The City of Tshwane (CoT) has disputed Eskom’s claims that load shedding by the electricity utility has had an adverse effect on its financial position.
Municipalities including CoT defaulting on their huge debt burdens are causing a cash flow crisis, the state-owned utility said on Wednesday.
CoT’s electricity debt has increased to R1.4 billion due to short payments and non-payments over the past few months, Eskom Gauteng spokesperson Amanda Qithi said. The Warga.
Honor the debt
The city recognizes Eskom’s R1.4 billion debt arrears and intends to make regular payments for service accounts, Tshwane MMC for Finance Peter Sutton said.
“Our finance team is constantly engaging with Eskom on the payment plan. As a city, we understand our responsibility to pay our creditors and that is why we continue to communicate with Eskom with the proposed payment plan so that the accounts are updated,” he said.
Also read: Emfuleni and Tshwane’s R7.1bn debt adds to Eskom’s cash flow crisis
Load shedding is to blame
While the city is honest about its financial challenges, the burden is also blamed for the current situation, Sutton added.
“We are currently implementing various interventions to address these financial challenges. However, we must also acknowledge the negative impact of Eskom’s burden on the city’s liquidity position.
“Our maintenance budget is out of control as a direct result of the load, but Eskom refuses to take responsibility. Furthermore, our residents and businesses are struggling economically due to the lack of load, which has reduced the city’s income,” said Sutton.
Eskom increases prices
South Africa’s National Energy Regulator’s (Nersa) decision to give the parastatal an 18% increase in electricity prices will “cripple” the city, Sutton said.
“We will not be able to extend these enhancements to end users until July 1, 2023.”
While CoT has a huge debt burden with Eskom, Emfuleni Municipality owes billions of rands, Qithi said.
READ ALSO: WATCH: Farms throw away 12,000 liters of milk as Eskom loses load