Wednesday 02 June 2021
The High Court in Pretoria is expected to grant a final order next week that will mandate Eskom to act as an agent for the struggling Maluti-a-Phofung municipality in Harrismith and execute electricity distribution on its behalf.
Eskom has confirmed that this will constitute the first of several so-called active partnership agreements with struggling municipalities that includes “a full suite of active partnering which includes distribution, reticulation and revenue management services.
While commentators have warned against numerous stumbling blocks in municipal legislation, the 16 applicants – including Afgri Milling, the Harrismith Business Forum, Nestlé South Africa, Nouwens Carpets, and Busamed Harrismith Private Hospital – based their arguments on constitutional grounds that allow the court to find a just and equitable remedy that cuts through other legislation.
Maluti-a-Phofung is one of several municipalities which together owed Eskom R35.3 billion at the end of March, and large power users have already been paying their electricity bills directly into Eskom’s account for some time following an earlier court order.
The latest agreement was supported in court by energy regulator Nersa, and the Minister of Finance and Free State MEC for Finance have been ordered to appear in court on June 8. They will be required to indicate whether the provision in the agreement that the municipal electricity revenue will be paid directly into Eskom’s bank account is a reason not to make the court’s earlier order final.
Commentators earlier pointed out that municipal legislation requires that all municipal revenue be paid into the municipality’s principal bank account.
Attorney MC Botha of Joubert Galpin Searle, who represents the applicants, says intense engagements are ongoing to address the concerns and establish a lawful contractual framework for Eskom to provide the service on behalf of Maluti-a-Phofung.Read More