Free State municipality refuses to pay Eskom debt, despite attachment of its bank account

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Eskom says as at 30 August 2020, it was owed R31 billion by municipalities countrywide.  Photo: Nadine Hutton, Bloomberg
Eskom says as at 30 August 2020, it was owed R31 billion by municipalities countrywide. Photo: Nadine Hutton, Bloomberg

Eskom says the struggling Maluti-a-Phofung local municipality is refusing to pay its debt to the power utility.

Instead of paying, the Free State municipality has taken Eskom to court to force its hand to release monies in the account that the utility attached in July, said Eskom on Saturday.

Eskom attached Maluti-a-Phofung's bank account on 21 July to try and recover the R5.4 billion owed to it for bulk electricity supply to the municipality.

The utility was granted court orders in 2017 and in 2019, which allowed it to recover what it was owed.

At the time of the attachment, the bank account had R220 million, equating to just 4% of what the municipality owed Eskom.

But this did not stop Maluti-a-Phofung from asking Eskom to release R90 million for its staff's salaries in July. And now, the municipality has taken the utility to court to gain access to more funds in the account.

Eskom said the municipality keeps requesting access to funds in its account, but has not paid a cent of the R5.4 billion debt.

Meanwhile, it has come to the utility's attention that Maluti-a-Phofung is now paying its other debt obligations.

"Eskom offered to conditionally release R15 million from the account if the municipality commits to a payment agreement with Eskom.

"The municipality, however, refused to enter into an agreement and approached the court again," wrote the power utility in a statement.

Eskom said, as at 30 August 2020, it was owed R31 billion by municipalities countrywide.

Free State municipalities accounted for R13 billion of this debt.

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