Three companies in the Lekwa Local Municipality in Standerton, Mpumalanga, have reached an agreement with Eskom that they will pay their bill directly to the power supplier for the next two months.
In terms of the agreement made an order of court, Cofco SA, Standerton Oil Mills and Astral Foods can for now sidestep the municipality.
It was, however, on the insistence of counsel for the municipality who agreed the bills would be paid into the trust account of Lekwa’s lawyers, who would pay it to Eskom.
Asked by the court why such a long process had to be followed, Lekwa’s advocate said “for good accountability”.
Eight other companies, including Bridgestone SA, also obtained an agreement from Eskom that it would not disconnect supply to the Madibeng Municipality, Brits.
These agreements will remain in place pending the outcome of what is said to be a groundbreaking case before the Gauteng High Court, Pretoria on May 2.
The aim was to find a solution to Eskom simply interrupting the supply to municipalities in arrears.
The main application of May 2 comes against the backdrop of Eskom’s ongoing struggle to retrieve outstanding debt from municipalities.
Consumers paid for their monthly electricity usage to municipalities, who were in turn obliged to pay Eskom.
Several municipalities across the country have fallen behind, which in turn resulted in Eskom either threatening to disconnect their supply or, in some cases, invoke load shedding.
These businesses want to find solutions to the problem and will ask the court to set aside Eskom’s decision to interrupt the supply of power to these municipalities.
In the case of Lekwa Municipality, it owed Eskom nearly R185 million last month.
Eskom threatened to interrupt the power supply to this area if the municipality did not pay up.
The companies said their power usage made up a big percentage of the supply to the area, and that if they paid directly to Eskom instead of Lekwa, the power giant would at least receive some of the outstanding money.
Eskom said it was happy with this arrangement.
Its gripes are similar to those of the companies in Madibeng, which said a constant power supply was vital to their operations.
Gerrit Greyling, a manager at Bridgestone in Madibeng, said even a power cut of a few hours a day had disastrous consequences, not only to the company, but also for the residents in the area.
It would mean that sewerage works would come to a standstill, it would not be pumped to the plant but instead spill over to the streets, and taps would run dry. It would also affect the health and safety of the residents, he said.
According to Greyling, Eskom, which holds the monopoly to provide electricity, was obliged to find other, less drastic alternatives to force municipalities to pay their debts.
“It appears Eskom did not consider the alternatives, but instead chose a drastic approach without allowing for meaningful participation by all,” he said.
Eskom, on the other hand, said it is entitled to interrupt the supply of electricity to municipalities who are in arrears and did not make a plan to pay.
It said the municipalities had entered into a contract in terms of which Eskom provided bulk electricity and for which the municipalities had to pay. It said it would not interrupt any supply as long as the contract was honoured.