Eskom to ramp-up efforts to recover municipal debt

Eskom to ramp-up efforts to recover municipal debt

Eskom says it will ramp-up efforts to collect monies owed to it by municipalities.

The remark follows a high court judgment, affirming the power utility’s right to cut power to defaulting municipalities.

The case had been brought before the High Court in Johannesburg by Pioneer Foods.

The company sought to review and set aside a 2018 decision to interrupt electricity supply to the Walter Sisulu Municipality due to its failure to pay Eskom.

The court ruled that Pioneer Foods had no standing in the electricity supply agreement between Eskom and the municipality, and dismissed the application with costs.

It held that before a third party approaches a court due to unhappiness with Eskom, it should first demonstrate that it had exhausted internal remedies by approaching the National Energy Regulator of South Africa (Nersa).

The power utility is describing the ruling as a landmark judgment, affirming the validity and lawfulness of its rights, powers and entitlement to cut power to non-paying municipalities.

“Eskom welcomes this landmark judgment as the court has set the important legal principle that Eskom is only obliged to supply electricity to paying customers,” the electricity supplier says in a statement.

Municipalities owe Eskom more than R31 billion and the frustrated power utility says the growing debt is threatening its sustainability.