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Matjhabeng Local Municipality has accused Eskom of acting in bad faith when the national power utility attached its bank account at the beginning of September knowing full well that its claim of R3.4 billion for bulk electricity supply was in dispute and yet to be finalised in a court of law.

In a statement issued on Friday by municipal spokesperson Kgojane Matutle, Matjhabeng says Eskom actually owes it about R4.5 billion for distributing electricity in the municipality’s jurisdiction, a claim that has been shot down by the power company as unfounded.

“Matjhabeng municipality is of the view that Eskom acted maliciously, knowing that its claim is disputed,” read part of the statement.

The latest legal tussle stems from a ruling delivered by the Free State High Court on September 4 which allowed Eskom to attach Matjhabeng’s bank account over the non-payment of a bulk electricity supply bill now standing at R3.4 billion.

According to the statement, Eskom instituted legal action against Matjhabeng in the High Court in November 2019.

The municipality denied the correctness of Eskom’s claim and went on to institute a counter-claim of about R4.5 billion.

Matjhabeng is confident it has a strong case in the counter-claim and hopes to use that money to off-set a substantial part of Eskom’s claim.

Following the attachment of its bank account, the municipality then approached the same court objecting the move as there was still another case in court from last year.

An agreement was then reached in which the municipality would surrender to Eskom 139 farms as security for the R3.4 billion.

The farms are valued at approximately R2.5 billion.

But in its statement, Matjhabeng argues Eskom was obliged to refer the dispute to an Intergovernmental Dispute Resolution Forum before attaching its bank account.

This, according to the municipality, is in line with recent court decisions in similar matters.

“The effect of the attachment of funds in the municipality’s bank account was that the municipality was unable to access the funds and pay any service provider and/or salaries and it was literally hamstrung,” the statement said.

“The affairs of the municipality were bound to come to a standstill if the court did not intervene or if Eskom did not agree to uplift the attachment, which it was not prepared to do.”

The municipality says it was forced to seek an urgent interdict and for this to materialise it had no option but to table a substantive form of security.

“It then became an option to provide security for whatever judgment the court might pronounce in respect of Eskom’s claim in the pending High Court action as well as the order obtained in 2014 (used to attach) the municipality’s bank account,” the municipality said.

“It must be emphasised that the 139 farms which were tendered as security are not utilised for purposes of service delivery and therefore the giving of security would have no negative effect on the municipality’s ability to continue rendering services.”

Matjabeng said the farms will only stand as security for whatever claim Eskom might prove in court.

It said the counter-claim against Eskom is based on constitutional principles relating to the ability of the municipality to supply electricity within its municipal boundaries.

“Eskom has usurped Matjhabeng’s powers and has since the establishment of the municipality in December 2000 supplied electricity directly to various consumers, amongst others in Thabong, farms and mines in its area and has therefore negatively affected the income-generating capacity of the municipality,” the statement said.

“The counterclaim is intended to recover the profits which the municipality would have generated on the supply of electricity in these areas.

“Eskom is obliged to provide the municipality with financial information relating to the direct supply of electricity in Matjhabeng’s municipal boundaries, but has frustrated Matjhabeng’s efforts to quantify its claim by failing to comply with its obligation to co-operate with the municipality in this regard.”

But Eskom spokesperson in the Free State Stefanie, Jansen van Rensburg, dismissed this as unfounded.

“Matjhabeng asked Eskom to take over the distribution back in 1994 and we have invested a lot towards the infrastructure,” van Rensburg told The Free Stater.

“We are also paying Matjhabeng every month for the electricity that we are distributing directly to customers in that area,” she added.

“It’s actually the municipality that’s not paying us for the bulk electricity.”

But Matutle insisted Eskom was not being honest in its conduct.

“Eskom has until now failed in various respects to adhere to the constitution and has failed to co-operate with Matjhabeng in an endeavour to resolve the disputes between it and Matjhabeng and, more importantly, to resolve the respective claims of Eskom and Matjhabeng,” the municipal spokesperson said.

“Eskom’s conduct has played a substantial role in the conflict between it and Matjhabeng.”

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