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Eskom attaches 139 farms of FS municipal council

As security on R3.4 billion in outstanding debt.
Image: Waldo Swiegers/Bloomberg

A week after it announced it had attached a bank account belonging to the Matjhabeng municipality, which includes the Free State town of Welkom, Eskom has attached 139 farms belonging to the council as security on R3.4-billion in outstanding debt.

The farmland has an estimated value of R2.5-billion, Eskom said in a statement on Tuesday.

The municipality agreed to hand over the 139 farms it owns as security on the debt. The title deeds of the farms will be endorsed in favour of Eskom until the debt dispute between Eskom and the municipality is finalised. The agreement has been made an order of the high court in the Free State.

“This step on the part of Eskom is a result of the repeated failures by the municipality to adhere to its payment obligations to Eskom for the bulk supply of electricity,” the state-owned utility said in a statement.

“As part of the agreement, the municipality has withdrawn its application in which it sought to uplift the attachment of its bank account by Eskom, which was granted on 4 September. Eskom has agreed to uplift the attachment of the account and the account was handed back to the municipality. The funds in the account, namely R2.7-million, will remain attached and in the care of the Sherriff of the court,” Eskom said.

Threat to sustainability

It said the municipality has consistently failed to honour its obligations and payment agreements, as well as court orders.

“Total outstanding municipal debt of R31-billion as at end-July 2020 continues to threaten Eskom’s sustainability. Municipalities have a responsibility to fulfil their financial obligations for the bulk supply of electricity.”  — © 2020 NewsCentral Media

This article was published with the permission of Tech Central. The original publication can be viewed here

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How much of that R31 BILLION is really convertible to cash? And whats next here-you attach farmland to be paid for electricity supplied?

The article actually states the long overdue account as R3,4 billion.

Well done to the directors of Eskom for acting and for following through.
If it was any other SOE or the government it would have slid by so as to reprieve the comrades at the municipalities. One of the reasons why S.A. is bankrupt as a country, is because of repeatedly turning a blind eye, not acting and not following through.

Is this municipality farming or running Welkom????

They cannot run a municipality, so their chances of running successful maize farms is less than zero.

what a mess?

Two questions:
– Why does a municipality have 139 farms on its books?
– How can one state organ provide security to another via property? Do all of it not then belong to the state anyway?

Farms are worthless in reality. Who is going to buy a farm with the risk of EWC?? Just games ANC=Eskom is playing for show. switch off the electricity to non payers .Simple.

One possible outcome of this is that Eskom ends up as one of the country’s largest agricultural landowners and ends up fighting the government in an expropriation-without-compensation case.

Eskom soek n boer.

Why does the municipality own (at least) 139 farms? How and why did it acquire them? How many other municipalities own how many other farms, and how and why were they acquired?

The farms are there for city officials to farm on for free or at a very low rent.

Who will pay the rate and taxes on the land? The municipality? Land can not be transferred until this amount is settled? Perhaps I am wrong?

let the government buy the farms,they want land

Letting the government buy the land is pointless. The government uses money from taxpayers / ratepayers to purchase anything. They are not an independent entity so in the end we (ek en jy) have already paid for it. So whatever happens to those farms, ek en jy have paid for the electricity directly, indirectly via subsides from our taxes, and now indirectly / indirectly via land paid for by taxes / rates. Confusing, but basically we (ek en jy) are screwed whichever way you look at it. All the while the cadres and the thieving patronage networks of politicians and their connections are laughing all the way to endless wealth. Until SA is bankrupt – but by then those having deposits in Dubai or Singapore or ??? will have the last laugh – heh, heh, heh!

Now you don’t need to ask for more tarrifs.

Government theatrics again.

So lets just hash this out – ESKOM (government) attaches the municipality (government) bank account and i assume it is a typo containing R2.7m? For an outstanding account of R3.4B. Farms and land are as about as ILLIQUID as one can get. They are ”valued” at R2.5B. Which the courts (government) have now attached as security, against a real incurred debt of R3.4B for electricity consumed.

Are we supposed to feel a sense of relief, that 3 divisions of government have put on an exercise in posturing, to show the public that they are ‘serious’ on outstanding debts. God forbid that the private sector and Joe Public who do pay their bills start to get any ideas.

What we should take away from this, is the terrifying fact that this municipality like 80% of RSAs municipalities are actually bankrupt. I really hope they do not have only R2.7m in their account.

I assume then that Eskom will continue to supply free electricity to this municipality in lieu of real money. Next year they can ask the court for an additional 15% of land to be attached to cover the increases.

So those farms are worth around R18 million each. In die Vrystaat???

WAHAHWHAHAHAHAHAHAAAAAAAAAAAA!!!!!!!!!

Well, at this rate Eskom will soon own every title deed in the country because nobody can afford to fund their incompetence, inefficiency and criminality.

Most ANC municipalities have already disappeared into the gravitational black hole of government monopolies. Eskom is the gravitational black hole at the centre of the economy that will eventually swallow the IMF loan, most BEE schemes, Luthuli House, as well as the social grant, and then spit out a hyperinflationary shockwave across Southern Africa.

The farms are worthless, cannot be converted Teach to repay debt. Get the Municipal Councillors to repay the debt.

the debates and stats about white vs black farm ownership need a third category : owned by state, traditional leaders, community trusts, etc.

If these are not working farms, it would be good if Eskom can lease them out and stimulate agriculture – one of their major client groupings

Eskom, see what happens when you play banker…..

Essentially here we have a State Owned Enterprise, Eskom (which is ultimately answerable to the ANC controlled govt) in a fight against debt owed by Local Government (in 99% of cases, the towns controlled by the ANC)

ANC vs ANC.

It’s like making a fist, and then hitting yourself square in the ribs…
“C’mon ribs…pay up!”

But let’s remain positive, and not call it a failing state…

What is the city council doing with 139 farms?
No wonder they could not focus on doing what they got paid for, deliver services and be accountable.

End of comments.

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