Tshwane secures landmark deal with Eskom to end R6-billion debt

The Tshwane metro has achieved a breakthrough in its financial recovery efforts, having reached an agreement with Eskom on its historical debt of R6.67-billion.

The agreement outlines a five-year structured repayment plan, starting with an initial payment of R400-million scheduled for this month.

This agreement, which was formalised as a court order on November 26, is labelled as a significant milestone in the metro’s journey to financial recovery and stability.

As part of its commitment to fulfilling the terms of the settlement, the metro has already made a payment of R425-million to cover arrears for October and agreed to pay its current account in full within 30 daysg.

Newly elected Tshwane mayor Dr Nasiphi Moya said this settlement not only puts an end to years of costly litigation between the metro and Eskom, but also signals a major step forward in Tshwane’s financial recovery strategy.

Moya described the agreement as a significant milestone for the metro and said that with this agreement in place, more attention can now be directed toward enhancing service delivery and strengthening revenue collection systems.

“This settlement marks the beginning of a new era for Tshwane. We are fully committed to making sure that this debt is repaid, while also improving the quality of services provided to residents,” said Moya.

The metro has also promised to implement stronger financial governance practices to avoid falling into a debt crisis in the future.

LISTEN:

Moya said better management of resources and improving financial accountability are key to the metro maintaining its financial health.

The arrangement outlines a structured repayment plan spanning five years, with the first payment of R400 million scheduled for Dec 2024. Additionally, the City has already paid R425 million in arrears for Oct 2024. #ReaSpana

— City of Tshwane (@CityTshwane) December 2, 2024

Metro spokesperson Lindela Mashigo told Rekord that the litigation started in the Gauteng North High Court on July 17.

“Due to the lengthy period that had to be allocated for a full hearing, the presiding judge ordered a postponement to October.”

He said however, at the request of the North Gauteng High Court Deputy Judge President (DJP), counsel for Eskom and the city were instructed to prepare for a full hearing set down for November 26 and 27.

Mashigo said the metro is committed to fulfilling its financial obligations and maintaining a good standing with Eskom.

DA Tshwane Caucus Leader Cilliers Brink said the settlement agreement was good news for the city.

“This is good news for the city, but it will require more difficult decisions. It would seem that the writing-off of interest on the debt is conditional on the city sticking to its payment plan.

“If this settlement becomes an order of Court, it will require iron-like financial discipline from Tshwane. If one Eskom payment is missed, it might mean that the deal is lost and that all arrears become due and payable immediately.

“This is why it is essential for Tshwane to continue with the Tshwane Ya Tima campaign started by the previous city government to improve billing and collections,” said Brink.

He said the Tshwane Ya Tima was another difficult, but necessary, undertaking to get Tshwane out of trouble.

He vowed that the opposition party would continue to support the difficult measures to achieve Tshwane’s financial rescue.

“The ANC and their coalition partners might well conclude that it was easier to derail these efforts in opposition than it will be to implement them in government.”

Do you have more information about the story?

Please send us an email to bennittb@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