Staff Reporter
Residents of Lindley, Ntha, Petrus Steyn, Reitz and surrounding areas can rest assured they will not have their electricity supplies interrupted – at least for the next six months – after the Free State High Court barred Eskom from disconnecting the local municipality over a debt that has since ballooned to R300-million.
In a ruling handed down on 7 January, Judge PJ Loubser interdicted the national electricity supplier from interrupting bulk power supplies to Nketoana Local Municipality – an administrative area in the Thabo Mofutsanyane district of the Free State that also includes the towns of Mamafubedu, Leratswana and Petsana – pending a resolution of the disputes between the two parties within six months of the date of the court order.
The municipality had filed an urgent application seeking an interim relief to restrain Eskom from implementing electricity restrictions with effect from March 13, 2018 in a bid to force the municipality to settle its arrears.
Nketoana also sought to have the power company ordered to render a complete reconciled account, fully motivated and supported by the underlying contracts, vouchers and meter readings, if applicable, on which Eskom relied to hold the municipality liable for electricity payments.
In its response, Eskom filed a counter-application seeking certain relief designed to place the municipality in a position where it simply had to pay without any further delay.
The power utility declared Nketoana was, at the end of October 2018, indebted to Eskom in the amount of R209 322 105.59, being an amount due and payable in respect of the electricity supplied to it by Eskom.
Eskom, which claimed the municipality was liable for interest at the prime rate charged to Eskom by its bankers, said failure by the municipality to pay the aforesaid amount as envisaged in the electricity supply agreements entered into between the municipality and Eskom would entitle Eskom to discontinue the supply of electricity to the municipality after having given a further 14 days written notice of its intention to do so.
As at December 2019, the outstanding amount had rocketed to almost R300 million.
The municipality accepted that it was indebted to Eskom in respect of the bulk electricity supply, but it denied the amount of indebtedness.
In particular, it denied the amount of R209 million, saying that the accounts of Eskom were incorrect from the beginning because Eskom was indebted to the municipality in various amounts.
This was still the case, it alleged, and it said that certainty regarding the quantum of Eskom’s claim could only be achieved by a debatement of the account.
“It is clear, therefore, that the municipality is relying on the fact that Eskom is owing it money, and that this indebtedness should be taken into account when final figures are calculated,” Judge Loubster noted in his ruling.
In order to attain clarity, the municipality wanted to engage in an informal debatement process and if that process was unsuccessful, it intended employing the services of an expert to obtain a total audit or reconciliation of the account.
“I am not persuaded that a process of informal debatement would result in a successful resolution of the existing problems between Eskom and the municipality, having regard to the history of those problems,” the judge said.
“In my view, such a process would only serve to delay a resolution even further, while the arrear debts of the municipality are increasing by the day.”
“It is clear that there is a dispute between the parties,” he added.
“The dispute not only relates to the quantum of Eskom’s claim, but also to the ability of the municipality to pay the amounts demanded and the timing and the method of payment of the arrears.
“It follows that a ‘dispute’ exists for the purposes of Section 41(3) of the Constitution.
“Section 41(3) provides that an organ of state involved in an intergovernmental dispute must make every reasonable effort to settle the dispute by means of mechanisms and procedures provided for that purpose, and must exhaust all other remedies before it approaches a court to resolve the dispute.”
The judge therefore issued an order interdicting Eskom from implementing interruptions in electricity supply to Nketoana pending resolution of the disputes between them within six months of the date of the order.
The parties were also ordered to make every reasonable effort to resolve the disputes by means of the mechanisms and procedures provided by statute.
Should the parties fail to resolve the disputes in the manner aforesaid within the period of six months, the judge ruled, they are each granted leave to approach the court again for appropriate relief.
