Tshwane targets to settle R1 billion debt in 8 days

The Tshwane metro last month collected over R700 million in electricity revenue in a bid to pay its outstanding R1-billion debt to Eskom by September 16.

Tshwane owed Eskom R1.6-billion for July 2022 and failed to comply with its financial obligations to service the bill in terms of the Electricity Supply Agreement (ESA).

Tshwane has, however, attempted to settle the bill by making daily payments to the state-owned enterprise.

Metro spokesperson Sipho Stuurman said it has collected R548 250 455.67 from postpaid customers and R153 459 437.70 from prepaid customers.

Stuurman said the revenue collected would cover some of its debt to Eskom, which had threatened to disconnect the metro, home to several national and provincial departments.

“ As of September 5, the balance we owe Eskom is R1-billion.”

Tshwane plans to settle its debt by September 16 by making two payments of about R550-million and R620-million as cash flows into the metro’s coffers from government departments, residents and businesses that paid.

He said strong revenue collection efforts were being imposed particularly on government consumers and businesses to allow Tshwane the opportunity to pay Eskom much earlier than proposed.

Stuurman said the metro was committed to paying Eskom but was, however, worried by Eskom’s hostile attitude and threats.

“We have continuously committed to ensure regular payment of our bills. Despite meeting with the top level executive management of Eskom, they have continued to try and threaten the city with disconnection, which they cannot do lawfully.”

An organisation for independent businesses recently demanded that Eskom halt its threats to cut off power to the Tshwane metro as that would penalise paying residents.

Sakeliga, through its attorneys, Kriek Wassenaar & Venter Ingelyf, on Friday said it was aware that Eskom was threatening to terminate the electricity supply to Tshwane.

“The intended action by Eskom is, in our client’s view, unconstitutional and in breach of the electricity regulation act of 2006.”

“Eskom’s attempt to cease the supply of electricity to the metro will lead to urgent litigation,” it warned.

Sakeliga said Eskom’s threats were “irrational” as there were businesses up-to-date with payments for electricity services in Tshwane.

“We struggle to see how the termination of bulk supply of electricity to paying end-users residing in one of Eskom’s largest supply markets in the country will improve its financial position.”

Eskom and the metro recently engaged in a spat over an outstanding debt for July.

Tshwane has since been in arrears for over two weeks and proposed a payment plan to Eskom, which the state-owned enterprise rejected.

Eskom Gauteng spokesperson Amanda Qithi said the power utility met with the metro management on August 24 and 30 to appeal to it to settle the outstanding amount.

Qithi said the metro had proposed to settle the outstanding payment after 76 days, which was not in line with the contract it had with Eskom, and the Municipal Finance Management Act (MFMA).

“These erratic payments make it a huge challenge to Eskom to continue supplying the city with electricity.”

Qithi threatened that Tshwane would face disconnection in line with the Intergovernmental Relations Framework Act (IRFA).

“We have also stopped all projects in the pipeline and will invoke security guarantees.”

Eskom said the disconnection would be implemented after it had considered public opinion.

It said it would give members of the public and any stakeholders that might be affected by the supply interruption, the opportunity to make submissions with motivation for or against the intervention.

The utility said it would then consider all the submissions before it decided whether to switch off Tshwane.

Since the failure to reach a payment agreement, MMC for Finance Peter Sutton said disconnecting the metro would be unlawful and there is already legal precedent indicating such.

“Should any such action be pursued, the metro will immediately interdict Eskom from proceeding.”

He said Tshwane currently faced various financial challenges, which affected payments to Eskom.

“Due to the liquidity challenges of Tshwane’s financial situation, we do not have access to reserve funds or short-term loan funding to bridge the cash deficit we are experiencing.”

Tshwane’s payment record as on September 5:

– Paid 17/08/2022 R20-million

– Paid 18/08/2022 R20-million

– Paid 19/08/2022 R 8 048 695.44

– Paid 22/08/2022 R20-million

– Paid 23/08/2022 R20-million

– Paid 24/08/2022 R20-million

– Paid 25/08/2022 R20-million

– Paid 26/08/2022 R80-million

– Paid 29/08/2022 R80-million

– Paid 30/08/2022 R80-million

– Paid 31/08/2022 R80-million

– Paid 02/09/2022 R80-million

– Paid 05/09/2022 R90-million

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