Joburg hotel ordered to settle R1.3m electricity debt, restore power

The Johannesburg High Court has ordered a prominent hotel in the Johannesburg CBD to settle R1.3 million towards its R4.1 million electricity debt owed before their power supply is restored.

The Reef Hotel was one of 10 City Power customers targeted in an operation last week for owing a combined electricity bill of R43.7 million. The renowned hotel owes R1.3 million towards a R4.1 million bill.

After the hotel’s power was disconnected on 12 September, it launched an urgent application in a bid to turn the lights back on.

Reef Hotel ordered to pay R1.3m to restore power

However, in a court order issued by Judge Majake Meshack Mabesele on Monday, the hotel has been compelled to make an upfront payment of R1.3 million before power supply is reconnected.

According to City Power, the hotel met with the City of Johannesburg’s business department on 22 January to discuss its initial bill of at least R3 290 717 at the time. The Reef Hotel was advised to pay 50% of the outstanding amount.

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The hotel then asked for a three-month extension to raise the outstanding balance of R1 645 358 and committed to paying it off by the end of April 2024.

The debt, however, increased to over R4 188 324 as the hotel failed to meet its payment obligations and numerous email notifications went unanswered.

City Power said that following the court ruling, the hotel has expressed a willingness to make an initial payment of R1 million upon signing an Acknowledgement of Debt (AoD) agreement, with R300 000 due by Monday.

Power will be reconnected after proof of payment

“The hotel proposes to pay the remaining balance in the coming months while continuing to meet current monthly charges,” City Power spokesperson Isaac Mangena said on Wednesday.

“In response, City Power will restore the power supply upon receipt of proof of payment.”

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The utility welcomed the ruling and said the High Court’s decision highlights the importance of financial accountability and ensures that significant arrears are effectively addressed.

“With a total backlog of over R10 billion in unpaid bills, this legal victory reinforces our commitment to recovering outstanding debts and providing fair and consistent service to all customers,” Mangena said.

The Johannesburg CBD faces an outstanding debt of R2,5 billion in total, accounting for about 25% of the total amount owed by customers across the city.

CBD’s R2.5bn outstanding debt

City Power added that it started noticing that part of the increase in electricity debt is associated with a growing number of hijacked buildings, whose costs of electricity have been transferred into its debt book.

In response to this, the utility will be reinforcing its units to pay special focus on disconnecting these hijacked properties.

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