Mahlaba Returns From Eskom With Good News And Bad News

Mayor, Dr Nthuthuko Mahlaba, promises there will be no power supply interruptions in Newcastle, following what he described as, “an excellent,” meeting with Eskom… But the Eskom has imposed strict conditions to ‘keeping the lights on’.

Dr Mahlaba was accompanied by acting municipal manager, Musi Mayisela, as well as representatives from Cogta (the Department of Co-operative Governance and Tradition Affairs) and Provincial Treasury when he engaged with Eskom on Monday. The urgent meeting was convened following a public announcement of Eskom’s intention to switch off power to Newcastle pending the municipality’s settlement of more than R213million debt.

“Remember, this is old debt. It is debt that was already here when we came into office. However, I really feel we had a good meeting with Eskom and that we are finding each other,” he said.

Eskom has agreed to extend the due date for the monthly payment of the municipality’s current account from the 2nd of each month to the 15th, allowing the municipality enough time to collect income from its ratepayers with which to make its payment to Eskom. Newcastle municipality is also negotiating a reduced monthly payment towards its existing debt by extending the duration over which the debt must be settled.

“We have not yet discussed the figure that we will be paying towards our existing debt every month, but in order to be able to stick to a payment plan, we need to pay in terms which are in conjunction with our existing financial situation. We need a workable plan so that we won’t default…” said Dr Mahlaba. “And Eskom has agreed that if we stick to the new payment plan, we will not have to pay any interest on our existing debt.”

“We have also found that we have been buying 125MW from Eskom, but on average, Newcastle only consumes about 84MW, so we are in the process of capping our purchase from Eskom at 100MW,” continued Dr Mahlaba. “From our side, we are trying to look at ways to reduce our costs. Some of the cost saving measures we are looking into, include reducing security and overtime in order to enhance our revenue. We will also be leasing out one of our buildings which hasn’t been in use for a long time.”

Eskom officials indicated that the Newcastle Municipality had signed payment plans on five different occasions in the past year, but reneged on their promise to pay every time. Asked what assurance the community has that the municipality will keep its word with the Eskom this time, Dr Mahlaba answered, “I am one hundred per cent certain, that with the support of Cogta and Treasury, we are going to be able to settle our debt with Eskom. The assurance I can give is that we have the political will to resolve this issue. I promise that we will stick to the plan.”

When it comes to the community’s call to have the property valuations reviewed, however, Dr Mahlaba stands his ground, saying the municipality will not apply a blanket approach to reducing this financial burden for Newcastle’s ratepayers.

“The community must understand that there are processes to be followed when it comes to property valuations. Residents needed to check the valuations roll and if they had a problem with the value of their property, the needed to have lodged an appeal. According to the law, once the objections period has closed, residents who still wish to appeal can be charged, but residents can still lodge queries and we will attend to them. Everyone, who has a problem, needs to submit a query, individually. We need to maintain the town’s infrastructure and the municipality cannot run without funds,” said Dr Mahlaba.

“Unfortunately, I could not be at the march today (Monday) but if I was there, I would tell the protestors that the municipality is sticking by its decisions. I am also a resident. I also experienced a rates increase, but I am paying. If you don’t pay, we will disconnect… It’s as simple as that. All of us have an obligation to pay what is due, but we will give property owners space to lodge their queries and we will attend to every query we receive,” concluded Dr Mahlaba. “I will address the protestors, but I will be honest and genuine when we engage. We must pay for services. Nothing comes for free and we must all be committed to the cause of making sure Newcastle returns to its former glory.”

DA constituency leader for the Amajuba District, Alf Lees, believes Newcastle’s residents should be grateful to Eskom for forcing the municipality to resolve its unpaid debt.

“We don’t want Eskom to cut the power. Most consumers have paid their bills and the economy will shut down if the electricity supply is interrupted, but unless Eskom puts pressure on the municipality, it will continue to allow the debt to escalate,” he explained.

“I spoke to the chief operating officer at Eskom and he feels that the municipality has plenty of time to resolve the issue and make good on its payment arrangement, so it is not imminent that Newcastle will be thrown into blackness. Eskom is being entirely reasonable. It is unfortunate that the municipality has reneged on its commitment to pay so many times. At the moment, Eskom is owed about R47billion by municipalities, and unless the municipalities settle their debt, that money will have to come from you and me.”

Mr Lees feels it would be possible for residents to obtain a court order to have the money they pay towards electricity ring-fenced for Eskom. “However, it would take a brave consumer or group of consumers to take on the legal costs and go ahead with that action,” he cautions.