The municipality is the coalface of service delivery — this is where citizens experience value for their votes, taxes and rates. It is one of the single most important spheres of governance, which cannot afford such vulnerability. (Darren Stewart/Gallo Images)
Ratepayers in eThekwini metro have launched a boycott of utility payments in protest against corruption and the mismanagement of the city’s finances, while dilapidated infrastructure awaits urgent repairs.
But eThekwini has warned that it is “unlawful” to withhold payments for property rates and municipal services and that it will implement credit control measures against non-paying residents, a move ratepayers have vowed to fight in court, if necessary.
This comes as former eThekwini mayor Zandile Gumede and her 21 co-accused faced charges related to a R320 million Durban Solid Waste tender in the Durban high court this week. They are on trial for more than 2 700 criminal charges relating to fraud, money laundering and racketeering.
eThekwini Rates Protest Movement representative Asad Gaffar said what had begun as the Westville Ratepayers’ Association drive to get the municipality to fix potholes and streetlights had evolved into a citywide protest.
He said the movement gained momentum after the association studied the city’s auditor general reports for the past five years and found losses of R50 billion.
“We have been engaging the city for the last two and a half years after dealing with different service delivery issues and we found that the city was not acting in good faith and not keeping the promises made to us,” Gaffar said.
He said the association had raised concerns about the 2023-24 budget with the city regarding it “spending money frivolously” on events such as the Durban July horse races, festivals and fashion shows.
“They spent close to R30 million on the Durban July campaign and we studied the auditor general report for the last five years and found eThekwini had lost R50 billion and this was a huge concern to us. They are losing so much money, yet they come to us asking for more money,” he said.
Included in the R50 billion are water losses of R7.5 billion and R8.5 billion in electricity losses caused by leaks, illegal connections and non-payment for services.
He also pointed to a recent e-News interview with Leo Saunders, the director of Integrity Forensic Solutions, who claims he has evidence the municipality made payments of R600 million to one of Gumede’s corruption co-accused, Hlenga Sibisi, since his arrest and first appearance in court in 2019.
eThekwini announced property rate increases for 2023-24 of 7.9% and residential water and electricity price hikes of 14.9% and 18.49%, respectively. Ratepayers also noticed the hike in electricity prices exceeds Nera’s guideline increase of 15.1% for municipalities.
Gaffar said ratepayers were also concerned that an appeals board had not yet been set up — a legal requirement of the Municipal Property Rates Act — to allow property owners to appeal the latest round of municipal valuations that took place more than a year ago.
Gaffar said a meeting with the city’s chief financial officer, Sandile Mnguni, in early June had not resolved ratepayers’ myriad concerns.
The association wrote to the city on 15 June declaring a formal rates dispute because it believed the 2023-24 budget is “illegal”.
They also wrote to President Cyril Ramaphosa, Minister of Cooperative Governance and Traditional Affairs Thembi Nkadimeng and KwaZulu-Natal MEC for Cooperative Governance and Traditional Affairs Bongi Sithole-Moloi asking for their intervention.
Gaffar said the breaking point for ratepayers was the revelation that the city had allegedly spent R579 million on contracts to repair and maintain streetlights, which should have cost R91 million.
“That was a kick in the face because we are fighting rates increases. We started the campaign to seal the holes in the leaking bucket because the city doesn’t have the will to look after the money of ratepayers,” he said.
Former eThekwini mayor Zandile Gumede is facing corruption charges. (Darren Stewart/Gallo Images)
Gaffar said the movement had received “phenomenal” support with about 3 000 ratepayers across the city having joined. They would pay money they would have paid to the municipality for rates and utility bills into a trust account until the impasse had been resolved, and it would then be transferred to the municipality.
“We are so busy every day meeting with communities. People want to hear us and ask us about the process because they are fed up. We are saying that the public participation process was flawed and we are concerned about the auditor general’s findings. The money will be paid into a trust account and it still belongs to the city but we are not paying a cent to the city. Once we have closed the leaking bucket we will pay it over to the city,” he said.
Gaffar said the association would take a municipality threat to cut off ratepayers’ water and lights to the Durban high court for a decision.
Responding to ratepayers’ concerns eThekwini spokesperson Gugu Sisilana said: “It is unlawful to withhold the payment of property rates and services for any reason. Each household is urged to educate itself and make informed decisions instead of engaging in unlawful acts. There are definite risks to withholding municipal payments and paying monies into trust accounts/other structures.
“The municipality will continue to implement credit control measures as allowed for in law. This includes levying of interest on overdue accounts and disconnection.”
Sisilana said the municipality had put internal auditing measures and performance and consequent management systems in place to remedy concerns raised in the auditor general’s reports.
She said the Westville Ratepayers Association (WRA) had handed a memorandum to the city at the budget hearing in May and a comprehensive response had been provided to ratepayers.
“This matter is now a legal matter as the city has received communication from attorneys representing WRA,” she said.
She denied the city had wasted R50 billion over the past five years. “The city does not agree with the comment. Nothing can be further from the truth.”
Sisilana said the amounts comprising the R50 billion related to water and electricity losses; “accounting treatment relating to amounts owed to the city as required by the accounting framework”; legal claims not yet resolved and “other losses due to write-offs on irrecoverable debts relating to rates, services, housing and sundry debtors”.
Regarding Sibisi being awarded tenders, Sisilana said the city had “blacklisted” one of the co-accused and one of his companies from doing business with the municipality.
“The co-accused challenged the blacklisting in court and the court ruled in his favour in September 2020. The court ordered the municipality not to implement the consequences of the blacklisting process. If the city had continued with the blacklisting, the city would have been in contempt of court,” Sisilana said.
“The municipality has a clean administration policy in place and there is a zero-tolerance approach to any fraud and corruption.”
Ramaphosa’s spokesperson, Vincent Magwenya, acknowledged receipt of the ratepayers’ letter.
“The president is leading a broader intervention aimed at resolving the many challenges impacting the smooth running of local government and service delivery. There are specific interventions that are being led by the governing party in the case of eThekwini,” he said.
He added that the president could not, according to the Constitution and laws, directly intervene in the running of a municipality or endorse non-payment for services.
“Residents will be advised to continue engaging the leadership of the metro, while paying for the utility bills,” he said
Sithole-Moloi’s spokesperson, Siboniso Mngadi, said that although the cooperative governance department understood ratepayers’ concerns, the payment of rates and taxes is crucial for the smooth functioning of municipalities.
“We firmly believe that boycotting rates may not be the most effective solution for both parties involved. Instead, we strongly encourage open channels of communication and constructive dialogue between the ratepayers and the municipality.”
He said the department is committed to supporting and capacitating municipalities in line with the Constitution.