The Newcastle Municipality’s financial position has come under heightened scrutiny following the circulation of a disputed R2.1 billion Eskom debt figure, now confirmed to have been incorrectly interpreted.
Yet the issue extends beyond the figure itself. It raises a broader question about how government entities should respond when discrepancies in official financial reporting enter the public domain.
In the spirit of democratic accountability, public institutions carry a responsibility to engage timeously and constructively with the media when matters of public interest require clarification.
This is particularly important where official documents are ambiguous, figures are disputed, and residents are left relying on competing explanations from different arms of government.
In this case, the disputed Eskom figure has exposed inconsistencies in the presentation of provincial Treasury data, highlighted gaps between Treasury-linked reporting and municipal communications, and placed renewed focus on the need for clear, functional engagement between government entities and the media when the public record requires correction.
At the centre of the matter is the KwaZulu-Natal Consolidated Municipal Budgets Performance Report, where a grammatical and structural ambiguity in the presentation of figures materially altered their interpretation.
As a result, the R2.1 billion figure—widely understood and reported as Newcastle’s standalone Eskom liability—was, in fact, a combined total attributed across multiple municipalities listed under the over 90-day category.
However, the broader fallout has been compounded by the KZN Treasury’s decision not to issue a formal correction or clarification, alongside the Newcastle Local Municipality’s response, which has focused on rejecting media reporting rather than substantively engaging with the media regarding the underlying data discrepancy.
This follows reporting by Newcastillian News on 20 May 2026, which highlighted that, according to the KZN Treasury’s Consolidated Municipal Performance Report, Newcastle was among the municipalities recorded with significant overdue bulk electricity obligations, with R2.1 billion reflected under Eskom-related arrears in the over 90-day category.
That figure, while directly drawn from the wording and formatting of the Treasury document at the time, has since been clarified as a misinterpretation arising from the structure and phrasing of the report itself rather than a standalone municipal liability.
While Newcastillian News was not the only media outlet to report on the R2.1 billion figure as they appeared in the Treasury documentation—it is now acknowledged that the initial reporting was consistent with the wording of the Treasury’s report; however, it has since emerged that ambiguity in the document’s construction resulted in a misinterpretation of the figures.
In light of this, Newcastillian News has moved to correct the record.
The ambiguity originates from the following excerpt in the Treasury report:
“This was due to the fact that the Newcastle, Msunduzi, eNdumeni, Ulundi, AbaQulusi, Mthonjaneni, eMadlangeni and eDumbe Local Municipalities reported amounts in the Over 90 Days category owing to Eskom of R2.1 billion, R540.3 million, R530.3 million, R374.4 million, R345.6 million, R283 million, R58.4 million, R21 million and R54 000 respectively for unpaid electricity. Furthermore, Bulk electricity is understated as the Mpofana Local Municipality reported no amounts owed for Bulk electricity whilst the MFMA Section 41 report for March 2026 reflects an amount owed of R666.9 million in the Over 90 Days category.”
Newcastillian News had attempted, without success, to confirm the figures with Treasury prior to publication.
Following the publication of Newcastle’s R2.1bn Eskom Debt Hangs Over EXCO’s Budget Push, and after becoming aware that the figures had been disputed, Newcastillian News formally sought clarification from both KZN Treasury MEC for Finance, Francois Rodgers, and Newcastle Local Municipality.
Newcastillian News also made follow-up telephonic attempts to secure clarity from the Newcastle Municipality, during which it was indicated that an official engagement with the Municipal Manager would be arranged. However, at the time of publication, no substantive response had been received from the Municipality.
The Newcastle Municipality then issued the following formal statement:
MEDIA STATEMENT
FOR IMMEDIATE RELEASE
Date: 26 May 2026
NEWCASTLE MUNICIPALITY REJECTS FALSE AND MISLEADING REPORTING REGARDING ESKOM MATTERS
The Newcastle Municipality has noted with serious concern a media article published under the headline “Newcastle’s R2.1bn Eskom Debt Hangs Over EXCO’s Budget Push.”
The Municipality categorically rejects the headline and narrative presented in the article, as it is misleading, inaccurate, unbalanced, and creates a false impression regarding the financial position and governance affairs of the institution.
The publication of sensationalised and unverified information compromises the integrity, credibility, and public image of the Municipality, while simultaneously creating unnecessary panic and confusion amongst residents, stakeholders, investors, and the broader public.
As a public institution established in terms of the Constitution of the Republic of South Africa, Newcastle Municipality remains fully committed to transparency, accountability, and openness in all matters affecting the public interest.
Furthermore, contrary to the false and misleading narrative being perpetuated, the Municipality wishes to categorically place on record that it is in fact owed approximately R2.4 billion by members of the public in outstanding consumer debt.
According to the Municipality’s latest debt summary records, the total outstanding public debt currently stands at precisely R2 440 731 744.87. Of this amount, the Newcastle Eastern Wards account for R2 169 792 311.51 (88.90%), while the Newcastle Western Wards account for R270 939 433.36 (11.10%).
The Municipality further acknowledges that as of 18 May 2026, it is truly and lawfully indebted to Eskom in the sum of R670,533,672.83 as per payment plan agreement with Eskom.
The Municipality will continue to communicate openly with the public on matters affecting service delivery, governance, and financial administration through official and verified communication platforms.
Ends.
Issued by:
Newcastle Local Municipality Communications and Customer Relations Directorate
Despite the Municipality’s categorical rejection of the reporting, MEC for Finance Francois Rodgers has since confirmed to Newcastillian News that the R2.1 billion figure was incorrectly interpreted.
Although KZN Treasury has declined to issue a formal amendment, correction, or explanatory note, MEC Rodgers clarified that the figure represents the combined total of Eskom arrears in the over 90-day category across multiple municipalities listed in the Treasury report, and not a singular liability attributed to Newcastle Municipality.
He further explained that, according to Newcastle Municipality’s MFMA Creditors Age Analysis S71 Report, the Municipality owes Eskom R540.3 million specifically within the over 90-day category, with the total outstanding Eskom obligation recorded at R674.9 million, broken down as follows:
- 0–30 days: Zero;
- 30–60 days: R67.5 million;
- 60–90 days: R67.1 million;
- Over 90 days: R540.3 million.
Although KZN Treasury has not issued a formal correction or explanatory note regarding the grammatical and structural ambiguity in the report, the wording contributed to the misinterpretation of the R2.1 billion figure across more than one media platform.
At the same time, the Municipality’s own statement confirmed that;
“As of 18 May 2026, it is truly and lawfully indebted to Eskom in the sum of R670,533,672.83 as per payment plan agreement with Eskom.”
However, MEC Rodgers has indicated that the Eskom Section 41 Report reflected a higher amount, placing Newcastle Municipality’s Eskom debt at R752 million at the end of March 2026, despite a different amount having been reflected in Treasury’s earlier statement.
This leaves a difference of approximately R81 million between the figure referenced by the MEC and the amount communicated by the Municipality’s Communications Unit on Tuesday, 26 May 2026.
As per MEC Rodgers, “According to the Eskom Section 41 Report at the end of March 2026, Newcastle owed Eskom and amount of R 752 million.”
This position has been corroborated by Newcastle Municipality’s MPAC Chairperson, Councillor Bebsie Cronje, who stated;
“MEC Francois Rogers was correct when he stated that the municipality owed Eskom R752 million, as this was the outstanding amount for March 2026.”
She further noted that while subsequent payments have since reduced the figure to approximately R670 million, the divergence between the R752 million and R670 million figures remains significant, particularly in the context of financial reporting timelines and disclosure consistency.
Furthermore, while the Democratic Alliance (DA) initially formed part of a coalition arrangement led by the Inkatha Freedom Party (IFP), Councillor Cronje clarified that this arrangement no longer constitutes a formal coalition structure.
“Firstly, we need to make it very clear, that the DA is not in a coalition with the IFP in the IFP-led Newcastle Municipality. At the beginning of the current term, we entered into a working relationship to ensure that the DA was placed in crucial portfolios, namely Chairperson of Development and Planning and Chairperson of MPAC,” she said.
She further added that the DA remains an active opposition party and did not support the budget in Council on Wednesday, 27 May 2026.
“It is not a pro-service delivery budget,” told Cronje.
Against this backdrop, Cronje confirmed that, from an MPAC oversight perspective, investigations are ongoing, with certain matters being escalated to the Financial Disciplinary Board for further investigation.
While Newcastillian News has acknowledged and corrected the earlier erroneous interpretation of the R2.1 billion figure, this is not the first instance in which discrepancies have emerged between Treasury reporting and municipal communications in the public domain.
In April 2025, KZN Treasury announced National Treasury’s decision to suspend conditional grant funding totalling R861.4 million to 25 municipalities across KwaZulu-Natal, including Newcastle, due to sustained underperformance.
Among the municipalities affected were Newcastle, Ladysmith, and Vryheid, with Treasury citing comprehensive performance assessments undertaken in collaboration with provincial and national authorities.
These assessments identified shortcomings across multiple programmes, including:
- Water Services Infrastructure Grant (WSIG)
- Energy Efficiency Demand Side Management (EEDSM)
- Expanded Public Works Programme (EPWP)
- Informal Settlements Upgrading Partnership Grant (ISUPG)
- Integrated National Electrification Programme (INEP)
- Municipal Infrastructure Grant (MIG)
- Neighbourhood Development Partnership Grant (NDPG)
- Public Transport Network Grant (PTNG)
- Regional Bulk Infrastructure Grant (RBIG)
- Rural Roads Asset Management Systems Grant (RRAMS)
At the time, MEC for Finance Francois Rodgers stated:
“We are incredibly disappointed by the underspending and poor financial government on the part of these municipalities, as this impacts service delivery. The decision to suspend the flow of funds follows attempts to rectify the situation with the municipalities. Unfortunately, it became clear that the only appropriate action in this regard is to reduce the municipalities’ allocation.”
However, the Municipality disputed Treasury’s position at the time, stating that it had not been made aware of such findings and asserting that all conditional grants were being utilised appropriately.
This created a clear divergence between the Municipality’s public position and Treasury’s assessment.
It should also be noted that Newcastle Municipality responded to Treasury’s statement approximately a month after the provincial entity’s announcement, despite earlier attempts to secure comment from the Municipality.
Further scrutiny emerged in June 2025, when Dr Imran Keeka submitted a parliamentary question highlighting inconsistencies between municipal statements and Treasury findings.
He stated:
“At the Newcastle IDP Roadshow on 5 May 2025, the CFO of the Newcastle Municipality was insistent that they did not submit an unfunded budget to Treasury. She went on to explain that their budget had a projected surplus of R37 million. She, together with the Speaker of the Municipality (Cllr Thengi Zulu), blamed the media for essentially peddling false and fake news.”
He further added:
“Essentially, they have discredited the MEC and Treasury’s assessment of their budget on a public platform. This iteration of the CFO’s view was subsequently repeated by others who presented and who suggested that such false information was disseminated by politicians for their own nefarious purposes. Such defamation of the Treasury process and the dignity of the MEC cannot be without consequence, given what may have been their own error.”
In its formal response, KZN Treasury confirmed that Newcastle Municipality’s 2025/2026 Annual Budget, tabled on 28 March 2025, was initially assessed as unfunded by R28.6 million following an analysis of the submitted documentation.
Although a revised submission later “appeared to be funded”, the episode further highlighted the discrepancies that have emerged between municipal reporting and Treasury oversight conclusions.
Further clarity has since been sought from the MEC for Finance regarding the source of the current discrepancies, including whether they stem from timing differences, reporting methodologies, or unresolved liabilities. However, KZN Treasury has declined to provide additional detail.
Meanwhile, Newcastillian News continues to await a substantive response from Newcastle Municipality. As previously stated, despite earlier indications that engagement would be arranged, no direct clarification had been provided by the Municipality’s Communications Unit at the time of publication.
This remains notable in a matter where fiscal accuracy, public disclosure, and institutional accountability are central to public interest.
Against this backdrop, the divergence between the MEC for Finance’s reference to approximately R752 million and the Municipality’s own disclosure of an outstanding Eskom obligation in the region of R670 million points to more than a simple timing difference.
This gap, while partially explained by payment movements and reporting cut-off dates, nonetheless raises clear questions about consistency in financial disclosure and the reliability of current figures circulated in the public domain.
Ultimately, the persistence of two distinct figures, each attributed to official sources, underscores the difficulty in establishing a single, stable reference point for the Municipality’s actual Eskom exposure.
Until reporting frameworks, reconciliations, and public disclosures are properly aligned, discrepancies of this nature could continue.
As a result, public understanding of the Municipality’s financial position remains dependent on which dataset, reporting cycle, or official statement is being referenced.
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