Eskom granted order to attach Emfuleni municipality assets

The business community in Emfuleni says the court decision allowing Eskom to attach R1.3bn worth of Emfuleni assets will be a big blow for business and employment.

Klippies Kritzinger CEO of the Golden Triangle Chamber of Commerce said while the court’s decision is scary, is not surprising.

“This is coming a long way where Emfuleni has failed to keep their commitments with Randwater and Eskom. Currently service delivery is non-existent in Emfuleni. Emfuleni is clearly not a responsible government and we are not completely surprised by this development.

“Emfuleni is not creating an environment which enables us to create jobs as the business community. We are the pothole capital of SA. We are the sewer capital of SA…A lot of our member are considering moving their business elsewhere because there is no service delivery. With this court order, more businesses will leave and unemployment will get worse,” Kritzinger said.

Eskom announced on Monday that the Pretoria high court  granted the power utility the order after the municipality failed to settle its current account and accumulated arrears.

“The electricity generator has started with the execution steps against the municipality to recover some of the municipality debt, including attaching the local authority’s bank accounts and movable assets.

“Emfuleni municipality is currently indebted to Eskom to the amount of R5.3bn despite several litigations 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, the local government still failed to pay a portion of its overdue account,” said Ronel Kotze, Eskom stakeholder practitioner.

Eskom has also served Emfuleni with further summons of R3.4bn for non-payment of its bulk electricity supply, and to date the council has failed to provide reasons for non-payment, Kotze said.

“This resulted in Eskom and the municipality 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 2023 and would set a precedence for municipalities failing to pay their Eskom debt and complying with the electricity supply agreements,” she said.

Kotze said the failure to pay Eskom is negatively affecting the financial performance of the company, leaving it with no option but to borrow.

Emfuleni has been having financial problems for years,  which have impacted service delivery.

The collapse in the delivery of services had left residents with no options but to collect money among themselves just to fix the sewerage system and clean roads.

The cash-strapped municipality has been under administration since 2018.  

dlaminip@sowetan.co.za