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WATCH: Inside plans to move Sandton and Soweto from Eskom grid
Despite a huge debt to Eskom, the City of Johannesburg wants to directly supply Sandton with electricity through City Power
Sandton City mall. Image: iStock
Plans to move Sandton into Johannesburg to the power supply of City Power are at an advanced level said the MMC of Finance Dada Morero.
Soweto and Sandton to be removed from Eskom supply
Morero announced the latest on the transfer of Sandton and Soweto from Eskom to City Power during his budget speech on Tuesday.
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The move had been motivated by complaints mostly from Soweto residents who felt that Eskom had been treating them unfairly with extended levels of load shedding and enormous electricity bills which some claimed they could not pay.
“The cross-functional team of City Power and Eskom have finished a detailed feasibility study and the high-level plan for transferring the business from Eskom to City Power. This plan is currently being discussed with the relevant internal stakeholders for comments,” Morero said.
He said public hearings would also be held concerning the matter.
“We will soon conduct public participation before the final implementation commences,” he said.
City Power and Eskom at loggerheads
While talks are at an advanced stage to move Sandton and Soweto to City Power’s care, Eskom was currently in a legal battle with City Power over unpaid debt.
Morero said an independent mediator would be approached to help resolve the matter because Eskom had overcharged the city.
ALSO READ: Eskom takes City Power to court over ‘unprecedented’ R1bn debt
“On the dispute between City Power and Eskom, the city is committed to the appointment of an independent mediator to resolve the current impasse between City Power and Eskom,” he said.
Morero confirmed that the matter was before the courts.
“As you are aware, the dispute involves Eskom’s claim that City Power owes Eskom R1,073 billion, and City Power’s counterclaim is that Eskom has potentially overcharged City Power by R3,32 billion on bulk purchases,” he said.
According to Morero, the mediation aims to find a mutually acceptable settlement and avoid lengthy and expensive legal proceedings.
Meanwhile, Morero said Electricity is the City’s largest revenue source and is expected to generate revenue of R21.5 billion (excluding new connection fees).
R83.1 billion
The total budget for the City for 2024-2025 stands at R83.1bn.
“The Operational Expenditure proposed is R75.7 billion. Meanwhile, the Capital Expenditure is at R7.4 billion for 2024/25 with a three-year capital budget of R23 billion,” Morero said.
According to Morero, the City’s funding model continues to rely on revenue generated from trading services as a primary source of revenue, followed by grants and loans.
“In light of the tight economic climate that South Africa is facing, the share of national grants allocated to local government remains constrained, causing municipalities, especially metros like Johannesburg to be reliant on their own sources of funding,” he said.
