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Eskom gets Cogta involved in bid to recover billions owed by City of Tshwane
Eskom said the city's debt is affecting its liquidity.
The mediation process between the City of Tshwane and Eskom follows a dispute as part of the Intergovernmental Relations Framework Act. Photo for illustration: iStock
Ailing parastatal Eskom has approached the Department of Cooperative Governance and Traditional Affairs (Cogta) to assist in mediating the ongoing debt battle with the City of Tshwane (CoT) to recover the roughly R1.6 billion it owes the utility.
The state-owned enterprise said the city’s debts continue to grow unabated, which is affecting the liquidity of Eskom.
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Mediation
Eskom said the mediation process follows a dispute as part of the Intergovernmental Relations Framework Act.
“Eskom has previously reported on the CoT’s erratic payments on its bulk account. The power utility further stated that the CoT failed to settle its account despite numerous engagements with the municipality.”
ALSO READ: Eskom, City of Tshwane electricity bill row continues
Tshwane’s electricity debt
“Tshwane’s bill as at 30 November is R1.6 billion after it failed to pay the September bill of R887 million, which was payable on 19 October.
“And it is in arrears of R699 million. The October bill of R894 million, which was payable on 16 November, also remains unpaid,” it said.
Eskom said the city of Tshwane was not responding to requests to settle its debt, which was why it approached Cogta.
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“The Public Finance Management Act (PFMA) requires that institutions recover what is owed to them, it is for this reason that Eskom sought the intervention of COGTA in this matter.
“The overdue debt has contributed negatively to the liquidity, financial performance, and sustainability of the organisation, where Eskom has to borrow to meet its financial commitments.”
Disconnection
In October, Eskom threatened to disconnect City of Tshwane to secure the outstanding debt, with the metropolitan municipality hitting back with its own threats of legal action.
Eskom said it relies on municipalities and all its customers to pay their accounts timeously, in order to continue delivering on its mandate to supply electricity.
Emfuleni assets seized
Meanwhile, Eskom seized vehicles belonging to the Emfuleni local municipality, after it was granted a R1.3 billion judgement against the municipality over the non-payment of its electricity bills.
The court order was granted after the municipality failed to settle its debts and arrears, owing the parstatal around R5.3 billion.
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