Eskom attaches bank account belonging to the Matjhabeng Municipality to recover 3.4 billion debt

The power utility has attached a bank account belonging to Matjhabeng Municipality in Free state province to recover a R3.4 billion 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.

Eskom said 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”.

The power utility said it 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”.

In a statement, Eskom indicated that it has been involved in numerous court processes since 2014 when the municipality’s
outstanding debt totaled 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 in the debt escalating to R3.4 billion over the period, said Eskom.

The total outstanding municipal debt of R31 billion as at the end of July 2020 continues to threaten Eskom’s sustainability, said Eskom in a statement.

“Municipalities have a responsibility to fulfill their financial obligations for the bulk supply of electricity”.