By Lehlohonolo Lehana.
The City of Tshwane has reached a landmark deal with Eskom to settle the R6.67bn historical debt it owes the cash-strapped power utility.
During a media briefing on Monday, Executive mayor Nasiphi Moya, described the agreement, formalised as a court order on November 26, as a significant milestone in the metro’s journey to financial recovery and stability.
In October, Moya revealed Tshwane is in talks with Minister of Electricity, and Energy Kgosientsho Ramokgopa to settle its Eskom debt, possibly out of court.
She said the capital was in a dire financial position, with a debt of R11-billion, more than half of it owed to Eskom.
Not only is the capital facing huge debt, but it has since 2023 been struggling to pay creditors such as Eskom and Rand Water. Its financial troubles were further crippled by a protracted municipal strike by workers demanding a 5.4% salary increase. It is also still struggling to render basic service delivery functions.
“This settlement signals a turning point, ending years of costly litigation and redirecting our focus toward improving service delivery and enhancing revenue collection systems, said Moya.
“My administration is fully committed to honouring this arrangement in full.
“We will adopt stronger financial governance practices to ensure this never happens again, safeguarding the city’s resources and financial health.
Moya added that Eskom also agreed to waive the R700 million interest, provided the city makes payment on time.
“To ensure that we continue to meet the obligations set out in the court order, we will also focus on revenue protection to ensure that residents who are able to pay their accounts are held accountable for non-payment,” Moya warned.
“This settlement signals a turning point as it allows us to turn our focus towards improving service delivery and enhancing revenue collection systems.”
“We also need to control expenditure. While financial stability is our goal, we must manage expenditure carefully in line with our budget. The new administration is committed to acting responsibly with the City’s finances,” said Moya.