NEWS & ANALYSIS

Mathabeng Municipality: Eskom attaches bank account

Power utility aims to recover R3.4 billion debt

Eskom attaches bank account belonging to the Matjhabeng Municipality to recover R3.4 billion debt

6 September 2020

In response to the non-payment of the municipality’s outstanding R3.4 billion debt for the provision of bulk electricity, Eskom on 04 September 2020 attached a bank account belonging to the Matjhabeng Local Municipality. This followed a court order granted 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.

Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered. This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its 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 involved in numerous court processes since 2014, when the municipality’s outstanding debt totalled R372 million, and employed other collection mechanisms to recover the funds. The municipality has consistently failed to honour its obligations and payment agreements, as well as court orders, resulting the debt escalating to R3.4 billion over the period.

The total outstanding municipal debt of R31 billion as at end July 2020 continues to threaten Eskom’s sustainability. Municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity.

Issued by Eskom Media Desk, 5 September 2020