Municipalities owe Eskom 119 billion rand due to unpaid electricity bills

The Mayor of eThekwini, Cyril Shabane, strongly urged council members to encourage residents to pay for municipal services after the total debt reached R47 billion in June 2026.

Addressing the council on Thursday, Shabane emphasized that it is the duty of all ward councillors to use the slogan 'We build together' during public meetings. According to the debt collection report for June 2026, water bills accounted for 42% of the total debt, while property taxes and electricity made up 22% and 14% respectively.

Household debt has accumulated to R35 billion, representing 75% of all debtors, while government departments owe the municipality R1.8 billion. Among the debtors are fifty council members who owe R3.1 million, and 3373 municipal employees who owe R73 million. Shabane noted that the municipality makes payments to Eskom for electricity and uMngeni-uThukela Water for water supply.

Shabane stated: 'We do not owe these organizations a cent, but our clients owe us. We run a business. The day we fail, they will cut off services.' He agreed that debt collection is an important issue and that the rise in debt is worrying.

He reported that the city has a collection rate of 94% of billed amounts, adding that he is concerned about the Department of Education's outstanding debt to the city amounting to R331.5 million. Shabane also asked council members to encourage parents to pay for school fees, as some educational institutions cannot afford the services provided to them.

The Mayor expressed readiness for intervention from the National Treasury, which could make payments to the municipality after deducting this amount from the defaulter's budget. Furthermore, he indicated that debt reduction and collection strategies developed by the Revenue Management Directorate are being implemented continuously.

Cyril Shabane faced criticism from opposition representatives. Ngiphevu Xulu, a DA council member, stated that the municipality's activities are not yielding results. She noted that quarterly explanations for the increase in debt, including unemployment, poverty, and illegal connections, are received, and insisted that the discussion should focus on real changes.

Xulu pointed to the municipality's problems in revenue management, fundraising, compliance, and accountability. Regarding household debt, she called on the municipality to review its revenue collection methods, supporting those who truly cannot pay, and decisively dealing with those who refuse to do so. She demanded an explanation as to why the municipality continues to lose ground despite the stated measures.

Sowul Basquin, a council member from ActionSA in eThekwini, believes that the presented report lacks a clear recovery strategy or a tangible way to determine if the situation is improving. Basquin also noted that about 42% of all unpaid debt is related to water services, which, in his opinion, should not be surprising given how much time council members spend arguing over billing, statements, faulty meters, and months-old invoices.

Basquin demanded a credible recovery plan, clear accountability, and consequences in case the recovery efforts fail.

The City of Johannesburg has made a payment exceeding R4.3 billion to settle its outstanding electricity debt with Eskom. This action was taken by the municipal company to prevent potential power outages in Johannesburg.

Previous Warnings and Debt Status

Previously, IOL reported that Eskom had warned of possible reductions, interruptions, or disconnections of electricity in parts of Johannesburg after the city and City Power failed to repay over R5 billion in unpaid bills.

The municipal company stated that it has received and is currently reviewing submissions from residents and other interested parties under the PAJA process, which was initiated due to the unpaid electricity bill.

Current Settlement Status

Eskom noted that although payments made by City Power and the City of Johannesburg show positive momentum, the total debt has not yet been fully cleared. As of July 24, 2026, the total overdue balance amounted to R3,801,864,153.45, of which R1,222,786,264 relates to the current overdue account, and R2,579,077,889.00 relates to the balance under the High Court-approved settlement agreement.

The utility also reported that the current electricity bill of R2,636,676,621.00 is due by August 3, 2026. Furthermore, the City committed to making payments totaling R5,117,736,000 by August 21, 2026.

PAJA Process and Next Steps

Eskom added that the PAJA process has been extended until August 22, 2026. This will allow the company to complete the assessment of received submissions and monitor the City's compliance with its obligations to pay electricity bills and its promised payments. The utility emphasized that nothing during this process constitutes a waiver of any rights available to Eskom under applicable agreements, court orders, or legislation.