CoT’s R1.4bn electricity debt aggravates Eskom’s cash flow crisis

Eskom says the City of Tshwane’s (CoT) R1.4 billion debt is exacerbating its cash flow crisis.

In a statement issued on Wednesday, the embattled power utility said the city’s electricity debt has compounded due to its short payment and non-payments over the course of the past several months.

“The city short-paid its November 2022 bill of R660 million and also failed to pay its December 2022 account of R780 million, negatively impacting the liquidity, financial performance, and sustainability of the power utility.”

Read: Eskom threatens to cut Tshwane’s power (Aug 2022)

It says despite several engagements with the CoT to settle its November 2022 account by 31 December 2022, the payment remains outstanding.

“Eskom does not have the financial capacity to finance the CoT’s operations and calls on the city to do right by its residents and pay the bulk electricity account to enable Eskom to continue supplying electricity to the city,” it adds.

Read: City of Tshwane finally settles R878m Eskom bill (Jul 2022)

It says it has approached the Department of Co-operative Governance and Traditional Affairs (Cogta) with the hopes of mediating a resolution for the city’s electricity debt issue.

“The Public Finance Management Act (PFMA) requires that institutions recover what is owed to them, hence Eskom sought the intervention of Cogta in the matter.”

It further notes that the mediation process was in line with Section 41(2) of the Intergovernmental Relations Framework Act 13 of 2005, after the utility declared a dispute in August 2022.

Read: No mercy from Eskom for cash-strapped City of Tshwane (Jul 2022)

Nondumiso Lehutso is a Moneyweb intern.