Striving to improve its financial standing, the Newcastle Municipality has stated that it is taking decisive steps to address its substantial debt to both Eskom and uThukela Water.
In December 2023, Newcastillian News reported that the Municipality owed an astonishing R225,710,616.83 to uThukela Water and an additional R96,593,441.50 to Eskom.
At the time, the Newcastle Municipality explained that the Eskom debt resulted from the state-owned power utility charging the municipality for surplus electricity.
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Now seven months later, the Newcastle Municipality’s Communications Unit confirmed that these debts are gradually being resolved. The Communications Unit confirmed that payment plans have been signed with both institutions (Eskom and uThukela). It further stated that the current account due to Eskom as of 1 August 2024 is R83 million.
While the Communications Unit did not disclose the outstanding debt to uThukela Water, despite being queried on the substantial debt, it highlighted that the municipality is negotiating for a portion of the interest to be written off by uThukela Water.
Furthermore, in an effort to enhance its collection rate, which will enable the Municipality to focus on various service delivery issues and improve its financial standing, the Communications Unit explained, “The municipality has advertised a bid to appoint a debt collector to focus on the Eastern region, where the municipality is struggling to collect revenue. The procurement process will be finalised before the end of the first quarter so that benefits can be achieved before the mid-year assessment is conducted.”
In light of the government entity’s efforts to secure a debt collector, the Newcastle Municipality’s Communications Unit revealed that its biggest challenge was the prevalent culture of non-payment among individual customers in Newcastle East. It should be noted that both Madadeni and Osizweni fall within Newcastle East.
Despite this challenge, the Communications Unit asserted, “The municipality is committed to settling the debts and is paying current accounts to show that commitment. The payment plans have been implemented to deal with the arrear debt and demonstrate our dedication to addressing the debt.”
Recently, it has been noted that the Municipality has been actively improving service delivery in Newcastle. This includes tackling infrastructure issues such as preventing future flooding, enhancing water and sewage infrastructure, and repairing local roads where possible.
Discussing the task of resolving its debts while striving to enhance service delivery, the Communications Unit noted, “The municipality agrees that it has not been easy, but we are trying to balance the two for the benefit of our citizens.”
As the Newcastle Municipality works on its debt to the state-owned power utility, what are your thoughts on the above? Share your views in the comment section below.
