Eskom has written to the City of Johannesburg and its electricity supplier City Power, telling them it will begin cutting off electricity to South Africa’s largest city and economic capital if the city fails to pay its bills.
Electricity will be cut off at “certain pre-determined times of the day in accordance with the Promotion of Administrative Justice Act (PAJA)“, Eskom said. However, such measures could seriously damage South Africa’s economy as Johannesburg is the country’s economic capital and wealthiest city.
In a statement on Thursday night, Eskom said the City of Johannesburg (CoJ) owes R4.9 billion, excluding a further R1.4 billion in the current account due at the end of November.
“Despite Eskom exploring all options and making every effort to accommodate the CoJ, the matter has reached a stage where Eskom cannot afford to accommodate the city without putting further financial strain on and damaging its operations,” the provincial electricity supplier said.
Eskom issued a public notice on Friday inviting stakeholders to submit written comments “explaining why Eskom should or should not cut off electricity to Johannesburg”.
Problems in electricity supply
Eskom put out a statement where it outlined the major bottlenecks that have led to it taking this drastic decision. It opined that regulations had been breached on the part of the CoJ,
It said: “In accordance with the Constitution and the Intergovernmental Relations Framework, the CoJ is meant to work with Eskom to assist it in fulfilling its mandate to provide access to affordable electricity to its citizens. The CoJ has breached these obligations by failing to pay Eskom for the amount of electricity it has supplied, making it nearly impossible for Eskom to fulfil its mandate.” It forces Eskom to borrow additional funds at tariff increases to cover operating costs. Operating costs should be covered by electricity sales revenues, not loans. Borrowing to cover operating liquidity shortfalls caused by local authorities such as the CoJ being unable to meet their bulk electricity payment obligations to Eskom is exponentially increasing the cost of electricity supply. CoJ payment defaults have contributed to growing local debt, which stood at R90 billion at the end of September 2024. ”
“The CoJ acknowledges its debt to Eskom but refuses to pay the full monthly invoices. The CoJ alleges, without substantiating its claims, that Eskom has overcharged at some supply points. To this end, the CoJ is offsetting monthly invoices issued by Eskom in breach of the electricity supply agreement and agreements with Chief Financial Officer Rendani Sadiki, City Power CEO Tshifulhalo Mashaba and the Johannesburg City Council. In several meetings, it was agreed that the payments would continue while the alleged overcharging was investigated by the court. However, there is no agreement on this obligation.
