Tshwane Financial Crisis: Billions Needed To Bring The City To Its Former Glory


The city of Tshwane is in a financial crisis and needs billions to be fixed, thanks to the past ANC administration’s overspending.

These were the implied words of mayor Solly Msimanga who reported that former Tshwane ANC-led government only allocated 4% of its budget to preventative maintenance for water infrastructure, resulting in his government inheriting a multibillion-rand backlog.

This follows a presentation by MMC of finance Mare-Lise Fourie at the mayoral office in Centurion on Tuesday, where she presented the outcomes of the auditor general’s report, which was recently tabled at the council sitting.

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The ANC caucus celebrated at the council chambers when the auditor-general announced an unqualified audit for the 2015/16 financial year, rubbishing Msimanga’s claim of a corrupt and bankrupt municipality.

But Fourie said that although all necessary financial statements were submitted, the audit showed that the former ANC administration had overspent by R2 billion.

Mayor Solly Msimanga added by saying not even a cent of the money was budgeted for preventative maintenance last year, leaving the city to source close to R8 billion in funding.

One of the main challenge faced by Tshwane city is the continuous water shortage pioneered by several water pipeline bursts. To this, the mayor said though his government is looking into people’s complaints about burst water pipes, the city was in need of more plumbers and technicians to improve the turnaround time.

“Water leakage remains one of our biggest challenges. There has been a lack of maintenance for years. Tshwane still has the old asbestos pipe networks that will take a number of years to redo. It will cost about R8 billion to get the system where it needs to be.

“We are sitting with billions in backlogs that need to be covered. Not only water infrastructure, but the electricity backlog is at about R10 billion. We are working hard on addressing those issues” he said, adding that the R2 billion was never budgeted for.

Fourie explained that the accumulation of the budgeted billions not budgeted means the budget was under-funded or they just didn’t care. All of this shows that the current finances have put a considerable strain on the city’s ability to function and provide the services our people need, said the mayor.

To increase the city’s revenue, debts needed to be collected, including an outstanding amount of R582 million from government departments. Businesses owe R1.6 billion and households R4.1 billion, she said.

“Of particular concern to me is the unauthorized expenditure of more than R2 billion identified by the auditor-general,” she said.

Mayor Msimanga, however, noted that his administration is determined to turn around the city’s finances so that his administration would be able to “deal with the infrastructure that the former administration made no provision for, with respect to preventative infrastructure maintenance for water, for instance.”

Measures to increase the city’s revenue included getting people to pay their bills on time. Payment levels for January 2016 were at 85%.

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Added to the financial challenges, report has it that the cost of electricity theft in Tshwane has increased by about 56% in the 12 months ending 30 June 2016.

Acting City Manager of Tshwane Lindiwe Kwele, blames tampering with its controversial smart meters for the sharp increase in electricity losses.

Losses in the City of Cape Town were fairly flat at 11.42% (2015:11.25%) and the City of Tshwane states that the national energy regulator (Nersa) set a benchmark of 7% for technical losses on a network like Tshwane’s and 9% for non-technical losses.