Reliable infrastructure: The key to saving Nelson Mandela Bay's industrial future

Nelson Mandela Bay’s local economy is under immense pressure, with many small, medium and large businesses across various sectors struggling to remain viable.

Our manufacturing sector, which is the anchor “tenant” to our economy and represents companies which have global footprints, is in a particularly difficult situation and faces many headwinds.

These include geopolitical issues such as the upending of the world trade order and the alarming number of wars on the go – including the current conflict in the Middle East which will have wide-ranging knock-on implications on most countries, further increasing instability and unpredictability around the world.

At a time like this, and to navigate the scale of crisis issues businesses are confronting, it is especially critical that the basics “on the ground” are working.

Sadly though, at a local level municipal service delivery performance has deteriorated to the extent that the environment is no longer enabling for business. Among the high-risk areas include a lack of safety and security, poor water management and electricity unreliability.

Despite these factors, we still strongly believe in the potential of the Bay, or the Bay of Opportunity, as we are theming it from an investor promotion perspective, but know that the biggest inhibitor to this potential being unlocked is the lack of delivery of basic services to businesses and residents.

Commitment to collaboration and action

The Nelson Mandela Bay Business Chamber, as a non-partisan organisation, is an active member of the Nelson Mandela Bay (NMB) Civil Society Coalition and is collaborating with key partners including organised labour, NGOs, churches, young people, women, the elderly and other critical constituents who form part of our broader community.

We are all united in working together for the greater good of the Bay, and on balance serving the best interests of the local economy and communities.

A NMB Civil Society Technical Task Team, which includes the various components of civil society and organised business, was recently established to work directly with the municipality to drive for the most critical issues affecting the metro to be resolved.

Over the past few years we have mobilised business volunteers to collaborate with the various stakeholders in helping to get key enablers in place. This has resulted in the formation of 11 geographic clusters around the Bay and specialised technical task teams, which are not only pinpointing the most critical issues but also working towards solutions.

This is based on our belief that Nelson Mandela Bay is the most fixable metro in the country, and through focused implementation plans, the infrastructure can be restored, maintained and upgraded.

Sadly, since 2023 National Treasury has taken at least R1.6-billion away from the municipality due to irregular and wasteful expenditure and inadequate spending of grants. This is all critical funding which should have been invested in the water, sanitation and electricity infrastructure.

Water management crisis

The metro once again faces a water management crisis, with overall dam levels having dropped to 32% usable water, while unaccounted water losses have spiralled to 63%, putting water security in the metro at risk.

As organised business, in an attempt to help bring the focus to the serious infrastructure maintenance shortcomings we ran an Adopt A Leak initiative where we fixed leaks in seven impoverished areas, saving the metro 1.7 million litres of water a day.

Additionally, because 10% of total water losses occur in schools, clinics and government buildings, our members adopted 76 schools to fix leaks, install water conservation measures and reinstate ablution facilities.

We recently launched the second phase of our Adopt A School initiative where 31 schools have been adopted so far, and at the same time we are encouraging businesses to fix their own leaks and to invest in back-up water solutions.

However, we need the municipality to play its part and to take urgent action to radically reduce its unaccounted water losses, which are completely unsustainable and continue to escalate with each passing week.

Through our Water and Sanitation Task Team we have repeatedly offered technical assistance over the years, and this offer of support continues to be on the table.

Furthermore, if there are businesses that are unlawfully taking or stealing water, the municipality should take strong action against them. Water is a scare resource and its security needs to be protected for the benefit of the metro and its people.

Electricity infrastructure

In terms of electricity, we are deeply concerned about the reliability of supply which can be directly attributed to the lack of proactive maintenance of the infrastructure, and other issues such as a lack of surveillance and monitoring of municipal infrastructure.

Since 2023 we have recorded 201 power outages in the main industrial areas of the metro, while numerous power dips occur almost daily. This results in factories having to halt production operations, which means that customer and export orders are not met, scrap and wastage occurs and employees are put on short time and may even be retrenched.

The chamber has consistently and repeatedly, for many years, flagged its concerns regarding the electricity infrastructure issues and has proactively offered assistance to the municipality through its multistakeholder electricity technical task team.

We have also made repeated requests to the municipality to collaborate with Eskom through the Active Partnering initiative, to provide much-needed technical expertise to help address the various electricity infrastructure issues, and also the very serious issues relating to the ongoing sustainability of supply.

Electricity used to generate a profit for the municipality but it has become a loss-generating activity, with electricity consumption losses now more than 27%. In the 2024/25 financial year, the municipality lost R1.4-billion and in the 2025/26 financial year this loss is forecast at R1.7-billion.

Given this deteriorating trend and the fact that the municipality is dipping into its reserves, it will eventually default on payment to Eskom.

The chamber, as a participant in the NMB Civil Society Coalition, has put these issues forward as a critical part of the Civil Society Technical Task Team’s priorities. We have also engaged with the various unions on the severity of the local economic crisis and the need for urgent interventions to address the electricity issues.

We believe Eskom must be part of the solution and would strongly urge the municipality to urgently provide the necessary authorisation for this assistance to be provided through the Active Partnering initiative.

The municipality has various options available to it to address the unsustainability of electricity distribution, including tackling electricity theft and resolving electricity billing issues; receiving far greater Eskom support with the maintenance of the infrastructure and ring-fencing electricity as a separate trading service.

A scenario in which Eskom potentially takes over electricity distribution in the metro should be viewed as an absolute last resort. However, whatever route is pursued, it is important that the municipality’s overall financial position is contemplated to ensure that services continue to be delivered to its businesses and residents in other key areas such as water, cleaning and roads.

Urgent action must be taken now to prevent a situation where the municipality becomes insolvent and defaults not only to Eskom, but to all other service providers, which in turn would result in a total collapse of the delivery of all municipal services.

Electricity theft is one of the issues exacerbating this situation and it is our view that the municipality should be taking swift and strong action against any businesses who may have illegal connections in place or are stealing electricity.

The chamber, as a nonprofit organisation, has absolutely no interest in participating in outsourcing and tender activities.

Our only interest is in driving for solutions that will ensure that electricity distribution is sustainable and the infrastructure is well maintained, so that reliable electricity can be provided to businesses and residents of the metro. This is key to retaining much-needed employment and investment in the metro.

Vandalism of infrastructure

The vandalism of critical municipal infrastructure, such as electrical substations and water and sanitation pump stations, has a severe impact on the operations of small and large businesses across all sectors.

The disruption of water and electricity supply causes factories to stop, customer and production orders not to be met, scrap and wastage, overall increased cost of doing business and leads to short-time, retrenchments and even business closures.

Vandalism is a very serious crime, which should be viewed as economic sabotage due to the severity of its impact on the local economy.

We need urgency in addressing this situation and actions required include:

• The municipality needs to adopt and implement stringent and effective asset control processes;
• Surveillance and monitoring needs to be in place at all key substations and pump stations;
• Scrapyard dealers who are accepting illegally obtained copper and other scrap must be closed down;
• Much stronger and more visible law enforcement is required from the SAPS and the municipal police to ensure these types of crimes are prevented; and
• Vandalism transgressors should face much higher penalties from the courts, given the very serious nature of the crime and its impact on the economy and livelihood of communities.

As an intervention to protect the continuity of power supply to businesses, chamber members have adopted 23 substations in key industrial and commercial areas, where dedicated surveillance and monitoring measures have been implemented. More recently and as an intervention to protect the operations of critical sanitation pump stations, the chamber launched Adopt A Pumpstation, with six adopted thus far.

The chamber’s geographic clusters have to date invested in the installation of more than 214 surveillance cameras as a further measure to help protect infrastructure from being vandalised, and as a proactive deterrent against other types of crimes.

It is clear though that saving and creating jobs can only be achieved if all the stakeholders take urgent accountability and action to address what is within their areas of control – from water and electricity, to safety and security. The bottom line is that implementation is required if we are to retain and build confidence in the metro as an investment destination.

It is not too late to unlock the potential of ‘The Bay of Opportunity’

Despite all the global and local headwinds, we firmly believe in the potential of the metro to become a vibrant and thriving, diverse manufacturing and export hub on the African continent. We are a two-port metro operating in an area that is not a conflict or war zone, and where ships can easily navigate without the threat of drones and missiles.

Our people and their passion for the Bay to succeed are our greatest strengths. This ranges from our community leaders, to unionists and captains of industry, engineers, entrepreneurs and the many other committed and talented people who call Nelson Mandela Bay home.

If we all unite along common priorities that best serve the greater good of our local economy and communities, we can unlock the potential of the Bay of Opportunity. This needs to start with getting our basic infrastructure back on track. DM

Denise van Huyssteen is chief executive of the Nelson Mandela Bay Business Chamber.