Durban - Eskom announced that Newcastle Municipality has settled its electricity arrears debt.
The municipality settled the massive debt with a payment of R127.4 million on July 5 ahead of the August 15, 2023 agreement target.
Eskom spokesperson Joyce Zingoni said in a statement on Monday that the state-owned power utility welcomed the settling of the debt.
“Eskom is grateful for the thorough and professional way the municipality has conducted itself during the tenure of the debt.”
Zingoni said the payment marked a significant milestone for Eskom, the Newcastle Municipality, the Department of Co-operative Governance and Traditional Affairs (CoGTA) and the KZN Treasury.
“In making this payment as full and final settlement of the R342.4m overdue debt, the municipality successfully discharged the conditions of the payment arrangement signed between the two organisations as facilitated by the chief director, CoGTA (KZN) and the office of the KZN treasury.”
According to Zingoni this payment marked Eskom’s largest settlement of overdue Municipal debt by a considerable margin.
Agnes Mlambo, general manager of Eskom’s Central East Cluster that includes KZN and the Free State, said the power utility acknowledges the dedication and commitment of the municipality leadership in resolving the various challenges over the past three years.
She said 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.
“Critically, the promises made were followed through with concrete actions. Without this physical discharge of the commitments made, the conditions of the payment arrangement would have lapsed, and Eskom would not have been able to fulfil its side of the equation,” said Mlambo.
Zingoni added that this settlement reflects the potential for success in South Africa when different people and organisations work together towards a common goal.
“For Eskom, it allows for the costs of electricity generation, transmission, and distribution to be recovered, allowing Eskom, as one of the largest power utilities in the world, to be self-sustainable,” she said.
“The Mercury” reported last year that Newcastle Municipality was among five other municipalities that owe Eskom several hundred million rand.
At the time of the report, the municipalities whose accounts were in arrears were Endumeni (Dundee) R36m, Msunduzi Municipality R189m, Newcastle R137m, Ulundi R99m and Mpofana (Mooi River) Municipality R293m.
Eskom said it looks forward to other municipalities, which are in a similar position, taking a leaf from the Newcastle Local Municipality book.
“Eskom would like to place on record its gratitude to the office of the chief director, CoGTA KZN and her staff, the director of municipal finance (KZN treasury) and his staff, as well as Eskom staff who worked tirelessly to ensure the success that we now celebrate.”
Newcastle Municipality have been approached for comment.