Tshwane targets settling of billions of rand debt to Eskom for bulk electricity services

Eskom is pioneering for Tshwane to pay it about R15-billion over the next year, which will see the metro iron out the debt for its current account for bulk electricity provided to the city.

The proposal is still in its planning phase following the recent Gauteng North High Court ruling that Tshwane and Eskom should meet under the facilitation of the National Energy Regulator of South Africa (NERSA). The outcome of the debt settlement negotiations would be made an order of court, according to metro spokesperson Lindela Mashigo.

If all parties reach a consensus, the final order will be agreed upon and compel Tshwane to make payments from April 2024 until March 2025.

The proposed plan comes as Eskom and Tshwane have been at loggerheads over delayed payments since 2022.
The demands for Tshwane to pay its debt resulted in litigation.

Mashigo said Eskom litigated against the metro for full payment of the arrears balance and future electricity consumption.

“Eskom has since made a forward-looking proposal in which the city would over 12 months of April 2024 to March 2025, pay a projected amount of R15.7-billion inclusive of an arrear of R2.9-billion as of March 31, 2024.

“However, the proposal is still to be signed by both parties after which it will become an order of the court.”

He said Tshwane was still in intense discussions with Eskom about how best the metro could settle its debt to Eskom.

Mashigo said Tshwane’s current debt to Eskom stood at R4.5-billion as of June 2024.

“As it stands, the city intends to conclude its debt payment arrangement with Eskom in the new financial year being 2024/25 financial year.”

Mashigo said Tshwane is taking steps to improve its financial position by increasing revenue collection by R1-billion monthly, as well as reducing its operating expenditure by R1-billion.

Eskom Gauteng spokesperson Amanda Qithi said there was still no payment or settlement agreement in place with Tshwane yet.

Qithi however said Tshwane owed the state-owned enterprise about R4-billion.

She said Tshwane had been making erratic payments dating back to 2022 and the payment levels had deteriorated to levels that further threatened Eskom’s liquidity.

“Tshwane is unable to settle its current account,” she said.

Qithi said the power utility has pursued the legal route to recoup all the monies owed by the Tshwane metro.

She said the matter was in litigation.

In October Eskom claimed that the Johannesburg, Ekurhuleni and Tshwane’s electricity debt was threatening the utility’s distribution capacity.

On Thursday, June 20, Eskom obtained a court judgment against the City of Johannesburg (CoJ) and City Power (CP) for failure to pay R1.073-billion of its debt.

The utility said the high court in Johannesburg ordered CoJ and CP to pay R1.073-billion including interest for the unpaid electricity account.

“The court application was necessitated by the fact that CoJ/CP has been defaulting on its electricity account since October 2023.”

The utility said when the matter was heard on June 4, the total amount owed to Eskom by CoJ/CP was R3.4-billion.

“The city in response to Eskom’s application, brought a counterclaim against Eskom for R3.4-billion alleging potential over-billing and that, as a result, it has applied an automatic set-off against Eskom electricity account. Furthermore, the court dismissed the counterclaim by the city with costs, consequently dismissing the automatic set-off claim.”

Eskom has written a letter to COJ/CP demanding payment of the full amount of R3.4-billion.

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