The IFP-run Newcastle Local Municipality in northern KwaZulu-Natal which has been in the news for all the wrong reasons recently says it has finally settled the R264 million debt it owed to Eskom.
The debt has been an albatross around the neck of the municipality which has been battling financial challenges since 2012 when it was under the rule of the ANC.
At some point, it was feared that Eskom would switch off the lights and plunge the industrial town into darkness and bring it to a complete standstill.
On Tuesday, the municipality’s mayor, Xolani Dube, said they had settled the bill and thanked the provincial government led by the ANC, their archrival, for helping them to navigate the challenge.
Dube said they are among the few municipalities in the country that have settled their Eskom debt in record time.
‘’Owing to debt accrued from the previous administration, the municipality has been facing severe financial 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 electricity supply.
“It is for the above reason that we honoured the commitment of paying a monthly amount of R30 million which resulted in the full settlement of this debt ahead of the deadline,” Dube said.
He added that the settlement of the debt brings relief to the municipality which this year was forced to revise its “unrealistic budget” by the provincial Department of cooperative governance and traditional affairs (CoGTA).
“While the settling of Eskom debt brings significant relief from financial distress, the municipality’s financial 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” Dube said.
Now that the debt had been settled, Dube said they would shift their focus to service delivery matters.
“As the municipality begins to overcome its financial challenges, the Mayor would like to reassure residents of his commitment to channel this financial relief towards accelerated service delivery and would like to urge residents to continue honouring their monthly rate payments to help the municipality to render basic services effectively.”
Eskom is yet to confirm the municipality's claim regarding the debt and its comment will be added as soon as received.