Home South African Eskom takes 139 farms from FS municipality as security against R3.4bn debt

Eskom takes 139 farms from FS municipality as security against R3.4bn debt

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Until the entire amount owed by the Matjhabeng Municipality is paid in full, the title deeds to the properties will remain in favour of the power utility

File Image: Noel Mcshane/Pexels

THE MATJHABENG Local Municipality in the Free State has handed over 139 farms to state power utility Eskom as security on the council’s more than R3.4 billion debt.

In a statement on Tuesday, Eskom said the farms were valued at around R2.5 billion.

Until the entire amount owed by the Matjhabeng Municipality is paid in full, the title deeds to the properties will remain in favour of the electricity company, it added.

“This agreement has been made by the order of the high court in the Free State division. 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,” it said.

Eskom has agreed to release the attachment of the municipality’s bank account, which had been in effect since September 4.

“The funds in the account, namely R2.7 million, will remain attached and in the care of the Sheriff of the Court,” it said.

The power utility said there had been numerous court cases involving Matjhabeng relating to its failure to repay debt.

Matjhabeng’s debt to Eskom has soared from R372 million in 2014 due to its failure to adhere to a repayment plan.

Eskom said municipalities’ total outstanding debt of R31 billion as at the end of July threatened its sustainability.

“Municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity,” said Eskom.

The massive debt owed by municipalities has contributed to Eskom’s financial woes, piling on to the pressure it already faces from constant breakdowns in its generating units, which have forced the utility to implement load shedding on and off for more than a decade.

– African News Agency (ANA)