Eskom has threatened to disconnect the City of Tshwane after the metro failed to pay its outstanding debt of R1.6-billion.
Eskom has threatened to disconnect the City of Tshwane after the metro failed to pay its outstanding debt of R1.6-billion.
The power utility announced on Tuesday that it was considering cutting the power to Tshwane, after the city breached its agreement with Eskom which was due and payable on 17 August. Eskom’s financial woes are well documented and the utility needs this money, it said in a media statement.
“The power utility had numerous engagements with the City of Tshwane’s management to ensure that the city paid its account. Nevertheless, these actions have not yielded any results as the city has continued with the same pattern,” it said.
“The inconsistent payments are both untenable and unacceptable since Eskom’s financial position is well known. The city’s persistent failure to honour its payments places a huge burden on Eskom to continue providing it with electricity.
“This was not arrear debt but debt for the month of July, the City had intended to settle the invoice in a staggered manner throughout the month, but Eskom rejected this,” it added. Tshwane, the utility said, had only paid R68-million of the R1.6-billion in arrears.
Why the delay?
Tshwane member of the mayoral council for finance Peter Sutton said the city was behind in its payment for July by four days due to cash flow problems and the lack of cash reserves. He added that the city had consistently been engaging with Eskom and presenting the utility with payment options, and that this latest move discredited the utility.
“The finance team and I will be engaging with Eskom tomorrow to see what to do to avoid a total disconnection of the city,” Sutton said.
The City of Tshwane also ran into cash flow problems in June, paying its account in a staggered manner. Sutton said Eskom was being rash because it had not given the city the same concession it had given to Emfuleni municipality which was “R4-billion” in debt.
“Eskom gives [bulk] customers only 15 days to pay and [private] consumers have 30 days to pay, they usually have to bridge the lag between collections and payments to Eskom through reserves. We do pay every month, we just pay late. The local payments system gives consumers 30 days,” Sutton said.
Working on it
“In some cases it has been stretched to 60 days in the belief that the council allows them an additional 30-day leeway. With us not having cash reserves, it is difficult. The long-term solution is more prepaid meters. For now, it is a tough one but we are working on it,” Sutton said.
Sutton added that cutting power supply to the municipality would discourage those residents who were paying their accounts from doing so.
“I met with [Eskom chief executive] André de Ruyter and pleaded with him to allow us to change the payment culture in Tshwane, because the people who are paying will also stop paying, which will make our situation worse,” he said.
Eskom said it would apply different approaches to try to recover money owed to it and had informed Lebogang Maile, who is the Gauteng MEC for cooperative governance and traditional affairs, about the risks associated with the late payment of the City of Tshwane’s electricity account.The strained relationship between the city and the power utility has resulted in residents suffering the frustration of prolonged power outages, with some looking to the public protector for recourse.