Staff Reporter
The Free State High Court has ordered First National Bank (FNB) to release funds belonging to Maluti-a-Phofung (MAP) Local Municipality which it had frozen after Eskom obtained a court order to put a hold on the funds.
Eskom attached the municipality’s bank account on July 21 as a way to force the municipality to pay its outstanding debt for bulk electricity supplies believed to be around R5.4 billion.
In response, Maluti-a-Phofung Local Municipality approached the court on September 17 for relief as the dispute over the amount owed escalated.
But on Monday, Judge C Van Zyl ordered the bank to release the funds immediately and slapped Eskom with a costs order.
“The third respondent (FNB) is ordered to release the hold on the first applicant’s (MAP) funds on its account . . . and allow the first applicant to operate the account within two hours of this order on it,” read part of the judgment.
“The first respondent (Eskom) is ordered to pay the costs of the first applicant, which costs are to include the costs of two counsel,” the court ruled.
There was no costs order against the other three respondents.
MAP was supported in the matter by the South African Municipal Workers Union which was listed as the second applicant in the matter.
The Office of the Sherriff in Bloemfontein West was the second respondent after it delivered the freezing order while the CEO of FNB was the fourth.
Eskom claimed in its court papers that MAP had reneged on an agreed payment plan and took it to court instead of coming up with an amicable solution to settle the debt.
The Free State Department of Cooperative Governance and Traditional Affairs (CoGTA) welcomed the ruling saying Eskom should have considered other measures to recover its funds before getting the initial court order to free the municipality’s account.
“As CoGTA, we welcome the ruling of the court and we believe that we are vindicated in our initial stance,” said a statement issued by spokesperson Zolile Lobe.
“. . . we were always of the view that Eskom, as a government entity, has access to other recourse, and the courts could be approached as a last resort.
“We call upon the municipality and Eskom to work out a payment arrangement, and in the process, we appeal that service delivery should not be compromised . . .”
Eskom claims that it is owed about R30 billion by municipalities countrywide of which R13 billion is owed by Free State municipalities.