Eskom, business and ratepayers bloody municipality’s nose in surprise turn of events

Big business, ratepayers and Eskom on Thursday took off the gloves to beat defaulting Inxuba Yethemba municipality into submission over its huge debt to the bulk electricity supplier.

The Cradock Business Forum (CBF), and the Cradock and Middelburg ratepayers’ associations had brought an application to once again interdict Eskom from cutting off electricity to Inxuba Yethemba municipality, which owes it  about R115m.

The application said the proposed move by Eskom would have a catastrophic effect on business and individuals in the areas falling under the municipality.

Eskom is determined to recoup money owed to it by defaulting municipalities and has over the past six months issued notices to several municipalities that it would cut bulk supply if they did not cough up.

In the case of Inxuba Yethemba, it had defaulted on every single repayment plan agreement.

Eskom’s advocate Sydwell Shangisa argued they had no choice but to resort to switching off the lights.

Big business and ratepayers say it is not fair that they pay their electricity bills to the municipality and then suffer the consequence of being denied electricity because the municipality is failing to pass on the payments to Eskom.

But in court on Thursday Eskom, the two ratepayers’ associations and the CBF suddenly found themselves on the same side.

Advocate Izak Smuts, SC, for the municipality, said the municipality had instructed him that a settlement with Eskom on a new payment plan was imminent and the court case no longer had to proceed.

But advocate David de la Harpe, SC, for the ratepayers’ associations and CBF, said they had nothing before them and were not prepared to abandon their case unless the settlement resolved the issues and concerns that they had.

Shangisa agreed.

“Our first prize is not disconnection. Eskom wants the money owed.”

He said he agreed with the proposal by the CBF and the ratepayers’ associations that the court impose a supervisory or structural interdict instructing the municipality to make payments on a strict timeline to Eskom. This protected Eskom and the residents living in the municipality.

A supervisory interdict would involve the court ordering the municipality to ring-fence electricity payments and to monthly pay most of that money over to Eskom in terms of a specific agreement between the two parties. The court would then oversee the implementation of the order.

“Given the history of (the municipality’s) financial delinquency and its breach of its statutory and constitutional obligations to residents, a judicial intervention in line with the supervisory order is merited,” said Shangisa.

“This takes care of the concerns of ratepayers and residents who face calamity and Eskom who remains unpaid.”

Judge John Smith stood the matter down and urged the parties to reach an agreement that would be satisfactory to all.

At the time of writing the parties were still negotiating.