Madibeng faces damages claim after power cut

THE BRITS Industrialists Association (BIA) is to launch a damages claim against the Madibeng municipality on behalf of its members after electricity supply to several factories, including tyre manufacturer Bridgestone South Africa, was illegally disconnected by the municipality.

Wimpy Greyling, the chairman of the BIA, said yesterday that electricity supply to some factories was disconnected at midday on Friday after the municipality had demanded the payment of R50 million from the association’s members to prevent Eskom cutting electricity supply.

Greyling said the businesses held a meeting on Friday morning after the municipality’s R50m payment demand and requested more information from it, including a breakdown of what the municipality had been billed by Eskom, what had been paid to the power utility, and for more time to come up with the money. He said the municipality was not prepared to provide the information requested and started cutting electricity to businesses.

Greyling said the BIA successfully brought an urgent application in the North Gauteng High Court in Pretoria against the municipality for contempt of court on behalf of five companies, none of which were in arrears with their electricity payments.

The court ordered the reconnection of electricity supply to the affected businesses.

The contempt of court application related to an urgent interim High Court interdict obtained by the BIA in 2014 preventing the implementation of planned electricity tariff increases by the Madibeng municipality.

The court then also determined the tariff increase that would apply until the review application of the tariff hikes was heard.

The companies that brought this interim interdict application were Bridgestone SA, Autocast, Syngenta, Omni Plastics, Robert Bosch and Polystar Tape & Fabric.

Greyling said a date had been requested for the electricity tariff increase review application to be heard and it would hopefully happen within the next six months.

He said the BIA had also requested all businesses affected by the illegal electricity disconnection to forward details of all the losses they incurred to the BIA to allow it to submit a damages claim against the municipality on their behalf.

Bridgestone SA confirmed its Brits tyre plant was one of the factories affected by unlawful electricity disconnections by the municipality and voiced its support of legal action by the BIA against the municipality. Its tyre production facility in Brits employs more than 800 people and was shut down from midday on Friday until early Monday night.

Gavin Young, the chief executive of Bridgestone SA, stressed that Bridgestone had paid all amounts due for its electricity consumption at the tariff set by the court.

“This cut off unlawfully prevented us from conducting our business,” he said, adding that the Madibeng Municipality should have been more sensitive to the impact of its actions on the broader community.

“Madibeng’s unlawful power cut offs placed livelihoods in jeopardy and had the potential to harm our standing with Bridgestone’s Japanese parent company. It is essential for investor confidence that arms of government operate within the law,” he said.

Young confirmed Bridgestone SA was not ruling out further legal action against Madibeng municipality to recover the costs of the shutdown and lost productivity. “Now that the plant has been re-started, we will begin to quantify our commercial losses, and our executive team will be taking legal advice on the relief available to us,” he said.

Kelly Fester, a spokesperson for Bridgestone SA, said that workers at the Brits factory, which produces passenger, original equipment and truck tyres, had reported for work during the period when electricity to the factory was disconnected but unfortunately had to be sent home.

Fester said the Brits factory normally continued production on weekends.