Eskom must recover CoJ debt without punishing paying residents

The Organisation Undoing Tax Abuse (OUTA) says Eskom’s threat to interrupt or reduce electricity supply to parts of Johannesburg over unpaid municipal debt is a predictable consequence of years of financial mismanagement, governance decline and the failure to properly ringfence service revenue within the City of Johannesburg (COJ).

The organisation says the latest dispute between Eskom and the City cannot be viewed in isolation, particularly following recent warnings from Finance Minister Enoch Godongwana regarding Johannesburg’s deteriorating financial position, unfunded budgets, escalating creditor debt and ongoing failures in revenue collection and expenditure management.

“Johannesburg residents cannot become collateral damage in this situation,” says Julius Kleynhans, Executive Manager at OUTA. “Residents and businesses have largely continued paying their electricity bills, yet the City has failed to pass those funds on to Eskom. Residents are already paying for Eskom’s electricity through their municipal bills.”

“If the City fails to pay Eskom, then Eskom should focus on intercepting the revenue stream instead of punishing paying customers.”

OUTA says Eskom should temporarily take control of the electricity payment component of CoJ’s billing system and recover its share directly until the outstanding debt is settled.

“Once CoJ has developed sufficient administrative, financial and technical skills and capacity to discharge its obligations efficiently, accurately and sustainably to ensure access to a stable supply of electricity to residents of CoJ, the revenue collection process can be handed back to the city,” says Kleynhans. “Eskom should not punish residents and businesses for failures within the City’s administration.”

OUTA acknowledges Eskom’s position that it is unsustainable for municipalities and metros to continue collecting electricity revenue while failing to honour payment obligations to Eskom. However, the organisation says there are alternatives that would allow Eskom to recover its funds without placing compliant residents and businesses at risk of supply interruptions.

“The principle is straightforward. Where electricity is supplied, payment obligations must ultimately be met,” says Kleynhans. “If municipalities cannot manage the process responsibly, alternatives need to be explored that still protect the customer. This could include split-payment mechanisms where Eskom automatically receives its share of electricity revenue before the balance is allocated to the municipality.”

OUTA says the concerns raised recently by National Treasury reinforce what residents, businesses and civil society organisations have warned about for years: Johannesburg’s financial position is becoming increasingly unsustainable while service delivery and infrastructure reliability continue deteriorating.

“We are seeing growing signs of financial mismanagement across critical municipal services,” says Kleynhans. “Residents are paying more for water, electricity, refuse removal and roads, yet reliability and service quality continue declining. This issue goes far beyond debt recovery. It raises serious concerns around transparency, infrastructure sustainability and the growing burden placed on compliant taxpayers.”

OUTA has also called on the National Energy Regulator of South Africa (NERSA) to play a more active oversight role in ensuring municipalities meet their obligations to Eskom.

“NERSA cannot continue approving tariff increases without ensuring municipalities pass Eskom’s portion on as required,” says Advocate Stefanie Fick, Executive Director of Accountability at OUTA. “As the regulator, it has a responsibility to ensure distribution licence holders such as the City of Johannesburg comply with their obligations. Municipal managers must also be held personally accountable where unlawful, negligent, or reckless decisions compromise service delivery, expose the municipality to financial loss, or shift the burden of failed governance onto residents and ratepayers.”

While OUTA acknowledges Eskom’s legal and financial obligation to recover outstanding debt and maintain the sustainability of the national electricity system, the organisation warns that indiscriminate supply interruptions would unfairly punish residents, businesses and communities already operating under severe economic pressure.

According to Eskom’s notice, the City of Johannesburg owes approximately R5.2 billion in historical bulk electricity debt. Eskom further alleges that previous repayment agreements and court arrangements were not honoured by the city.

The proposed supply interruptions could affect major residential and economic nodes including parts of the Johannesburg CBD, Fordsburg, Fairlands, Cresta, Midrand, Carswald and surrounding areas. OUTA warns that supply interruptions would affect households, small businesses, schools, healthcare facilities and broader economic activity across Johannesburg.

OUTA says any solution must balance Eskom’s sustainability concerns with the broader public interest and economic stability of Johannesburg. The organisation is currently exploring available avenues to protect residents and businesses from unfair disruptions while also supporting sustainable governance reforms.

“We are considering all available options to ensure that electricity supply to residents and businesses is not unfairly disrupted,” says Fick. “At the same time, we need long-term solutions that address corruption, financial mismanagement, and declining administrative capacity.”

OUTA is calling on affected residents and businesses to raise their concerns through public representations and submissions to Eskom.

Submissions can be sent to:

Anna Tsukudu

Key Accounts Manager for Customer Services

Email: cpsubmissions@eskom.co.za

Reference number: CoJ / CP

The closing date for submissions is 17 June 2026. Eskom is expected to communicate its final decision before 24 June 2026.

OUTA says it is also exploring mechanisms to mobilise public participation from affected residents, ratepayers, businesses, and communities regarding the proposed supply interruptions.

“Residents cannot keep paying more while government systems become less reliable,” says Fick. “Accountability must start with ensuring that money collected for essential services is used for its intended purpose.”

Supporting Documents

• A soundclip from Julius Kleynhas, OUTA Executive Manager, is available here in English and here in Afrikaans.