Joburg fighting R1.1-billion Eskom debt ruling

The City of Johannesburg (CoJ) has announced that it and City Power are appealing a High Court order for the city to pay its R1.1-billion debt to Eskom.

It reiterated its claim that Eskom owes City Power R3.4 billion, describing the dispute as complex and needing a comprehensive resolution process.

“The City and City Power believe that critical aspects of the evidence were not fully considered by the court in reaching its conclusion,” it said in a statement on Friday, 21 June 2024.

“While we accept and respect the court’s decision, the City reserve the right to appeal the ruling.”

The CoJ added that Eskom avoided its efforts to engage in mediation and Inter-Governmental Relations dispute resolution processes.

“Eskom bypassed these avenues and rushed to court to seek a resolution,” it said.

The Johannesburg High Court ordered the CoJ and City Power to pay Eskom R1.073 billion for various unpaid electricity bills on Thursday, 20 June 2024.

In a sworn statement submitted to the court, Eskom revenue manager Susan Smith said City Power had been rolling its debt with Eskom since October 2023.

She added that the state-owned power utility only wanted the CoJ to get its affairs in order and pay what it acknowledges it aims to Eskom.

“Despite Eskom’s best efforts to accommodate the City of Johannesburg, the matter has reached a point where Eskom can no longer afford to accommodate the CoJ without harming its own business,” she said.

“Eskom is not a bank and does not have the financial means to bankroll the CoJ electricity debt of more than R1 billion.”

Invoices submitted to the court in May 2024 revealed that City Power’s debt to Eskom comprises four invoices from earlier in the year, with one invoice amounting to nearly R500 million.

Eskom said it had no choice but to apply to the court for a declaratory order forcing City Power to pay its debt.

Dada Morero, City of Johannesburg MMC for finance

While the CoJ acknowledges its debt to Eskom, it claims that the state-owned power utility owes it R3.4 billion for unresolved overbilling dating back to 2021.

“Eskom has admitted in some cases that there have been potential billing inaccuracies and has so far refunded City Power at least R483 million over the recent years,” City Power said in May 2024.

However, Eskom preemptively rebutted City Power’s allegations in its initial public statement, saying that even if it was overcharged, that didn’t negate City Power’s responsibility to pay bulk power bills.

“Eskom denies the claims made by City Power and will prove its position through the arbitration process,” Eskom said.

Johannesburg MMC for finance, Dada Morero, previously said City Power wanted to resolve the dispute through an independent mediator rather than the court system.

“On the dispute between City Power and Eskom, the City is committed to the appointment of an independent mediator to resolve the current impasse between City Power and Eskom,” said Morero.

“The matter is currently before the courts.”

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Joburg fighting R1.1-billion Eskom debt ruling