Residents of Newcastle can now look forward to improved service delivery. This comes after the municipality announced that it has finally settled their long outstanding debt of R264 million which has been owed to Eskom since 2020.
Eskom Holdings (SOC) LTD supplies Newcastle Local Municipality with bulk electricity to re-sell to local businesses and households. Having inherited an outstanding debt of about R196 million out of R264 million from the previous administration when it came into office in 2021, the coalition government led by the Inkatha Freedom Party (IFP) is one among very few, if not the first municipality in the country, that has managed to settle its debt with Eskom in record time.
Speaking at a press conference held at the Mayoral Parlour on 11 June, Mayor of Newcastle Local Municipality, Xolani Dube, said that the municipality has been facing financial constraints for a long time.
“Owing to debt accrued from the previous administration, the municipality has been facing constraints, but we understood that the impact of defaulting on our payment agreement to Eskom would have a dire effect on businesses and households who rely on the municipality for an electricity supply,” said Mayor Dube.
He said that it was for that reason that the entity had honoured the commitment of paying a monthly amount of R30 million which resulted in the full settlement of the debt ahead of the deadline.
“While the settlement of the Eskom debt brings significant relief from financial distress, the municipality’s challenges are not fully mitigated. However, the leadership demonstrated by the coalition government led by the IFP must be applauded for its display of good governance through this debt settlement,” said the Mayor.
He also acknowledged Eskom for their patience and cooperation with the municipality throughout the process. Mayor Dube stated that this achievement must also be attributed to the support by the provincial Department of Cooperative Governance and Traditional Affairs (CoGTA) through Joey Krishnan and Wayne Donelly of the Provincial Treasury.
“Without such support, it may have not been easy to reach this point and the municipality wishes to extend its appreciation to them,” said Mayor Dube.
Agnes Mlambo, General Manager of Eskom Central East Cluster, welcomed the debt settlement. “Eskom would like to acknowledge the dedication and commitment of the municipality leadership in resolving the various challenges over the past three years. The municipality communicated any concerns and challenges proactively to Eskom and this, in turn, allowed for further discussions to keep the payment arrangement conditions intact,” said Mlambo.
Eskom has said that the entity is grateful for the thorough and professional way in which Newcastle Local Municipality conducted itself during the tenure of their debt.
