Another Free State municipality, Matjhabeng Local Municipality, is in hot water with Eskom after the non-payment of an outstanding balance of R3.4 billion for the provision of bulk electricity. The bank account belonging to the Matjhabeng Local Municipality after a court order had been granted in 2014, which resulted in the account being frozen.
According to a statement by Eskom, the Matjhabeng Municipality is in the process of establishing the balance and transferring funds for 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.