Local ANC asks Cogta to take over Tshwane to stave off financial ruin

The Tshwane ANC has called on the Gauteng MEC for cooperative governance and traditional affairs (Cogta) to take over the metro as its debts accumulate.

Party secretary George Matjila said on Wednesday the metro now owed Rand Water and Eskom a joint R2.4-billion – R1-billion to the former and R1.4- billion latter.

Eskom had earlier announced that it could no longer carry the metro’s debt of R1.4-billion, which exacerbated its own cashflow crisis.

Matjila accused the DA-led coalition of peddling lies to residents and business on its ability to meet its financial obligations and improve service delivery.

In November, the metro short-paid its Eskom bill of R660-million and failed to pay its December account of R780-million.

Matjila said the recent Auditor General’s report further exposed the deep-rooted financial difficulties in Tshwane and claimed that the metro could soon face a total blackout due to failure to pay for its electricity consumption.

“We would like to repeat our call to MEC Mzi Khumalo to take over the financial administration of the city through Section 139(5) of the Constitution before Eskom attaches its bank accounts.”

Matjila said in 2022 such fate befell Emfuleni, and the municipality was allegedly unable to pay salaries in January “due to the takeover of the account by Eskom”.

He said further pointers to a serious financial crisis was that Tshwane also owed Rand Water.

“Tshwane also owes Rand Water R1-billion and we will be deep in trouble if both entities run out of patience with the administration of the Tshwane.”

Tshwane MMC for finance Peter Sutton said the metro had consistently proposed payment plans which Eskom rejected multiple times.

“We acknowledge the R1.4-billion arrear debt and we intend to make regular payments to service the account. Our finance team has consistently been engaging Eskom on a payment plan.”

Sutton said Tshwane understood the responsibility to pay creditors and had been upfront and honest over its liquidity challenges.

“We are currently implementing various interventions to address these financial challenges, however, we must also acknowledge the adverse impact Eskom’s load-shedding has on the city’s liquidity position.

“Our residents and business are battling economically due to load-shedding, which in turn contributes to low revenue.”

He said the city’s maintenance budget was also spinning out of control as a direct consequence of load-shedding.

“Eskom cannot ignore its adverse contribution to some of the metro’s financial liquidity problems.”

This week Eskom said Tshwane was several payments behind and called on it to pay its bills as residents would face the consequences.

“We call on the metro to do right by its residents and pay the bulk electricity account to enable Eskom to continue supplying electricity to the metro,” Eskom spokesperson Amanda Qithi said on Wednesday.

Qithi said Tshwane’s R1.4-billion debt was worsening Eskom’s cashflow crisis.

“Tshwane’s poor payments continue to spiral out of control.”

Qithi said despite several engagements with the metro to settle its November account by December 31, the bill remained outstanding.

She said the Public Finance Management Act required that institutions recover what is owed to them, hence Eskom sought the intervention of Cogta in the matter.

Eskom had previously been unsatisfied with Tshwane’s erratic payments on its bulk account.

The power utility earlier warned that Tshwane could face the same fate as Emfuleni should its debt remain unpaid.

Eskom said it was also closely monitoring all metro and municipality accounts and would follow a strict debt collection process should they not settle their bills on time.

Rand Water had yet to comment.

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