Emfuleni Municipality says it is exploring its legal options and has written to the National Treasury after Eskom's announcement that it had attached its bank accounts over its ballooning R8bn debt.
The power utility on Wednesday evening revealed that the sheriff of the court had successfully attached Emfuleni's four bank accounts to ensure that the money collected for electricity is paid directly to Eskom.
The R8bn owed to Eskom by Emfuleni for bulk electricity represents about 10% of the total R82bn owed by municipalities and places Emfuleni among the top three municipalities in debt to Eskom.
Eskom said the move came after it had exhausted all legal and mediation avenues to secure payment for services rendered since 2018. It also noted that Emfuleni was “no longer a beneficiary of the Municipal Finance Management Act's (MFMA) debt relief programme due to multiple breaches”.
This was denied by the municipality's spokesperson Makhosonke Sangweni, who also explained the implications this has on their operations.
“When they've attached an account, it means you can't do anything. You can't pay salaries or creditors, you can't do anything. You're literally dysfunctional and a municipality by name, so that's what happened, they've attached all of them. At least if they had left one or two where we can direct people to pay or get money [for projects], but they've taken all of them.
“Of course, we are in discussion with our legal team to see what our possible avenues are to try to turn this thing about. Previously, when this happened, it was resolved in and out of court. The difference is that last time, they had every right to do that because we were paying, but not enough, while there was no intervention from the National Treasury and premier's office,” he said.
In 2022, Eskom attached the municipality’s assets after obtaining a R1.3bn judgment against it. The high court in Pretoria granted the order after the municipality failed to settle its account.
At the time, salaries were paid later than usual after national government's intervention, according to Sangweni. There is a “high possibility” that history may repeat itself with Eskom's latest move.
“Our month-end is actually next week ... so we have this week and next to try to resolve it, so hopefully we'll be able to. Because last time ... they agreed to pay our salaries but kept the rest of the money. So I hope we can have that [similar] arrangement, but I don't know.
“Our major concern is that it's not that we're not paying them anything, we pay what we can afford. It's not that we don't want to pay Eskom; the issue is that we're paying what we can afford,” he added.
Sangweni said that in addition to the legal route, the municipality had written to the National Treasury for their intervention in the matter.
Emfuleni accused Eskom of being “dramatic” and “moving away” from the service level agreement both parties were ordered to finalise within six months of a July 2023 ruling allowing Emfuleni customers to pay Eskom directly and handing over all electricity-related functions to the power utility. The latter is only set to happen once the agreement has been finalised.
It's been a long time coming, we all know that Emfuleni has been [poor] in its electricity payments to Eskom for many years
— Golden Triangle chamber of commerce chairperson Jaco Verwey
“They are the ones moving away from signing a service-level agreement because they want a bigger amount than what we can afford. They're the ones who've collapsed the discussions and engagements,” Sangweni said.
But this was disputed by Golden Triangle chamber of commerce chairperson Jaco Verwey, who said Emfuleni had only signed the first agreement, which Eskom rejected, but not the final one.
He did, however, confirm that several large power consumers had begun paying Eskom directly in anticipation of the signing of the agreement.
“It's been a long time coming; we all know that Emfuleni has been [poor] in its electricity payments to Eskom for many years,” he said.
Detailing the effect the years-long dispute has had on businesses, Verwey said: “Businesses are really struggling, because the municipality is not proactive when it comes to working with Eskom to reach an agreement ... this has had a very negative effect,” he said.
Samwu’s Gauteng secretary Mpho Tladinyane said this attachment by Eskom of the municipality’s accounts was not new as it also happened in December 2022 when workers were nearly not paid.
Tladinyane said this was an inconvenience to employees, who have standing agreements with financial institutions with their home and vehicle loans and other service providers expecting to be paid.
Tladinyane said when these debit orders were not honoured, there was a penalty charge that had to be borne by the workers.
Tladinyane said the municipality also relied on service providers to obtain tools of trade for the workers to perform their functions. These included petrol for the municipality's vehicles.
He said if the municipality was not able to obtain these services, this might affect the provision of services to residents.
Tladinyane said the last time there was attachment of bank accounts by Eskom, the union engaged the office of the Gauteng premier for assistance and had a number of meetings with Eskom which led to the payment of December salaries a day or two before Christmas that year.
“We have requested a meeting with the municipal manager on Friday to understand the extent the debt to Eskom. It is Eskom today, and tomorrow it could be Rand Water.”
— Additional reporting by Ernest Mabuza
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