Photo: Unsplash/Kyle-Philip Coulson
- The City of Tshwane is behind in its payments for July.
- Eskom says many previous engagements with the City have not solved the problem.
- The City says it has cash flow problems as collections lag the payment dates for Eskom invoices.
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Eskom said on Tuesday it is considering disconnecting the City of Tshwane after it failed to pay the outstanding debt of R1.6 billion.
Eskom said that Tshwane had paid only R68 million of the July invoice, due on 17 August 2022.
In a statement, Eskom said:
“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. 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.”
The Member of the Mayoral Council for Finance Peter Sutton said in an interview that the City was behind in its payment for July by five days due to cash flow problems and the lack of cash reserves. This was not arrear debt but debt for the month of July, he said. The City had intended to settle the invoice in a staggered manner throughout the month, but Eskom rejected this.
In June, the City of Tshwane also ran into cash flow problems, paying its account in a staggered manner. But this month, Eskom demanded full payment on the due date.
As Eskom gives customers only 15 days to pay and 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. Many of them have stretched this to 60 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,” said Sutton.
Sutton said the City was due to meet again with Eskom on Wednesday.
Eskom said it “will continue to apply different approaches to recover money owed to it and has acquainted the MEC of Cooperative Governance and Traditional Affairs in Gauteng of the risks associated with the late payment of the City of Tshwane’s electricity account.”