Eskom Attaches Farmland for R3.4 Billion Matjhabeng Local Municipality Debt

  • In its ongoing efforts to recover more than R3.4 billion in unpaid debt owed by the Matjhabeng Local Municipality , the municipality has agreed to hand over to Eskom 139 farms belonging to the municipality as security on the debt. 
  • The farms are valued at approximately R2.5 billion.
  • The Title Deeds of the farms will be endorsed in favour of Eskom until the debt dispute between Eskom and the municipality is finalised.

This agreement has been made the order of high court in the Free State division. This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity.

Related news: Eskom attaches Matjhabeng Local Municipality’s bank account for unpaid debt

As part of the agreement, the municipality has withdrawn its application in which it sought to uplift the attachment of its bank account by Eskom, which was granted on 04 September 2020. Eskom has agreed to uplift the attachment of the account and the account was handed back to the municipality. The funds in the account, namely R2.7 million, will remain attached and in the care of the Sherriff of the Court.

Related news: Only 18 out of 257 municipalities receive clean audits in South Africa in 2019

Eskom has been involved in numerous court processes since 2014, when the municipality’s outstanding debt totalled R372 million, and employed other collection mechanisms to recover the funds. The municipality has consistently failed to honour its obligations and payment agreements, as well as court orders, resulting in the debt escalating to R3.4 billion over the period.

The total outstanding municipal debt of R31 billion as at end July 2020 continues to threaten Eskom’s sustainability. Municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity said Eskom.

Author: Bryan Groenendaal

Source: ESKOM

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