Rabia Mayet | rabiamayet@radioislam.co.za

01 September 2026

2-minute read

The Organisation Undoing Tax Abuse (OUTA) has welcomed Eskom’s withdrawal of its electricity supply interruption process against the City of Johannesburg after the municipality and City Power settled its R5.25 billion overdue debt.

The payment removes the immediate threat of power cuts to residents and businesses. Eskom had warned that it could reduce or terminate supply after the City repeatedly failed to honour its electricity obligations, with arrears accumulating over two years.

OUTA executive manager Julius Kleynhans described the settlement as a positive development but cautioned that it should not end public scrutiny. Unfortunately, residents of Johannesburg are the “ones who are being victimised in the process,” he stated.

A central concern is the management of electricity revenue. “This failure does not happen overnight,” Kleynhans pointed out. Municipalities in South Africa consistently default on payment to bulk service providers and bailouts are no longer sustainable because “there is no money left” to bail them out.

OUTA says there are a variety of factors at play and stronger oversight is required at local and provincial level. The National Energy Regulator of South Africa has failed in its duties when issuing electricity distribution licences to municipalities. Municipalities should be able to supply electricity on a sustainable level, justify their tariffs, ensure residents are receiving good, affordable electricity, pay bulk suppliers, provide feedback on performance monthly and demonstrate that electricity revenue is being used responsibly.

An additional problem is that money collected by City Power is not ring-fenced for the utility and instead flows into the City’s central treasury. This leaves City Power without direct control over their revenue, as “the money doesn’t go where it should be,” Kleynhans emphasized, creating the risk of funds being diverted elsewhere.

While the settlement resolves the immediate crisis, underlying governance weaknesses remain. Without transparent financial controls, disciplined revenue management and sustained regulatory oversight, Johannesburg could find itself facing the same debt problem again.

Listen to the full interview with Ml Sulaimaan Ravat and Julius Kleynhans here.