Joburg City Power faces cash crunch
City Power‚ which contributes about 40% of the City of Joburg’s revenue‚ is cash-strapped.
Earlier in 2017‚ mayoral committee member for finance Rabelani Dagada said he was worried about City Power’s financial state.
Business Day has been reliably informed that City Power’s cash balance stood at -R562m at the end of August 2017‚ but had negatively ballooned to -R1.2bn by the end of September.
Luyanda Mfeka‚ spokesman for mayor Herman Mashaba‚ said a deficit of R533.4m was reported to the board and members of the mayoral committee on September 30 2017.
He said this deficit was primarily caused by a shortage of R640.8m on electricity sales‚ where there appeared to be underbilling of 275-million kW hours for the quarter.
“There is consequently a negative position on the cash balance of about R1.2bn caused by the shortfall in electricity sales of the R640.8m plus a short collection of revenue billed of R393.5m‚” Mfeka said.