- In a startling case, Eskom notes the court judgment regarding the attachment of the Emfuleni Local Municipality’s bank accounts due to non-payment of its current electricity account which has around R8 billion outstanding.
- The matter was heard before JudgeNeukircher of the Gauteng High Court on 18 October 2024, following Emfuleni’s application to the court.
- Municipal debt to Eskom currently stands at approximately R90 billion.
Emfuleni sought to set aside or suspend Eskom’s attachment of its bank accounts, arguing that the municipality is part of a National Treasury Debt Relief Programme. The case was divided into two parts, with the recent judgment on “Part A” focusing solely on the interim relief pending the finalisation of “Part B”. This comes after the municipality failed to pay its electricity bill which Eskom claimed to be around R8 billion.
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The Court did not make any findings against Eskom regarding the unconstitutionality, unlawfulness, or invalidity of the attachment. These issues will be addressed in Part B of the case.
It is important to note that by the time the matter was heard on 18 October 2024, Eskom had already released all Emfuleni bank accounts, and both parties had signed the Distribution Agency Agreement (DAA) (as instructed by the Pretoria High Court order on 5 July 2023), thus rendering the “Part A” order moot.
Judge Neukircher stated that it is not for the Court to decide whether Emfuleni remains a participant in the Debt Relief Programme at the stage of Part A, as this issue will be addressed in Part B.
“Municipal debt to Eskom currently stands at approximately R90 billion, posing a significant financial burden that affects Eskom’s ability to deliver affordable and reliable electricity,” the state owned utility said. Eskom adds that they remain committed to recovering outstanding debt from defaulting municipalities to strengthen the power supply for the benefit of all South Africans. “Debt collection efforts are essential for maintaining stable electricity supply and minimising reliance on government and interventions such as loadshedding,” concludes Eskom.
In July, South Africa’s Electricity and Energy Minister, Ramokgopa said the current trajectory of the debt owed to Eskom poses a threat to the existence of the power utility in the future.
“To give you the magnitude of the problem, if we don’t resolve this problem, our projection is that at the current rate, by 2050, Eskom will be owed R3.1 trillion. Eskom will collapse. Generation capacity is going to be compromised. So, it’s important that we resolve this question. This is the most urgent task that is confronting us. It is municipality related but we can’t fold our arms, we need to help them from a technical point of view,” said Ramokgopa.
Ramokgopa said the electricity distribution at municipal level is a major challenge. He said that some municipalities mismanage this sector and invest too little in maintenance and modernisation.
“Distribution is our albatross…it’s on a mode of self-destruction and the casualties are the poor. They are the ones that are subjected to conditions of load reduction in the main and even those who are diligent payers are subjected to load reduction. This can’t continue any further. It’s important that we arrest it so that we are able to ensure that the country is able to achieve its developmental objectives,” said Ramokgopa.
Author: Bryan Groenendaal
