11th-hour payment plan to Eskom keeps Enoch Mgijima lights on
Eskom and the Enoch Mgijima municipality have concluded yet another payment plan agreement which will see the ailing municipality pay about R90m of its 2020 equitable share budget straight to the national electricity supplier.
The agreement was concluded just days before Thursday’s high court case, in terms of which big businesses in the district wanted the high court in Makhanda to force the two entities to enter into a payment plan to ensure the uninterrupted supply of electricity to the area.
The Border-Kei Chamber of Commerce and several businesses, including Twizza, Crickley Dairy, Farmhouse Frozen Foods and Shell Ultra City, launched the application after Eskom threatened to cut off electricity to the municipality.
Towns that would have been affected by the proposed electricity outages included Komani, Hofmeyr, Molteno, Sada, Sterkstroom, Tarkastad and
Whittlesea.
But if the municipality thought it would avert the court case in its entirety by quietly concluding an agreement with Eskom, it was mistaken. The businesses on Thursday successfully applied to the high court to make the payment plan agreement an order of court. Eskom also undertook, as part of the court order, not to switch off the lights to the municipality as long as it stuck faithfully to the terms of the agreement.
The municipality has breached every single payment plan reached with the national power utility to date. If the municipality does so now, its officials risk being found in contempt of court.
Acting judge SM Mfenyana also ordered the municipality to provide evidence every month to the court that it had complied with the court order.
Attorney for the businesses Brin Brody said the municipality had been ordered to pay all the costs of the application except Eskom’s costs. The national utility will foot its own legal bill. The municipality acknowledges that it owes Eskom R265m.
In terms of the agreement, it says it will pay its current account of R23m before the end of December. After that, it will pay R30m at the end of March, July, and November 2020.
Enoch Mgijima mayor Luleka Gubhula said the council resolved in a meeting that this R90m would come out of its equitable share budget for the first and second quarters of the 2019/20 financial year.
It further agreed to pay another R30m at the end of March, July and November 2021. It will make a final two payments of R30m and R32m at the end of March and July 2022.