Eskom attaches 139 farms of FS municipal council

A week after it announced it had attached a bank account belonging to the Matjhabeng municipality, which includes the Free State town of Welkom, Eskom has attached 139 farms belonging to the council as security on R3.4-billion in outstanding debt.

The farmland has an estimated value of R2.5-billion, Eskom said in a statement on Tuesday.

The municipality agreed to hand over the 139 farms it owns as security on the debt. The title deeds of the farms will be endorsed in favour of Eskom until the debt dispute between Eskom and the municipality is finalised. The agreement has been made an order of the high court in the Free State.

“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,” the state-owned utility said in a statement.

“As part of the agreement, the municipality has withdrawn its application in which it sought to uplift the attachment of its bank account by Eskom, which was granted on 4 September. Eskom has agreed to uplift the attachment of the account and the account was handed back to the municipality. The funds in the account, namely R2.7-million, will remain attached and in the care of the Sherriff of the court,” Eskom said.

Threat to sustainability

It said the municipality has consistently failed to honour its obligations and payment agreements, as well as court orders.

“Total outstanding municipal debt of R31-billion as at end-July 2020 continues to threaten Eskom’s sustainability. Municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity.”  — © 2020 NewsCentral Media

This article was published with the permission of Tech Central. The original publication can be viewed here. 

Source: moneyweb.co.za