South Africa

High Court orders Joburg and City Power to pay R1.073 billion debt to Eskom

Eskom court case joburg

The High Court in Johannesburg has ordered the City of Joburg and City Power to pay R1.073 billion, including interest, for the unpaid electricity account.

Eskom approached the court in May in an attempt to get the regional power utility to settle its debt. This after the utility started to default on its payments from October 2023. No payment was received for the March 2024 invoice either.

When the matter was heard on 4 June, the amount owed to Eskom was R3.4 billion, argued Eskom.

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The amount relates to bulk electricity that Eskom supplied to the City of Joburg. The bulk electricity supply is in terms of Electricity Supply Agreements binding between Eskom and the City of Joburg.

In response to Eskom’s application, the City of Joburg said it decided to withhold these payments from Eskom, alleging that Eskom owed it an amount in excess of R3.4 billion in respect of previous over-billing.

The City of Joburg contended that the April and May 2024 payments to Eskom are set off against the amount of over R3.4 billion owed to it by Eskom for previous overbilling.

City Power declared a dispute regarding potential overbilling on bulk purchase invoices dating back to 2021.

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The court dismissed the counterclaim by the City of Joburg, consequently dismissing the automatic set-off claim.

Eskom wins against City Power

In his judgment on Thursday, Judge Maenetje AJ ordered the two entities to pay Eskom R1 billion.

“The first respondent, alternatively the second respondent, further alternatively the first and second respondents jointly and severally, the one paying the other to be absolved, are ordered to pay interest on the amount of R1 073 593 894,38 at a rate prescribed in terms of the Prescribed Rate of Interest Act, 55 of 1975 calculated from the date the application was served on the first and second respondents until date of final payment,” reads the judgment.

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“The first respondent, alternatively the second respondent, further alternatively the first and second respondents jointly and severally, the one paying the other to be absolved, are ordered to pay the applicant’s costs of the application.”

Eskom has now written a letter to the two entities demanding payment of R3.4 billion by Friday, 21 June 2024.

“We hope they will respect the court decision and settle outstanding debts to Eskom,” it said.

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