Eskom did not go to court over land
Financially strapped utility embarked on land sales across the country to raise revenue
Eskom did not approach the courts, as it said it would, to declare ownership of land it intends selling at what has been described as “garbage-sale” prices. The power utility said a court order had found in its favour that selling the 40 hectares of land — which has 138 residential houses in Redan village in south Gauteng — was within its rights. But the land claims court order that Eskom referred to neither made a determination on whether the utility owned the Redan land, nor determined whether the sale was valid.
Instead, the land claims court — in an order handed down in September last year by Judge Brian Spilg — dismissed an application by 23 Redan residents who had approached it that April to stave off their eviction after the property’s new owner, Barnabas Dube, hiked monthly rental prices from R1 925 to more than R4 000 a household shortly after Eskom ceded the property to him in January 2021.
Spilg ruled that the applicants had incorrectly used the Extension of Security of Tenure Act (Esta) — which deals with evictions from farm or rural land to protect farmworkers’ tenure rights — and should instead have relied on the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) in their eviction application.
“Since Esta does not apply, this court does not have the jurisdiction to deal with what is essentially a PIE issue in relation to all applicants,” reads Spilg’s judgment.
When asked whether the cashstrapped utility had forgone its expected rental income in the sale, and why it did not involve the treasury as chief executive André de Ruyter said he would, Eskom stated: “Kindly note that the matter was handled in the land claims court and a ruling was handed down in favour of Eskom. We do not have further comments in this regard.”
Eskom’s response comes after the Mail & Guardian reported last week that the state-owned entity was selling off property — which De Ruyter said was valued at about R10-billion — at discount prices before the energy company splits itself into three entities.
The embattled utility did not
respond to questions on why Lillian Els — Eskom’s regional real estate manager responsible for southern Mpumalanga, Free State, Kwazulunatal and the Cape area — was given authority to sell property in Gauteng, which was not under her purview.
Redan village, which forms part of what was known as Kookfontein Farm in the late 19th century, was sold for R14-million when the parastatal generated more than R3-million a year in expected rental income from it, according to internal Eskom documents.
Sources also confirmed that Eskom had embarked on land sales across the country to raise revenue, as well as ditching “problematic properties” such as Kookfontein, which the state entity sold despite having only had a 99-year lease agreement on it since the 1930s.
“The problem is we have lost a lot of money in the properties we tried to sell, including the Kusile [power station] housing project, so we need the properties to be sold so Eskom can have revenue to keep its business running,” one Eskom source said.
It has also emerged from the deed
of sale document that Eskom would approach the courts for the entity to be declared the legal owner of the Redan property through “prescription” but has not done so.
Ownership by prescription is a legal term for the acquisition of property a person or entity has had at least 30 years of unbroken usage of.
“Eskom, therefore, records that, in respect of properties that are not registered in its name, the sale is conditional upon Eskom successfully applying to court and the court declaring Eskom to be the owner of the property through prescription,” reads the Eskom document.
Eskom sold the property after being approached in September 2018 with a R14-million offer by Dube —
the director of Dbvest Properties, which was trading as Builders One Stop Centre at the time — although the buyer knew the land was not registered in the power utility’s name.
Dube’s offer, according to another internal note, followed a property valuation that Eskom commissioned in September 2017, and which found Kookfontein to be worth R13.5-million.
De Ruyter, in an affidavit filed for the land claims court eviction case, stated that Dube, as one of the conditions of buying the property, agreed to “indemnify Eskom of any claim that may arise in relation to the registration of the unregistered portions of the farm”.
“The properties in issue presented a serious financial liability on Eskom’s part and [Dube’s] offer received would relieve Eskom from the said liability,” De Ruyter stated.
Dube denied that he had bought Kookfontein at a discount price, saying he had acquired the property at market value.
“I bought the property in December 2020 and, when I got the property, there were tenants who
Eskom sold the property … although the buyer knew the land was not registered in the power utility’s name
were renting from Eskom. Some of them left but some are still there. The property was supposed to be run down, which meant that there was quite a lot of work to be done on our side in the form of maintaining it.”
He added the property came with controversy and difficulties because of resistance from tenants.
“When I took over the place, it was occupied by white people. They formed a movement against me called the Patriotic Movement [and] people joined. Then they did all sorts of things to sabotage me. They defamed my name by making all sorts of accusations on Youtube, which reached as far as Australia, but it was a race issue only because the building would be owned by a black person,” he said.
De Ruyter, in an interview with Biznews, said Eskom would sell 7 000 of its non-core properties, which he said were valued at R10-billion, and that all transactions would be done through the treasury.
The national treasury acknowledged receipt of requests for comment from the M&G but did not elaborate.