Pietermaritzburg’s Msunduzi municipality placed under administration yet again

The worsening state of municipal affairs in the provincial capital including the collapse of service delivery, a looming financial crisis and allegations of internal sabotage has resulted in provincial government placing Msunduzi municipality under administration, reports Pietermaritzburg’s Public Eye newspaper.

The provincial cabinet held a special meeting on Friday afternoon to discuss the crisis and resolved to invoke Section 139 (1)B of the constitution to take control of the city’s affairs and stabilise its finances.

Just two weeks ago Capital Newspapers warned that unless provincial and national government stepped in, it would have been only a matter of days before the city’s coffers ran dry. The last publicly available financial records showed that, as of June 2018 Msunduzi’s outstanding debt had soared to over R3 billion.

Friday’s decision to place the city under administration did not come as a surprise to many stakeholders.

Acting premier and ANC chairman Zihle Zikalala had repeatedly warned the municipality to get its act together. Addressing the business community at a breakfast on Wednesday, Zikalala gave a clear signal that the time for talking was over and that provincial government would act decisively to stabilise the capital.

National logal government minister Dr Zweli Mkhize had also made exhaustive efforts to pull Msunduzi in line and it was believed that both Mkhize and Zikalala held high-level discussions this week, presumably to discuss Friday’s special cabinet resolution.

Previously, finance MEC Belinda Scott, speaking to Capital Newspapers after the recent tabling of the provincial budget, said reports of financial instability were concerning.

“Even though Msunduzi does not report to provincial treasury, we cannot ignore the problems that are being raised,” said Scott.

ANC councillor Sandile Dlamini said just two weeks ago that the municipality may find itself reacting when it was too late.

The municipality once had nearly R1 billion in its reserves, but over the past two years things had taken a turn for the worse. Aside from registering disclaimer and adverse audit opinions in two successive years, the municipality had also battled to collect revenue.

Pietermaritzburg Chamber of Business (PCB) CEO Melanie Venness said there was no alternative but to put the municipality under administration, as the organisation had become dysfunctional.

“In fact, it’s long overdue and the ratepayers of Msunduzi have had to bear the consequences of the gross mismanagement of our resources for far too long now. This the second time in the past 10 years that we’ve faced administration. What we would like to see this time, which we didn’t see last time, is some accountability for the decision-making as well as the actions that led us to this point,” said Venness.