Staff Reporter
Matjhabeng Local Municipality has handed over 139 farms that it owns to Eskom as security towards a debt of R3.4 billion that it owes the national power utility.
The farms are valued at approximately R2.5 billion.
In a statement, the company said the title deeds of the farms will be endorsed in favour of Eskom until the debt dispute between Eskom and the municipality is finalised.
“This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity,” read part of the statement.
The agreement stems from an order made order made by the Free State High Court.
The municipality had approached the court after Eskom attached its bank account at the beginning of this month in a bid to force it to pay.
The agreement will now see the municipality withdrawing its application against that court order granted on September 4.
“Eskom has agreed to uplift the attachment of the account and the account was handed back to the municipality,” said the statement.
“The funds in the account, namely R2.7 million, will remain attached and in the care of the Sherriff of the Court.”
Eskom says it has been involved in numerous court processes since 2014, when the municipality’s outstanding debt was only R372 million, and employed other collection mechanisms to recover the funds.
“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,” according to Eskom.
The company says as at July 31, 2020, it was owed a total of R31 billion in outstanding municipal debt.
It says the huge debt continues to threaten sustainability and urged municipalities to act responsibly by fulfilling their financial obligations for the bulk supply of electricity.