Eskom has warned that is was considering cutting off electricity supplies to the City of Tshwane over outstanding debts of more than one billion rand.
In a statement on Tuesday Eskom said it “was considering disconnecting the City of Tshwane as one of the necessary steps to secure the outstanding payment”.
Eskom said the City of Tshwane was in breach of the Electricity Supply Agreement.
The power utility said the City of Tshwane failed to pay the outstanding R1.6 billion, which was due and payable last week Wednesday (17 August 2022).
“The City only paid R68 million to date, which did little to dent the massive outstanding balance on its electricity account,” said Eskom.
Responding to the threat of disconnection, City of Tshwane MMC for Finance Peter Sutton acknowledged the debt.
“We acknowledge the R1.6 billion current account and we intend to service this amount. Our finance team has consistently been engaging Eskom on a payment plan,” said Sutton.
He said he has noted Eskom’s media statement threatening to disconnect provision of electricity to the municipality due to the delayed payment.
“We understand our responsibility to service our account,” Sutton said.
However, Suttom said it was important that the City points out a few facts regarding this amount which he listed as:
The amount owed is only 4 days in arrears.
The outstanding amount only relates to July and all prior debt was paid. This is only a current invoice.
Our entire value system is not aligned. Eskom payment date is in 15 days (16 August). Tshwane invoices for July are payable around 21 August.
On average residents pay the City in a 60-day cycle for services consumed while Eskom expects payment in 15 days. The City has zero cash reserves to bridge the gap with payment from our coffers and therefore this results in the current situation.
We have been continuously engaging Eskom on the payment plans and will continue to do so.
Sutton said: “We have previously met with the Eskom CEO and CFO and discussed the citys financial challenges, so we note this Eskom statement with disappointment.”
He added: “The City of Tshwane remains committed to paying what we owe and ensuring that we service our Eskom accounts.
“This is why we have embarked on our aggressive revenue collection campaign to ensure that we collect enough revenue to service our creditors like Eskom.”
