Johannesburg’s City Power is facing fresh legal trouble after diesel supplier African Rhino Fuels (ARF) accused it of breaching a supply contract and failing to pay for 250,000l of diesel delivered in July last year.
ARF approached the Johannesburg high court on April 13, seeking to compel City Power to pay more than R5m, and is asking the National Treasury to intervene in the dispute.
The company claims that City Power acknowledged receipt of the diesel and signed invoices confirming that payment would be made in line with the parties’ agreement. It says the purchase order was signed and authorised by City Power administrator Tshepo Mahlangeni on July 2 2025.
According to the claim, despite the invoices being approved, City Power failed to settle the outstanding amount and did not provide any firm commitment on when payment would be made.
The company said that after repeated attempts to secure payment had failed, it issued a formal demand to the utility.
In the claim, ARF attorney Leon Oosthuizen states that payment for the diesel should have been made before August 27 2025. “Despite demand for payment, City Power has failed and alternatively refused to make payment to African Rhino Fuels,” it reads.
There are suppliers who have done work for City Power nearly a year ago, and they are still not paid
— City Power source
A senior insider at City Power said ARF’s claim was just one of many unpaid bills, with the entity allegedly owing suppliers more than R1.3bn.
“There are suppliers who have done work for City Power nearly a year ago, and they are still not paid. The situation is bad, and it makes us vulnerable to the auditor-general, as the law prescribes that suppliers must be paid within 30 days of having done work,” the insider said.
The source added that City Power was also battling to keep up with payments to Eskom, its main bulk electricity supplier. “The payment towards Eskom is not consistent, with City Power some months missing payments to reduce its bill with suppliers.”
Last week the Sunday Times reported that City Power chair Makhosini Kharodi had written to Johannesburg city manager Floyd Brink requesting an urgent adjustment to the utility’s R17.5bn allocation for bulk electricity purchases from Eskom.
In the March 30 complaint, Kharodi said City Power spends about R1.8bn a month on bulk electricity and had by February already used R14bn of its allocated budget for the current financial year.
He warned that the utility had no option but to continue purchasing electricity from Eskom to keep power flowing to homes and businesses across Johannesburg, saying any reduction would trigger widespread outages.
Kharodi argued that the projected overspend was not caused by poor financial management but by a structural funding shortfall created by an inadequate budget allocation. He warned that this could place it in breach of the Municipal Finance Management Act, which prohibits municipalities from spending beyond approved budgets and requires unauthorised expenditure to be reported and urgently addressed.
City Power spokesperson Isaac Mangena said the utility was in contact with its suppliers to resolve disputes.
“City Power acknowledges receipt of the particulars of claim filed in court relating to the said customer,” he said.
“The matter concerns an alleged outstanding payment for diesel supplied during July 2025, and we note the details set out in the claim regarding the quantity supplied, delivery, and the invoiced amount. We have been in contact with all our suppliers, including this one, about payment backlogs to contractors, some as far back as 150 days, a number we have reduced in recent days with payments [being] gradually made.”
Mangena added that City Power was also in consultation with the city of Johannesburg to ensure the matter is settled.
“We are engaging the complainant and [are] committed to resolving the matter amicably and in a lawful and responsible manner,” he said. “We will continue to engage through the appropriate channels with all stakeholders to ensure that all aspects of the matter are properly considered and addressed.”
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