The Joburg Crisis Alliance (JCA), along with its partners WaterCAN and JoburgCAN, are calling for full public disclosure of Johannesburg’s controversial sweeping system after municipal financial reports revealed that City Power had accumulated a R22.5 billion internal overdraft and still owes billions to Eskom.
Once considered one of Johannesburg’s most important revenue generators, City Power has become a major financial liability within the City’s own accounting system. The extent of the problem raises serious questions about financial management, transparency and the sustainability of essential municipal services.
The scale of the crisis is outlined in a report released by the JCA titled An Essential Guide to Fixing Joburg – JCA – October 2026 adding that it is a “must read for incoming councillors and voters who want to fix the City of Johannesburg”.
Yunus Chamda, a coordinator at Joburg Crisis Alliance (JCA), believes the incoming council must urgently confront the City’s sweeping arrangement, explain the true state of City Power’s finances and ensure that revenue collected for essential services is accounted for properly.
“The next council will inherit more than failing infrastructure and deteriorating services. It will inherit a financial system that has allowed City Power to accumulate billions of rands in internal debt while Johannesburg Water’s surpluses have been used to help keep the electricity utility afloat,” said Chamda.
“This is an extraordinary failure of financial transparency and oversight. Residents and councillors deserve a full explanation of how this situation developed and what it will take to resolve it.”
A multi-billion rand Eskom bill
On 19 October, a summary of City Power’s payments to Eskom circulated to City stakeholders showed an outstanding balance of R9.906 billion at the end of September 2026, possibly reduced to R6.406 billion by late October, paid partly with a R2.5 billion loand from CoJ.
This followed Eskom’s announcement on 21 August that the City and City Power had settled accumulated arrears of R5.255 billion in full and undertaken to pay the July electricity account of R1.860 billion by 31 August.
It remains unclear how much of this represents historical arrears, how much relates to current electricity accounts and whether the July account was paid as promised.
Executive Manager for JoburgCAN Julia Fish said the confusion over what is owed to Eskom is worrying.
“The City cannot announce that billions of rands in Eskom arrears have been settled and then leave residents and councillors to work out why another multi-billion rand balance remains outstanding. The City must explain what is owed, when these debts arose, what has been paid and how future obligations will be met,” said Fish.
Fish said what was also unclear is whether City Power will be solely saddled with the Eskom debt that accumulated because its historic revenues were being absorbed elsewhere into the city.
“If this is the case, City Power is responsible for debt not entirely of its own making and we are therefore setting the entity up for failure,” said Fish.
How did City Power get to this point?
Financial reports tabled in council over several years show how City Power moved from being a revenue generator to accumulating substantial internal debt through the City’s sweeping arrangement.
Under this system, cash collected from customers is transferred into a central municipal bank account before funds are allocated between the City’s core administration and its 13 municipal entities, including City Power, Johannesburg Water and Pikitup.
While the system was intended to manage municipal liquidity, there has been limited public disclosure about how funds are distributed, how internal balances are calculated and whether entities receive sufficient revenue to meet their operational obligations.
Financial reports tabled in council show that by the end of July 2026, City Power had accumulated an internal sweeping overdraft of R22.476 billion, Johannesburg Water recorded a credit balance of R2.304 billion, while the City’s core administration had a credit balance of R23.410 billion.
WaterCAN executive director Dr Ferrial Adam said this admission raises significant concerns about how Johannesburg Water’s finances have been managed while the entity faces considerable infrastructure maintenance and service delivery demands.
WaterCAN has raised concerns about the financial arrangements affecting Johannesburg Water and the implications for communities that rely on its services.
“Water revenue must be properly accounted for and the financial needs of Johannesburg Water must not be sacrificed to support failures elsewhere in the municipality. Residents deserve to know how their payments are being used and whether sufficient resources are being made available to maintain and improve water infrastructure,” said Adam.
The sweeping system must be dismantled
The council meeting of 24 and 25 June 2026 approved the ring-fencing of municipal trading entities as part of the National Treasury’s Metro Trading Entities Reform Programme.
The reforms are intended to move Johannesburg away from the sweeping arrangement and establish greater financial independence and accountability for its trading entities.
Adam said Johannesburg Water was expected to begin ring-fencing from 1 July, with City Power and Pikitup to follow by the end of the year.
There is little clarity from CoJ and council on progress on the ring-fencing, or how City Power’s massive internal debt is to be resolved.
“Again, there is no clarity on what is happening within the city. This is deeply disturbing and needs urgent action,” said Adam
The JCA believes the incoming council must ensure that these reforms are fully implemented and accompanied by transparent reporting on the financial position of each municipal entity.
“Ring-fencing must mean more than changing the way money is transferred between bank accounts. It must end the opaque financial arrangements that have allowed liabilities to accumulate without sufficient public scrutiny,” said Chamda.
“The new council must establish exactly what each entity is owed, what it owes the City and how these balances will be resolved without further compromising essential services.”
For media inquiries, please contact:
Nokuthula Khwela
Media Officer
Joburg Crisis Alliance
072-697-7538
jcamedia@kathradafoundation.org