Eskom wins arbitration award against GMM

Eskom won the arbitration case against the Govan Mbeki Municipality. Municipal Manager Elliot Maseko revealed this at the council meeting held on January 26.

Maseko said despite the power utility winning the arbitration regarding the interest charged, their relationship had improved.

“Eskom knows our cash flow and revenue collection efforts and how we pay our current account.

“We are unable to enter into a payment plan agreement with Eskom because the moment we default, they can take the municipality to court and the result will not be in the municipality’s favour. That is what we are trying to avoid.

“We asked Eskom to give us space to look into our revenue collection and to close up the areas where we lose money,” said Maseko.

He said the municipality would approach Eskom about how much it could afford to pay toward the current and inherited debts and would indicate payment duration.

He said their strategy is to settle the small accounts such as Evander, Kinross, Bethal and eMzinoni, leaving them with the monster accounts of Secunda and eMbalenhle.

This bill to Eskom is estimated to be R52m monthly.

“Eskom wants to convert the award into a court order. Once that happens, they will have direct access to the municipality’s account,” said Maseko.

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“When they see how much is in the account, they will take everything, and the municipality will struggle to pay salaries and other accounts and we will not be able to render services.”

Maseko said Eskom is not yet willing to negotiate.

“We are involving provincial treasury to assist us in negotiations with Eskom,” said Maseko

Maseko said Eskom charged an estimated R7m interest on GMM’s debt of R3.4 billion.