Staff Reporter
Eskom has attached the bank account belonging to a Free State municipality over the non-payment of a bulk electricity supply debt which now stands at R3.4 billion.
In a statement released on Sunday, the national power utility said it resorted to the move after several efforts to get Matjhabeng Local Municipality – the hub of mining activity in the province including the towns of Welkom, Allanridge, Odendaalsrus and Virginia – to settle the arrears failed.
“In response to the non-payment of the municipality’s outstanding R3.4 billion debt for the provision of bulk electricity, Eskom . . . attached a bank account belonging to the Matjhabeng Local Municipality,” Eskom said.
The bank account was attached on Friday, following a court order granted in 2014.
“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,” added the national power utility.
It however said it will continue to explore all available legal avenues to ensure that the outstanding municipal debt is recovered.
“This step . . . is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity,” Eskom explained in the statement.
“Since (the beginning of) 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.”
According to Eskom, it has been involved in numerous court processes with the municipality since 2014 when its outstanding debt totalled R372 million and tried different collection mechanisms to recover the funds but it never worked.
“The municipality has consistently failed to honour its obligations and payment agreements, as well as court orders, resulting in the debt escalating to R3.4 billion over the period.”
The total outstanding municipal debt in the country was R31 billion as at July 31.
The national power company said this continues to threaten its sustainability.
It urged municipalities to act responsibly and fulfil their financial obligations for the bulk supply of electricity.
In July, Eskom used a similar court order to attach the bank account belonging to Maluti-a-Phofung Local Municipality after it failed to honour its debt for bulk electricity amounting to about R5.3 billion.
Eskom later agreed to release some of the frozen funds to allow the municipality to meet some of its running costs.