News / South Africa

Ilse de Lange
2 minute read
25 May 2017
6:22 am

Eskom wins court battle on use of scheduled power cuts

Ilse de Lange

The applicants wanted Eskom to use other methods to collect its debts.

The High Court in Pretoria has dismissed applications by AfriForum and a number of business concerns aimed at declaring Eskom’s use of scheduled power cuts to get municipalities to pay their debts unconstitutional.

AfriForum, Astral Operations, Bridgestone SA and Mediclinic Brits all applied for various orders aimed at stopping Eskom from resorting to scheduled power interruptions in Madibeng, Lekwa and Kamiesberg in an attempt to collect arrear debts.

The applicants wanted Eskom to use other methods to collect its debts and wanted to ensure judicial oversight in case Eskom resorted to this strategy in future.

Eskom threatened with the move at the end of last year after the total municipal debt increased from R6 billion to more than R10.2 billion between March and November last year, with 20 defaulting municipalities owing Eskom more than R7.4 billion and 74 municipalities owing more than R10 million each.

The threat resulted in Eskom concluding repayment plans with 30 municipalities and collecting about R980 million between November 2016 and January 2017 and withdrawing its decisions to interrupt supply.

Eskom reached a settlement with certain of the industries in Lekwa that they would pay Eskom directly and undertook not to interrupt the electricity supply in Madibeng and Kamiesberg after concluding repayment plans with those municipalities.

Eskom also accepted it could not revive any electricity interruptions without notice to and further consultation with the affected parties.

The applicants, however, wanted the court to prevent possible future interruptions of electricity supply and challenged the constitutionality of Eskom using bulk power cuts as a debt-collecting measure, arguing that it amounted to self-help and would violate the constitutional rights of innocent third parties.

Eskom maintained the issues had become moot and that the court could not give advisory opinions on matters in the abstract.

Judge John Murphy agreed with Eskom, saying that in light of Eskom’s undertakings, the alleged wrongfulness could not reasonably be expected to recur and there was no significant prospect of future harm evading judicial review.

He stressed that judicial assessments of past hypothetical events could impact litigants in unforeseen ways.

Sight should also not be lost of the fact that Eskom’s positional bargaining had positive results in rectifying the delinquency of municipalities which caused a financial crisis of substantial proportions, he added.

He did not grant costs orders against the applicants, who had acted in the public interest.

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