Nelson Mandela Bay's Business Chamber has warned that the metro's spiralling electricity losses will force the city into insolvency and collapse municipal services if there is no urgent intervention.

The Nelson Mandela Bay Business Chamber has cautioned that the municipality is at risk of defaulting on payments to Eskom as losses from its electricity department approach a projected R1.7-billion this financial year.

Calling the situation dire, Business Chamber CEO Denise van Huyssteen said the crisis could ultimately render the metro insolvent and collapse municipal services.

The warning comes after the metro recorded electricity losses of R840-million and a investment portfolio reduced by R318-million in the first half of 2025/26.

Keep up with the latest headlines on WhatsApp | LinkedIn

With electricity failing to generate a profit, the city is covering the shortfall by dipping into its reserves.

Van Huyssteen said the municipality's electricity trading losses and shrinking reserves were placing the metro's financial sustainability under severe pressure.

She said an Eskom takeover of electricity distribution was one of the options the municipality needed to urgently consider, alongside authorising Eskom's active partnering initiative to provide technical assistance.

A business environment under threat

Van Huyssteen said municipal service delivery had already deteriorated to the extent that the environment was no longer enabling for business.

"High-risk areas include the lack of safety and security, poor water management and unreliable electricity," Van Huyssteen said.

She said that since 2023 the metro's industrial...