Durban - THE RULING in the Pietermaritzburg High Court in favour of keeping Newcastle Municipality connected to the power grid has adverse consequences for Eskom’s operations and power supply, the power utility said yesterday.
The court ruled that Newcastle residents and businesses would be the hardest hit if the parastatal was allowed to cut electricity supply over the municipality’s more than R200 million debt.
In court papers the municipality said it could afford R30m monthly payments, while Eskom wanted R60m per month.
The municipality and co-operative governance and traditional affairs MEC Sipho Hlomuka filed an urgent application on September 29 to interdict the parastatal from disconnecting the town’s electricity supply, pending yesterday’s hearing.
The applicants were granted relief by Judge J Bezuidenhout, which effectively meant the municipality’s residents will not be left in the dark.
Eskom had submitted that the municipality generated a profit of just over R200m a year from the sale of electricity to consumers and should be able to pay its debt.
A counter argument was made, however, that Eskom failed to take into account the operating expenses to maintain the electricity supply network, breakages, salaries and operations-
related expenses.
Eskom was also found not to have given formal notice to the municipality that its power would be interrupted or disconnected, if the owed amount was not paid or arrangements made for the payment of its outstanding debt.
It was submitted that if electricity was disconnected or interrupted, the effect would be “catastrophic”, and would severely affect residents and businesses in Newcastle.
For those reasons the court granted interim relief in favour of the municipality, with conditions that it made monthly payments of R30m, starting on Tuesday.
Eskom KwaZulu-Natal spokesperson Joyce Zingoni said they were disappointed by the outcome, but that they would respect the judgment.
“We trust that Newcastle Municipality will do the same by paying the monthly R30m on the set dates. Eskom is concerned about the financial implications of the judgment on its operations and security of supply.
“The revenue we collect is crucial for producing electricity, servicing the customers, and strengthening the power-supply network for the future economic growth of the province,” she said.
Co-operative governance MEC Sipho Hlomuka said the judgment was a welcome relief for the residents and businesses of Newcastle. At the same time, the judgment does not exempt Newcastle from settling its debt with Eskom, which is also good news for the power utility,” said Hlomuka.