The Ekurhuleni Metro’s financial position has deteriorated to such an extent that it is unable to pay Eskom a deposit of R177 million for upgrading four mini-substations in Chloorkop.
If Ekurhuleni had a clean record with Eskom, the utility would not have required such a deposit from the Metro. Ekurhuleni, however, owes the power utility around R2 billion.
Teraco, a company providing the Metro with a data centre, will now front the money.
In contrast, Ekurhuleni could have collected a deposit of R307 million from Teraco and kept the money in an interest-bearing account.
It could have generated an additional income for the Metro.
The Metro missed this golden opportunity due to its poor financial footing.
It appears that Ekurhuleni may have to increasingly rely on external entities such as Teraco, one of the Metro’s clients, to fulfil its financial obligations.
The immediate benefits of the Escrow guarantee agreement cannot be denied, but it is not a sustainable approach to managing the Metro’s finances.
The Metro’s declining financial status could damage its reputation and negatively influence future investment opportunities.
The Freedom Front Plus asked the Mayor, Mr Nkosindiphile Xhakaza, in writing to explain the Council’s strategic intervention and to indicate what long-term plans are in place to restore Ekurhuleni’s financial relationship with Eskom in order to ultimately qualify for deposit exemption.
Restoring Ekurhuleni’s financial integrity should be top priority to ensure long-term sustainability and protect the interests of residents and businesses.
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