Well, that’s one way to settle the scores. The Matjhabeng Municipality in Free State has agreed to hand over 139 farms belonging to the administrative region, to act as a security on their billion-rand Eskom debt bill.
Why Eskom has been ‘given 139 farms’ in Free State
The serial defaulter has run up a tab of more than R3.4 billion in unpaid electricity bills over the years. Eskom put their foot down earlier in 2020, severely limiting the supply of energy for the municipality. However, it seems both parties have come to an agreement, and the total cost of the land is believed to be worth R2.5 billion.
This doesn’t clear all of the debt, but it marks a significant – if not unusual – agreement between both parties. The deal was facilitated by the Free State High Court, and the title deeds will be signed over to Eskom while Matjhabeng remains in arrears. It is not yet clear what the power utility intends to do with these farms, should the debt stay in place.
When land expropriation meets load shedding, we get ‘land shedding’
The firm issued a statement on the matter earlier on Tuesday, confirming the details of their ‘land shedding’ exchange. They state that all defaulting municipalities still owe them R31 billion, which remains a ‘threat to sustainability’ for Eskom.
“In its ongoing efforts to recover more than R3.4 billion in unpaid debts owed by the Matjhabeng Municipality, the administrative body has agreed to hand over to Eskom 139 farms belong to the municipality, as a security on the debt. The farms are worth approximately R2.5 billion, and the title deeds will be endorsed in favour of Eskom.”
“This will remain in place while the debt is unsettled. The order has been made by the High Court in Free State. This step on the part of Eskom is the result of repeated failures by Matjhabeng Municipality to adhere to its payment requirements. The total outstanding municipal debt [for all municipalities] of R31 billion threatens our sustainability.”
Eskom secures farmland estimated at R2.5 billion as security for debt owed by the Matjhabeng Municipality pic.twitter.com/C2dCizuFnR
— Eskom Hld SOC Ltd (@Eskom_SA) September 15, 2020