Eskom says the City of Tshwane owes it around R3.2 billion which accumulated over July and August (amidst the ongoing strike) due to erratic payments. The Ekurhuleni municipality is R1.5 billion in the red.
Eskom said on Wednesday that Tshwane and Ekurhuleni jointly owe it R4.7 billion from 31 August 2023.
The power supplier says both municipalities’ payment patterns have deteriorated to alarming levels which now threaten Eskom’s liquidity, financial performance and sustainability.
“Despite all the avenues Eskom explored to recover (the debt), both municipalities failed to honor their payments and their electricity supply agreements.”
Cilliers Brink, mayor of Tshwane, said in response on Wednesday that it is no secret that the Tshwane metro is in financial trouble and in arrears with its power bill.
Brink says one of the main reasons for the metro’s financial situation is the loss that Tshwane, along with many other municipalities in the country, suffers from the sale of electricity.
“This year the country had more load-shedding days than ever before. This wreaks havoc not only in terms of maintaining our network, but also affects our funding model. During load shedding, we cannot sell electricity and therefore struggle to cover the fixed costs associated with the efficient operation of our network,” explains the mayor.
According to Brink, the National Energy Regulator of South Africa’s (Nersa) approved tariff for the resale of electricity also does not cover the metro’s costs. “We are therefore now finalizing a cost-of-offer study to clarify our submissions to Nersa for the next financial year.”
Brink says the budget that was accepted in June this year was underfunded by at least R3 billion. The council therefore also approved a funding plan which includes measures to achieve a funded status within three financial years.
“One of these measures is to request exemption from salary increases, “even in light of a dangerous unprotected strike”, says Brink.
“We have consistently and clearly outlined the reality of our financial situation, as well as the difficult decisions that must be made by the council, the mayor’s committee and city management to get out of our financial predicament.”