The City of Ekurhuleni has clarified the stand-off with Eskom over the reportedly unpaid bulk electricity services owed by the City to the power utility.
This came after Eskom issued a media statement on February 28 suggesting the City of Ekurhuleni is among the defaulting municipalities that owe the power utility substantial amounts of overdue debt.
According to Eskom senior manager of customer services in Gauteng Daphne Mokwena, Ekurhuleni has failed to service its Eskom accounts, and the debt has been increasing, with its bill accumulating to R544-million.
Mokwena, however, pointed out that on February 18, Ekurhuleni paid a partial amount of R530-m of its bulk accounts, which total R1.074-billion that was due. They said late payments by the City have resulted in Eskom charging interest of R86-m per year to date.
“This is in breach of the electricity supply agreement between Eskom and the City, and it places a significant strain on the utility’s financial performance and sustainability,” said Mokwena.
“With all the engagements with the City’s management, we have seen no action from them. It is disappointing to see how the municipality and its mayor are dealing with the matter as no sense of urgency is observed from them,” said Mokwena in the statement issued by the parastatal on February 28.
Metro rejects Eskom’s account of events
In an interview with the Advertiser on March 1, metro spokesperson Zweli Dlamini refuted the claims made by Eskom and described Eskom’s statement as misrepresentative of the truth that seeks to damage the City’s reputation.
According to Dlamini, the City pays for the Eskom-supplied monthly bulk electricity services regularly within 30 days after receiving the invoice.
“The City of Ekurhuleni is disturbed by the recent statement issued by Eskom. The outstanding R544-m forms part of the total sum of money due to Eskom for the January bulk electricity services. It’s not a historical debt or money accumulated over a long time, as suggested.
“On average, the City’s monthly account bill for bulk electricity services is about R1-b and we have already paid Eskom almost half of the money for the January bill. The remaining amount will be paid within the 30 days,” explained Dlamini.
He maintained the City has a good payment record as it has always been consistently honouring its monthly payment obligations on time, and doesn’t have arrear debt greater than 30 days.
“There were times when we would use money from our reserves to pay Eskom within 15 days instead of the agreed 30-day period. But due to the problems the pandemic brought, our reserves were depleted, and we recently reverted to the 30 days, and that seems to be the bone of contention.”
Dlamini pointed out that labelling the City as a defaulter that has failed to service its Eskom electricity account tarnishes the City’s reputation and has the potential of scaring off investors.
City lodges dispute against Eskom
The metro said it has on multiple occasions disputed Eskom’s ‘tendency’ to ‘flout’ legislated financial practices and has based on this lodged a dispute with National Treasury.
The City has made and continues to make concerted efforts for National Treasury to conclude all the disputes lodged in the interests of its citizens,” said Dlamini in a statement.
“To protect the reputation and integrity of the City, the metro shall not hesitate to initiate litigation against Eskom over the non-compliance with municipal finance legislation and has already written to Eskom to publicly withdraw its statement.
“This action is also intended to ensure electricity supply to residents is not unlawfully disrupted. A crucial aspect to the dispute, and which
was already addressed with Eskom, is the incurring of interest charges of approximately R86-m. This amount is strenuously defended.”
The City believes a healthy working relationship with Eskom is still achievable and an amicable conclusion can be reached to end the impasse.
“For this to happen, both parties need to commit themselves to transparent communication. All decisions made in this respect must place the interests of the citizens of Ekurhuleni first.”
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