2021 LOCAL ELECTIONS GROUND LEVEL REPORT
Decaying Ugu District: Mayor says protests alert municipalities to service delivery challenges in KZN’s South Coast
All the municipalities in the district, including the district itself, have, over the last eight years, repeatedly found themselves on the ‘financially distressed’ list released annually by the National Treasury.
Ugu District Municipality Mayor Sizwe Ngcobo this week claimed — without a blush — that the district had delivered on its 2016 local government elections promises, that he welcomed protests as these assisted in communicating with residents, and that the district had a plan for water delivery (weeks without water are not uncommon in the area) — but that plan was no longer relevant.
It appears Ngcobo has not read the district’s last three Auditor-General and National Treasury reports.
Too, the mayor seems oblivious to the fact that the last two protests in Ugu — in March and July — led to extensive damage of municipal assets, infrastructure, and negatively impacted on the local economy, particularly tourism, which accounts for more than two-thirds of the region’s gross domestic product.
Ngcobo made his sans-a-blush comments at an ANC-organised “Hot Seat” forum on Monday where six of KwaZulu-Natal’s mayors were able to “state their case”, as well as field questions from journalists and the public.
Ngcobo was representing the district and the four local municipalities of Umdoni, Umzumbe, Umuziwabantu and Ray Nkonyeni. All are majority governed by the ANC.
The main towns in the district include Harding, Hibberdene, Margate, Pennington, Port Edward, Port Shepstone, Scottburgh/Umzinto North, Ramsgate, Marburg and Southbroom.
While the district is known as Ugu, it is referred to as the South Coast, which includes 112km of coastline from Scottburgh in the north to Port Edward in the south, bordering on the Eastern Cape, and west towards Harding.
Daily Maverick earlier this year tried over two months to pry answers from the district over its water problems, but questions remained unanswered. Instead, we had to rely on Ngcobo’s claims, monthly council minute reports as far back as March 2019, and several provincial and national government reports.
Nevertheless, said Ngcobo during the “hot seat” forum: “Are we doing those things we promised in 2016? The answer is yes. As the ANC government we have constructed a number of roads, we have electrified a number of houses, we now have tarred roads in rural areas.”
Here is what the mayor didn’t say.
The municipality last received an unqualified audit from the Auditor-General in the 2015-16 financial year. It received a qualified audit in 2016-17 — which was the first year for the current council’s term — an adverse opinion in 2016-2018 and qualified audits again in 2018-19 and 2019-2020.
Ugu failed to finalise its latest audit within the legislated period.
In fairness, Ngcobo only took up the position in September 2019, replacing Mondli Chiliza who was deployed to the provincial legislature. Ngcobo was previously the mayor of Umzumbe, a rural municipality almost entirely reliant on government transfers for its budget.
So dire have the audit opinions been for Ugu, that when Adéle Howard of the Auditor-General’s office attended a council meeting in May 2021 to present the 2019/2020 audit findings, which contained a list of 34 serious areas of concern, Ngcobo asked if Ugu had fewer findings than the previous year. Replied Howard: “They were relatively the same.”
And the findings were grim — irregular expenditure of R281.9-million, unauthorised expenditure of R295.3-million and fruitless and wasteful expenditure of R10.9-million, the latter being more than double that of its peers in the province, according to the National Treasury.
Other findings included the inability to meet targets, concerns over the ability to meet basic service delivery needs, problems with the indigent register, lack of internal controls and lack of consequence management.
Three of the local municipalities — Ray Nkonyeni, Umuziwabantu and Umzumbe — received unqualified audits with findings. Umdoni received a qualified opinion. The municipalities failed to comply with the Municipal Finance Management Act, procurement regulations and had material misstatements in their financial reporting. The performance reports — a scorecard of achieved versus promised — were of inadequate quality.
The visible signs of decay are hard to miss. Earlier this month, Daily Maverick took a road trip to the area and recorded 70 potholes — we only recorded those 20cm in diameter or more and at least a fist deep — over a 41km stretch on the R620 between the Hibberdene N2 off-ramp and Margate. This road is the region’s main thoroughfare along the coast and drives economic activity. The only other alternative is the tolled N2.
A drive on various residential roads found the situation equally dire, while roads in rural areas such as Mnamfu had washed away on dangerous hillsides. Children had filled in potholes with sand. Gravel roads did not appear to be maintained.
“There is an ANC plan to make this district one of the best [run municipalities],” said a beaming Ngcobo at the forum, without offering details on how this would be done.
All of the municipalities in the district, including the district itself, have, over the last eight years, repeatedly found themselves on the “financially distressed” list released annually by the National Treasury, known as the State of Local Government Finances and Financial Management Report.
Being deemed in “financial distress” is an indicator that a municipality could be close to collapse, or already has collapsed.
According to the Treasury, “Liquidity challenges are the most common manifestation of financial distress in a municipality.”
Ugu has been on this list three times, with the last two being in the 2020 and 2021 editions of the report.
The instability in leadership and fiscal direction was magnified when the council suspended municipal manager Dhanpalan Devaraj Naidoo in November 2020 on allegations of fraud and corruption.
This was after a lengthy investigation by the KZN Department of Cooperative Governance and Traditional Affairs. In April the municipality said that an “amicable settlement equivalent to six months’ salary has been concluded between the municipality and Mr DD Naidoo to part ways amicably from his employment contract with immediate effect”.
The Democratic Alliance — the official opposition in Ugu — has twice called for the municipality to be placed under the administration of the province.
The DA made its first request in May 2019, and on 20 October 2021 it picketed outside Ugu’s offices in Port Shepstone demanding that it be done. The party also called for an increase in spending on repairs and maintenance.
According to the National Treasury, municipalities should spend 8% of the value of their total fixed assets that include property, plant and equipment, on repairs and maintenance.
According to the district’s audited statements, between the 2015/16 and 2018/19 fiscal years it spent an average of 1.5% on repairs and maintenance.
And judging by Ngcobo’s response, it is unclear if the district has a clear plan for water delivery.
“The issue of water in rural areas is a challenge, but what remains a challenge for the whole district is that we had the water plans, but the plans we have made are not relevant right now because of the drought,” he said.
What is clear is that the district, over and above being severely damaged by the July riots, has consistently experienced protest action over a severe lack of water delivery.
Ngcobo welcomed the protests, saying they helped the municipality identify problems.
“For protests to come to Ugu — some of the protests have assisted us. Because when they protest [they alert us of issues],” said the mayor.
In March 2021 residents from Izingolweni, Shobeni and Umtentweni barricaded the N2 highway to protest against water shortages.
According to The Witness newspaper, Izingolweni residents, who started their protest at 4am, burnt a municipal guard room and set alight a tractor. Umtentweni residents blocked the N2 between Umtentweni and Hibberdene and torched three trucks.
In Shobeni, residents blocked the N2 between Paddock and Port Shepstone, where they also torched a truck. The residents told the paper they were tired of Ugu’s inconsistent water supply and excuses.
In December 2020 — one of the busiest times on the coast and a massive economic boost for all businesses — large parts of the district were waterless for more than 15 days. According to the Democratic Alliance, 150,000 residents were left dry as a result.
In March, the South Coast Herald reported that residents in the tourist town of Hibberdene were without water for nine weeks.
Extended periods of water cuts can be found in news reports as far back as 2013. And since that time the reasons have remained consistent — sabotage, load shedding, drought, ageing infrastructure.
The claims of sabotage are directed at Ugu employees. In January 2020, the municipality dismissed 51 staff members who took part in an illegal strike and vandalised property.
The urban areas, particularly bed and breakfast and other holiday letting establishments, have made large capital investments in water tanks, boreholes, and purchase water from mobile water tankers when there are dry weeks.
Some household swimming pools have been turned into emergency reservoirs, while the poor are reliant on sporadic water tanker deliveries.
Often the district’s water tankers are out of commission, with the council — which employs 10,800 people — unable to repair them because of budget constraints.
But the municipality has increased its use of private contract services from 2.1% of the budget in 2015/16 to 15.3% in 2018/19.
According to Ugu South Coast Tourism, the official destination management organisation of the Ugu District, tourism contributes approximately 67% towards the district’s gross domestic product (GDP) “and as such it is considered a pivotal sector within the context of sustaining livelihoods and as an employment provider”.
A September 2020 profile and analysis report conducted by the KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs found that in 2019 the district had a GDP of R 38.6-billion, contributing about 4.80% to the provincial GDP in the same year.
The report, which was collated as part of the national government’s District Development Model programme, is an indictment on the future of the district.
The report found that most of the economic sectors in the area, such as manufacturing, construction, trade, finance and community services, had flatlined or had been on a downward trajectory over the last 10 years.
The outliers were agriculture and mining, which are affected by external factors, as well as transport, which was slightly more buoyant.
The report stated that unemployment — which in 2019 stood at 30% of working age — was at its highest level due to “the bulk of the population lacking skills which would allow them to be employed”.
The total population of the Ugu District municipal area is 754,954.
The report also found that the Gini coefficient in Ugu District Municipality was at 0.624 and was steadily increasing.
After a scouring of the district’s council meeting minutes as far back as March 2019, Daily Maverick found:
- March 2019: It was pointed out that in January 2019 monthly water losses were far in excess of 33% of billable water and that it was not known what the actual losses were.
- March 2019: The audit committee found the Municipal Public Accounts Committee was inexperienced and lacked financial skills.
- March 2019: It was noted that no councillors attended a two-day imbizo held by the municipality’s budget and treasury office.
- 20 May 2020: The acting general manager: Budget and Treasury Office said the budget was still not funded and that it would take five years for the municipality to be in a position of a funded budget.
- 30 June 2020: Water rationing occurred in KwaQwabe and parts of Mehlomnyama to prevent the “total bulk system from collapsing”. The GM for water said serious water supply interruptions within the operational areas over the past month were due to infrastructure breakdowns, major equipment breakdowns and pipeline bursts. Fifteen static water storage units were installed in Harding and a water shedding timetable had been designed. The drought in the area was blamed.
- 27 August 2020: Several councillors on a site visit to Harding found the dam dry. They said it was not well maintained and could not retain water anyway despite the recent rains.
- 30 September 2020: Municipal water tankers were not working and were left at a municipal workshop. This was due to budget constraints. The municipality had to use private suppliers.
- 30 September 2020: Ray Nkonyeni Local Municipality had water problems as a result of ageing infrastructure. Burst pipes were recorded in the Uvongo, Ramsgate, Melville and Hibberdene areas.
- 28 January 2021: The GM for water services said Ugu had experienced “serious water supply interruptions and challenges… over the past few months due to infrastructure breakdown, pipeline bursts”. Water scarcity inland had negatively affected the Harding Dam for three years and led to the dam drying out and being closed temporarily.
- 31 March 2021: Sewage spills resulted in pollution of the Uvongo River and Uvongo Beach.
- 29 April 2021: Reports of water shortages that lasted almost two weeks in the Koelwaters area.
- 24 June 2021: Umzinto wards 11, 12, and 13 were without water on an almost daily basis.
- 30 July 2021: The performance report for the water department over the last financial year averaged 47% for each quarter. DM