Eskom was wrong to attach Emfuleni's bank accounts

Eskom should not have attached Emfuleni municipality’s bank accounts as the municipality is still part of the national debt relief programme, the Pretoria high court has ruled. 

In the judgment delivered on Monday, the court said Emfuleni’s participation in the programme remained valid, making Eskom’s ongoing attempt to enforce debt collection measures an "injustice". 

“It is clear that Treasury’s view is that Emfuleni’s participation in the programme is extant; thus Eskom is not entitled to enforce historical debt processes,” the court stated in its ruling.

"It is clear that as at 2 April 2024, Treasury was told of view that Emfuleni enjoyed the benefits of the programme.

"Eskom’s stance was that it was entitled to continue with its debt payment enforcement processes. This then saw it attaching Emfuleni’s bank accounts."

The decision follows Eskom’s announcement in September that it had attached Emfuleni’s bank accounts to secure payments for the municipality’s electricity debt, which Eskom reported to be around R8bn.

It said it had exhausted all legal and mediation avenues to secure payment for services rendered since 2018. 

The power utility had initially argued that Emfuleni had failed to meet certain obligations which then justified its removal from the debt relief program. However, it was a claim that was later proven to be false.

According to the rules of the programme, all court processes have to be suspended for the duration of the programme.

The municipality then approached the courts for relief, saying attaching their bank accounts by Eskom was impeding them from complying with their constitutional obligation. Eskom's action, they said, was unconstitutional, unlawful and invalid.

In his ruling, judge Brenda Neukircher noted that Eskom’s attachment of the accounts had caused significant harm, impacting the municipality’s ability to fulfill its obligations to creditors and employees.

"This effectively means that employees, contractors, service providers, and legislated creditors such as Sars cannot be paid, nor can an Emfuleni make any payments in regard to statutorily required benefits and deductions.

"These amount to R159m monthly and include salaries of R55m, Sars Paye of R21,828,594, employee pension fund contribution of R27,923,293, employee medical aid contribution of R15m, UIF, Rand Water, VAT, fuel and insurance.

"Emfuleni is unable to comply with its statutory and contractual obligations because of the attachment – it and its other creditors and employees thus suffer ongoing irreparable harm," said Neukircher.

Speaking to Sowetan, Mako said the judgment proved that Eskom’s attachment of the municipal bank accounts was unjustified.

“It also suggests that they were wrong to claim the municipality was no longer part of the National Treasury debt relief program.

"As a municipality, we are pleased that it has been demonstrated that Emfuleni Local Municipality was subjected to harassment by Eskom, who even went as far as to falsely state that we were no longer part of the debt relief program. This judgment will definitely help restore the municipality’s standing in the community,” he said.

Eskom's Daphney Mokwena said they were still studying the judgment.

SowetanLIVE