Eskom granted order to attach Emfuleni municipality assets

Eskom has started taking steps to recover R1.3bn owed by the Emfuleni local municipality for electricity supplied by the power utility.

Eskom obtained a judgment from the high court in Pretoria last month against the municipality, whose main towns are Vereeniging and Vanderbijlpark, after it failed to settle its account and accumulated arrears.

“The electricity generator has started execution steps against the municipality to recover some of the municipality debt, including attaching the local authority's bank accounts and movable assets,” Eskom said on Monday.

Emfuleni municipality owes Eskom R5.3bn despite litigation brought by the power utility since March 2018 to get the municipality to service its account.

Despite the municipality's healthy revenue collection rate of about 90% from its customers, Emfuleni still failed to pay a portion of its overdue account.

“Eskom has also served Emfuleni with further summons of R3.4bn for non-payment of its bulk electricity supply and, to date, the local authority has failed to file a plea setting out the reasons for non-payment,” Eskom said.

This resulted in Eskom and municipal customers applying to the court to transfer the municipality's electricity distribution licence or part thereof to Eskom. This application is to be heard in March next year.

Eskom said the overdue debt is affecting its liquidity, financial performance and sustainability, leaving it with no option but to borrow to meet its financial commitments.

Eskom is owed about R50bn by municipalities.

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