While the City of Tshwane, Gauteng’s second-largest metro in terms of its contribution to the economy, battles to pay its creditors, including Eskom and Rand Water, it is also in trouble with thousands of workers who are up in arms over a freeze on salaries.

Workers affiliated with the South African Municipal Workers’ Union (Samwu), SA’s biggest local government union, representing more than 150,000 municipal employees, have taken to the streets in ongoing protests demanding a pay increase of 5.4%.

That figure was agreed upon by all municipalities in the province at the SA Local Government Bargaining Council (SALGBC) in 2021. However, in March this year, the City of Tshwane tabled its R46.9-billion budget for the 2022/23 financial year — with no increases for workers.

Samwu’s secretary-general, Dumisane Magagula, described the move as “sabotage” of the collective bargaining agreement.

SA Transport and Allied Workers’ Union members protest outside Tshwane House in Pretoria, on 26 July 2023 over a municipal salary freeze. (Photo: Neil McCartney / The Citizen)

“They took a decision that they are not going to [increase] worker salaries despite the agreement that was negotiated at a central level with all the municipalities. It is not a case of the municipality not having money; they intentionally budgeted a zero percent increase while they are in a collective agreement,” Magagula said.

SALGBC has since issued an order directing the municipality to:

• Pay workers their 5.4% salary increase as of July 1, 2023;
• Increase the minimum wage to R9,531.54; and
• Increase the homeowner’s allowance to R1,011.77.

A union statement welcomed the directive, which it said vindicated the workers, who could not be relegated to poverty and starvation by the city.

“These workers are failing to catch up with the forever rising cost of living. If the City of Tshwane respects collective bargaining and wants sound labour relations within the city, it will comply with the order as directed by SALGBC,” the union said.

‘Can’t afford increases’

The municipality has consistently maintained that it is unable to pay the increase, which would cost more than R600-million, because of its liquidity challenges.

Responding to the SALGBC order, city spokesperson Selby Bokaba said the city would file an exemption application no later than 10 August.

“The finances are in such a bad state that the city can’t afford to pay the increases. We’re battling to pay our creditors such as Rand Water, Eskom and others due to the low collection rate of revenue.”

Without going into detail, Bokaba said a plan was in place to improve Tshwane’s finances.

“And we’re confident that we will turn the corner. When our collection rate improves, we will reassess our position during the budget adjustment period in February 2024.”

Tshwane Executive Mayor, Cilliers Brink briefs the media while SA Transport and Allied Workers’ Union members protest outside Tshwane House in Pretoria on 26 July 2023. (Photo: Neil McCartney / The Citizen)

Speaking to journalists on the sidelines of a recent strike, Executive Mayor Cilliers Brink said the city could not spend money it does not have and it was not feasible to grant the workers increases.

“The finances are in a terrible state. The city is on a financial rescue mission… We want to be a city that can afford to pay salary increases, but any objective assessment of our finances now shows that we can’t.

“We are in a difficult time. We are trying to save this city from going up in a ball of flames, essentially, and we’ve got to make the tough decisions… We have to act in the long-term interest of the residents and the Tshwane community as a whole and that’s what we are doing. Of course, we will face difficulty and upheaval, but we will try to communicate as clearly as we can.”

Brink was elected mayor in March 2023.

Read more in Daily Maverick: How the DA’s Cilliers Brink was elected as the City of Tshwane’s executive mayor

Delivering his maiden State of the City Address in May, he said restoring the capital city to functionality and getting its finances under control would be his priority.

This came as an Auditor-General report exposed gross financial misconduct in Tshwane. The report’s findings on the city’s finances for 2021/2022 revealed irregular expenditure of more than R10-billion.

Tshwane’s money problems go back many years. The tipping point, however, came under the rule of former ANC mayor Kgosientsho Ramokgopa, who is now the electricity minister. He awarded the infamous PEU Capital Partners a R950-million electricity smart meter contract in 2012, which was later declared unconstitutional and set aside by the Pretoria High Court in 2017.

Read more in Daily Maverick: Trouble with a capital T – Jacaranda City municipality is wilting under bad finances and scandal

Writing in Daily Maverick, Reg Rumney said, “Tshwane’s present mayor, Brink, has described the PEU contract as ‘a financial disaster for the city’ from which Tshwane still hasn’t recovered. He has stated that the contract has cost the city R2-billion, and even now Tshwane finds itself saddled with a R4.7-­billion VAT bill from that contract.

“It is not only the ghost of the PEU contract the city has to deal with but, apparently, an inherited culture of corruption in its procurement division.”

To underline its financial dysfunction, Tshwane has racked up a debt of almost R2-billion to Eskom. The city has admitted the problem, but it’s not clear where the money will come from to settle the debt.

Brink said a raft of other measures had been implemented in an attempt to save the city and put it on a path of financial recovery.

Probed on these measures, Bokaba said: “These raft of measures include zero payment of salary increase, reduction of 30% expenditure, amongst others. Importantly, there’s a plan in place to collect maximum revenue, including from debtors such as government departments and embassies.”

Impact on service delivery  

Bokaba said the strike had had little impact on service delivery, and that the impact was mostly felt at clinics where staff and patients were forced out of the buildings.

“We have a strategy we have employed which, unfortunately, we’re not at liberty to share.”

Tshwane’s MMC for finance, Peter Sutton, said there had been attempts by strikers to close finance offices, block electricity and water services and damage city property, actions likely to further hobble Tshwane’s financial affairs.

“All these aspects affect the revenue and cash collection capabilities of the city. While these individuals think they will force a specific outcome, they are in fact potentially worsening our financial situation,” Sutton said.

Arrests

Fifteen employees have been arrested and charged with public violence and three are facing internal charges, which may lead to their dismissal.

On Friday, 28 July, the city approached the Labour Court in Braamfontein, Johannesburg, on an urgent basis following what it described as “a week-long unlawful and illegal protest by employees affiliated to labour movement Samwu who intimidated their nonstriking colleagues and caused damage to property”.

The court ruled in its favour and declared the strike action unlawful and unprotected. It ordered the striking employees to disperse and stop participating in the unlawful strike.

Despite the arrests and court order, some employees have vowed not to return to work, but instead, aim to bring the metro to a standstill until it reconsiders the salary and wage freeze. Talks between union bosses and city officials are ongoing. DM