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Eskom’s attempts to force municipalities to pay when they can’t are undesirable, the Supreme Court of Appeals said on Tuesday when it dismissed two applications from the power company.
The requests concerned appeals against two decisions of the Pretoria high court, which overturned Eskom’s decisions to cut off the supply of bulk electricity to the local municipalities of Emalahleni and Thaba Chweu of Mpumalanga.
The appeal court said that the dire situation facing these municipalities forced the national and provincial governments to intervene, as provided in the constitution.
Without the intervention of the national and provincial governments in the financial crises experienced by Emalahleni, Thaba Chweu and many other municipalities in a similar situation “all are condemned”, wrote the vice president of the Supreme Court of Appeals, Xola Petse, in a unanimous sentence of the full.
The two municipalities are among the main defaulters of Eskom.
In June 2017, the power company threatened to cut supply to the two municipalities to induce them to pay. At the time, Emalahleni owed Eskom about 1.2 billion rand, while Thaba Chweu owed him about 407 million rand.
Both signed debt acknowledgments in favor of Eskom, agreeing to cancel the accumulated debt in agreed monthly installments. But these commitments were not kept, leading Eskom to cut off its power supply. The decision of the electric company was contested by several parties.
In the case of Emalahleni ‚Resilient Properties‚ which owns the Highveld Mall there ‚submitted the application. The 68,200m² shopping center has 185 commercial premises. Resilient had fulfilled its payment obligations to the municipality for the supply of electricity, despite the latter’s failure to comply with Eskom.
In the second application, three chambers of commerce in the area challenged the decision to cut off the electricity supply in Thaba Chweu. They said the disruptions had a devastating effect as they threatened the fabric of society, with hospitals, schools, homes and businesses severely affected.
Gwilym Rees, who filed an affidavit on behalf of the chambers, explained the effects of the cuts.
“First of all, when the power supply is cut off, all sewerage work stops immediately. This means that the wastewater is not pumped to the wastewater processing plants, but will simply stay (and eventually spill onto the streets) for the duration of the outage, with associated serious risks to the health of the community ”.
The higher court ruled in favor of Resilient and the cameras, saying Eskom’s decision was illegal. It argued that Eskom failed to comply with its constitutional and statutory obligations to make all reasonable efforts to resolve the dispute that arose between it and the municipalities in relation to the implementation of its decision to interrupt the supply of bulk electricity.
Eskom appealed against the decisions, but the appeal court dismissed the appeals with costs. He said Eskom had realized that the sorry state in the municipalities justified the intervention of the provincial government and, if necessary, the national government.
The court said this avenue was not explored because Eskom was not prepared to wait for that process to unfold. He said Eskom’s decision to cut off the supply of bulk electricity to municipalities was used as a lever to extract payment. The energy company did this knowing full well that it would not result in municipalities with financial difficulties paying off their debts, the court added.
These measures were taken by Eskom in the context that Eskom himself had realized that without the intervention of both the national government and the provincial government, it was beyond the power of Emalahleni and Thaba Chweu to change their fortunes on their own. He said.
The court said the record showed that the two municipalities had been in financial crisis for nearly two decades. “Given their dismal financial condition, it is no wonder they breached their payment agreements with Eskom.”
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