( 3minutes read)
· Power Utility Eskom has attached the bank account of Free Sate’s Matjhabeng Municipality, to recover R3.4 billion in debt the latter owed to it
· The municipality repeatedly failed to clear its n payment obligations to Eskom for the bulk supply of electricity
· Since 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.
Power Utility Eskom has attached the bank account of Free Sate’s
Matjhabeng Municipality, to recover R3.4 billion in debt the latter
owed to it. The attachment had taken place on 4 September on the strength of a court order granted in 2014 to the power company. That enables a creditor company to freeze the accounts of the debtor entity. Eskom is in the process of establishing its dues from the debtor municipality so as to transfer funds to its account.. Eskom said it will “continue to explore” all available legal avenues to recover outstanding municipal debt, which aggregates to a quite tidy sum.
The municipality repeatedly failed to clear its n payment
obligations to Eskom for the bulk supply of electricity. Since 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. Eskom has been caught in court processes to recover monies from Matjhabeng since 2014, when debt was just R372 million.
Total outstanding municipal debt owed to Eskom amounted to R31 billion as on July 2020. Problems with defaulting municipalities lie in their lack of capacity to collect debt. Eskom has been working with the provinces and the Department of Cooperative Governance and Traditional Affairs to deal with the situation. Eskom’s own debt burden is some R480 billion.
