The saga of mounting municipal electricity debts in Gauteng has taken a new turn as Eskom disclosed a collective debt of R4.7 billion owed by the City of Tshwane (CoT) and Ekurhuleni Municipality (CoE) as of 31 August 2023.
Eskom unveils City of Tshwane, Ekurhuleni ‘erratic’ debt payment patterns
In a statement, the national electricity suppler uncovered a concerning trend of escalating debts amid erratic payment patterns by the said municipalities, which threaten not only the financial stability of Eskom but also the broader energy security in the region.
The breakdown of the debt reveals a more precarious situation for the City of Tshwane, which owes Eskom about R3.2 billion.
Concurrently, the debt of Ekurhuleni Municipality stands just shy of R1.5 billion.
“The payment patterns by both municipalities have deteriorated to concerning levels that further threaten Eskom’s liquidity, financial performance, and sustainability,” Eskom warned.
Moreover, the power utility lamented on CoT’s erratic payments, tracing back to 2022, emphasising that the municipality’s unstable debt commitments raise serious concerns about its financial management.
Additionally, the entrenched habit of the CoE in delaying account settlements over the preceding six months adds to the gravity of the issue.
Eskom has been navigating through various channels to recover the outstanding amounts, yet the endeavors have hit a wall as both municipalities have fallen short of fully honoring their payment obligations and adhering to the stipulated electricity supply agreements.
This scenario not only paints a grim picture of the financial discipline among the municipalities but also casts a long shadow on Eskom’s ability to ensure a steady supply of electricity.
“Despite all the avenues that Eskom has explored to recover what is due to the organisation, both municipalities have failed to fully honour their payments and to comply with their electricity supply agreements,” Eskom added.
The financial health of Eskom is instrumental in ensuring the energy security of the region, and the mounting debts by the municipalities could potentially force the utility to cut off power supply to both metros.
Neither the City of Tshwane nor Ekurhuleni Municipality had issued a response to Eskom’s scathing statement when this article was published.