The Pietermaritzburg High Court on Tuesday granted an urgent interim interdict declaring that state power supplier Eskom should not cut power supply to Newcastle Municipality as it would be “catastrophic”.
The municipality and the KwaZulu-Natal department of cooperative governance and traditional affairs (Cogta) brought the urgent application to interdict Eskom from disconnecting the power.
The municipality owes Eskom more than R200-million, a debt that has accumulated over seven years.
In court last week, the municipality offered to make monthly payments of R20-million, but this was rejected by Eskom. The municipality upped the repayment amount to R30-million, but Eskom also rejected this.
Judge Sidwell Mngadi, on behalf of Judge Pieter Bezuidenhout, handed down the judgment.
“It is not disputed that [Eskom] is entitled to payment for the electricity supplied to the [municipality] and that the [municipality] must make such payments.
“It is also not disputed that if there is non-payment, [Eskom] is legally entitled to disrupt the electricity supply.
“However, the situation is not that simple. [Eskom] is the only electricity supplier to municipalities in the country. It is also not the non-payment for electricity of a specific entity, but of a municipality,” read Judge Bezuidenhout’s judgment.
He said the consequences of an electricity interruption – at crucial times - on residents and businesses had to be considered.
“There are industrial areas in Newcastle dependent on the electricity supply as well as well as various businesses, households and government departments, etc.
“If the electricity supply is disconnected or disrupted at crucial hours, it would have a catastrophic effect no only on all the residents and businesses, but on the whole economy of the town.”
Judge Bezuidenhout said that should the power be cut, it would not assist Eskom recovering the money it was owned.
It would also result in the failure of businesses and factories and cause job losses “in a country where it is common knowledge that the economy is struggling and high rates of unemployment is found in various areas of the country”.
There would be “irreparable harm” should the interim relief not have been granted, said Bezuidenhout.
He ruled that the municipality had to make a monthly minimum payment to Eskom of R30-million, starting on October 15, no later than the 15th of every month.
Judge Bezuidenhout reserved judgment on costs.
Responding to the judgment, provincial Cogta MEC, Sipho Hlomuka, said: “KZN Cogta has actively supported the efforts of Newcastle Municipality to force Eskom to accept its payment plan rather than pull the plug on all consumers and businesses within its jurisdiction.
“The payment plan has been drafted with Cogta's assistance and it is deemed affordable by the department, given the municipality's financial obligations."