City Power hit with R5m lawsuit as diesel supplier claims breach of contract

Johannesburg’s City Power faces a lawsuit from diesel supplier African Rhino Fuels (ARF), which accuses the utility of breaching a supply contract and failing to pay more than R5m for 250,000l of diesel delivered in July 2025. ARF says City Power acknowledged receipt, signed invoices and a purchase order authorised by administrator Tshepo Mahlangeni on 2 July 2025, but has not settled the debt or provided a firm payment timeline. ARF attorney Leon Oosthuizen states payment should have been made before 27 August 2025 and that City Power has failed or refused to pay despite formal demand. A senior City Power insider says this claim is one of many, with the entity allegedly owing suppliers over R1.3bn and struggling to meet 30-day payment requirements, increasing exposure to the auditor-general. The source adds that City Power is also inconsistent in paying Eskom for bulk electricity. Last week, City Power chair Makhosini Kharodi wrote to Johannesburg city manager Floyd Brink warning of a structural funding shortfall, with the utility spending about R1.8bn monthly on electricity and having used R14bn of its R17.5bn allocation by February. Kharodi warned that reducing electricity purchases would trigger widespread outages and that projected overspend could breach the Municipal Finance Management Act. City Power spokesperson Isaac Mangena says the utility is engaging ARF and other suppliers to resolve payment backlogs, some up to 150 days old, and is consulting the City of Johannesburg to settle matters lawfully and amicably.

(Source：Timeslive)