Promises, potholes and a R71bn budget — can Mayor Xaba Fix Durban?

eThekwini Mayor Cyril Xaba is talking it up, and who can blame him?

The man at the helm of a city hobbled by corruption is putting his best foot forward, trying to build trust with citizens fed up with crooks.

Last week, Xaba passed a R70.9-billion budget, and his recent speeches to council and business have been measured and optimistic.

Xaba, constantly drilled by ratepayers, is basking in a bit of glory after Durban successfully pulled off a host of big sporting events, which saw the city spruce up and the metro police out in full force.

But while the mayor’s reassuring language is laden with mollifying words about National Treasury prescripts and the virtues of consequence management, he is in the spotlight.

The city’s public relations machine aims to signal competency and accountability, distancing Xaba from the ineptitude and looting that have come to characterise the municipality.

The jury’s out on how much difference Xaba has made since he was parachuted into the top job a year ago.

Read more: eThekwini in crisis — a city on the brink

His installation coincided with a provincial intervention in the city headed by former city manager Mike Sutcliffe and former presidential director-general Cassius Lubisi.

A month before their arrival, President Cyril Ramaphosa established a working group in response to business concerns about city failures.

And, a year before that, the city launched a turnaround strategy.

So, while First Citizen Cyril is trying hard, ratepayers, business and opposition parties are concerned that the city is sliding deeper into debt. Not everyone likes Xaba’s numbers, especially tariff increases.

• The average property rate increase is 5.9%;
• Electricity is up by 12.72%;
• Water is up by 13% for residents and 14% for businesses;
• Sanitation is up by 11%; and
• Solid waste is up by 9%.

In broad strokes, the budget allows R63-billion for operational expenses and R7.3-billion for capital projects.

The big-ticket items include bulk purchases from uMngeni-uThukela Water (R5.7-billion) and Eskom (R18.7-billion).

The city spends R15.2-billion on salaries for about 24,000 staff, R7.6 billion on contractors and R1-billion on interest for loans.

Debt crisis

The city’s big issue is growing debt.

Residents owe R35.5-billion, which the city puts down to the economic crunch, but critics say rates and services are too costly.

Of the total debt, 40% is for unpaid water.  Outstanding property rates and unpaid electricity account for 25% and 15%. Most of the debt (75%) is owed by households. Businesses owe 20% and state departments the balance.

In December 2023, the debtor’s book was at R28-billion.

A year later, it was at R35.5-billion, which had risen to R38.6-billion by April. This means the city will need to borrow more or bill more for services.

In a bid to staunch the losses, it is offering businesses and residents a chance to write off 50% of their debt if they settle before the end of June.

The valuation roll has only 554,280 rated properties (481,000 residences, 17,000 businesses and 7,000 industrial).

About 330,000 properties are valued at less than R350,000 and rates-exempt. Another 150,000 are worth more than R350,000, but are not rateable.

Durban, with a population of about four million, has more informal settlements than any other city in the country (about 600 with 314,000 households).

And, other metros in South Africa have more rate-paying households.

Figures from the Centre for Affordable Housing Finance in Africa show about 824,000 residential properties on the deeds registry in Johannesburg and about 767,000 in Cape Town.

In eThekwini, the Ingonyama Trust (land administered by the Zulu king) controls huge swathes of land where properties are not rated.

Alan Beesley is an accountant, a former eThekwini councillor and ActionSA’s finance spokesman.

“The only way for the city to fix its books is to spend less and offer a better service that will attract more ratepayers. At the moment, Durban has a shrinking ratepayer base subsidising a growing number of people not paying for services.”

Read more: The Point of little progress: Ambitious plans meet reality amid corruption and crime

Business backlash

Xaba has promised the city will bring in more money from rates and services, and that officials will waste less and work harder. “Dashboards linked to service delivery targets” are among a host of measures to improve and cut annual water losses of R2-billion.

“We will bury potholes, sweep the streets, cut the verges and keep the lights on,” Xaba promised.

Reaction to the budget has been testy.

The Durban Chamber of Commerce and Industry is concerned with low confidence in the municipality’s ability to spend on priorities. There was a “continuous disconnect” between what happened on the ground in Durban and the “grand plans” emerging from the Presidential Working Group.

“We need to see meaningful action with key timelines and tangible reforms that will accelerate service delivery and reverse the economic decline,” the chamber said. Water losses might be higher because many meters were “dysfunctional or not working at all”.

Tariff tensions

The Ethekwini Ratepayers Protest Movement (ERPM) is tired of city hall promises. ERPM’s Rose Cortes roasted the “habit of reckless lending and spending”, saying some parts of the municipality were “delinquent”.

The ERPM says city billing is a mess.

“For example, they didn’t read the water meters for extended periods and some residents had underground leaks which they didn’t know about.

Then, when they actually read the meter, you are hit with a massive bill you can’t pay. They won’t give us stats on how many meter readers they have. The contractors are paid, but they don’t read the meters, some for as long as 500 days.”

Cortes says some houses valued at less than R350,000, which qualify for rates exemption, free water and discounted electricity, don’t receive this benefit, but others that don’t qualify do.

Read more: Residents issue ‘No water – No rates’ ultimatum to eThekwini Municipality

The only way to stop blatant theft and crooked deals was line-by-line scrutiny of spending. Cortes said the city recently ran out of money to pay contracted plumbers and even the mayor expressed concerns about the poor workmanship by contractors.

Also, city schemes to provide poor relief were dubious, Cortes said.

“Reports on indigent households are inaccurate and the process to register for indigent care is ineffective and stupid.”

ERPM’s chair Asad Gafar said 500,000 ratepayers effectively cross-subsidised eThekwini’s four million-plus residents.

“Ratepayers wouldn’t object to the cross-subsidy if the city improved the lives of the poor, but it doesn’t. Instead, losses increased, like the water that bleeds into the ground through leaking pipes, or just flows 24/7 at standpipes, unmonitored. Or, the water is pumped into tankers by the mafias and then dumped so they can turn the truck around and fill it up and get paid for another trip.”

Broken billing

Democratic Alliance councillor Alicia Kissoon sits on the city’s finance committee. She said the budget was “polished on paper”, but operationally detached. The real picture emerged in the adjustments budget, where money was “constantly reallocated in a cycle of crisis management which is like robbing Peter to pay Paul”.

R345-million for 100 new water tankers was a prime example of short-term thinking. “Tankers do not fix leaking infrastructure. It masks a systemic failure to repair broken pipes.”

Kissoon said it was unsustainable for so many residents not to pay for rates and services. The city was dealing with a “dangerous culture of administrative neglect, contractor abuse and non-payment.”

Inkatha Freedom Party councillor Jonathan Annipen voted for the budget because the city provided free services to poor residents.

He praised the city’s recent “determined effort at transparency”.

To “avoid collapse”, the city had to improve revenue collection, debt recovery and credit control. But, Annipen said, billing was bedevilled.

“Daily, we hear heart-wrenching stories where frail, elderly and disabled citizens have their services disconnected, and the city has no credible dispute mechanism. I intervened in the case of a pensioner who was suicidal because he was lumped with a R1.3-million monthly bill for water and electricity, but investigations revealed he was actually owed a credit.

“People wait three months for a water leak to be repaired. Water is flowing down the street by gallons and you call the contact centre, they tell you the fault has been closed.”

City Response

Daily Maverick sent the city a detailed list of questions relating to the budget.

In response the municipality confirmed broad aspects of the budget and promised to answer outstanding questions when line departments provided information.

With regards to city income, the municipality said its numbers were constantly changing for various reasons, including updates in the valuation roll. But the rates income collection rate was 91%.

The city hopes to secure at least R2-billion from the debt write-off deal. With regards to criticism of its indigent monitoring, the city said it had put in place checks and balances, including visits by social workers to households and income verification. DM