Financially challenged Tshwane discuss R1.6bn payment plan with Eskom

The City of Tshwane says it has engaged Eskom to discuss its financial challenges and also to make arrangements to repay the R1.6 billion it owes the embattled utility.  

This comes after Eskom on Tuesday announced that it is considering disconnecting the City of Tshwane to secure the payment of the arrear amount.

MMC for Finance Peter Sutton says the City of Tshwane has taken note of the parastatal’s notice to cut its lights due to the late payment of its account.

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“We acknowledge the R1.6 billion current account and we intend to service this amount. Our finance team has consistently been engaging Eskom on a payment plan. We understand our responsibility to service our account.”

However, Sutton has pointed out what he calls “a few facts” regarding the outstanding amount.

“The amount owed is only 4 days in arrears, only relates to July and all prior debt was paid. This is only a current invoice. Our entire value system is not aligned. Eskom payment date is in 15 days (16 August). Tshwane invoices for July are payable around 21 August.”

“On average residents pay the city in a 60-day cycle for services consumed while Eskom expects payment in 15 days and the city has zero cash reserves to bridge the gap with payment from our coffers and, therefore, this results in the current situation,” Sutton said.

Sutton says the City of Tshwane will be tenacious in engaging Eskom on the payment plans.

“We have previously met with the Eskom CEO and CFO, and discussed the City’s financial challenges, so we note this Eskom statement with disappointment. The City of Tshwane remains committed to paying what we owe and ensuring that we service our Eskom accounts.”

Sutton says the City of Tshwane has embarked on an aggressive revenue collection campaign to ensure that it receives enough revenue to service creditors like Eskom.

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