Pretoria and East Rand municipalities owe Eskom over R4.7 billion in debt

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Eskom recently disclosed a combined outstanding amount of R4.7 billion owed by the City of Tshwane and the City of Ekurhuleni to the power utility.

The City of Tshwane carries the larger share of this debt, owing R3.2 billion, while the City of Ekurhuleni's debt stands at R1.5 billion.

The state-owned power utility expressed serious concern over the deteriorating payment patterns of these municipalities, which pose a significant threat to Eskom's liquidity, financial performance, and overall sustainability.

Eskom pointed out that the City of Tshwane's irregular payments dating back to 2022 are deeply troubling, and it also highlighted the concerning practice of the City of Ekurhuleni consistently settling its accounts late over the past six months.

Despite Eskom's efforts to recover the amounts owed and to uphold the terms of their electricity supply agreements, both municipalities have failed to fully meet their payment obligations.

Eskom, openly critical of non-compliant municipalities, particularly emphasized the City of Tshwane's lack of payment. In June 2023, Eskom even threatened legal action against Tshwane due to a delay in paying a R1.9-billion power bill. Prior to this, in August 2022, Eskom had warned of a potential power cut to the City of Tshwane over an outstanding bill of R1.6 billion. The utility considered disconnection as a necessary measure to secure the outstanding payment.

Eskom emphasized that the City of Tshwane breached its electricity supply agreement by failing to pay the R1.6 billion due on 17 August 2022. Although the City of Tshwane had paid R68 million of the debt at the time, this amount did little to reduce the substantial outstanding balance on its electricity account.

Furthermore, Eskom raised concerns about an additional unpaid bill of R878 million by the City of Tshwane that was due on 17 June 2022.

In a public statement, Eskom highlighted that among the eight metropolitan municipalities in the country, the City of Tshwane stands alone with its erratic payment behavior.

The Tshwane government countered Eskom's claims, stating that Eskom's public statements were not made in good faith, as the power utility was informed about the metro's financial situation and ongoing negotiation efforts. However, the outstanding bill has since escalated to approximately double the amount from last August.

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