Tshwane owes over R3b to Eskom

Tshwane’s electricity debt continues to increase and Eskom is not pleased.

As of August 31, the metro owes R3.2b to the power utility that is fuming over the growing debt.

“Tshwane owes Eskom about R3.2b which has accumulated over July and August 2023 due to erratic payments,” said the state-owned enterprise in a statement.

“The payment patterns by Tshwane have deteriorated to concerning levels that further threaten Eskom’s liquidity, financial performance, and sustainability.”

It said the ‘erratic payments’ by Tshwane dated back to 2022 and had reached alarming figures.

“Despite all the avenues that Eskom has explored to recover what is due to the organisation, the municipality has failed to fully honour its payments and to comply with its electricity supply agreement.”

Tshwane confirms debt

City manager Johann Mettler confirmed the two months of debt owed to Eskom.

“We have arrangements [with] Eskom to make payments, and have stuck to those arrangements, although not to Eskom’s satisfaction.”

Mettler said there are significant problems in collecting water and electricity payments from ratepayers, which have impeded their ability to make payments. He said revenue management is being reworked to fix the ability to pay the likes of Rand Water, which is also owed for services.

Tshwane drives to collect billions

This is as the metro aims to collect about R22b owed by ratepayers following two months of destabilisation in the capital, which has not made it easy for the metro to push itself out of its financial predicament.

Since September 19, 114 000 accounts in the economically depressed metro have not been serviced for water and electricity benefits. Due to the culture of non-payment, the city’s debt has risen from R17b in 2021 to R20.8b in March.

The over R22b is spread over the following categories as of September 19:
– Businesses: Over R5b
– Residents: Over R12b
– Government: Over R1b
– Embassies: Over R18m
– Councillors: Over R2m
– Employees: Over R29m
– Indigents: Over R1b
– Inactive accounts: Over R1.6b

Financial distress

Tshwane Metro spokesperson Sipho Stuurman said: “It is no secret that Tshwane is in financial distress and that we are behind on our payments to Eskom. We have been consistent and clear in conveying the reality of our financial situation and stipulating the difficult decisions that need to be carried out by council, the mayoral committee and city management to get out of our financial distress.”

Stuurman said the metro’s adopted budget in June 2023 was underfunded by at least R3b.

He said Tshwane’s approved funding plan comprised several measures such as seeking exemption from salary increases to achieve a funded status within three financial years. He added that the loss sale of electricity also made the financial position of the metro worse this year as the country has had more load-shedding days than ever before.

“This wreaks havoc not just on the maintenance of our network, leading to heightened wear and tear, but also affects our funding model. During load-shedding we cannot sell electricity and therefore struggle to cover fixed costs associated with the operation of our network.”

He said the metro remained fully committed to honour their financial rescue mission.