Eskom and Maluti-a-Phofung municipality at loggerheards over electricity debt

Power lines feed electricity to the national grid . (Photo by: Education Images/UIG via Getty Images)
Power lines feed electricity to the national grid . (Photo by: Education Images/UIG via Getty Images)
  • The Maluti-a-Phofung municipality and Eskom are locked in a battle over access to funds in the municipality's bank account.
  • Eskom claims the municipality owes it billions and had the bank account frozen.
  • Although the High Court ordered the bank to unfreeze the account, appeal proceedings are pending which effectively suspends the order.

The Maluti-a-Phofung Local Municipality, which has been at loggerheads with Eskom over non-payment of its electricity bill, says the power utility has decided to continue freezing its bank account even though the Free State High Court in Bloemfontein ruled in the municipality's favour on Friday.

Eskom decided to attach the municipality's bank account in July over outstanding debt of R5.3 billion at the time.

Two weeks ago, Eskom said the debt had increased to R5.4 billion - money that the municipality had failed to pay to Eskom for bulk electricity for the municipality.

But on Friday, the Free State High Court in Bloemfontein ordered FNB, the bank that holds the municipality's account, to release the attachment, the Maluti-a-Phofung municipality said in a statement on Saturday. Eskom has filed an application to appeal the judgment, which effectively suspends the ruling.

Municipal manager Futhuli Tseko Mothamaha said the municipality struggled for more than four hours to get proper access to the account. According to Mothamaha, the municipality needs the funds to pay salaries, taxes to SARS, pension and medical aid contributions, and service providers, among other things.

"Eskom does not want to adhere to the constitutional obligation of inter-governmental dispute resolution principles. Organs of state are obliged to adhere to the said statutory obligations," said Mothamaha.

In the past, Eskom allowed the municipality to access funds to pay running costs and staff salaries. Last month, however, it said that, since the municipality kept requesting access to funds in the account, it has not paid a cent of what its debt to Eskom but pays other debt obligations.

The municipality denies that it hasn't paid its monthly electricity bill.

"Maluti-a-Phofung's top 100 businesses are paying Eskom monthly [and] directly more than R50 million. Over and above these direct payments, the municipality also pays 20% of all the electricity sold over to Eskom," it said in the statement.

It said Eskom's monthly bill consisted of one third of "various vague administrative charges" which the municipality disputed.

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