt during the current financial year.
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“The increase in growth of the municipal debt consequently puts a strain on Eskom’s financial performance and, most importantly, [its] liquidity, impacting Eskom’s ability to buy diesel which contributes to higher stages of load shedding,” it said.
Read in Daily Maverick: “Hand-to-Mouth: South Africa’s power lifeline frays as Eskom scrambles for diesel”
According to the power utility, the following municipalities had the highest debt, as at 30 November 2022:
- Emalahleni in Mpumalanga — R7,104,472,405;
- Maluti-a-Phofung in the Free State — R7,040,792,724;
- Emfuleni in Gauteng in Gauteng — R5,594,563,607;
- Matjhabeng in the Free State — R5,024,751,159;
- Govan Mbeki in Mpumalanga — R3,520,016,258;
- Lekwa in Mpumalanga — R1,794,290,310;
- City of Tshwane in Gauteng — R1,702,446,692;
- Ngwathe in Free State — R1,642,749,981;
- City of Matlosana in North West — R1,420,652,789; and
- Thaba Chweu in Mpumalanga — R1,221,229,828.
In response to Daily Maverick questions last week, Eskom said the December 2022 month-end results were still being finalised and therefore not available for distribution.
On Wednesday, the ailing power utility said it did not have the financial capacity to finance Tshwane’s operations, and called 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”.
Daily Maverick requested comment from the City of Tshwane but had not received a response by the time of publication. DM
All municipalities have to pay Eskom; not only the ones that are not run by the ANC, right?