City Power ditches plan to cut Charlotte Maxeke hospital’s electricity over unpaid R41m bill

30 Nov 2023

Cooler heads prevailed when City Power decided not to cut off electricity to Charlotte Maxeke Johannesburg Academic Hospital over a reported R41m in unpaid electricity bills. While a potential humanitarian crisis has been avoided, City Power still has its sights set on collecting what it is owed.

The Gauteng Department of Health and the administration at Charlotte Maxeke Johannesburg Academic Hospital were able to breathe a collective sigh of relief on Thursday after City Power made a U-turn on its threats to cut off electricity to the public hospital because of its non-payment of electricity bills.

This comes after the Gauteng Department of Cooperative Governance and Traditional Affairs (Cogta) stepped in and mediated the payment stand-off between City Power and the Gauteng Department of Health.

City Power’s general manager for revenue management, Thami Mathiso, told Daily Maverick, “Our commitment today with Cogta, which was in good faith, was that we will not cut off Charlotte Maxeke Hospital, considering the humanitarian crisis it’s going to create.”

After issuing a warning this week that hospitals behind on their electricity bills would be cut off, City Power on Thursday gave Charlotte Maxeke hospital four hours to make alternative arrangements at other facilities for patients in critical condition.

The hospital reportedly owes the utility R41-million, making it City Power’s biggest debtor.

However, Gauteng’s Cogta MEC, Mzi Khumalo, and its Finance MEC, Jacob Mamabolo, negotiated a truce between the company and the hospital.

City Power’s Mathiso said Cogta agreed that if the payment issue was not resolved, an intergovernmental relations (IGR) mediator would be appointed.

“We think that that’s not just a way [for Cogta] to say stop disconnections, but its a commitment to say if it’s not resolved, we will take it to another level because the resolutions in IGR are mostly binding,” Mathiso said.

Four other hospitals in Johannesburg are on City Power’s debtor list: Helen Joseph Hospital, which owes R13-million, Rahima Moosa Mother and Child Hospital (R4-million), South Rand Hospital (R3-million) and Chris Hani Baragwanath Hospital (R2.6-million).

Read more in Daily Maverick: Charlotte Maxeke Hospital hit by R3m theft and refusal of ICU nurses to work overtime

The Gauteng Department of Health (GDoH) released a statement on Wednesday claiming it had settled 80% of its debt. “Six invoices amounting to a total of R32,474,056.39 have been paid to CoJ [City of Johannesburg] from April to September 2023 towards the settlement of the R40m debt,” the department said.

However, Mathiso said the department’s claims to have settled the debt were false, adding that there may be a reconciliation issue on the department’s part or it may be missing information.

“We’ve made sure there are no [invoice] disputes logged by Charlotte Maxeke. It’s sad for them to say the money was paid this year. The money was not paid this year. I think what they’ve been trying to do is keep up with their month-to-month billing. Even so, if they paid R36-million from their month-to-month billing, it’s not enough.”

He said City Power was willing to engage with the department and go through invoices and proofs of payment to sort out the issue.

Culture of nonpayment in government departments

When asked whether public hospitals should be exempt from power cuts, Mathiso said the Municipal Systems Act required City Power to collect all revenue owed to the utility, and hospitals were not excluded from that.

“By these hospitals not paying, we actually end up not complying with the Municipal Systems Act. I think it’s because we are people, and even though we [work] in a sphere of government structures, we do make considerations. I think that’s sometimes what creates a situation where these amounts end up building up.”

He said City Power was owed more than R500-million by government departments.

While City Power and its technicians are standing down for now, that does not mean that the debt will be forgotten.

City Power spokesperson Isaac Mangena said City Power was serious about collecting what it was owed.

“Even with the suspension of the power cuts, if GDoH does not pay next month, we will cut them. It’s not like we are saying after today, we are not going to do what we are supposed to do. We have an obligation to make sure revenue collection is up to scratch. There is R500-million owed by other government departments. This pause does not absolve them. We are going to pursue that half-a-billion rand that is still sitting with government departments.”

Daily Maverick asked the Gauteng health department for comment, but was referred to Wednesday’s press release. DM

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Culture of nonpayment in government departments