The Organisation Undoing Tax Abuse (Outa) has called on Eskom to pursue the recovery of R5.2-billion in outstanding debt owed to it by the City of Johannesburg (CoJ) without interrupting power supply to residents and businesses.

Eskom issued a notice of its intention, from July 8, to interrupt the supply of electricity to certain bulk supply points, which could affect the Johannesburg CBD, Fordsburg, Fairlands, Cresta, Midrand, Carswald and surrounding areas.

Eskom has initiated consultations on these potential interruptions after the municipality failed to honour the terms of a settlement agreement reached with Eskom and which had been made an order of the High Court in November last year.

The utility stated the CoJ currently owed arrear debt of R5.25-billion, excluding the current account of a further R1.6-billion due on June 5.

Eskom said it was unacceptable for the city not to pay over Eskom’s share after having collected electricity revenue from ratepayers. 

In response, Outa argued that paying residents and businesses should not become “collateral damage” as a result of what it described as the CoJ’s debt and financial mismanagement.

It argued for alternative interventions to be explored, including one where Eskom took control of the electricity payment portion of CoJ’s billing temporarily until the debt was settled.

“If the city fails to pay Eskom, then Eskom should focus on intercepting the revenue stream instead of punishing paying customers,” Outa executive manager Julius Kleynhans said in a statement.

A split-payment mechanism was also flighted, whereby Eskom automatically received its share of electricity revenue before the balance was allocated to the municipality.

Outa also called on the National Energy Regulator of South Africa to play a more active oversight role in ensuring municipalities met their obligations to Eskom.

It also urged affected residents and businesses to make representations to Eskom ahead of the June 17 deadline for public comment.