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Tshwane In Trouble with Eskom For Outstanding Debt Of R878 Million

Due to an outstanding debt of R878 million to Eskom, the City of Tshwane is having issues with the electricity company.

Eskom informed the public of this after the City failed to pay a total of R908 million that was due and payable on June 17, 2022.

Eskom claims that the municipality only paid R10 million on June 23 and R20 million on June 30.

Eskom said in a press release that it had turned down Tshwane's offer to engage into a payment settlement agreement for the R878 million.

The issue of the City's inconsistent payments was raised by Eskom to Tshwane Executive Mayor Randall Williams in a meeting with him and his leadership team in January as part of attempts to collect the debt, the power company said.

It further said that Williams was contacted again in June to "seek his assistance in ensuring that the City pays the amount by June 30 2022" after the situation had deteriorated.

The only metropolitan municipality among the nation's eight that receives irregular payments is the City of Tshwane, according to Eskom.

Eskom must borrow money to satisfy its financial obligations as a result of the City's inconsistent payments over the last year, which have had a severe impact on Eskom's liquidity, financial performance, and organizational sustainability. Eskom's past-due debt has increased and now exceeds R46.6 billion.

Daphne Mokwena, Senior Manager for Customer Services at Eskom in Gauteng, stated: "As a utility, we are required to run our company in a sustainable way and, as a result, to take all necessary steps to recover any money owing to us. We continue to have faith that the City would reconsider its present stance in light of Eskom's pleas and honor their payments.

Selby Bokaba, a spokesman for the City, stated: "The City has spoken with Eskom and given them a payment plan of our debt. Due to the previous financial year's poor income collection, we have had difficulties with cash.

He said that with the resumption of our aggressive revenue collection campaign known as #TshwaneYaTima on June 21, the municipality anticipates an enhanced level of collection in the first quarter of the 2022–2023 fiscal year and beyond.

With our debtors coming forward to make payments after we had terminated their connections, this campaign is already demonstrating great results. By Thursday, July 7, 2022, the city will make sure Eskom has received complete payment. For us to be able to pay our creditors like Eskom and others, it's critical that our clients pay their debts in full and on time, according to Bokaba.

"As cash-strapped consumers fall behind on paying municipal rates and taxes, credit-rating agencies are flagging an increased concern around the likelihood of metros being unable to meet their debt payments or source cash from capital markets to meet future obligations due to falling revenues," the Auditor-General Tsakani Maluleke wrote in the most recent Municipal Finance Management Act report for 2020/2021.

According to Maluleke, the percentage of a metro's debt that is unlikely to be fully collected ranges from 53 to 88 percent.

Despite the fact that some of these metros have cash reserves, she warned that if they continue to utilize them to cover income gaps, their ability to pay down future debt when it becomes due would be compromised.


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Eskom Tshwane


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