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By Jehran Naidoo 
6h ago
Durban – The local municipality of Matjhabeng in the Free State province has handed over 139 farms to the state power company Eskom as collateral for the council’s debt of more than R3.4 billion.
In a statement Tuesday, Eskom said the farms were valued at around R2.5 billion.
Until the full amount owed by the Matjhabeng municipality is paid in full, title to the properties would remain in favor of the power company, he added.
“This agreement has been made by order of the superior court of the Free State division. This step by Eskom is the result of the municipality’s repeated failures to meet its payment obligations to Eskom for the supply of bulk electricity, ”he said.
Eskom agreed to release the embargo on the municipality’s bank account, which had been in effect since September 4.
“The funds in the account, that is, R2.7 million, will remain attached and under the care of the Sheriff of the Court,” he said.
The power company said there have been numerous court cases involving Matjhabeng in connection with his default on debt.
Matjhabeng’s debt to Eskom has skyrocketed from R372 million in 2014 due to its failure to comply with the elaborated payment plan.
Eskom said the municipalities’ total outstanding debt of R31 billion at the end of July threatened their sustainability.
“Municipalities have a responsibility to meet their financial obligations for the bulk supply of electricity,” Eskom said.
The huge debt incurred by the municipalities has contributed to Eskom’s financial problems, adding to the pressure it already faces due to constant breakdowns in its generating units, which have forced the company to implement load shedding in a intermittent for more than a decade.
African News Agency (ANA)
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