The City of Tshwane on Thursday said it was disappointed that Eskom has rejected its debt repayment plan that would have seen the outstanding amount settled within 29 of the due date.
Eskom said it rejected the proposed payment arrangement and said it was considering disconnecting the whole City over the outstanding bill amounting to R1.7 billion.
The power utility said Tshwane breached the electricity supply agreement by failing to settle the bill, which was due and payable last month, on 17 August 22,
“The City of Tshwane has noted with disappointment the communication issued by Eskom indicating that they have rejected the payment plan the City placed before the power utility, which ultimately would have seen the full outstanding amount settled within 29 days after the due date,” said Alderman Peter Sutton MMC for Finance in a statement.
“We would like to reiterate once more that we remain committed to settling the full outstanding balance as fast as possible.
“In the interest of providing factual information to our residents, it is important to point out that Eskom’s media statement, which indicates that we offered to settle the outstanding amount within 76 days, is misleading.
“The City proposed a revised payment plan of 29 days, which Eskom has now rejected.
“We have had various discussions with Eskom and presented them with a revised payment plan based on the realistic financial situation of the City of Tshwane.”
The MMC for Finance said the City was under no illusion of the urgency to settle the full outstanding amount.
“In the revised payment plan we submitted to Eskom we committed to settle the full outstanding amount by 16 September 2022,” Sutton said.
“We would like to reiterate that the outstanding amount owed to Eskom only relates to July 2022 and all prior debt has been paid.
“Furthermore, the outstanding balance on the current account is only 14 days in arrears.”
The MMC for Finance said Eskom has also indicated in their statement that they will move to disconnect the City.
“Let me be clear in stating that such action would be unlawful and there is already legal precedent indicating such,” Sutton said.
“Should any such action be pursued, the City will immediately interdict Eskom from proceeding.
“We have further taken note that Eskom will declare a dispute in terms of the Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005), and we await further communication in this regard.”
The MMC for Finance said the City of Tshwane remains committed to finding a long-term financial solution to this challenge and ensures that Eskom invoices in the future are paid in full on the due date.
“The City has its own financial challenges, as does Eskom, which is currently owed over R49 billion by municipalities across the country,” said Sutton.
“As communicated previously, due to the liquidity challenges of the City, we do not have access to reserve funds or short-term loan funding to bridge the cash deficit we are experiencing.
“It remains important that we increase our revenue-collection levels to resolve the liquidity problem in the City.
“We therefore appeal to residents, businesses and other clients to pay their municipal accounts on time so that the City can be able to pay creditors like Eskom.”
