Staff Reporter
Cash-strapped Eskom has asked one of the banks used by Maluti-a-Phofung Local Municipality in eastern Free State to freeze its account so that it can recover some of the money it is owed.
The unusual move follows a court order granted to the national power utility in 2018 after the municipality failed to honour its debt for bulk electricity supplies which now stands at about R5.3 billion.
In a statement released Wednesday, Eskom said the execution of the court order is part of its revenue recovery strategy.
“This resulted in the account being frozen,” Eskom said in the statement.
The municipality’s bank account was attached Wednesday.
“Upon response by the bank, funds in the account will be transferred to Eskom to help us recover a portion of the R5.3 billion owed by the Maluti-a-Phofung Municipality,” added the statement.
“This step, on the part of Eskom, is a result of repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity.”
Eskom said it will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered.
The power company says as at June 30, 2020, municipalities in the country were owing it about R30.9 billion.
The amount, according to Eskom, continues to threaten its sustainability and argues municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity.