It is a matter of public record that municipalities owe Eskom more than R44 billion. All in unpaid debt for the supply of electricity. Plus, Eskom’s attempts to recover the debt have often been countered with various legalities. However, after years of legal battles, the Supreme Court of Appeal (SCA) has officially agreed that municipalities must pay their Eskom accounts.
This comes shortly after some municipalities had started clamping down on those with municipal accounts in arrears. Such as what we have seen in Tshwane in recent months.
The Letsemeng Municipality Eskom Dispute
By January 2020, the Letsemeng Municipality, close to Kimberly in the Free State, had racked up R41 million in debt with Eskom. This amount then accumulated to R108.5 million by the end of February 2022.
Furthermore, following the evidence given, the SCA agrees that Eskom had even tried to aid the municipality. Having made several attempts to assist with the structuring of its debt. Even going as far as to allow the municipality to prepare its Repayment Plans. So that it could prepare terms of repayment that were affordable for it.
However, after years of legal battle, the SCA ruled in favour of Eskom. Agreeing that any municipality is liable to pay their Eskom accounts. And that the Letsemeng municipality must pay Eskom money owed within 30 days of receiving the relevant invoice. The SCA went on to describe the Letsemeng municipality’s dealings with Eskom as disgraceful, and awarded costs against the municipality.
The Supreme Court of Appeal added that “A local government is required to strive, within its financial and administrative capacity, to achieve, among others, its object of ensuring the provision of services to its community in a sustainable manner. Electricity is an important basic municipal service which local government is ordinarily obliged to provide.” While also pointing out that the simple truth is, “Eskom is obliged to supply bulk electricity to Letsemeng; and Letsemeng is obliged to pay for this service.”