Joburg Businesses and Residents Are Set to Bear the Brunt of Another City Blunder, and Have Now Had Enough

City of Joburg chaos leaves residents facing power cuts:

The alarming warning from Eskom that the City of Johannesburg (CoJ) could face power cuts because of a dispute over a R4.9 billion electricity bill has sent angry shockwaves through the country’s economic hub. JoburgCAN, an initiative of OUTA, on behalf of residents’ associations and alongside multiple community organisations, has issued an urgent letter to Eskom calling for an emergency meeting to halt the impending crisis and obtain the facts of the debt situation between Eskom and the CoJ.

According to a statement by Eskom, which supplies most of City Power’s bulk electricity: “Despite all the avenues that Eskom explored and efforts to accommodate the CoJ, the matter has reached a point where Eskom can simply no longer afford to accommodate the CoJ without putting further strain on and harming its own business”. The CoJ disputes the bill but while the entities sling mud through press releases, several parts of the City are set to experience extended and targeted load shedding over the festive season and beyond. From the communications we have seen, it appears that Eskom has called for public comment until 12 December for affected parties to object to its planned cuts, but this has not been passed on to Joburg residents by the metro.

The CoJ financials appear chaotic.

The City’s billing system was strongly criticised by a high court judgment in October, in a dispute with a customer over an electricity bill, with a judge saying it was “highly doubtful” that the City had “the slightest knowledge of what is really going in in the accounting systems” or in the electricity supply.

Eskom’s dispute with the CoJ has also been in court this year. In July, the court ordered the City to pay Eskom R1.074 billion plus interest and legal costs (this is the full monthly bill), after both parties agreed that they could not settle the facts of the billing dispute through court papers. The court was told that the electricity supply agreement between Eskom and the City states that the City must pay its electricity account even if it disputes it, provided that the account will be corrected if an error is later revealed.

Residents who have disputed bills in the past will have little sympathy for the CoJ over the “pay first, ask questions later” approach, as this is how the CoJ treats its own customers.

In September, in another development in the billing dispute, Eskom went to court to demand payment of R4.5 billion, for the bulk supply for April, May and June 2024; the matter was struck from the roll.

The City’s budget sits at a crossroads. In the October budget review of the first month of financials in council, collections were down, spending had stalled and debt had risen. The amount owed to the City which is more than 90 days overdue is over R51 billion. Tariff increases, falling services and increased nonsensical punitive polices like solar charges and prepaid meter fees have left people defaulting and checking out of the municipality’s shambolic billing.

Although City Power and Joburg Water are legally separate entities, their billing is managed by the CoJ centrally. Both City Power and Joburg Water, on paper, recorded accumulated surpluses in their annual reports for 2022/23 (the most recent) – R2.2 billion for City Power and R13.5 billion for Joburg Water – however, the City retains control over this and uses this income to fund other services and administration.
The CoJ council meeting at the end of July passed the Johannesburg Water Turnaround Strategy, in which Joburg Water included significant concerns over the system of centralised billing, and called for control over its own finances, to run its own billing and collections, and to be allowed to use its own surplus. The council passed this strategy, but we have not seen any indication of a change in the financial arrangements. We understand that City Power similarly wants to control its own finances.

Planned power cuts by Eskom will not just be an inconvenience, as this affects services that take time to recover. When there is no power, water shortages follow close behind. Still without water after more than two weeks due to a contested power outage in the Palmiet system, South Hills residents are relying on roving tankers that aren’t sufficient to meet the area’s needs.

If the dispute with Eskom is not resolved, and fast, it could leave large swathes of the City with interrupted supply of multiple services.

Residents who have paid ever-escalating bills are at the end of their allowance for a municipality in seeming free fall, where their voices are ignored.

JoburgCAN and its affiliates and partner organisations have called for an urgent meeting with Eskom to establish what communication and warnings were sent to the City and ignored, and what possible interventions could be contemplated to keep the lights on, including through bypassing the CoJ when it comes to payments, as a result of the lack of reliability of the CoJ to manage its affairs.

This is a frustrating wake-up call to all residents and business owners, who are already straining under an avalanche of CoJ failures, that we have to unite to fight back against a Joburg council that no longer represents our interests.