Tshwane’s non-payment to Eskom leads matter to courts

The Tshwane metro is facing court action from Eskom as it has been chronically servicing late payments to the power provider.

The legal action was sparked as Eskom Gauteng senior customer services manager Mpumelelo Mnyani recently told media that the metro had been regressing in its financial obligations to the utility.

Mnyani said Eskom was exploring all avenues available to it to recover the billion rand debt, including, but not limited to, approaching the courts for relief.

Rand Water also has since recently threatened court action against the metro due to its inability to service its account.

Tshwane spokesperson Lindela Mashigo said the metro owed Eskom about R1.68-billion and Rand Water R544-million.

“There is no court action from Rand Water, and the Eskom matter is sub judice.”

Mashigo said the metro aimed to collect revenue at a ‘quicker pace’ to resolve some of its outstanding debts.

He said a continuously assessed Financial Recovery Plan (FRP) was embarked on and would see a quicker approach to increasing revenue collection, which would subsequently increase cash inflow to pay outstanding creditors.

The recovery plan is also as Tshwane residents and businesses from July 1 were hit with increases in electricity, water, sanitation, refuse removal and property rates and taxes.

https://twitter.com/CityTshwane/status/1672881837759143936?s=20

https://twitter.com/CityTshwane/status/1672927881628983297?s=20

https://twitter.com/CityTshwane/status/1673238626631573506?s=20

https://twitter.com/CityTshwane/status/1673589760718241794?s=20

“We are hoping our customers will understand the motive behind the increases as they are linked to NERSA and Rand Water approved tariffs,” said Mashigo.

Tshwane mayor Cillier Brink also recently said his administration was rebuilding a “broken” revenue collection system to pay the over R1-billion it owed to Eskom.

“It’s no secret that Tshwane has financial and cash flow difficulties, including long-standing issues with debt collection and credit control.”

He said the metro was buckling under the debt but planned to strengthen its revenue drive to help finance its basic operations.

“We are making aggressive revenue collection a number one priority. We are rebuilding a revenue management pipeline which, unfortunately, over the years has fallen apart.”

Brink had since announced that finance MMC Peter Sutton and utility services MMC Themba Fosi were tasked to lead a team to ensure that credit control and debt collection policy was enforced.

Rand Water spokesperson Makenosi Maroo said payment negotiations between the water supplier and the metro were recently deadlocked.

“Non-payment of bulk water by municipalities vastly threatens Rand Water’s financial position and is a direct threat to its medium- and long-term sustainability, thus, to the sustainable provision of bulk water.”

It said it had relentlessly attempted to resolve and accommodate the non-paying municipalities by entering into engagements; however, the situation had not improved.

“Rand Water finds itself with no alternative but to pursue legal recourse through court proceedings to enforce adherence to the existing agreements.”

“We believe that resorting to legal action is regrettable, however imperative to protect the integrity of the agreements and secure our financial stability,” said Maroo.

Goodie bags for participants in Spar Women’s Challenge will ensure smiles all the way

Do you have more information about the story?

Please send us an email to editorial@rekord.co.za or phone us on 083 625 4114.

For free breaking and community news, visit Rekord’s websites: Rekord East

For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram