Eskom attaches municipality’s bank account due to millions owed
The attachment is expected to have a ripple effect into the day-to-day running of the municipality and services rendered to the community are expected to take a knock.
Rand West City Local Municipality (RWCLM) has landed itself in trouble with Eskom again and has had its primary bank account attached by the power utility in effort to recover millions of rands owed to it.
This was through a court order which was granted to the power utility and enabled it to have the municipality’s bank account attached. In turn, the attachment affects the municipality’s access to its primary account.
The bad news was also confirmed by RWCLM’s head of Communications Phillip Montshiwa who stated that the municipality’s bank account was “under siege”.
“The RWCLM’s bank account is under siege due to the poor payment of its Eskom account. We have been consistently paying R15 million on a weekly basis as part of servicing the arrears encountered but we have been battling to pay for the current account of usage in full,” said Montshiwa.
He attributed the municipality’s battles to the monthly interest rates charged on the current account by the power utility which subsequently increases the balance.
This is in addition to the annual tariff increase implemented by the National Energy Regulator of South Africa (NERSA) which is less than the tariff increase that the municipality charges to ratepayers.
Other factors highlighted include the high rate of electricity distribution losses, illegal connections, aged infrastructure, as well as the winter and peak season which resulted in the doubling of the current account.
Meanwhile, the attachment is expected to have a ripple effect into the day-to-day running of the municipality and services rendered to the community are expected to take a knock. Municipal staff will also bear the brunt of their employers poor payment record with Eskom.
“RWCLM will go on the rampage and this is the catastrophe that the municipality doesn’t want to see happening,” said Montshiwa.
This is, however, not the first time that the municipality has had a face-off with the power utility.
Prior to this, on April 24, 2018, RWCLM had entered into an agreement with Eskom and committed itself to paying for its current usage at the time, as well as the arrears incurred. This arrangement fell flat on its face, as the municipality couldn’t service its account as agreed, due to “other debts that needed its attention”.
This, however, backfired and resulted in the power utility obtaining a court order on August 24 in 2020 to disconnect the municipality, should it not fork out an any amount in relation to the R370 million owed at the time. The municipality was able to mitigate this and paid a substantial amount, which saw it escape Eskom’s grip. The plan to disconnect electricity supply was subsequently discontinued.
“The municipality remains committed in resolving the matter amicably with the interest of rate payers at heart. The legal engagement with Eskom will reasonably find permanent solutions to the matter. It is therefore in the interest of the municipality to plead with communities to continue paying municipal services and refrain from illegal connections. Our lawyers are in negotiations with Eskom to have the attachment lifted,” said Montshiwa.
