Tshwane has reached a landmark deal with Eskom to settle the R6.67bn historical debt it owes the cash-strapped power utility, executive mayor Nasiphi Moya said.
In a media briefing on Monday, Moya, an ActionSA councillor, described the agreement, formalised as a court order on November 26, as a significant milestone in the metro’s journey to financial recovery and stability.
“The arrangement outlines a structured repayment plan spanning five years, with the first payment of R400m scheduled for December. Additionally, the city has already paid R425m in arrears for October 2024,” Moya said.
“A critical condition of this agreement is the timely payment of current accounts within 30 days of billing. This settlement signals a turning point, ending years of costly litigation and redirecting our focus toward improving service delivery and enhancing revenue collection systems.”
Moya said her administration was committed to honouring the agreement in full. “We will adopt stronger financial governance practices to ensure this never happens again, safeguarding the city’s resources and financial health.”
Eskom, choking under a R400bn debt burden, received a R254bn debt relief package over three years from the Treasury in 2023 in a programme that enjoined municipalities to pay their dues to the power utility .
However, in October, Gauteng finance MEC Lebogang Maile said the province’s 11 municipalities owed Eskom R19.650bn.
Eskom has applied to the National Energy Regulator of SA for tariff increases that will net it revenue of more than R1.4-trillion for financial years 2026-28.
Eskom is seeking to generate total revenue of R446bn for 2026, R495bn for 2027 and R537bn for 2028.
The proposed average price increases for Eskom’s direct customers are 36.15% (April 1 2025 to March 31 2026), 11.81% (April 1 2026 to March 31 2027) and 9.10% (April 1 2027 to March 31 2028).
The increases are well above inflation, which eased to an annual rate of 2.8% in October from 3.8% in September and 4.4% in August.
Meanwhile, the executive mayor said ensuring clean, potable water for Hammanskraal residents remained her administration’s priority. “For decades, residents have endured unsafe water conditions, an unacceptable reality that we are determined to change. Our administration has already taken significant steps to address this crisis,” Moya said.
The Tshwane metro council recently approved a decision to write R600m in water-related debt, “relieving Hammanskraal residents of the financial burden of paying for water they could not safely consume”. That, she said, was a vital step towards restoring dignity and fairness.
Regarding the recent foodborne illness outbreaks linked to unsafe practices in spaza shops, Moya said the metro had intensified efforts to regulate the multibillion-rand sector in the interests of public health. A disaster operations centre has been activated to co-ordinate a multisectoral response to the crisis.
In his address to the National Council of Provinces (NCOP), President Cyril Ramaphosa said government inspectors had already visited more than 200,000 spaza shops, shut down 1,000 and issued “numerous fines” for noncompliance.
The Tshwane mayor said on Monday: “Thus far, we have inspected over 400 spaza shops, issuing fines and shutting down non-compliant operations. These efforts highlight our commitment to ensuring that residents have access to safe, healthy food options. To strengthen these interventions, the city has introduced an online registration portal for spaza shops, streamlining compliance processes and enhancing oversight.”
Moya said a draft Informal Trading and Township Economy By-Law had been approved by the council for public consultation. "This by-law proposes stricter licensing requirements, enforces health and safety standards, and outlines penalties for non-compliance. We encourage all stakeholders to participate actively in the public consultation process," she said.
According to research by author, marketer and brand specialist GG Alcock, who has studied the township economy for almost 20 years, the sector comprises 30,000 spazarettes (local supermarkets), which are valued at R200bn a year, and are dominated by Somalians, Ethiopians, Pakistanis and Bangladeshis.
The country’s township economy — into which JSE-listed retailers such as Shoprite, Pick n Pay and Boxer are making spirited inroads — is valued at R400bn, equivalent to almost 8% of GDP annually, and employs about 2.6-million people.
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