City of Tshwane executive mayor Nasiphi Moya has announced that the municipality is in talks with the minister of electricity and energy Kgosientsho Ramokgopa to settle the R6.7-billion Eskom debt matter out of court.
She revealed that the aim was to reduce this debt to R5-billion by the end of January 2025. To also build monthly cash-backed reserves of R50-million, which would total R150-million by January 2025.
Action plan for Tshwane’s transformation
Moya was speaking from the Tshwane House Council Chamber on Tuesday. The address was to give an action plan for Tshwane’s transformation.
Tshwane is currently in over R11-billion debt. And this has motivated the prioritisation of financial stability in the municipality.
Moya said they first needed to enhance revenue collection as the municipality is owed over R24-billion. The debt is owed by residents and businesses. This is 6.7% more than the pre-audited amount for the fiscal year of 2023/2024.
She said while attempting to recover this amount, they understood that the municipality would not be able to recover all the money. Particularly with regards to the R17.7-billion owed by residents.
She said the city was on track to achieve a record R4-billion in monthly collections. But it was aiming for R4.4.billion by the end of the financial year.
Culture of payment, improved revenue collection
“It is critical that we establish a culture of payment. Key to this is moving away from billing customers on estimates and billing them on actual readings. Our target is to reach 95% actual readings within our first 100 days,” said Moya.
“Second, we need to reduce water and electricity losses. Water losses currently stand at a staggering 34%, while electricity losses are at 19%. Lowering these levels is crucial for financial sustainability. This as every Rand lost on non-revenue water and electricity is diverted from essential service delivery,” said Moya.
Moya said improved revenue and collection is set to help the city. It will assist in making budget adjustments to reallocate resources to, among other things, historic debt.
She said Eskom debt needed to be addressed while ensuring that the municipality’s account with Rand Water remains in good standing. As recorded on September 30, the municipality owes Rand Water R517-million.
“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.
