Eskom has rejected the City of Tshwane Municipality's offer to enter into payment settlement arrangements for R878-million owed to the power utility.

Tshwane failed to pay Eskom a total amount of R908-million, which was due and payable by 17 June 2022. The municipality only made a payment of R10-million on 23 June, and R20-million on 30 June 2022, Eskom said.

"As a utility, we are obliged to operate this business in a sustainable manner, and to consequently take all the appropriate measures to recover money owed to us. We remain hopeful that the City will review its current position regarding the appeals made to them by Eskom and honour their payments," said Daphne Mokwena, the Eskom Senior Manager for Customer Services in Gauteng.

"Out of the eight metropolitan municipalities in the country, the City of Tshwane is the only one with erratic payments," Eskom added on Monday. "The City's erratic payments over the past year have contributed negatively to Eskom's increasing overdue debt (which is in excess of R46.6-billion), liquidity, financial performance, and the sustainability of the organisation, such that Eskom has to borrow to meet its financial commitments."

But City of Tshwane spokesperson Selby Bokaba cited "liquidity challenges" due to non-payment by its own customers, and said the municipality had given Eskom a payment schedule. It committed to a full payment to Eskom by 7 July.

In February, the City of Tshwane cracked down on those in arrears when it embarked on a power and water cutting campaign against some of the biggest defaulters, which included private businesses as well as government entities.

"We have experienced liquidity challenges occasioned by low revenue connection in the previous financial year," Bokaba said.

"We’re anticipating an improved level of collection in the first quarter of the 2022/23 financial year, following our relaunch of our aggressive revenue collection campaign known as #TshwaneYaTima, which resumed on 21 June."

The campaign was already showing "positive signs", Bokaba added, with debtors making payments coming forward after their services were disconnected.

As part of the efforts to recover the debt, Eskom has previously escalated the matter of the City's erratic payments to the Tshwane Executive Mayor, Randall Williams, in a meeting held with him and his leadership team in January 2022, Eskom said.

The matter was again escalated to the Executive Mayor in June, requesting him to assist in ensuring that the City settles the account by 30 June 2022.