Eskom to release some frozen funds to assist Maluti-a-Phofung municipality with running costs

Eskom is to release part of the frozen funds to assist the Maluti-a-Phofung municipality with running costs.
Eskom is to release part of the frozen funds to assist the Maluti-a-Phofung municipality with running costs.
Image: ESKOM

After the successful attachment of the Maluti-a-Phofung Local Municipality's bank account this week, Eskom and the municipality on Friday reached an agreement to partially release some of the funds to assist the municipality to meet its running costs.

As part of this agreement, which has been made an order of court, the parties must conclude an agreement on or before August 7 to address the Free State municipality’s R5.3bn debt to Eskom and to service its monthly current account, Eskom said on Saturday.

“Eskom has agreed to release R90m to allow the municipality to pay the salaries of its workforce and to meet other running costs. The bank account currently has a balance of more than R220m, and was attached by Eskom on July 21 2020 in execution of a court order granted in 2018 to help Eskom recover unpaid debt by the municipality, the power utility said.

It said the account balance would remain attached until a repayment agreement that met Eskom’s requirements had been concluded, or until the court ordered otherwise.

“This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity.

“Eskom will continue to explore all available legal avenues to ensure that outstanding municipal debt is recovered.

“The total outstanding municipal debt of R30.9bn as at end June 2020 continues to threaten Eskom’s sustainability, and municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity,” Eskom said.

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