Johannesburg —South Africa’s power utility, Eskom, has headed to court in an effort to recover more than R1 billion in outstanding payments from Johannesburg’s City Power.
In a statement, Eskom said City Power started to default on payments in October last year and owed a total of R1.073 billion in payments and said it had no other option but to take City Power to court.
City Power reportedly declared a billing dispute, but the power utility said it denied the claims made, and planned on defending its position in an arbitration process and insisted that a municipality should still be obliged to pay, even if it raised a dispute.
City Power’s R1,073 billion debt forces Eskom to approach the High Court pic.twitter.com/szx2gvFDBu
— Eskom Hld SOC Ltd (@Eskom_SA) May 6, 2024
Eskom said City Power had not made any payments up until March 2024, and the dire situation has undermined it’s financial sustainability.
“The debt owed by City Power has reached unprecedented levels, exacerbating Eskom’s already strained financial situation. This dire situation not only undermines Eskom’s financial sustainability but also threatens its ability to maintain essential infrastructure, invest in new technologies and meet the growing energy demands of the province.” it said.
According to BusinessTech, Eskom has faced trouble from many municipalities in South Africa due to non-payment, with debt standing at R70 billion nationwide in December 2o23. Tshwane owed close to R4 billion by the end of January 2024.
Up to 70 municipalities applied for and been approved for the Eskom debt relief programme introduced by the National Treasury last year, which aims at assisting municipalities to pay off their bulk electricity supply debt.
The case is set to be heard on 4 June.
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Compiled by Matthew Petersen
