The City of Tshwane (CoT) has hit back at Eskom saying the load shedding imposed by the power utility has had an adverse impact on its financial position.
Municipalities including the CoT defaulting on their massive debt burden was exacerbating its cash flow crisis, the state-owned utility said on Wednesday.
CoT's electricity debt compounded to R1.4 billion due to its short payment and non-payments spanning several months in the recent past, Eskom Gauteng spokesperson Amanda Qithi told The Citizen.
The city acknowledged the R1,4 billion Eskom arrear debt and intend to make regular payments to service the account, Tshwane MMC for Finance Peter Sutton said.
"Our finance team has consistently been engaging Eskom on a payment plan. As a city, we understand our responsibility to pay our creditors and it is for this reason that we continuously communicate with Eskom with a proposed payment plan to bring the account up to date," he said.
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Load shedding to blame
While the city has been honest about its financial challenges, load shedding is also to blame for its current predicament, Sutton added.
"We are currently implementing various interventions to address these financial challenges. However, we must also acknowledge the adverse impact Eskom's load shedding has on the city's liquidity position."
"Our maintenance budget is spinning out of control as a direct impact of load shedding, but Eskom refuses to take responsibility for this. Furthermore, our residents and business are battling economically due to load shedding, which in turn contributes to low revenue for the city," Sutton said.
Eskom price hike
The National Energy Regulator of South Africa's (Nersa) decision to grant the parastatal an 18% electricity price hike will "cripple" the city, Sutton said.
"We will not be able to pass that increase onto end users until 1 July 2023."
While CoT has a huge debt burden with Eskom, the Emfuleni Municipality owes the utility billions of rands, Qithi said.