This comes as the municipality put up 139 of its farms as security for its mammoth R3,4 billion debt to Eskom for services rendered. 

Matjhabeng has in a statement claimed that the nation’s power utility unlawfully and unconstitutionally “usurped” the Free State municipality’s powers by directly supplying electricity to consumers, which include “Thabong, farms, and mines in its area” ever since the municipality was established in December 2000. They say this happened despite Matjhabeng being able to, on its own, supply electricity “within its municipal boundaries”.

Eskom national spokesperson, Sikonathi Mantshantsha, tells OFM News Eskom is not aware of any court action by the municipality at this point. And in reaction to the allegations made, says that “all of Eskom’s operations are licenced and regulated by the Electricity Regulation Act of 2006 through the National Energy Regulator of South Africa (NERSA)”.

Three days after Eskom publicised Matjhabeng had put up 139 of its farms as security for its debt, the municipality vehemently defended the agreement by outlining the terms of said agreement with the nation’s power utility, deeming it the only way to ensure that essential services continue to be delivered to Welkom, Virginia, Odendaalsrus, Hennenman, Allanridge, and Ventersburg residents.

According to the Matjhabeng spokesperson, Kgojane Matutle, Eskom approached the Bloemfontein High Court in late 2019, in an effort to recoup its money from the municipality - deemed to be one of its ten worst offending municipal clients. Matjhabeng on the other end of this court action, launched a counterclaim, disputing Eskom’s claims that they were owed money for services rendered. However, Eskom approached the inter-governmental dispute resolution forum in order to attach the municipality’s bank account. At the start of September 2020, Eskom emerged successfully.

In turn, Matjhabeng, being desperate and unable to access the bank account, proposed the idea of putting up the 139 farms as security, so that they would be able to pay employees and render services.

Matutle stresses “by putting up the farms as security, the farms have not been transferred to Eskom and Matjhabeng has not lost control or ownership thereof. They may still be used for their intended purpose. Eskom still has to prove its claim, which the municipality obviously disputes,” says the spokesperson.

However, should the Bloemfontein High Court side with Eskom on the R 3,4 million debt, the municipality has a contingency plan in place, telling media they will still be “entitled to negotiate a repayment plan if the parties cannot come to an agreement, the issue will be determined” coincidentally by the same inter-governmental dispute resolution forum, that gave Eskom the green light to attach Matjhabeng’s bank account in the first place.

OFM News