Eskom Initiates Legal Action Against 14 Defaulting Municipalities As Arrear Debt Surpasses R110 Billion Milestone

Eskom begins legal Paja process against 14 municipalities with 18-month arrears, warning of power limits as debt reaches R110 billion.

By: AXL Media

Published: Mar 6, 2026, 5:55 AM EST

Source: The information in this article was sourced from TimesLIVE

The Triggering Of Administrative Justice Protocols

Eskom has officially moved toward a confrontation with 14 of the country's most heavily indebted local governments by initiating a formal process under the Promotion of Administrative Justice Act (Paja). This legal maneuver follows what the utility describes as the exhaustion of all available engagement channels under the Intergovernmental Relations Framework Act. By turning to Paja, Eskom is launching a mandatory public consultation process that allows affected parties to make formal representations before any drastic service interruptions or supply limitations are implemented at a municipal level.

Criteria For Selecting High Risk Municipal Default

The 14 municipalities targeted in this latest credit control drive were not chosen at random but based on a specific set of financial and operational criteria. According to Eskom, these entities have failed to settle their utility accounts for a minimum of 18 months and have neglected to adhere to the debt relief conditions established by the National Treasury. The utility maintains that these specific municipalities now pose a significant financial risk to Eskom’s overall stability, potentially undermining the fiscal discipline rebuilt during the first three years of the company's turnaround strategy.

Strategic Measures To Curb Financial Hemorrhaging

Should the ongoing consultation process fail to yield a sustainable and viable payment plan, Eskom has outlined two primary credit control measures intended to stop further financial loss. The first involve scheduled interruptions, where power would be disconnected entirely during predetermined daily windows to force a reduction in consumption. The second, more precise measure is supply limiting, where the volume of electricity dispatched to a municipality is capped to align strictly with the actual payments received, effectively ending the practice of providing electricity on credit.