The Tshwane metro said it had a good reason why it delayed paying power utility Eskom.

Last week a war of words erupted after Eskom said that Tshwane metro owed R635-million for services provided by the company.

Also read: Tshwane admits owing R635 million in Eskom debt

In turn, the Tshwane metro said they were only 15 days late for payment, and had made arrangements with Eskom.

Tshwane chief of staff, Jordan Griffiths said the R635-million was the bill for January only.

“This R635-million is the bill for January. Now Eskom issues that bill by the 17th and expects their payment by the 18th. In this particular month, the metro indicated to Eskom that we were not in a position to pay it immediately,” he said.

“One of the reasons is that our billing cycle happens from the 20th onwards each month, now that’s when our revenue comes in, allowing us to effectively pay the funds to Eskom.”

Griffiths said one of the other challenges was that some of the metro’s key grants used to fund operational expenses have not been fully paid yet by the national treasury, and would only come in around February and March.

He said the metro then has to fund much of its operations out of its existing cash flow.

“That is why there was a delay in payment. The city will be in a much better space going forward once the grants have been received.”

Griffiths said the metro itself was owed over R200-million by the Madibeng municipality to whom the metro supplied bulk water and electricity.

“Some of our biggest clients that have a history of non-payment are the department of public works and some of the other major government departments. This is really problematic.

“As we receive [revenue collection], we obviously pay over to Eskom and so we need to make sure we manage this account appropriately and this was why we were engaging with Eskom.”

While Griffiths said he was not sure whether politics had anything to do with Eskom’s choice to single out the Tshwane metro, he understood that the power utility’s finances may be “sensitive” given its current debt.

The cash-strapped Eskom said the overdue debt owed by Tshwane had contributed negatively to the liquidity, financial performance and sustainability of the organisation, where Eskom had to borrow to meet its financial commitments.

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