KEY POINTS
- Eskom has given Johannesburg until July 8 to pay R5.2 billion or face electricity supply cuts.
- Areas at risk include Sandton, Fourways, Soweto, Orange Farm and Ivory Park across greater Johannesburg.
- Moody’s has placed Johannesburg on review for a downgrade as French lenders refused new loans.
Johannesburg Mayor Dada Morero said last week that the city’s working lights proved it was not in financial trouble. Eskom responded this week by threatening to turn those lights off.
The power utility gave the City of Johannesburg and City Power until July 8 to settle a R5.2 billion debt. A first payment of R1.58 billion is due by June 5. Eskom said it had spent more than two years trying to work with the city on repayment. Its patience, it said, has run out.
A formal notice was issued this week laying out plans to cut or stop electricity supply to major power points across the city. Sandton, Fourways, Soweto, Orange Farm and Ivory Park are all on the at-risk list. Street lights in parts of those areas are already dark over a separate R4 million debt that has not been paid.
Eskom made a pointed accusation. The utility said the city collects electricity payments from residents but fails to pass the money on. It called the unpaid bills a complete failure to honor their agreement.
Mayor appeals to national government
On Monday, Morero wrote to Electricity Minister Kgosientsho Ramokgopa asking him to intervene and block the threatened cuts. The City of Johannesburg had not issued a formal public response to Eskom’s notice at the time of this report.
A previous Eskom threat against the city was halted after a court challenge and support from national government. Whether that safety net will appear again remains unclear.
Financial pressure closing in from multiple sides
The Eskom standoff is not the only crisis bearing down on Johannesburg. Finance Minister Enoch Godongwana told the city to cancel a pay rise agreement it had reached with municipal unions, saying the city cannot afford the commitment.
French development lenders have declined to extend further loans to the city. Credit rating agency Moody’s has placed Johannesburg on review for a possible downgrade, a signal that international confidence in the city’s finances is weakening.
Taken together, the picture is of a city running out of financial road at speed, with its lights, its credit and its negotiating room all under simultaneous threat.
