The North Gauteng High Court has allowed poultry producer Astral and another industrial customer to make direct monthly electricity payments into power utility’s Eskom account.
Earlier this year, Astral said Eskom’s plan to cut power to the Lekwa local municipality, in Mpumalanga, where its feed and poultry operations are based would hold “catastrophic” results, particularly as it was already marred by the poultry dumping crisis the country was facing.
At the time, Eskom had planned to cut power to more than seven municipalities that owed it roughly R10.2-billion.
In its finding, the court said its decision did not usurp Eskom’s constitutional right to recover its debt from the owing municipalities.
Eskom legal and compliance acting head Suzanne Daniels explained that Astral would now be paying its contribution, estimated at about 60% of the monthly municipal consumption, directly to Eskom.
“However, the Lekwa municipality remains fully liable to servicing the balance of the debt to Eskom.”
The municipality has signed a legally compliant payment agreement, whereby it will surrender a portion of its equitable contribution to Eskom towards serving its debt burden.
Daniels highlighted the fact that the present agreement between the utility and Astral is merely an extension of the arrangement that had been in place since January.
“We have consistently said the implementation of scheduled interruptions, as a debt recovery mechanism, was an option of last resort; a necessary lever exercised responsibly within the strict application of the required law,” she noted.
“Eskom will always be mindful of the impact such action would have on the economy and residential customers. That is why there has never been any malicious intent on the part of Eskom in taking this action,” she emphasised.
Daniels said that the solutions adopted to address municipal debt cannot be “one-size-fits-all . . . as each municipality has unique dynamics and challenges – all of which need to be considered on a case by case basis”.