Sakeliga puts government on trial for Eskom cut-offs

Using a new legal strategy, business grouping Sakeliga (‘Business league’) on Tuesday scored an early court victory in its efforts to stop Eskom from bullying paying consumers as it tries to punish municipalities that fail to pay Eskom for bulk power purchases.

The High Court in Pretoria ordered Eskom to refrain from disconnecting bulk power supply to the defaulting Musina Local Municipality until the court finally determines Sakeliga’s application to have Eskom’s decision to cut the power supply reviewed and set aside.

No date has yet been set for that hearing.

Eskom did not pitch in court and according to Sakeliga CEO Piet le Roux, the utility failed to respond to papers served on it.

Outstanding debt from municipalities is a massive problem for Eskom. Cooperative government and traditional affairs minister Zweli Mkhize recently told parliament that it grew from R13.6 billion to R17 billion in six months.

Listen to the podcast: Municipal debt to Eskom at R17bn and counting

Sakeliga, formerly known as AfriSake, claims to have 12 000 members and said in court papers that briging the application is in line with its mandate to protect constitutional rights on behalf of its members and in the public interest.

It points out that Musina’s R73 million odd debt to Eskom has been accumulating since 2014 and questions why Eskom has allowed it to grow to such an extent and why it is only acting now.

Leverage

According to Sakeliga, Eskom’s conduct “is clearly aimed at maximising pressure on the local municipality in order to effect payment to Eskom using consumers and end-users as leverage, which the second respondent (the municipality) probably will not be able to do because of ostensible financial difficulty, which Eskom, in all likelihood as a state-owned enterprise, is aware of and which warrants the attention of the Limpopo Province and National Treasury”.

It argues that the disconnections will result in hardship for residents and businesses in Musina and will result in the infringement of their constitutional rights to, among other things, dignity, water, housing, the right to work, health care services and education.

Sakeliga relies on the constitutional and legislative obligation on organs of state to work together in mutual trust and good faith to ensure the wellbeing of all the people in the country. On that basis it asks the court to order all the respondents to work together to resolve the municipality’s financial problems so that it will be able to pay Eskom and deliver proper services to its residents.

Apart from Eskom and the municipality, the respondents include national energy regulator Nersa, the minister of cooperative governance and traditional affairs, the member of the executive committee (MEC) for local government in Limpopo, and the MEC for finance in Limpopo.

In its court papers, Sakeliga spells out the legal powers and obligations each of these organisations and functionaries have in the process of finding a solution to the municipality’s financial crisis.

Musina is not alone

After the court proceedings on Tuesday, Le Roux said in a statement: “What makes a revision application so important is that it could eventually provide a national solution for communities that are prejudiced by defaulting municipalities. Currently, there are more than 30 towns listed on Eskom’s website that face power interruptions just like Musina

“We cannot allow paying electricity users’ power to be cut simply because one arm of the state, a local municipality, does not pay its accounts to another arm of the state, Eskom.

‘Sakeliga’s revision application is going to be a decisive test case that will eventually also be applied at national level in the interests of local communities and local economies.’

Le Roux said this is the fourth time this year that Sakeliga and Eskom have been engaged in legal action against each other.

In May, Sakeliga assisted in preventing Eskom from interrupting electricity supply to the Kgetlengrivier Municipality in North West Province.

In July, in the run-up to an urgent interdict application by Sakeliga, Eskom reached a payment agreement with the Musina Local Municipality.

In August, Sakeliga, as amicus curiae (‘friend of the court’) in the action between Resilient Properties and others versus Eskom and others, made unique legal contributions on the principles that should apply to Eskom in trying to collect debt from local municipalities.

Moneyweb approached Eskom for comment. It indicated that it would comment. We will add the response when received.

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Source: moneyweb.co.za