Ramokgopa calls for Eskom to take over Joburg’s failing electricity revenue system

Johannesburg’s worsening financial crisis may be entering dangerous territory, with Electricity Minister Kgosientsho Ramokgopa confirming that Eskom is seriously considering stepping in to manage parts of the city’s electricity revenue system while debt, billing failures and technical collapse deepen inside City Power.

Speaking on Radio 702 on Wednesday evening, Ramokgopa said Eskom would probably implement its Distribution Agency Agreement (DAA) model in Johannesburg — a system under which Eskom can install smart meters, provide technical support and directly collect electricity revenue on behalf of municipalities.

The DAA model has been implemented in a scattering of municipalities across the country. One of the most recent was the Merafong City Local Municipality, in the west of Gauteng, which signed a DAA with Eskom in December 2025. The signing meant that billing and revenue collection are ring-fenced and administered through Eskom systems.

“We are seriously looking at DAA… We have successfully started this in some smaller municipalities. Joburg will be the biggest metro so far to start this,” Ramokgopa said.

The minister said Eskom had “no legal power to ring-fence money paid by Joburg residents to pay Eskom”, despite residents continuing to settle electricity bills with the city.

“The city is collecting revenue. People are paying, and they are the real casualties here. The money must be redirected to us. Once we deliver bulk electricity, the city has to pay,” he said.

Ramokgopa described the situation as a repetition of a similar debt crisis last year, when Eskom intervened and a repayment agreement was reached with the City.

“I personally intervened, and we reached a payment plan to service the debt. Unfortunately, City Power did not keep up with the payment agreement, and it is catastrophic for Eskom,” he said.

“I will sit with the City to talk about how to resolve this. The money people are paying for electricity must be ring-fenced and redirected to Eskom.”

The minister said Eskom should treat the matter as a “normal debtor-creditor situation”, rejecting suggestions that Johannesburg was “too big to fail”.

His comments came less than 24 hours after Eskom issued a notice, warning that it intended to “reduce, interrupt and/or terminate” electricity supply to certain bulk supply points supplying Johannesburg because of unpaid debt exceeding R5.2-billion.

Eskom said the City of Johannesburg and/or City Power owed arrear debt of R5.25-billion, excluding a further R1.58-billion current account payment due in June.

“As a result of CoJ/CP’s continued failure to honour its Electricity Supply Agreement with Eskom, including repeated defaults, Eskom has been forced to issue a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points against the City of Johannesburg and City Power,” the utility said.

The statement reinforced the utility’s promotion of its DAA model, which it described as part of a broader initiative aimed at restoring financial and technical sustainability in struggling municipalities.

‘Collecting revenue, but failing to pay Eskom’

“Eskom maintains it simply cannot be acceptable to the city’s residents and all South Africans that COJ/CP is collecting electricity revenue but failing to pay over Eskom’s share,” the utility said.

Ramokgopa also painted a bleak picture of City Power’s operational capacity, pointing out what he described as a “haemorrhaging” of technical skills from the utility.

He said experienced engineers had left the entity, contributing to technical losses reaching about 30%, far above a normal benchmark of around 7%.

“The billing is also in chaos,” Ramokgopa said, citing incorrect tariffs, incomplete billing and billing inaccuracies.

He said Eskom believed improvements were possible if the correct technical and administrative skills were restored, although he cautioned that recovery would not happen within “two to three months”.

Outa calls for intervention

The Organisation Undoing Tax Abuse (Outa) reinforced calls for intervention in the city’s electricity revenue system, saying Eskom should “intercept the revenue stream” instead of punishing paying residents and businesses.

“Residents and businesses have largely continued paying their electricity bills, yet the City has failed to pass those funds on to Eskom. Residents are already paying for Eskom’s electricity through their municipal bills,” said Outa executive manager, Julius Kleynhans.

“If the City fails to pay Eskom, then Eskom should focus on intercepting the revenue stream instead of punishing paying customers,” Kleynhans said.

Outa said Eskom should temporarily take control of the electricity payment component of Johannesburg’s billing system until the outstanding debt was settled.

The organisation also linked the Eskom dispute to broader concerns over Johannesburg’s finances following recent warnings from Finance Minister Enoch Godongwana on unfunded budgets, escalating creditor debt and governance failures.

During Wednesday’s State of the City Address, Executive Mayor Dada Morero sought to project confidence in Johannesburg’s finances, referring to ongoing engagements with Eskom as well as international infrastructure funding initiatives, including a German-backed financing arrangement intended to support infrastructure upgrades and urban resilience projects across the city.

However, the funding initiatives Morero mentioned are aimed at longer-term capital and infrastructure recovery programmes, rather than the immediate settlement of Johannesburg’s escalating Eskom debt.

While the mayor indicated that the city was working towards resolving its disputes with Eskom, he did not publicly elaborate on how Johannesburg intended to settle more than R5-billion in arrear electricity debt, whether a formal repayment agreement had been reached or how the metro planned to prevent Eskom’s threatened supply interruptions.

The escalating dispute now raises broader concerns over the stability of Johannesburg’s infrastructure systems, including electricity supply, water pumping, wastewater treatment and other critical municipal operations reliant on stable power networks. DM