Newcastle Municipality approaches High Court for R200m debt to Eskom

On Thursday, the Newcastle Municipality will approach the Pietermaritzburg High Court to force Eskom to not switch off power to the town, as the municipality resolves its more than R200 million debt to the power utility.

Newcastle Municipality plans to reach a sustainble payment arrangement

The municipality filed an urgent application to interdict Eskom from proceeding with power interruptions, and Eskom is yet to reach a sustainable payment arrangement with the defaulting municipality.

“The leadership of the municipality is ceased with the matter and the last thing that we want is an interruption to the electricity supply. We have put forward a payment plan and are awaiting Eskom to give us approval. As soon as we reach an agreement with Eskom we will communicate with residents.”

Mayor, Ntuthuko Mahlaba

The High Court application was brought forth by the municipality and it further prompted Eskom to suspend its plans of disconnecting the power supply to the Newcastle Municipality, until a court judgement is reached.

The defaulting municipality has failed to reach sustainable payment arrangements and the Municipality has revealed that they are involved in extensive negotiations with Eskom and are “optimistic” to find a solution.

The Municipality has revealed that these negotiations are at an “advanced stage”, and further pleads with residents not to panic with the speculations surrounding the matter.

“We also understand that the goal of growing the economy of our province is one that we share strongly with Eskom; and know that a complete blackout would spell disaster for the province and country growth prospects.”

Mayor, Ntuthuko Mahlaba

What was the planned power interruption?

The planned power interruption was scheduled for Monday, 30 September, and it would have taken place from Monday to Friday between 6:00 and 9:00, and commencing between 17:00 and 20:00. During the weekend, Eskom announced an interruption from 8.30 until 12:00, and again between 15:00 and 20:00.

Eskom further stated in their notice:

“After careful consideration of the impact of the growing municipal debt and failure of Newcastle Municipality to settle its overdue debt, Eskom has taken a decision to proceed with the contemplated interruption. Notwithstanding the above proposed indicative times for the interruption of electricity supply, Eskom may, upon 15 calendar days’ notice, disconnect electricity entirely and indefinitely should the electricity debt situation not improve.”

Eskom notice

Municipalities are struggling to pay Eskom

Recently, over 200 residents have signed a petition through the Newcastle Advertiser objecting to the planned power interruption and Eskom has acknowledged the receipt and communicated they will respond to each submission.

According to Eskom’s 2019 Integrated Report, the total debt owed to Eskom by municipalities is R19,9 billion; this indicates 71,7% of invoiced municipal debt which includes interest. The Department of Co-operative Governance and Traditional Affairs indicated that more than R9,7 billion is owed by national and provincial government departments to municipalities.

The National Treasury has indicated that the aggregate Municipal Consumer Debts amounted to R165.5 billion as of 30 June 2019.