Newcastle Municipality's lights to stay on for now pending court decision

2019-10-03 20:02
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The Newcastle Municipality will not have its electricity supply cut off - for now - pending a decision by the high court in Pietermaritzburg on the hotly debated issue.

Eskom had threatened to turn off Newcastle's power supply on Sunday due to a R200m debt.

On Thursday, the municipality together with the provincial Department of Cooperative Governance brought an urgent application against Eskom to stop it from disrupting the town's electricity supply.

A final decision on cutting its power will be made early next week when Judge Piet Bezuidenhout hands down his reserved judgment.

During arguments in court, advocate Sydwell Shangisa, who is Eskom's legal representative, said the municipality had failed to comply with its constitutional obligations.

"The municipality is compelled to pay the electricity revenue it generates from ratepayers," added Shangisa, saying Eskom did not "suddenly wake up" and decide to cut off the electricity supply in Newcastle.

He said the municipality had been sent 10 letters warning that it was in breach.

Asked about the ramifications for the business community, residents and economy, Shangisa replied there was "ample authority" making it clear that Eskom was within its rights to interrupt the electricity supply of defaulting customers.

Eskom said it subsidised the municipality to the tune of R2m per day.

The municipality's legal representative, Joseph Nxusani, said the administrative action was likely to have "very serious" consequences for the municipality and ratepayers.

"The municipality is in [a state of] collapse because of high electricity tariffs, and in some instances there is a high default rate, which leaves them in a situation where they have to make choices on how to fulfill their constitutional obligations.

"The municipality derives a [monthly] income of R90m, its expenses are R110m and that leaves a R20m deficit."

Nxusani said over the course of the financial year, it had a deficit of R240m.

He also criticised Eskom for not alerting the municipality when it issued a final notice to disrupt the supply of electricity to the public, saying it was a "sheer chance" that the acting municipal manager had seen it in a newspaper.

"Eskom is taking the kind of retaliatory action designed to punish residents and create a rift between the municipality and residents. There have already been protests as a direct consequence of this. The community is being targeted at a time it needs electricity the most," Nxusani said.

The threat to cut electricity supplies is part of Eskom's strategy to recover debt from defaulting municipalities.

Read more on:    eskom
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