Key points in this article:
- Newcastle Municipality’s Eskom Debt Escalates
- Non-Payment and Tariff Absorption Contribute to Crisis
- Efforts to Recover Outstanding Payments Underway
- Ongoing Financial Challenges with Eskom
The Newcastle Municipality finds itself heavily indebted to Eskom, owing the state-owned power utility a staggering R311 million. This was confirmed by the Municipality’s Finance Director during a community meeting held on Tuesday night, 25 February 2025.
Newcastle Municipality’s Councillor Bertie Meiring hosted the meeting at the Newcastle Show Hall, providing Ward 4 residents with an opportunity to discuss pressing issues affecting their community.
During the proceedings, a resident raised a critical question regarding how much the Municipality’s owed Eskom, sparking serious concerns about how the situation was being managed.
According to the Municipality’s Finance Director, Mfanafuthi Ndlovu, the substantial debt has accumulated due to widespread non-payment by both residents and businesses. Additionally, he highlighted that the Municipality had been absorbing a portion of the tariff increases imposed by the National Energy Regulator of South Africa (NERSA) to shield the community from excessive financial strain.
“Prior to the new tariff increases, NERSA approved an increase of just over 14%, and the Newcastle Municipality absorbed 2% of that increase to assist the community. Also, what the Newcastle Municipality is able to collect from residents in terms of their monthly bills is not enough to cover the debt owed to Eskom,” explained the Finance Director.
This revelation prompted a wave of concern from community members, who sought clarity on the Municipality’s efforts to resolve the issue.
Residents questioned whether action was being taken against defaulters and demanded insight into the extent of Newcastle East’s contribution to the overall debt.
Addressing these concerns, Cllr Meiring explained that in terms of collecting payment, the Municipality had no authority to take action against Newcastle East, which includes Madadeni and Osizweni, as Eskom supplies electricity directly to these areas, bypassing municipal control. However, he reassured the community that decisive steps were being taken to recover outstanding funds owed to the Municipality.
“The Newcastle Municipality is currently conducting a list of the top 100 defaulters, and we will then be taking steps against them. The Municipality has also employed three service providers to collect the outstanding debts,” he stated.
Furthermore, he emphasised that Newcastle East could not be solely blamed for the Municipality’s financial woes, pointing out that numerous residents and businesses in Newcastle West were also responsible for millions of rands in unpaid debts.
Moreover, the urgency of the situation was further underscored by residents’ concerns over the impending closure of ArcelorMittal South Africa’s long steel business in Newcastle, which is expected to impact the Municipality’s revenue collection. While residents expressed frustration over the mounting financial burden, they were assured that proactive measures were being implemented to address the crisis.
However, it should be noted that this is not the first time the Newcastle Municipality has faced significant financial strain due to Eskom-related debt.
In 2019, the Newcastle Municipality made national headlines when Eskom threatened to switch the town’s power off due its debt of R342 million. This debt took the Municipality four years to pay, with Eskom praising the Newcastle Municipality for clearing the debt.
To read more, click here.
Then in December 2023, Newcastillian News reported that the Newcastle Municipality owed Eskom a total of R96,593,441.50. At the time, Newcastle’s former Deputy Mayor, Musa Thwala, clarified that the Municipality bore no fault for this debt. He explained the debt stemmed from Eskom supplying more electricity than needed, billing the Municipality accordingly. This was despite the Municipality not requesting the additional electricity.
However, in March 2024, Newcastle Municipality’s Municipal Manager, Zamani Mcinecka assured that the Municipality managed to resolve the issue.
To read more, click here.
Now, as the Newcastle Municipality once again faces severe financial constraints related to Eskom, what are your thoughts on the situation? Share your views in the comments below.
13 Responses
It just shows you how our Municipality is lieing about their debt. According to us they settled it.
If we as residents skip one month our electricity gets cut off. Why don’t they cut, the businesses and the Residence that owe them soo much money, electricity off.
This country is going under because the people employed are not competent to do their work. Before 1994 we had a country that was well managed, was loyal and hard workers. They were also deciplined and controlled.
Where? Of course, that country took care of few of population
and discriminated a majority of it.
Take out the people who is incompetant to do their jobs because they are going to let down the hole of Newcastle. Residents cant not be punished for mis-management from top managers.
They have a responsibility against the whole town. What are they doing with all the monthly payments of loyal citizens of NN
Good morning,
Please explain; If Newcastle East is supplied directly by Eskom, bypassing Newcastle Municipality controls, why/how does it become Newcastle Municipality debt?
It allows Eskom to Invoice however they want.
I’ve been running on solar system (Completely off grid) for 2 years straight but I still get billed around R3200 per month.
I moved 10 years ago and back in Town. What baffles me is that if you did not pay by a certain date, you get cut off. Then you get charged reconnection fee with payment. What is different now, whether Business or Residential. I come to the conclusion that payments is being diverted, finance not managed, and Eskom account not being paid. Who is controlling Eskom account, people should speak up and tell the truth. This used to be such a well managed Municipality, and it self is to blame for miss Management.
This is not true if u dont pay they switch off so plse list the bussinese that hasnt paid but still get electricity ? They are lying and looking for exuses it is mismanagement this municipality is bankrupt look at the roads there is not one road without a pothole it is a disgrace this morning there was a taxi in a serious accident due to a pot hole ….we need to get rid of this wonderfull municipal management and put strict control on monies ….they can have meeting in private venues but cant fix the roads
Why waiting till it gets out of hand. Take immediate action when it happens.
Municipality is being mismanaged period. Firstly on our accounts we are being charged for electricity we do not use, under usage they give more units than we can use and charge us for the unused portion plus what we use. So where is the money going to.
Then when pensioners who ate willing to pay their monthly accounts, and need to apply for a discount of rates or the concession that t0he Gov allows for are not given it. Meaning that they are dissolving it somewhere and not giving to those who need that relief.
These Municipality Management musy be charged as they fraudulently allowed business and all the other people who owned money for more than a month not been switched off. How do the say working and poor are been made easy target’s by enforcing them cut off dates and so onwards. Now the outstanding depth must be paid by them the Municipality Management who allowed it, Not the Newcastle residents. Take their houses and car if they could not pay back.
What a Fecal & Self entitled council we have!
Meetings held with residents are only done to humor the residents, there has never been a positive outcome from these meetings for the residents.
This council resembles a person that would cry on your shoulder whilst he is urinating in your pocket at the same time. Absolutely disgusting!
Overflowing sewerage, potholes, poorly maintained water supply the list goes on and the excuses never ending.
You can cook the books as much as you like but we can all see what you are doing.
A fish rot from its head. Maybe it is time to investigate the salaries & benefits that are paid to the top council management.
Have you no shame Newcastle council!!
We need DOGE(department of Government Efficiency) in this country.
Electricity to Newcastle East is supplied directly by ESKOM.
Can the Honourable Ward Councillor, Cllr Bertie Meiring, please explain to the Newcastle West community how come that Newcastle East’s debt to ESKOM is added to Newcastle West’s debt?
Commenting on these issues seems like the biggest waste of time.It only makes you as the writer feel better because you’ve had your chance to spew acid, but it changes nothing and the corruption just seem to increase in speed and frequency!!One feels absolutely hopeless and frustrated to no end!!!!