JOHANNESBURG – City Power contributes about 40% of City of Joburg’s revenue has found themselves at a cash crunch.
Earlier this year, the mayoral committee member for finance Rabelani Dagada said he was concerned about City Power’s financial state. City Power has had a constant cash balance of R562 million at the end of August but has had negative ballooned to –R1.2 billion by the end of September.
The spokesman of the Mayour Herman Mashaba, Luyanda Mfeka said a deficit of R533.4 million was reported to the board and members of the mayoral committee on September 30 2017. He said that this deficit was caused by a shortage of R640 million on electricity sales, where they happened to be underbilling of 275 million kW hours for the quarter.
There is consequently a negative position on the cash balance of about R1.2 billion caused by the shortage in electricity sales of the R640.8 million plus a short collection of revenue billed of R393.5 million,” added Mfeka. The City Power is still working on their revenues which is most likely to increase the electricity sale prices in Johannesburg and the surrounding areas.
The electricity bill will be higher with city power, which will be more effective from the first quarter of 2018, along to the rest of the year, making its highest peaks during winter.