Eskom settles out of court over Astral power
The utility strikes a deal with poultry producer Astral over power interruptions at its Lekwa operations
Eskom has brokered a deal with poultry producer Astral to give the company uninterrupted power despite the base of its operations, Lekwa Local Municipality, owing Eskom millions of rands for electricity.
Municipalities that have also faced interruptions administer services to at least 26 towns — including Ventersdorp, Richmond, Witbank, Ermelo and Bloemhof.
These municipalities owe Eskom about R10bn.
The interruptions in Lekwa would have severely affected Astral’s operations as it needs much power for its operations.
As part of the new agreement, Astral will make payments to Eskom directly for the powerit consumes.
The agreement came as a settlement out of court, after the company had approached the High Court in Pretoria for an order preventing Eskom from interrupting electricity supply to Standerton over Lekwa’s continued defaulting on its electricity payments.
Astral CEO Chris Schutte said that the agreement would go a long way in assisting Lekwa municipality to fulfil its constitutional obligation to provide electricity to all of its rate-paying residents.
"We are very pleased with this victory, which resulted in the settlement agreement being made an order of court, thereby protecting Astral’s operational interests in the region permanently," he said.
"We are satisfied that a permanent solution has been obtained to eliminate the uncertainty surrounding planned power cuts threatened by Eskom," said Schutte.
Eskom spokesman Khulu Phasiwe was not immediately available for comment.
Eskom has interrupted power to eight municipalities in three provinces since January to ensure that the indebted councils pay the power utility for electricity.
Minister of Cooperative Governance and Traditional Affairs Des van Rooyen said the inter-ministerial committee on basic services had set up a task team in 2017 to conduct an in-depth analysis of every council owing Eskom money.
Eskom acting CEO Matshela Koko told Parliament recently the power utility had made a mistake by allowing the overall municipal debt to escalate to the levels they have reached.
The utility made concessions to councils, including that councils committing to repayment agreements will benefit through a reduction of the interest rate on their debt from prime plus 5% to prime plus 2%.
The utility said it would also change its payment period for municipal bulk infrastructure from 15 days to 30 days.
Middelburg Chamber of Commerce and Industry CEO Anna-Marth Ott said businesses in Mpumalanga were resilient enough to adapt to Eskom’s scheduled power disruptions in the long term.
However, she warned if business sought alternative power sources local councils in the region could be starved of much-needed revenue.