HomeIndustry SectorsFinance and PolicyAstral to repay utility debt in installments

Astral to repay utility debt in installments

Last week, the North Gauteng High Court settlement between Eskom and Astral ruled that the poultry producer could repay its debts in monthly installments directly into Eskom’s account.

According to the South African power utility, the agreement indicates that the applicants consented to paying Eskom the monthly electricity payments owed by making direct payments into the utility’s direct account.

Should the applicants comply with their payment obligations, Eskom will cease all possible electricity interruptions. Read more…

Eskom to accept payments directly

Explaining the circumstances of the agreement, acting head of legal and compliance, Suzanne Daniels, said: “Astral and another industrial customer will be paying their contribution of municipal consumption directly to Eskom which was estimated at about 60% of the monthly municipal consumption.”

She added that the Lekwa Municipality remains fully liable to servicing the balance of the debt to Eskom.

“The municipality will transfer 15% of its equitable share to Eskom, as and when this is allocated Eskom to absorb the costs of the suit,” Daniels said.

The parastatal noted that the Municipality has signed a legally-compliant payment agreement, the terms of which still need to be honoured.  Intrinsic to this, the municipality will surrender a portion of its equitable contribution to Eskom towards serving its debt burden.

Extended arrangement

Daniels highlighted the fact that the present agreement between the utility and Astral is merely an extension of the arrangement that had been in place since January.

“We have consistently said that the implementation of scheduled interruptions, as a debt recovery mechanism, was an option of last resort; a necessary lever exercised responsibly within the strict application of the required law,” she noted.

“Eskom will always be mindful of the impact such action would have on the economy and residential customers. That is why there has never been any malicious intent on the part of Eskom in taking this action,” she emphasised.

“Eskom is always open to creative alternatives to addressing these challenges without totally crippling the functions of a service delivery.  It is in this spirit that the settlement has been reached,” said Daniels.

She said that the solutions for addressing municipal debt cannot be approached on a “one-size-fits-all manner, as each municipality has unique dynamics and challenges – all of which need to be considered on a case by case basis. Read more…

According to Daniels, debt recovery is both about compliance, with the PFMA, and other relevant laws of the country.

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.