Emfuleni fails in court bid to stop Eskom from seizing its assets

Eskom says it is going ahead with the seizure of Emfuleni municipality assets, after the high court on Thursday ruled against an urgent bid for an interdict.

On Tuesday, the sheriff of the High Court descended on the offices of the municipality and seized furniture and vehicles. Emfuleni owes Eskom R2.3 billion.

WATCH: Municipal cars, furniture seized as Eskom tries to recover money

Emfuleni filed an an urgent application to stop Eskom from the further attachment of property from its offices.

But the North Gauteng High Court on Thursday struck the matter off the roll with costs.

Eskom spokesperson Sikonathi Mantshantsha said the power utility would now go back to the municipal offices to seize more assets.

The state-owned power producer is owed a debt of R615 million by the municipality for electricity supply. The municipality - which covers Vanderbiljpark, Vereeniging, Evaton, Sebokeng and Vaal Oewer - has previously warned that the attachment would disrupt the provision of basic municipal services.

In 2018, a court judgment ruled that Eskom could recover R615 million in this debt from the municipality. Eskom has issued another summons to collect the balance. 

Spokesperson for the municipality, Stanely Gaba, earlier told Fin24 that the reason for going to court was to allow for an inter-governmental mediation process to take place.

In a statement on Tuesday, Emfuleni said the seizure of its assets would lead to backlogs in the delivery of basic services, further stating that it had made regular monthly payments to Eskom of R1.6 billion in 2018 and 2019.

This year almost R1 billion has been paid, it said.

A contributing factor to Emfuleni’s big debts was Vanderbijlpark’s 1987 decision to grant large power users in the area much cheaper electricity tariffs.

Emfuleni generates more than 60% of its revenue from electricity tariffs, most of which is collected from these large companies.

Eskom, which itself owes around R450 billion to creditors, is faced with a challenge of mounting municipal debt. In December, Parliament's Standing Committee on Public Accounts heard that overdue debt owed to Eskom by municipalities increased by some R1.2bn in September to R26.4 billion by the end of October.