When municipalities fail to deliver essential services, why do the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (KZN CoGTA) and the provincial government not step in to address the problem?
This question was posed by Siphiwe Mbatha, a member of the KwaZulu-Natal Legislature representing the Umkhonto we Sizwe (MK) Party, who directed his inquiry specifically to the MEC of CoGTA regarding the Newcastle Local Municipality.
The issue of municipal challenges and service-delivery failures in Newcastle was discussed during the legislature’s Standing Committee on Public Accounts (SCOPA) session on Thursday, 30 October 2025, where Mbatha stated that the local municipality has collapsed and is a failure.
“Everything is a disaster”
Reflecting on systemic challenges across KwaZulu-Natal, Mbatha addressed the legislature and noted:
“When you drive up north, you must just go to Newcastle. You will be like, ‘There is no municipality in this area.’ Everything is a disaster — water and roads — and I am not talking about what is under the province’s care. I am talking about what is under the municipality’s control. Everything is just a mess. Now the question is, until when? Because there is a system failure in that Municipality, and CoGTA is doing nothing. There is a system failure at Newcastle Municipality and Amajuba itself, but CoGTA is doing nothing. The only thing we hear is promises.”
Mbatha further stressed the importance of the Auditor-General of South Africa reports, noting that the facts were clear. He emphasised that it was now time for the provincial leadership to take a closer look at both the Newcastle Local Municipality and other failing municipalities in KwaZulu-Natal, provide a concrete plan to address these issues, and demonstrate to the legislature that meaningful action was being taken.
MEC Buthelezi: “Newcastle is not dysfunctional”
In response to the concerns regarding Newcastle Municipality’s status, the MEC for CoGTA, Reverend Buthelezi, clarified:
“From where we are as CoGTA and our assessment, we would not say it has collapsed. There are challenges, but if you categorise municipalities in our state of local government, where you have dysfunctional, distressed, and functional municipalities, Newcastle Municipality certainly does not fall under dysfunctional municipalities.”
Moreover, he added that the municipality has fully utilised its municipal infrastructure grant.
“Not only that, but National Treasury has given them an extra allocation because of the good work they’ve done in infrastructure.”
Furthermore, the MEC noted that the municipality has also secured another grant via the Disaster Management Fund.
However, Buthelezi identified the most pressing challenge in Newcastle as non-payment in Madadeni and Osizweni, stating:
“They are not paying for the water, and they are not paying for the electricity, and those living in town are now subsidising those who are not paying. In terms of revenue enhancement, this has caused a huge strain on the fiscus of the Municipality. But in terms of governance and functionality, Newcastle Municipality is doing well.”
He also added that CoGTA would investigate further if appropriately directed.
The East–West divide
It should be stressed that the persistent issue of non-payment in Madadeni and Osizweni — areas directly supplied by Eskom SOC Ltd, leaving the municipality without enforcement leverage — has long forced Newcastle West to subsidise Newcastle East, a major problem eating away at the town.
Consequently, this has created deep-seated resentment among ratepayers who fund shared services amid deteriorating infrastructure.
As reported by Newcastillian News in September and October 2025, this imbalance stems from widespread non-payment in Newcastle East, where residents collectively owe the municipality R2 billion in unpaid services, mirroring the authority’s own debts to creditors and perpetuating a cycle of financial strain that hinders revenue collection and sadly, service delivery.
This debt burden, which includes an Eskom liability of R311 million as of February 2025—exacerbated by defaulters in both East and West but disproportionately concentrated in the former—has intensified following tariff hikes in July and August 2025.
Furthermore, electricity costs increased by an average of 13%, though residents report effective hikes of 35% to 65%, while water increased by 7%. As a result, in Newcastle West’s Ward 5 suburbs, including Ncandu Park, Amajuba Park, and Barry Hertzog Park, households now face monthly bills reaching R10 000, often for unreliable services characterised by chronic water outages, burst pipes, and pump failures.
Residents’ frustration grow
During a public meeting held on 16 September 2025, Ncandu Park residents stated:
“We’ve been hearing promises for years, but nothing changes. Now we are left to carry the financial burden.”
They blamed East non-payers for the erosion of services and called for transparency and usage-based billing.
Similarly, a 6 October 2025 report on Eskom’s smart-meter rollout noted Councillor Shandy Singh stating that “only six wards are carrying Newcastle”, while highlighting that prepaid smart meters are unlikely to resolve the financial imbalance.
Promises and plans
Over time, the municipality has pledged repeated action. For example, Mayor Xolani Dube committed at the September meeting to reviewing billing structures, benchmarking tariffs against cities like Durban and Johannesburg, escalating issues to SALGA for provincial intervention, and establishing a resident oversight committee.
These commitments were reiterated during the October smart-meter rollout; however, as of early November 2025, tangible improvements in debt recovery or tariff relief remain absent.
The law and provincial powers
It should be noted that under the Constitution of South Africa and the legislative mandate of provincial governments, the KZN CoGTA is empowered to intervene in municipalities under specified circumstances.
According to the department’s website:
“Section 139 provides for provincial intervention in local government. This intervention in municipalities includes the issuing of directives, and managing interventions by the Provincial Executive Council in accordance with the provisions of section 139(1)(a), (b) and (c); … Section 154 determines that provincial governments must provide support and strengthen the capacity of municipalities …” (KZN CoGTA ‘About Us’).
Furthermore, the SALGA-KZN “Municipal Support and Intervention Framework” states that provincial intervention can occur when a municipality fails to fulfil an executive obligation, fails to approve a budget or revenue-raising measures, is unable to meet its obligations to deliver services or meet financial commitments, or admits that it is unable to do so.
Interventions may include issuing directives, assuming responsibility, or, in exceptional cases, dissolving the municipal council and appointing an administrator.
Audit findings and oversight gaps
Additionally, the Auditor-General’s reports show that local government in South Africa remains under severe strain.
The 2023-24 consolidated general report states:
“Despite the commitments made … action has been too slow and little has changed, and that local government continues to be in a dire state.”
The situation in Newcastle Local Municipality underscores the persistent challenges of service delivery, financial management, and revenue collection. Despite existing constitutional and legislative mechanisms, including Section 139 interventions under the Municipal Finance Management Act, the provincial government has not taken the full measures available to address the municipality’s financial and operational strain.
Audit findings from the Auditor-General of South Africa and the SALGA Municipal Support and Intervention Framework indicate that, without decisive provincial oversight, the burden on compliant ratepayers will continue to grow, revenue shortfalls will persist, and essential services will remain at risk.
In this context, timely and targeted interventions are required to stabilise service delivery, ensure financial sustainability, and restore trust between the municipality and its residents.
What are your thoughts on this? Let us know below.
Be sure to read, South African Revenue Service (SARS): Complete Guide for Taxpayers and Businesses, if you missed it.
FAQs
Newcastle Municipality faces multiple challenges, including widespread non-payment of services in Madadeni and Osizweni, infrastructure deficits, and financial strain exacerbated by rising tariffs. These issues have created a significant burden on paying ratepayers and have hindered reliable water, electricity, and road maintenance.
As of early 2025, Newcastle East residents collectively owe the municipality approximately R2 billion in unpaid services. This includes an Eskom liability of R311 million, and combined with the municipality’s obligations to creditors, it perpetuates a cycle of financial strain that impacts service delivery.
The KwaZulu‑Natal Department of Cooperative Governance and Traditional Affairs (KZN CoGTA) is constitutionally mandated to provide oversight, support, and intervention under section 139 of the Constitution and the Municipal Finance Management Act (MFMA). Interventions may include issuing directives, assuming municipal responsibilities, or, in exceptional cases, dissolving councils.
The Newcastle Municipality has committed to reviewing billing structures, benchmarking tariffs against other major cities, escalating concerns to SALGA for provincial intervention, and establishing a resident oversight committee. However, as of early November 2025, tangible improvements in debt recovery or tariff relief have not yet materialised.
Residents in Newcastle West, particularly in Ward 5 suburbs like Ncandu Park, Amajuba Park, and Barry Hertzog Park, face escalating bills often exceeding R10,000 per month, along with intermittent services including water outages, pothole-damaged roads, and electricity disconnections. Pensioners, unemployed residents, and households reliant on municipal services report severe financial pressure and growing frustration.
One Response
It’s not only ward 5 (Ncandu Park, Amajuba Park, and Barry Hertzog Park, face escalating bills). Also other areas such as Sunny Ridge, Pioneer park and onwards, also all pensioners needs discounts on all service tariffs as they can’t keep up with costs of living!. The real answers are Newcastle west to have their own Municipality.