Johannesburg sees light at the end of the tunnel in new deal with Eskom

Nelson Mandela Bridge with Johannesburg CBD in the background. Image credit: South African Tourism, CC BY 2.0, via Wikimedia Commons

About a week ago, Eskom issued a notice of intent to reduce, interrupt and/or terminate electricity supply to certain bulk supply points in the city due to the R5.2bn owed by the City and City Power (CP) to Eskom.

“I’m delighted to say that we have found a path to resolve this problem,” the minister said, following a meeting with all stakeholders, including Joburg Mayor Dada Morero and Eskom group chief executive Dan Marokane.

Some two years ago, the two parties had reached an electricity supply agreement to address the debt issue.

“The city… experienced a number of challenges leading up to the end of last year and the beginning of this year, and they were unable to keep up with the provisions of that agreement.

“Eskom… then issued a notice of either interruption, disruption or discontinuation of bulk electricity supply to the City of Johannesburg.

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“What we have agreed to… reaffirms the provisions of the existing agreement, which says we need to keep up with the current account and find a way of servicing the debt that has now grown,” Ramokgopa said.

The minister said Eskom, the City and City Power will “work out a partnership” because of the sheer scale of the city and the residents who pay for services.

“Johannesburg is just too big to fail. It is the powerhouse of the South African economy and the epicentre of the financial markets in the country and across the continent.

“As opposed to dealing with Johannesburg at arm’s length…we have accepted that we need to provide some degree of support to City Power.

“There are a lot of customers who are paying, and I think it would be particularly unfair for those customers to be collateral damage, so we need to find a solution,” Ramokgopa said.