Pay up: Tshwane’s unpaid Eskom debt soars to nearly R2 billion

The City of Tshwane has come under the spotlight again for defaulting on its Eskom bill which by 9 June had reached R1.9 billion.

Eskom on Wednesday said Tshwane’s March 2023 invoice, which was payable on 19 April 2023, was short paid by R179 million, while the April 2023 invoice of R776 million which was payable on 18 May 2023, remains unpaid.

The parastatal said it has also issued the May 2023 invoice of R904 million to Tshwane which is payable on 17 June 2023.

Tshwane Eskom debt

While Eskom had escalated the matter to National Treasury and the Department of Cooperative Governance and Traditional Affairs, it said there had been no progress.

Mpumelelo Mnyani, senior manager for customer services in Gauteng, said Eskom has engaged with Tshwane on numerous occasions regarding its failure to settle the debt.

He said Eskom does not have the financial capacity to continue supplying bulk electricity to the city without the necessary payments.

“As Eskom’s cash flow challenges and the provisions of PFMA dictate, Eskom is accordingly exploring all avenues available to it to recover this debt including, but not limited to, approaching the courts for relief.”

ALSO READ: Tshwane blames load shedding for Eskom debt burden

Financial sustainability “woefully inadequate”

Meanwhile, the city of Tshwane said it had taken note of the statement issued by Eskom pointing to the city’s arrear debt.

Mayoral spokesperson Sipho Stuurman confirmed Tshwane’s systems and controls essential to the city’s long-term financial sustainability were “woefully inadequate.”

“Tshwane’s mayoral committee is not in denial about this situation, nor do we deny that we owe an obligation to Eskom, which we must pay.  The mayor is on record that getting control of the city’s finances, and responding to the findings of the AG, two interrelated matters, constitute the city’s number one political priority.”

ALSO READ: Financially challenged Tshwane settles massive R1.6bn Eskom debt

Treasury to assist

Stuurman said National Treasury had deployed resources to Tshwane and has had direct input into the budget adopted by the city for the 2023/24 financial year.

“Difficult measures have been taken regarding this budget, including the decision not to budget salary increases for employees and councillors.

“As the mayor announced in his State of the City address, far more rigorous attempts are being made than in the immediate past to strengthen the city’s revenue value chain. A target has been set of doing 1000 credit control disconnections per week and then ensuring that payment is received on these accounts,” he said.

Serious defaulter

Tshwane has become a serial defaulter over the past two years.

In January, the auditor-general (AG) flagged it for “serious irregularities” and for failing to submit the correct financial statements for the July 2021 to June 2022 financial year.

The 28-page report found the city’s finances were seriously irregular, while officials and councillors benefited from flawed procurement processes and irregularities.

Fruitless and wasteful expenditure was also understated by R1 billion as the municipality failed to record such expenses.

The municipality reportedly also failed to disclose the reasons for deviating from supply chain management regulations.

This resulted in financial statements being overstated by R488 million, the report said.

ALSO READ: Auditor-general flags ‘serious irregularities’ in City of Tshwane’s finances