File picture: EPA/Kim Ludbrook
Eskom has agreed to release a portion of the funds in the accounts of Maluti-a-Phofung to allow it to pay salaries for workers and meet other operational costs after it was attached by the power utility this week.
The power utility said on Saturday it has agreed to release R90 million to the Free State municipality to meet its operational costs.
Eskom is owed a total of R30.9 billion by municipalities across the country and the debt has been increasing in the last few years due to municipalities defaulting.
Maluti-a-Phofung owes Eskom R5.3 billion and this week it took the step to attach its accounts.
But a meeting was held between the municipality and Eskom on Friday where an agreement was struck on the release of a portion of the money to pay workers.
“As part of this agreement, which has been made an order of court, the parties must conclude an agreement on or before 07 August 2020, to address the municipality’s R5.3 billion debt to Eskom and to service its monthly current account,” said Eskom in a statement.
“Eskom has agreed to release R90m to allow the municipality to pay the salaries of its workforce and to meet other running costs.
“The bank account currently has a balance of more than R220m, and was attached by Eskom on 21 July 2020 in execution of a court order granted in 2018 to help Eskom recover unpaid debt by the municipality,” it said.
“The account balance will remain attached until a repayment agreement that meets Eskom’s requirements has been concluded, or until the court orders otherwise.
“This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity,” it added.
Political Bureau