Rustenburg - The City of Tshwane has acknowledged the R1.6bn debt it owes Eskom, and it says it intends to pay.
Eskom issued a media statement earlier on Tuesday threatening to cut the lights in the capital.
Tshwane Finance MMC Peter Sutton confirmed they owed Eskom R1.6 billion, adding the amount was only four days in arrears, only related to July and all prior debt was paid.
“Our entire value system is not aligned. Eskom payment date is in 15 days (August 16). Tshwane invoices for July are payable around August 21. On average residents pay the city in a 60-day cycle for services consumed while Eskom expects payment in 15 days and the city has zero cash reserves to bridge the gap with payment from our coffers and therefore this results in the current situation,” he said.
“We have previously met the Eskom CEO and CFO and discussed the city’s financial challenges, so we note this Eskom statement with disappointment. 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.”
Eskom on Tuesday, said it was considering disconnecting electricity to the City of Tshwane in a push to recover R1.6bn outstanding payment.
The power utility said it had numerous engagements with the City of Tshwane’s management to ensure that the city pays its account.
“The City of Tshwane is in breach of the Electricity Supply Agreement which it holds with Eskom by failing to pay the R1.6bn which was due and payable on August 17. The city only paid R68m to date, which did little to dent the massive outstanding balance on its electricity account,” Eskom said in a statement.
“The power utility had numerous engagements with the City of Tshwane’s management to ensure that the city pays its account. Nevertheless, these actions have not yielded any results as the city has continued with the same pattern. 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.”
Eskom said it would continue to apply different approaches to recover money owed to it and had acquainted the Gauteng Co-operative Governance and Traditional Affairs MEC, Lebogang Maile, of the risks associated with the late payment of the City of Tshwane’s electricity account.
The looming disconnection came after Tshwane implemented the confrontational revenue collection drive #TshwaneYaTima to recoup the R17bn of revenue owed by debtors.
In June, the Pretoria News reported that the city had collected more than R700m in the first instalment of the Tshwane Ya Tima drive in March.
During the Tshwane Ya Tima drive, the city posted on its social media platforms, companies, SOEs and government departments it had disconnected and the amount owed to the city.
In July, IOL reported that Eskom had rejected the City of Tshwane’s offer to enter into payment settlement arrangements for the R878m owed to the power utility.
This was after Tshwane failed to pay Eskom a total amount of R908m which was due and payable by June 17.
IOL