Caught in a R6.3 billion battle

Eskom’s threat to cut off Joburg’s power for incurring R4.9 billion in debt and running up a R1.4 billion current account highlights the city’s maladministration, with its citizens and small businesses caught in the crossfire.

This is according to the Organisation Undoing Tax Abuse’s (Outa) executive director and advocate, Stephanie Fick, who spoke to 702 following Eskom’s statement that there will be power cuts if Joburg fails to settle its debt.

The state power utility has since withdrawn the threat following electricity minister Kgosientsho Ramokgopa’s intervention.

“Eskom can look at a few things to make their operations more lean. But, on the other hand, I don’t blame Eskom,” Fick said.

“I can’t believe that a big metro and economic hub is R4.9 billion behind in electricity payments. And that is while most people in Joburg probably pay their electricity accounts.”

Fick said that while both entities have taken the matter to court, with City Power claiming they were being overcharged for electricity, the court determined an amount was due and payable.

She points to the most realistic solution as one where municipalities indebted to Eskom pay the state utility in instalments.

However, she critiques the city for being in this situation in the first place, pointing to maladministration as the reason for the debt and lack of infrastructural maintenance.

“While these two big entities are fighting about who owes who money, who will bear the brunt of it? The citizens of Joburg,” Fick said.

“Although it is in the powers of the local government to deal with their own electricity, maybe one should pay Eskom directly if the city is unable to do it.”

While Fick does highlight that many local governments rely on selling electricity to citizens and businesses as a revenue source, she argues that it could work if it were effectively used and paid to Eskom.

However, the city is now in debt just short of R5 billion.

“Let’s eliminate all the maladministration, corruption, and fruitless and wasteful expenditure, and maybe we can see this city become the city we want it to be.”

Eskom warns of power cuts, then withdraws threats

Last week, Eskom said it had served a notice of intention to interrupt the power supply to the City of Johannesburg (CoJ) and City Power at certain pre-determined times of the day.

It said that this was in accordance with the Promotion of Administrative Justice Act (PAJA).

“The CoJ and/or City Power currently owe Eskom an amount of R4.9 billion, excluding the current account of a further R1.4 billion, which will become due and payable at the end of November 2024,” the power utility stated.

Eskom said it explored several avenues to accommodate Joburg, but the matter has reached a point where Eskom can no longer afford to oblige the metro without putting further financial strain on and harming its own business.

Joburg citizens and businesses spent the weekend apprehensive that the city would once again be plunged into darkness.

This was until Monday when Electricity and Energy Minister Kgosientsho Ramokgopa intervened, and Eskom withdrew the threat.

Johannesburg power utility City Power has committed to paying its current account of R1.4 billion, which is payable by the end of November 2024.

This amount triggered Eskom’s threat, which it has now withdrawn.

While Eskom has withdrawn the immediate threat of implementing power supply interruptions in the City of Johannesburg, the issue of what is owed still needs to be addressed.

To achieve this, Ramokgopa proposed using an independent person to evaluate what Eskom claims is owed to it and what the City of Johannesburg believes it owes.

The independent person will be supervised by a technician from the opposing utility and City Power has 14 days to confirm what it owes to Eskom, giving it until 25 November.