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- Eskom attached the bank account of the Matjhabeng municipality in the Free State on Friday.
- The municipality owes Eskom R3.4 billion.
- At the end of July 2020, the municipalities’ outstanding debt to Eskom amounted to R31 billion.
Eskom has attached the bank account of the Matjhabeng municipality, in the Free State, to recover R3.4 billion in debt to him.
According to a statement issued by the power company on Sunday, it had attached the local municipality’s bank account on Friday, September 4.
“This followed a court order issued in 2014, and resulted in the account being frozen. Eskom is in the process of establishing the balance and transferring the funds in the account to Eskom, to help recover some of the money owed by the municipality. “. the statement read.
Eskom said it will “continue to explore” all available legal avenues to recover outstanding municipal debt.
“This step by Eskom is the result of the municipality’s repeated failure to meet its payment obligations to Eskom for the supply of electricity in bulk.
“Since 2020, Eskom has only received five payments from the municipality worth 66.5 million rand, compared to a total bill of 1.3 billion rand for the period,” Eskom said.
Eskom has been caught in legal proceedings to recover money from Matjhabeng since 2014, when the debt was just R372 million.
“The municipality has systematically breached its payment obligations and agreements, as well as court orders, causing the debt to increase to R3.4 billion during the period,” he said.
The total outstanding municipal debt owed to Eskom amounted to R31 billion at the end of July 2020.
Eskom CEO André de Ruyter has previously said that collecting debt from municipalities is a “substantial challenge.”
Many of the problems with municipalities in arrears lie in their lack of ability to collect debts, Fin24 previously reported.
Eskom has been working with the provinces and the Department of Cooperative Governance and Traditional Affairs to address the situation.
The energy company’s own debt burden is about R480 billion.
Compiled by Lameez Omarjee
