Municipality owing R265m to Eskom gets schooled on debt repayment

A municipality facing blackouts because it owes Eskom R265m for electricity has been schooled in the art of debt repayment by local businesses who need the lights on.

Enoch Mgijima municipality in the Eastern Cape was hauled before the high court in Makhanda on Thursday by the Border-Kei Chamber of Commerce and businesses including petrol stations, a soft drinks company and a dairy.

The court ordered, by agreement between the parties, that a debt and payment agreement recently reached between the municipality and Eskom become an order of the court.

Eskom, in exchange, undertook to supply electricity to the municipality, except during the course of load-shedding.

Ken Clark, executive chairman of Twizza Ltd and chairperson of the civil movement Let's Talk Komani, said the order was a win for the whole town. “We have 27 organisations from the faith, cultural, ratepayers, farmers' fraternities. We just could not sit back anymore and see our town go down.

“By next Friday, the municipality has to appoint a responsible person, so if they default on their payment plan, that person can be charged with contempt of court.”

In terms of the court order, the municipality will have to produce evidence by the 8th of every month that it is paying its bills, as per the agreement, and nominate an official who must “ensure compliance” with the payment plan.

The agreement stated that: “The municipality acknowledges that as at December 9 2019 it is truly and lawfully indebted to Eskom” in the sum of R265m. The current account of R23m must be settled by December 20. Eight further payments of about R30m each must be made, ending on July 31 2022.

Failure to do so will make the full balance become payable, with interest and possibly see Eskom pull the plug on the municipality.

Jacques van Zyl, a business manager and member of Let's Talk Komani, said the court order was a good starting point, and that it was necessary for business and civil society to step in.

“We had to take a hard stance, but we cannot just leave it to President Cyril Ramaphosa to bring positive change.

“Now at least we are in a position to help manage the running of our town, to the benefit of everyone living here.”