Eskom, City of Tshwane electricity bill row continues

The City of Tshwane has once again failed to honour its August invoice of R1,6 billion of its electricity bill, according to Eskom.

The amount, the power utility said, was due and payable on 16 September.

Earlier this month, Eskom threatened to disconnect City of Tshwane to secure the outstanding debt, with the metropolitan municipality hitting back with its own threats of legal action.

‘Erratic payment pattern’

While the city claimed that it fully paid its debt to Eskom two weeks ago, the power utility says it has only paid R492 million of its electricity bill.

Following a meeting on Friday, Eskom rejected the municipality’s proposed payment arrangement yet again and warned the city to settle a balance of R1,1 billion by close of business.

“The meeting on Friday is one of numerous engagements Eskom has held with the City in an attempt to secure payment for the debt owed by the municipality,” Eskom said in a statement.

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The power utility also criticised Tshwane’s “erratic payment pattern”, saying this had a devastating impact on its cash flow.

“Eskom reported in the past that it would continue to implement different methods to recover money owed to it and has acquainted National Treasury to facilitate the dispute it has declared to attain a resolution to the municipality’s inconsistent payment pattern. The municipality’s erratic payment pattern is in breach of the electricity supply agreement it holds with Eskom,” the statement further reads.

“The City’s partial payment of its account exposes Eskom to serious financial risk and its ability to supply electricity to customers due to under recovery,” the power utility added.

‘Liquidity situation’

Meanwhile, the City has lashed out saying that Eskom has been going around tarnishing its reputation.

Speaking to eNCA on Saturday, Peter Sutton, Tshwane’s Finance MMC, said the city has paid R500 million and owes R1.1 billion to Eskom.

Sutton explained that the city has struggled to pay Eskom on time over the past few months “because of our liquidity situation”.

“But we have paid within 30 days and I can’t answer for Eskom or [say] there won’t be no coordination.

“We liaise with Eskom daily [and] we made payments to them daily,” he said.

READ MORE: Eskom rejects City of Tshwane’s payment arrangement on outstanding bill – disconnection looms

The MMC further said the city and the power utility had a “timing difference”.

“There’s a value chain misalignment with Eskom wanting payments within 14 days, but on average our residents pay us within 30 to 60 days and we are doing what can to change our payment culture.

“At the moment due to the fact that we get late payments, we don’t have cash reserves and we don’t qualify for short-term loan funding as company. [So] we land up in this liquidity issue where we pay late on our Eskom account,” Sutton continued.