Eskom secures R2.5 billion worth of farmland as security for municipal debt

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Eskom has secured farmland valued at an estimated R2.5 billion as security for debt owed by the Matjhabeng Municipality, it said in a statement on Tuesday afternoon.

"In its ongoing efforts to recover more than R3.4 billion in unpaid debt owed by the Matjhabeng Municipality, the municipality has agreed to hand over to Eskom 139 farms belonging to the municipality as security on the debt," Eskom said.

The title deeds of the farms will be endorsed in favour of the power uility until the debt dispute between Eskom and the municipality is finalised, it added.

Eskom has agreed, meanwhile, to uplift the attachment of the municipality's bank account and the account was handed back to the municipality. R2.7 million in the account, however, will remain attached and in the care of the Sheriff of the Court.

 The municipality has "consistently failed" to honour its obligations and payment agreements despite numerous court processes over the past six years, Eskom said.

Municipal debt has been a major bugbear for the ailing power utility. At the start of this year. Emfuleni municipality headed to court in a bid to block further asset seizures by Eskom after the state-owned company seized furniture and vehicles. At the time, Emfuleni owed Eskom over R2 billion.

The court bid was unsuccessful.

In August, Deputy President David Mabuza fingered municipal debt as one of the "foremost" contributors to service delivery challenges.


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