The Enoch Mgijima mayor and municipal manager have been sentenced to six months in prison for the deliberate failure to heed a court order, whereby the municipality agreed to pay R90m in 2020 towards its then R260m debt with Eskom.
The judgement was handed down this week in the Grahamstown High Court, where judge Thami Beshe found the Enoch Mgijima Local Municipality (EMLM) mayor, Luleka Gubhula, and municipal manager (MM) Nokuthula Mgijima, to be in contempt of court for not paying the local authority’s increasing Eskom debt.
Mbeshe sentenced the EMLM top brass to six months in jail and wholly suspended the sentence, indicating that if they did not rid themselves of the contempt in 30 days by paying what was due to Eskom, the court could be approached again to directly imprison the two for a year, for ongoing contempt.
Several businesses including Twizza, Crickley Dairy, Shell Ultra City, Farmhouse Frozen Foods, King Fisher Industries and the Border-Kei Chamber of Business resorted to the high court after Eskom threatened to switch off electricity late last year due to the EMLM’s failure to pay its historic debt and current account.
The mayor and MM entered into a payment plan with Eskom whereby they were to pay R90m in three tranches of R30m over a period of three months this year, with their equitable share. They also agreed to simultaneously continue paying their current account.
However, EMLM only managed to pay its current account for January and February and nothing ever since.
Judge Beshe indicated the municipality had failed to mention in court papers that the municipality’s financial standing had improved in July this year when they received R89m in equitable share.
Earlier this year during a press briefing, Gubhula indicated to The Rep that the municipality struggled with its revenue collection as people lost jobs and could not pay for services, thus affecting their payment obligation to the power utility.
Court papers indicate that the local authority’s accumulative debt has increased to R400m.
Twizza CEO Ken Clark said as a business collective that initiated the litigation they were happy with the judgement, and that it was fair that the municipality was given a further 30-day period to right their wrongs.
“Once you make an undertaking that has been turned into a court order you have to comply, this is not ambiguous but very straightforward. They failed to honour an unconditional court order which they agreed to and are now suffering the consequences. We pay our monthly electricity bill to the municipality and they have to pay Eskom, it is that simple. That is why we have already approached the court to say if they do not pay the Eskom debt in 30 days which will lapse some time in January, they must be locked up.”
EMLM spokesperson Lonwabo Kowa said the municipality would study the judgement and come up with a plan of action thereafter.
“Any suggestion on the course of action at this stage would be speculative. The municipality is under administration and implementation of the financial recovery plan is underway. The administrator, Monwabisi Somana, who is responsible for our finances, has been in negotiations with Eskom and other municipal creditors to find amicable solutions and affordable payment terms.”