Eskom writes off R830m of R3.2bn City of Joburg debt

JOHANNESBURG - Eskom has written off R830 million of the City of Johannesburg’s massive debt, leaving an outstanding balance of R3.2 billion.

On Tuesday, the city and the power utility announced that they had reached an agreement on how the remaining money would be settled.

The two have just come out of a billing dispute that stemmed from the metro’s initial refusal to settle the debt.

Mayor Dada Morero and Electricity Minister Kgosientsho Ramokgopa held a media briefing in Johannesburg, where they announced the agreement.

Over the next four years, the City of Johannesburg will gradually settle its R3.2 billion debt to Eskom, a liability that has accumulated over several years.

The debt grew due to interest charges, with the metro also claiming it was overbilled for electricity supply.

Ramokgopa confirmed that the city would now only pay the R3.2 billion, as all accrued interest has been written off.

“Eskom has conceded with regard to the periods of load shedding, estimations and also the penalties that have to do with notifiable maximum demand. So, all of these have been removed. As we remove them, they total to R830 million and that’s the concession that Eskom has made.

Ramokgopa said intergovernmental relations had to be strengthened to avoid billing disputes between municipalities and Eskom.

Morero says the municipality is committed to the repayment plan and will settle the debt in full.

“We do spend a particular amount on our bulk purchases. So, we are going to service the settlement with Eskom. We don’t see that there’ll be a challenge in this regard. We will cover those costs.”

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