Despite its excellent location, investors are giving the Mpumalanga town a wide berth.
Residents of different political persuasions in Balfour in Mpumalanga say the town's municipal services have continued to deteriorate, despite President Jacob Zuma's surprise visit to the town three and a half years ago when it was hit by violent service delivery protests.
In the 2012 SBP SME (small and medium enterprise) Growth Index study, SME owners placed a surprisingly large emphasis on the proper collection of municipal rates and the delivery of essential services. Thirty-eight percent of them identified this as a major concern for the future growth of their businesses — ahead of unnecessary regulations and red tape (21%), the global economy (15%) and the local economy (9%).
In Balfour, business people and residents, black and white alike, are angry about the municipality's poor services — the roads are potholed and the town is blighted by litter.
Potential investors, attracted by the town's excellent location between KwaZulu-Natal and Gauteng, and its rich hinterland, are put off by these issues, they say — thus contributing to the general demoralisation and high unemployment rate, and social problems such as drug abuse in the nearby Siyathemba township.
Balfour offers a familiar picture of many failing small-town municipalities in South Africa.
What makes it a bellwether of these problem municipalities is both Zuma's visit in August 2009 and the fact that, because of its rich hinterland, the town should be prosperous.
Zuma's visit has become the stuff of town legend — both because the surprised town clerk reportedly dropped her lunch plate and the then-mayor, Lefty Tsotsetsi, had apparently knocked off early for the day.
Zuma's visit followed some of the most serious "service delivery" unrest ever in the country — there was a lot of violence and many properties were torched.
A leading demand of the protesters was that the municipality should be rezoned to fall under neighbouring Gauteng. The government undertook to do that, but there has been no progress in implementing the promise.
Zakhele Maya, convenor of a local body, The Stakeholders Forum, and a member of the local Young Communist League, says a major factor prompting Zuma's visit was the then-impending football World Cup.
Balfour forms part of the Dipaleseng Local Municipality — the other smaller towns in the municipality are Grootvlei and Greylingstad. The extended municipality has a population of 45 000 and a 37% unemployment rate, according to the municipal manager, Vusi Ngcobo. The municipality's budget is about R180-million a year.
Following Zuma's visit a task team was set up and Balfour was slated to become one of five model towns. But despite the involvement of Cabinet ministers, including the late Sicelo Shiceka and Police Minister Nathi Mthethwa, the decline has not been arrested, according to Johans van Tonder, who was a member of the task team.
The only recent improvement in municipal services has been the erection of some new streetlights, he says.
Van Tonder, who is the Dutch Reformed Church minister in the town and also president of the Dipaleseng Business Chamber, says that virtually nothing came of the task team's many discussions and plans.
Potentially, Dipaleseng has much going for it. The area is home to the recently revived Grootvlei power station. And, in 2007, Burnstone, a new gold mine, was opened by the American company Great Basin Gold — the first new gold mine in South Africa in 19 years.
For a short time the mine employed more than 1 000 people, but operations were suspended late last year and it has now been placed under business rescue.
Then there is the surrounding rich farmland, which is ideal for growing maize, sunflowers and soya beans, and for rearing cattle.
Mines and farms generally create their own infrastructure, so they don't have to rely on local municipalities. But the businesses and residents of Balfour have had to create some of their own infrastructure. Van Tonder says it's a time-consuming and disheartening process because the municipality often opposes these initiatives and does not respond to suggestions for improvement.
Among the specific concerns listed by Van Tonder and Maya are complaints that:
• Most roads in the town are latticeworks of potholed tar. Residents routinely fill the potholes with earth;
• Rubbish removal is inadequate. The business chamber set up 15 concrete rubbish bins at its own cost, but the municipality removed one;
• There are frequent dips in the electricity supply because the town has inadequate transformer capacity;
• Municipal services bills are often not sent, and tariffs seem to be set on an arbitrary basis and are, in some cases, much higher than in municipalities like Johannesburg. Some residents often pay what they estimate they owe — or they don't pay, and the municipality does not pursue them, so it does not collect the revenues it is legally entitled to;
• The municipal fire service has a staff of three, with three fire trucks — but it does not operate after normal working hours. The owner of a private firefighting service, Louw Maritz, says he responds to after-hours calls, but has given up invoicing the municipality because he has not been paid. Though the province has set up a new disaster management centre in Balfour, it is virtually unoccupied because of an apparent bureaucratic turf war — even though 22 Working on Fire employees should logically occupy it, says Maritz. Veld fires are a big issue in the area, particularly in winter; and
• Water has often not been available for days at a time. When it is flowing, the water is not always purified, apparently because the municipality runs out of chemicals and the water purification works is dilapidated.
There are many other complaints, including overflowing sewage and unrepaired sewerage facilities, the many feral animals roaming in the townships, little maintenance of the municipal rubbish dump, and overgrown graveyards and sports facilities.
Balfour's biggest business is Karan Beef's abattoir, the largest abattoir in the southern hemisphere, which slaughters more than 2 000 cattle a day. The company has tarred the road to its factory, installed a generator and set up a water purification plant. But it still draws its water from the municipality and when water is not available it cannot slaughter.
Maria Lephoto, the abattoir's manager, says the water problems put the company's relationship with some major customers at risk. And in the township, she says, children sometimes get sick from drinking the municipal water.
Large potential investors have apparently been repelled by the municipal problems. Nestlé investigated setting up a factory in the town, as did Rembrandt Tobacco. Both companies reportedly shelved plans to open operations in the town after the municipality could not assure them of adequate water supplies. Smaller businesses have also taken the hint, judging by the lack of new development in the industrial sites.
Ngcobo says the municipality acknowledges there are major problems related to service delivery, but that these are primarily because of a lack of human resources that is now being addressed. The municipality has no heads of department, he says, but appointments will be made shortly. Ngcobo was only appointed in February this year.
He says that despite the many problems the municipality achieved an unqualified audit for the 2011-2012 financial year, a rarity among local municipalities in South Africa.
There is also a shortage of municipal funds because most people are not paying rates and electricity is being stolen, he says.
But the lack of funds is not the main reason for poor delivery, according to Maya. "The ruling party in the town council is very divided," he says. There are 12 councillors, of whom seven are ANC members.
Maya says there is division among the executive mayor, Sarah Nhlapo, and at least two other "centres of power".
"These factions are not reflective of the national divisions in the party, but might be aligned to provincial power factions."
This means, he says, that a municipal official from one faction might defy the mayor without consequences, because that person can seek assistance from his or her provincial principal.
Because of these divisions the best people available have not been appointed, Maya says.
Ngcobo says he has heard rumours of factionalism, but has not experienced it.
Maya says given the big companies that operate in the area there should be no shortage of funds.
Service delivery protests reflect economic frustration and dissatisfaction surrounding the appointments of councillors and/or corruption. They also reflect desire for fundamental economic change in South Africa, he says.
Despite their frustration and anger about the municipality, the voters of Balfour will not necessarily withdraw their support from the ANC in next year's elections. "We have a strange voting pattern," Maya says.
He and his colleagues are considering standing as councillors in future, he says. They have characteristics which might give many business people nightmares: they are young, bright, radical and demand "fundamental economic change".
But they might well represent an improvement on the current and past administrations of Balfour.