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Tshwane’s Soaring Debt – Municipality Owes Eskom Over R3 Billion

Published

7 months ago

October 5, 2023

Tshwane owes over R3b to Eskom, which has raised significant concerns within the state-owned power utility. As of the end of August 2023, Tshwane’s debt to Eskom had surged to a staggering R3.2 billion, with erratic payments cited as the primary cause for this financial strain.

In a statement, Eskom expressed its deep apprehension regarding the worsening payment patterns by Tshwane. This concern stretches back to 2022 when the municipality’s delinquent payments accumulated significantly.

Despite extensive efforts by Eskom to recover the funds owed to them, Tshwane has struggled to meet its financial obligations and adhere to its electricity supply agreement. This mounting debt severely threatens Eskom’s financial stability and overall sustainability.

City manager Johann Mettler acknowledged the two-month debt to Eskom and explained the challenges faced by the municipality in collecting payments for essential services. Tshwane is working on revamping its revenue management to address these issues.

Also read: Eskom’s Municipal Debt Crisis: Over R63 Billion Owed

Tshwane has been grappling with a substantial debt collection challenge, with approximately R22 billion owed by ratepayers. An economically challenging environment and a culture of non-payment have exacerbated the municipality’s financial predicament. As of September 19, 114,000 water and electricity services accounts remained unpaid.

The outstanding debt is categorised as follows:

Businesses: Over R5 billion
Residents: Over R12 billion
Government: Over R1 billion
Embassies: Over R18 million
Councillors: Over R2 million
Employees: Over R29 million
Indigents: Over R1 billion
Inactive accounts: Over R1.6 billion

The financial strain on Tshwane is no secret, with the municipality’s adopted budget in June 2023 being underfunded by at least R3 billion. Tshwane has implemented various measures to alleviate this financial burden, including seeking an exemption from salary increases to achieve a funded status within three financial years. However, factors like the loss of revenue due to load-shedding have further exacerbated the city’s economic woes.

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