Municipalities in fiscal turmoil as appropriations committee scrutinises financial mismanagement
The Standing Committee on Appropriations has raised an alarm over the dire financial state of metropolitan municipalities
Image: Supplied
The Standing Committee on Appropriations has raised an alarm over the dire financial state of metropolitan municipalities during a recent engagement with the Mangaung Metropolitan Municipality in the Free State, as part of discussions surrounding the 2025 Division of Revenue Bill.
The committee's session focused on the pressing fiscal challenges exacerbated by unfunded mandates and poor financial management practices that continue to plague these vital urban areas.
One of the major points of contention was the late submission of critical documents by the City of Johannesburg, which arrived a mere 30 minutes before the meeting commenced, limiting the committee's ability to review and discuss its contents thoroughly.
In response, the committee has resolved to reconvene with Johannesburg next week in hopes of addressing these concerns in detail.
Particular emphasis was placed on the financial practices at the Mangaung Municipality, where several directorates are reportedly overspending their approved annual allocations by an alarming 10 to 12 per cent.
Much of this overspend can be traced back to bloated employee costs and outsourced contracted services. Committee members expressed their alarm at the continuing trend of outsourcing fundamental municipal responsibilities, arguing it undermines institutional capacity and invites potential misuse of funds by service providers.
Committee chairperson Mmusi Maimane did not mince words, highlighting the pervasive threat of corruption that continues to inflate service delivery costs.
'What should cost one rand ends up costing three, four or even five rands due to corrupt practices,' he emphasised.
The committee is firmly of the view that addressing corruption is essential to restoring financial integrity and ensuring that funds are used effectively for public services.
In a stern reminder of the consequences of mismanaged resources, the committee pointed to Mangaung's failure to achieve unqualified audit outcomes for the last three consecutive years.
The Auditor-General's reports have consistently pointed to significant financial management deficiencies, including weak internal controls and governance failures that undermine public trust.
Members of the committee urged Mangaung to clarify its outstanding debts to Eskom, emphasising the urgency of reporting on any progress made in tackling these fiscal obligations.
Maimane further lamented the broader decline of metropolitan municipalities across the country, particularly focusing on the deteriorating conditions in inner-city areas.
He warned that such decline leads to a profound loss of housing opportunities and vital economic infrastructure, exacerbating already strained urban living conditions.
As part of its discussions, the committee issued a pointed reminder to municipal officials to prioritise basic service delivery, which includes repairing potholes, installing traffic lights, ensuring reliable water access, and maintaining clean sanitation facilities in informal settlements.
IOL
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
eNCA
2 days ago
- eNCA
Employees charge utility R3bn for overtime
JOHANNESBURG - Eskom is bleeding cash at an alarming rate. Its financial report reveals over R10-million in board fees and R3-billion in overtime was paid out. Electricity Minister Dr Kgosientsho Ramokgopa was replying to a Parliamentary question from the EFF. Energy expert Mohamed Madhi said there are a number of factors relating to overtime.
IOL News
2 days ago
- IOL News
Will SA bear the cost of Eskom's R257bn air quality compliance?
Cooling towers at an Eskom coal-based power station in Duhva. Image: Mike Hutchings/Reuters SOUTH Africa's electricity crisis is about to get worse, not just because of load shedding, but because of the staggering cost of cleaning up Eskom's toxic air pollution. In a tense engagement with the National Council of Provinces (NCOP) Select Committee on Agriculture, Land Reform and Mineral Resources, Eskom executives dropped a bombshell: full compliance with stricter air quality laws would cost R257 billion in capital expenditure and R6.3bn per year in operational costs — potentially hiking electricity tariffs by 10%. Even more alarming? Without compliance, 22 gigawatts of Eskom's coal fleet — nearly half its capacity — could be forcibly shut down after 2030 due to sulphur dioxide violations. The revelations came as Eskom's chief executive, Dan Marokane, and Deputy Minister of Electricity and Energy, Samantha Graham-Mare, faced tough questions from MPs over the utility's financial constraints, its slow transition to cleaner energy, and the devastating health impacts of coal pollution on communities. Eskom has already spent R3bn on emission reduction projects, with another R15.6bn allocated over the next five years. But this is a drop in the ocean compared to what is needed. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Marokane admitted that while Eskom currently met SO² and nitrogen oxide limits, post-2030 regulations present an existential threat. The utility's proposed 'compromise' solution — focusing on SO² reductions at Kusile and Medupi, along with particulate matter upgrades at six other stations — would still require R77bn in capital and R2.1bn per year in operational costs. But even this plan is in jeopardy. Only R15.6bn has been budgeted for emissions projects over the next five years — far short of what's needed. Perhaps the most damning admission came from Deidre Herbst, Eskom's Senior Manager for Environment, who revealed that retrofitting the aging coal fleet for full compliance could take up to 14 years and more than R257bn — only for many of these plants to be decommissioned shortly afterward. 'Given the time frames, refitting most plants would be imprudent, constituting fruitless and wasteful expenditure,' Herbst said. Several power stations — Matla, Duvha, and Kriel — will shut down before flue-gas desulfurisation (FGD) plants can even be installed. Others, such as Lethabo, Tutuka, Matimba, and Kendal, will close shortly after FGD completion. 'Majuba and Matimba are in sparsely populated areas, limiting the health impact and cost benefit,' Herbst said — an utterance that drew sharp criticism from MPs who accused Eskom of downplaying the health risks to rural communities. MPs did not hold back in their criticism. DA MP Nico Pienaar demanded answers on why R40bn was being spent on diesel generation — money that could instead fund FGD plants. 'What happens if the new FGD plant isn't built and diesel turbines aren't closed, as per the World Bank agreement?' he asked. The DA's Sune Boshoff was even more scathing: 'Gauteng looks terrible when the wind blows. Is Eskom not wasting money on upgrading structures that won't exist much longer?' She slammed the projected 10% tariff hike to fund compliance, asking why alternative technologies and international funding were not being aggressively pursued. The EFF's Moses Kennedy pressed Eskom on whether independent health impact assessments had been conducted near Kendal, Matla, and Duvha stations, where residents suffer from chronic respiratory illnesses. Herbst admitted that while health benefits from cleaner stoves had been studied, power station health assessments were still lacking. Eskom's much-touted Just Energy Transition (JET) also came under fire. The state-owned utility's air quality offset programme — meant to provide cleaner energy alternatives to 96 000 households in Mpumalanga — has reached only 5 500 homes so far. Herbst claimed the rollout would accelerate, but MPs remained sceptical. Meanwhile, Northern Cape representatives Henri van den Berg (FF+) and Patricia Mabilo (ANC) pushed for green hydrogen and ammonia projects, arguing that they could create jobs. Deputy Minister Graham-Mare revealed that the EU had pledged €7bn for energy transition projects, including aviation sector decarbonisation. But with coal-dependent regions such as Mpumalanga facing massive job losses, MPs questioned whether the transition was truly 'just'. Marokane hinted at a controversial solution: nuclear energy. 'Most countries are building nuclear,' he said, suggesting that South Africa's Integrated Resource Plan (IRP) should reconsider its stance. 'Nuclear stimulates economies and industrialisation.' Yet, with Eskom's finances in shambles and R50bn earmarked for new technologies — including a Medupi FGD plant — the feasibility of nuclear expansion remained doubtful. Eskom's dilemma is clear: Spend R257 billion to comply with air quality laws, raising tariffs by 10%. Risk 22 GW of shutdowns if they don't comply, plunging SA into darkness. Face public outrage over health impacts and job losses in coal regions. As Deputy Minister Graham-Mare admitted, 'This is about balancing interests with limited resources.' But for millions of South Africans choking on coal pollution and struggling with soaring electricity costs, that balance feels dangerously skewed. The question remains: Will Eskom clean up its act—or will South Africans pay the price for its failure? Get the real story on the go: Follow the Sunday Independent on WhatsApp.
The South African
3 days ago
- The South African
'False prophets': Mmusi Maimane takes swipe at Floyd, Bushiri
Build One South Africa (BOSA) leader Mmusi Maimane has taken a swipe at Floyd Shivambu's political standing with the MK Party and his controversial visit to Prophet Shepard Bushiri, a fugitive of South Africa. On Thursday, 19 June, the former secretary-general held a press briefing in which he expressed interest in forming his own party. He also used the opportunity to insult his former parties, the EFF and the ANC. Outspoken Floyd also indirectly threw shade at Duduzile Zuma-Sambudla, the daughter of former president Jacob Zuma. With Floyd Shivambu's press conference a hot topic on social media, Mmusi Maimane used his X account to mock the MK MP's headlines. Hinting at his visit to the wanted Malawian pastor, and Floyd's prospective party, Mmusi posted: 'Join @BuildOneSA. We will not Bushiri you'. Addressing South Africans, Mmusi Maimane continued in another post: 'You deserve a political party that does not chase false prophets. You deserve a political party that is not a family business. 'Join the party of ubuntu and professionalism, not umuntu and bushirism'. Throwing more shade – this time at Mzansi's viral drug feind – he added: 'Others, they have Alostro'. Apart from politics, Mmusi Maimaine is also an ordained minister and an elder at the Liberty Church in Johannesburg. The father of three – who has a masters in theology – also regularly preaches at churches around South Africa and around the world. He said of his choice of career: 'Politics is about two things: it's about government and it's about influence…the only way they (Christians) will become in charge of the nation is if the nation votes for them.' Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
