The court order comes after the troubled municipality failed to settle its monthly debt repayment to Eskom, which now is R1.5 billion in the red. Over the years, the municipality has failed to keep up with payment arrangements with Eskom, plunging the city into a debt crisis. 

On Wednesday 8 March 2023, the mayor, James Tsolela, told residents who gathered at the municipal hall in Klerksdorp for the Mayoral Imbizo, that despite challenging the court order, Eskom won in the end.

He said they have entered into a dialogue with Eskom to see how the municipality can settle the debt.

Tsolela said the municipality has since sought the intervention of the MEC of the Department of Cooperative Governance and Traditional Affairs (Cogta), Nono Maloyi.

He, at the time, said the power utility has not gained control of the city's account due to the engagement and intervention of Cogta, held in Mahikeng on Wednesday.

"We owe Eskom an amount of R1.5 billion, which we are trying to service. Our biggest problem is the collection rate at which our people are paying for services. We are unable to deal with the debt as well as the current account of Eskom.

"Most of the time we find ourselves having to underpay Eskom and that is not helping because it actually grows the debt we have with Eskom.

"We have engaged in a number of meetings with Eskom, trying to come to an arrangement, but a stumbling block is that we are unable to keep up the monthly account. It is always underpaid," said Tsolela.

In 2022, Eskom launched a scathing attack on several municipalities in the Free State, KwaZulu-Natal, as well as Matlosana, for what it termed "an unwillingness from municipalities to settle their debts".

ALSO READ: Eskom slams municipalities

The general manager of Eskom’s central east cluster (Free State and KwaZulu-Natal), Agnes Mlambo, slammed both Free State and North West municipalities for spending millions on legal costs instead of paying their debts, which run into millions of rand. 

According to Mlambo, the municipalities had approached the courts to challenge Eskom's intention to cut power supply due to non-payment. In 2013, Matlosana owed the power company R83 million. As a result, Eskom threatened to cut power to the municipality. The struggle over the nonpayment between Eskom and Matlosana has continued over the years, and in 2016/17, Eskom implemented a series of power cuts that plunged the city into darkness, leaving businesses in crisis mode.

"We have involved the Cogta department, and they are coordinating the discussions between ourselves and Eskom. They have also pushed all the other provincial departments that are owing us to begin paying the municipality so that we are able to pay at least the monthly account of Eskom. 

"So there is progress as far as that is concerned, however, Eskom has gotten a court order to attach our accounts, which is actually enforceable today.

"However, after the engagement we had with Eskom through Cogta on Wednesday, we hope we will be given some time to address our payment with Eskom."

Whilst addressing residents at the Imbizo, Tsolela said Cogta's intervention had avoided what he termed a "catastrophic situation".

Meanwhile, Matlosana is not the only North West troubled municipality faced with financial issues.

Another North West municipality, the Potchefstroom-based JB Marks Municipality, which is just 50.2 kilometres away from Klerksdorp via the N12, also got into trouble with National Treasury.

Treasury told this municipality it intends to withhold R60 million in grants meant for infrastructure due to its non-performance.

ALSO READ: 'Grant will be spent and projects completed' – Potch municipality

In a letter to JB Marks municipality, National Treasury's head of intergovernmental relations, Malijeng Ngqaleni, proposed that a portion of the 2022/23 allocation to the municipality, in respect of the municipal infrastructure grant (MIG), the integrated national electrification programme and the water services infrastructure grant, be stopped due to the underperformance of the grant allocations.

In the letter sent to the municipality in February 2023, Ngqaleni said the National Treasury intends to stop the allocations in terms of section 18 of the 2022 DoRA and section 38 of the Municipal Finance Management Act (MFMA).

"Acting on the above, the National Treasury hereby informs you of the intention to stop an amount of R28.9 million from your 2022/23 MIG allocation of R76.2 million, an amount of R27.6 million from your 2022/23 INEP allocation of R45.9 million, and an amount of R5.7 million from your 2022/23 WSIG allocation of R35 million, respectively in terms of section 18 of the 2022 DoRA. This decision will not in any way affect future allocations to your municipality."

Former Chairperson of the Standing Committee on Public Accounts (Scopa) at the Provincial Legislature, Mahlakeng Mahlakeng, previously told OFM News that the two municipalities were once tipped to become the first North West Metro Municipality but this has since failed due to corruption, fraud, and wrongdoing.

The two municipalities recently attracted the eyes of the special investigative unit (SIU) following numerous scandals pertaining to officials' failure to follow the MFMA.

In 2020, the SIU raided the Klerksdorp-based municipality’s offices and seized documents following allegations of wrongdoing. SIU spokesperson, Kaizer Kganyago, at the time of the raid said the R47 million that was allegedly used for Personal Protective Equipment (PEP) purposes, was done in a corrupt manner and that’s why they were there.

OFM News