Eskom  pursuing Tshwane over R1.4 billion energy debt

Eskom claims the City of Tshwane’s (CoT’s) electrical debt has risen to R1.4 billion after a string of late and missed payments in recent months.

The electricity provider stated that the CoT’s debt exacerbates its cash flow issue, since it is owed around R57 billion by non-paying consumers.

Tshwane failed to pay its R680 million November 2022 payment and also failed to pay R780 million for its December 2022 account, according to Eskom.

Despite Eskom’s repeated requests to the CoT to clear its November account by December 31, 2022, the debt remains unpaid.

Eskom stated that it asked the Department of Co-Operative Governance & Traditional Affairs (CoGTA) to negotiate their unsatisfactory payments with the CoT.

According to the Public Finance Management Act (PFMA), institutions are required to collect what is owing to them, which is why Eskom approached CoGTA.

When Eskom reported a disagreement in August 2022, it claimed the mediation procedure was in accordance with section 41(2) of the Intergovernmental Relations Framework Act 13 of 2005.

Eskom sought the CoT earlier this month to settle its long-overdue billing for November 2022, but no solution was reached.

Eskom has stated that it cannot fund the CoT’s operations and has requested that the CoT pay its account in order for it to continue delivering energy to the city’s population.

A recurring issue

Eskom has made multiple requests to the CoT to pay its electrical debt over the previous several months.

Eskom threatened to disconnect the CoT in August 2022 if it did not pay its R1.6 billion debt. The CoT would subsequently settle the bill, but the problem persisted.

After failing to pay its September and October payments, as well as other arrears, the CoT’s bill on November 30, 2022 increased to R1.6 billion.

Over the previous few months, the city’s finances have been repeatedly scrutinised.

According to TimesLive, a leaked Auditor-General (AG) report discovered irregularities in the city’s finances in an unfavourable audit finding. The conclusions of the AG included R10.5 billion in unaccounted for irregular expenditure.

CoT mayor Randall Williams subsequently stated that the city will pursue former CFO Umar Banda with breaking the Municipal Finance Management Act owing to the poor quality of the financial records.

The mayor’s spokeswoman, Sipho Stuurman, stated that the accusations against Banda will be decided at the council’s next meeting on Thursday, January 26.