The Pietermaritzburg High Court has ruled that Eskom is not allowed to cut power to Newcastle despite the fact that the municipality did not pay its bills.
Newcastle owes Eskom more than R200 million and has not met its payment commitments of R60 million per month to the power utility.
The municipality launched the court action after Eskom said it was going to cut power to Newcastle because it failed to pay its debt.
The court ruled in favour of the Newcastle municipality, lowering the instalments to R30 million per month and preventing Eskom from cutting the town’s power.
The first instalment is due on 15 October, and Newcastle mayor Ntuthuko Mahlaba said he will ensure the payments are all made as per the court ruling.
“We now have a concrete agreement in place. We will not disappoint the people of Newcastle,” said Mahlaba.
Corruption and maladministration to blame
Mahlaba said the money to Eskom should have been paid, but that a lack of financial discipline dumped the municipality into financial ruin.
He said the problems started in 2012, with fraud, corruption and maladministration being rife in the town.
He added that a forensic report showed how money was misappropriated out of the municipality by crooked officials.
He is, however, confident that they are turning the situation around and will be able to meet their financial commitments by mid-2020.
Eskom owed billions by municipalities
Eskom’s latest financial report shows that municipalities owe Eskom R19.9 billion.
The situation has become so bad that the DA is calling for drastic action to bring municipalities which have failed to pay Eskom to book.
The DA, however, pointed out that the problem of government departments not paying municipalities for electricity should also be addressed.
The party called on Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma, to recover the debt owed by government departments to municipalities.
The debt owed by municipalities to Eskom is close to R20 billion, and the debt owed by government departments to municipalities is also around R20 billion.
“Once government departments start paying municipalities what is due to them, municipalities will thus be in a far healthier financial position to pay their Eskom bills,” the DA said.