- In response to the non-payment of the municipality’s outstanding R3.4 billion debt for the provision of bulk electricity, Eskom on 04 September 2020 attached a bank account belonging to the Matjhabeng Local Municipality.
- This followed a court order granted in 2014, and resulted in the account being frozen.
- Eskom is in the process of establishing the balance and transferring the funds in the account to Eskom, to help recover some of the money owed by the municipality.
Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered. 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. Since 2020 Eskom has only received five payments from the municipality amounting to R66.5 million, against a total bill of R1.3 billion for the period.
Matjhabeng Local Municipality is an administrative area in the Lejweleputswa District of the Free State in South Africa, that includes the city of Welkom. The name is a Sesotho word meaning “where nations meet”. It is derived from the migrant labour system where people from various countries like Lesotho, Mozambique, etc. meet to work in the mines of the Goldfields.In 2011 the municipality came into the news as one of the worst examples of the widespread corruption under the ANC government. In about four years about R2 billion went missing.
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 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.
Author: Bryan Groenendaal