At the end of August, municipal debt to Eskom countrywide totalled R31 billion, of which R13 billion is owed by Free State municipalities
Following this, Eskom today in a statement said that the refusal of the Maluti-A-Phofung Local Municipality in the Free State, to pay Eskom for the bulk supply of electricity, and to enter into a payment agreement has left the power supplier deadlocked.
To help recover a portion of the R5.4 billion owed by this Municipality, Eskom attached the bank account of the Municipality on 21 July 2020. At the time of the attachment, the account had a balance of R220 million. These steps were taken in execution of a court order granted in 2017 and 2019 respectively for R2.4 billion and R1 billion, and in implementation of Eskom’s revenue recovery strategy.
On 25 July 2020 Eskom, at the request of the Municipality, released R90 million to allow the Municipality to pay salaries of its workforce and to cover running costs.
Maluti-A-Phofung then took Eskom to court on Thursday, 17 September. While Judgement in this matter was reserved, Maluti-A-Phofung has again asked for further release on the funds.
Eskom now says that when asked for details about the expenses and total amount required, the Municipality did not deliver an answer. “This is despite the fact that they have had access to all deposits and have not paid a cent towards their Eskom account. Eskom offered to conditionally release R15 million from the account if the Municipality commits to a payment agreement with Eskom to settle the R5.4 billion debt and remainder of funds in the account to be paid towards the Judgment debt. The Municipality, however, refused to enter into an agreement and approached the Court again, even when the same issue is pending. Eskom repeated the offer, the Municipality refused and the Court reserved Judgement.”
The power supplier today said it came to their attention that the Municipality is now unable to meet other payment obligations. “As much as Eskom appreciates the dilemma which the Municipality is faced with, it cannot risk its own financial stability by allowing the continued escalation of Maluti-A-Phofung’s debt.”
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https://parysgazette.co.za/42826/42826/?fbclid=IwAR2Z6fCDE6zz9p14NmI26dfzvIwjoihkmO43exN-eCGEZB8xojM0PZ2MFKI
