Municipal audit outcomes require systematic tracking through action plans, with oversight committees monitoring implementation progress to ensure compliance with financial regulations and improve governance. The City of eThekwini Metropolitan Municipality demonstrated improvement in audit findings (reducing from 25 to 13 findings over three years) while addressing key challenges including infrastructure management, procurement compliance, and consequence management for irregular expenditure. Effective municipal governance requires continuous monitoring of audit action plans, proper consequence management for transgressions, and alignment with national treasury norms for infrastructure investment and expenditure management.
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Standing Committee on Public Accounts追加:
that chair.
Uh thank you very much honorable members and thank you very much to uh to our esteemed guests, our delegation from the city of thank you for I hope that's not my phone. Okay, the chairperson can have his phone ringing.
No thank no thank you very much uh for for a few things uh honorable mayor and your and your colleagues and that is firstly um accommodating our request for you to to come to to parliament and have this conversation with us. That's the first thing. Secondly, thank you for the detailed information. Uh you've sent you didn't complain that we keep sending information requests. You did your best to accommodate and I know that there might be a couple of pieces of information we don't have. I I don't think it's for unwillingness on your part. You you've done uh as much as you as you could. I believe there's lots of information that we have such that we can have a meaningful conversation. So that is the that is the second thing uh that I want to thank you for. Uh the third thing that I I want to to thank you and your delegation for is also for taking the time uh from Cape Town. Uh I know that for us it might be a a meeting today but for you the trip started yesterday and then tomorrow it continues. So it's 3 days uh that you will have taken. So we don't take that time for granted at all. H we appreciate that you have uh you've made the the the effort. But before I make any any further remarks, I just I'm going to give you an opportunity, honorable mayor, just to uh to to to make some remarks, introduce your team and then I will just set out how our proceedings are going to uh to to go on.
Thank you so much. Over to you, sir.
>> Uh thank you very much. and greetings to to yourself chair of Scopa the chair of COA Dr. Zulenim.
All honorable members, the office of the AG behind me, colleagues, it gives me pleasure to thank you for welcoming us uh this morning. Um indeed uh we tried to comply with all the deadlines. Uh there were times where we had to ask for an hour or two or three extension and the office was really willing to accommodate our request.
uh the report we'll present um is in three parts but consolidated into one but still uh deal with the the questions as we have sequenced them uh but you will guide us as to what in that information you want us to present uh this this morning let me start uh with uh the introductions uh I'll start with the city manager uh Mr. Mam B and I would request the city manager to then introduce the the team. City manager.
Thank you very much. Uh your worship councelor Kaba. Uh greetings to the chairperson of Scopa, the chairperson of the portfolio committee on cocktab.
uh the honorable members uh of both committees who are here, auditor general, colleagues behind me, uh the executives uh from from the city. I will start uh oh sorry a special greeting to the chairperson of uh meek councelor councel kuma who is with us on my left hand side I've got Dr. Liun who's the chief financial officer. I've got Lindo who's the executive director operations management in the city. I've got Edniki who's the executive director for uh for technical services. I've got uh Mr. Reginald Smiz who is the acting executive director for corporate services. I've got Dr. So a colleague can I humbly request that when you when I call your name you raise your hand for easy identification.
Don't raise it.
You are not doctor yet.
Dr. Mapul who is our chief audit executive. And then on on her left hand side I've got uh uh Pau uh Mr. Lawrence Pau who is the director for human settlements.
And then at the back I've got the head of legal services Mr. Malino in the blue jacket. I've got the director of metrop police or uh metrop police chief uh Mr. Spelo.
I've got the mayoral advisor uh uh Mr. talk and then I've got Mlu who is the mayoral spokesperson uh or does the communication for the mayor that is h I thank you very much thank you >> thank you very much I'm not going to waste your time chair we will then wait for you to guide how you want us to deal with the issues and then we'll take that from there thank you so much >> I will do so executive mayor I I at least I was relieved to hear that there are no mises at the back because them are everywhere. There's at the front there but at least there was a there was a relation of mine. So okay no no thank you so much. So let me guide as follows and welcome to to the members that came after we started. So the and this is both for you and and and the public and and I I suspect that when uh when Scopa calls it might feel like somebody has uh has said some things about you just a bit of context. This is not our only interaction h between now and the end of the seventh parliament we are going to have a few. You may have seen that between ourselves and the portfolio committee on COA we've seen uh several h municipalities and metros already from the perspective of the commit this committee the standing committee on public accounts even though we're sitting together uh we took a decision to focus on some key institutions that are important for economic growth as well as service delivery to people.
metros are very important economic hubs.
You will also notice that we're looking at the transport h ecosystem your your transnet your prasa etc etc. There will be other institutions like that. So this is our at least from the perspective of the standing committee on public accounts our first interaction with other metros such as BCM or tambbo district municipality we've already even been on oversight. So you are not being targeted uh in that way. We are going to have a relationship all the way through to 2029 and hopefully working together we will begin to see some some good outcomes that we are able to work on together through this accountability process. So that's the first thing. The second thing is that the insul today is that the auditor general gave us a briefing h about the city of audit outcome. So it's always important to start there because that's at the core of why we we got here. Obviously there are many issues that arise out of these unrelated issues. Some go to the portfolio committee on COA, others come here. So you will note that that members of the portfolio committee on COA are also here. So our conversation will not be limited only to the audit outcomes on on financial issues and you might have picked up from the questions that they cut across.
My guidance is as follows. I saw your presentation. I think it's about 86 slides. Thank you very much for that.
The members have got the same. I think for the to kickstart our conversation, let's deal with the part of it that focuses on the audit outcomes that we've had. You can continue to have it up as the members interact with you. You can then go to the relevant slide because the matters will be relating mostly to the issues that we've raised with you.
At least then you've got the benefit of just going to that slide and showing it and then giving an explanation. If you have to do that, I would encourage you though h that I find that the most efficient is just schoolage just provide an explanation with context and we keep it moving in that way. If we have to show a slide then let's draw a slide but at least Wongundu has got the slides.
What also helps is to say because the members have got just refer them to the slide number even if you don't show it.
Uh when you answer say just go to slide 75. what I'm talking about is there and then you just give a brief explanation.
If the member has a follow-up question, they can ask it if if that's the case.
So can I then thank you once again for the for the introduction uh mm and and and executive mayor and say we go then I think it's slide 29 uh for this phase and then we will take a short break and then we come back and we have a conversation with you. We will break I think at 1:00 or half 1. The secretariat will guide me because we've got uh plenaries in the afternoon and then we will continue uh later on and then hopefully we'll leave before 3:00 a.m.
Uh don't worry today still. So thank you very much. Over to you. So we're going I think until up to slide 29 and then we'll take a break and then have a conversation.
>> Yes. Thank you very much chair. Thanks for this uh guidance. We really welcome this exercise.
It's part of our strengthening um you know oversight over the administration.
I I wish to refer to the letter I signed on the on the 20th of January 2026 addressed to the office of the auditor general.
In that letter I made a few commitments that I believe um I still live by. The first commitment is to strengthen oversight and accountability.
I detailed what I mean uh by that. The second part is to uh ensure improvements to ICT operations and uh and governance and in the report we refer to exactly what we are doing uh in that respect.
And the third part is to improve infrastructure management. Again uh that would also be visible in the report that we present. And the fourth part is monitoring and addressing a slow progress in addressing um audit uh queries um particularly on matters relating to compliance performance reporting and infrastructure uh management. So we are on top of that. We'll also explain exactly what we do. We we have elevated audit um the the the the monitoring on the implementation of the audit action plans that now committees assist with that respons cluster committees assist with that responsibility almost on a monthly basis and thereafter we received the quarterly report as the as as as a as as as ESCO that which I I I I I table at the at at at council on on a quarterly basis.
I I wish to invite chair without I know the time is limited. I would wish to invite the the city manager and um he will break the the the reports into various uh components and then attach the names of the people who will be making the the presentation. I don't want to disrupt this order. Please allow me to come in um here and there if if if needs be. Over to you city membership.
>> Thank you very much. uh your worship. Uh in keeping with the directive and the mandate of the chairperson uh we had uh split our presentation into two that I was going to focus uh from page 31 till to the end of the presentation and then the stuff that deals with the audit outcomes uh the financial performance the the CFO was going to deal with it. I I humbly request at this stage that we give CFO Dr. Muni to deal with the first part as per direction from the chairperson.
Thank you.
Yeah. No, thank you very much, city manager and good morning chair. Good morning chair of COA, the members of parliament of scopa h babe and our chair of empagues from the a and the colleagues from the office. So as directed and guided I will start from slide one and my last slide will be slide 29.
Uh before we get to uh the audit outcome, I think it's important uh just to uh give a key highlight in terms of the uh city of uh the increased population uh is about 4.2 million uh the last count and then as far as the this population 59.2% of the population is under 35 years of age. H this prov this present an opportunity but at the same time is a challenge h in terms of unemployment at win GFC of around 59 54.9 billion during 2021 and the gross value added of a tuin is about 36 361.2 2 billion during 2021.
Uh we are all challenged with respect to the global and domestic economic climate. Uh there is negative impact of rapidization that is impacting on us and on us delivering the services.
Over the past 3 to four years, we've suffered a lot in terms of the disasters. H started with COVID where it was very challenging to collect what is due to us followed by the civil unrest in in 2021 and then the floods 2022 and tornado. So we are still recovering from those disasters.
As a result there are gaps in terms of capital budget mainly because of the uh refunding challenges. We also experiencing a lot of infrastructure vandalism especially around electricity and also uh water. Uh there is a challenge as well with respect to uh homelessness but there are plans in place to attend to that matter. Uh the inform formal trading especially around the city center is exploding but there are also plans uh to uh deal with that challenge.
Uh as far as the city uh finances uh there are three key indicators that we consider critical. Uh one of those is the audit opinion from the auditor general and then the second one is the credit rating that is done on a yearly basis and then the third one is the uh annual assessment by national treasur in terms of city's finances.
So with respect to the audit opinion from the auditor general uh we've received in December unqualified audit opinion uh with the findings in terms of the uh performance information and also findings in terms of compliance with the laws and regulations. Uh over the past five years we've been getting unqualified audit opinion. However, I think the first two years there were challenges with respect to uh the fair presentation of the financial statements. But now uh the financial statements over the past three years that have been submitted are clean uh uh free from material misstatements.
Uh we are capacitating the team within finance. H we there is a training program for structural accountant. So this is assisting us in improving the quality of the financial statements. The last credit rating assessment that was done which was in July last year. Our credit rating is aa minus and long-term and then a1 plus uh short-term uh this is investment grade credit rating. So we are able to access uh funding uh but when we do that always take into account the issue of affordability.
uh budget assessment. The budget that we are currently implementing uh 2526 it was assessed by national treasury as credible fully funded and aligned with the uh priorities as per the IDP. Uh we've also engaged with the national treasury recently in April where they were assessing our 26 27 budget.
They've also confirmed that the proposed budget which is due to go to council next week is also fully funded and also aligned with our priorities.
As far as collection rate uh the monies that we collect uh from uh our rate payers as at end of June 2025 we had collected about 95%.
uh uh to date uh as at end of April our collection around 94%. So we are uh maintaining uh this uh 94 95% average over the years. Uh so this enables us to uh continue uh putting the required infrastructure in various areas uh within teuini.
Uh with respect to uh bulk services uh we do not we are not in areas with escom uh we're not in areas with the water h water port. So our account is is in is in order as far as the the bulk supply uh services.
>> May I request him to skip this slide? I will deal with it later. Thanks.
>> Okay.
>> Can to the next slide. Uh the the next slide is the auditor general. We're looking at the period of 3 years. Uh 22 23 it was unqualified as indicated. uh we had about 25 uh audit findings that were included in the report and then uh uh 23 24 uh again unqualified with 20 findings and then 24 25 unqualified the findings reduce from 20 to about 13. Uh the matters that are uh preventing us from achieving a clean audit they include the following. One is the challenges with respect to compliance regarding the SCM rules. H two is the expenditure management especially around the payment of service providers uh within 30 days as required by the MFMA. And then three we found wanting in terms of not dealing speedily uh with cases where there's a need for consequence management. And then uh uh the next one is with respect to performance reporting. Uh not all the indicators were adequately supported.
And then the fourth one is environmental compliance where we found wanting in terms of some of our treatment works.
And then the last one the infrastructure management.
Uh as indicated by Mayor H there are action plans that are in place and those are being monitored uh by ESCO by MEC the portfolio committees. Uh the action plan for the uh 2425 financial year was concluded by management by end of December. H we are now busy with the implementation and we are being held to account uh by council escort and the portfolio committees the comm may I interrupt you? Can we can we colleagues can we just get this situation fixed? It's becoming red. Can you see the the screen?
>> No, no, no, no. We are used to them. My apologies.
Honorable mayor and and city manager.
We just need to get that sorted.
Okay. Shall shall we soldier on in the meantime? There's somebody coming in.
When they come, then I'll ask for another interruption just so we can fix.
Yeah, you can look at your respective screens. The members also have the same on there. Oh, yeah. Then it fixed itself.
Yeah. No, thank you chair. And then the the next slide as indicated by Mayor there was communication that was central to the H with commitments and those commitment were first first one was with respect to oversight and accountability.
H we are marking that as complete. uh the portfolio committees uh the audit committee uh escore and council are now playing oversight in terms of the audit action plans they are being tracked uh and then with respect to improvement to ICT operations and governance uh that is in progress there is oversight by the executive management committee and there are various project that we are doing in order to ensure that we close gaps in terms of the control weaknesses that were identified.
Uh those include the the uh automation of tender management system. Uh the online invoicing processing in order to ensure that we uh we pay invoices within 30 days. uh the human capital system in order to ensure that we comply with the MCORE regulations as the current system is not complying and also the uh implementation of revenue management system in order to ensure that we deal with some of billing issues that sometimes are being raised with us. H so those are in progress as we speak. uh improve improving uh infrastructure management. Erh we are capacitating ourself in terms of the program management and at the same time council had approved trading services reform strategies for electricity or energy for water and sanitation and also uh for DSW uh refuse collection unit. H those strategies are being uh implemented as we speak and in preparation for next year h we are working with national treasury to ensure that the key areas are funded from there and then the last one is monitoring and addressing slow progress and audit findings. H this is in progress. I will touch on it later on but it is being monitored uh by the oversight structures as already indicated.
Uh the 13 findings that were highlighted by the auditor general they include the following uh the conflict of interest what are we doing about the conflict of interest I've indicated that we are in a process of concluding uh the tender management system. So our financial management system which which is inclusive of SCM system is now talking to CST uh because uh in the past it's been a challenge for us to identify the employees that are in other organs of state. So at least now with the CSD talking to our systems we are able to pick up that tously where the declarations as part of the tender documents was not done. Uh with our own employees we are also implementing the new uh human resource system uh which will integrate with our SCM system in order to pick up those matters. And then on consequence management, consequence management is now being monitored by by ESCO. There's a report that is done by financial misconduct board to ESCO and that report is also escalated uh to cancel. So we are progressing in terms of uh uh dealing with with those matters and also there's accountability uh to the uh city manager through the executive management committee in terms of the matters that are are still pending and then on expenditure management uh payment not made within 30 days I did indicate that there is a system that we've activated we've gone live 1 of April there were teething issues However, we've stabilized now. So, that system will allow us to uh uh monitor the receiving of invoices because in the past you'll find that invoices are are received but they're not captured on the system timeously and will only pick up later when the invoices are with finance that the invoice should have been paid maybe a month or so before. So there is a system now that is able to track from the time the invoice comes and uh it will indicate if the invoice is getting close to the uh to date and also the service providers are able to track their own invoices uh from the system uh because uh they are also expected to load the invoices themselves. But those that are not able to load, we are still continuing to support them through the various departments and through our CIA our CIA centers. And then on performance information uh we are monitoring there is there is an S SDBIP uh which was signed off by Mayor at the beginning of the financial year. uh the performance in terms of SDBIP is being monitored through uh the portfolio committees and also through ESCO and also city manager has got a committee that monitors this performance where there's a need for corrective actions uh those are taken appropriately on the environmental management issues uh the we are working on packaging the license applications we are assisted by the water As far as this matter is concerned and working with the department of water and sanitation, h there was a finding about inappropriate use of section 36. Uh the SCM policy was refined to ensure that there's clear guidance in terms of when we are able to use uh the deviations. Uh but at the same time the contract that was picked up it released they made the big one released to uh the plumbing uh which was uh uh procured at some stage back in 2012 uh through guidance from council but that process was found not to be in order. Uh immediately after we had received the h feedback from the ag we activated a process of procuring and where we advertise to our service providers. However, uh we were interrupted through court processes. Uh but we are almost done in terms of finalizing uh that process. Uh the next issue was uh the splitting of orders or procurement uh where we procure uh for items below 750. uh we are working on auto machine on automation in order to identify uh items of similar nature and prevent them from being procured uh using the trib system uh and recommend them for the uh uh tender management system. H but at the same time we are intensifying our uh planning as far as procurement is concerned. You will see later on that we are already planning for the next financial year. So we believe that if we intensify uh the procurement planning we'll then be able to eliminate a number of items that are procured through uh the tribes as a result of splitting of orders. And then the next one is procurement not in compliance with the supply chain regulations.
uh we've uh we've got interim contract uh which was procured uh in terms of uh complying with the principles of section 217 and then the last one relates to the uh transit camps there is a a plan in place uh to uh relocate uh in order to improve uh the living conditions.
>> Sorry, can I the technician is here so can I just ask them to to just sort sort us out quickly? My apologies again.
>> Oh, that's honorable. You know, >> now it seems to be okay. But it was Can I move and give respect?
is my sorry >> can I answer?
>> Yeah, it's better now. Maybe it's because of your touch.
Honorable members, shall we get back to our seats?
Yeah, sorry.
>> Yeah, I know.
No, no, that that's fine. You're my favorite today, Honorable Isach. You're out of the dog box.
>> You've got amnesty.
>> Amnesty.
>> You've got amnesty. You've got amnesty today. You're not in trouble. Thank you very much. My apologies again. So, they say it won't be a quick fix. Let's try and keep the cable as stable as possible. Thank you so much.
>> Please honorable members, shall we give them a chance to speak? Thank you.
>> Uh yeah. Yeah. No, thank you. Uh my next slide, uh the measures that we are implementing to improve audit outcome. H uh when we when we get to clean audit, we want to ensure that we are able to maintain and that's why it's critical at this point in time uh to ensure that we improve all the key controls around various areas.
uh with respect to institutional reforms uh the audit action plans have been strengthened as I've indicated we concluded as management our audit action plan by December and uh there was a focus a lot of focus in terms of dealing with the root causes of the findings that were noted by the A and we also had to ensure that the target that we set for ourself are complying with the smart principle and the milestones in terms of time frames we made sure that they are and also the evidence will be in place to support the achievement.
uh the executive directors have been tasked with the responsibility of ensuring that all the actions that have been put in place are uh complied with and uh city men are directed that as part of our performance plans at least 20% uh should relate to uh the implementation of the of achieving a better audit outcome. The audit matters are elevated as a standing item at our executive management committee. Uh the internal audit and also audit committee they are playing their oversight in terms of monitoring and also providing guidance where where necessary.
Uh with respect to uh the oversight monitoring uh there is executive management as indicated that tracks these plans and at the same time they do go to uh portfolio committees the impact and council and escort and they are escalating mechanism in place where uh the milestones as set in the plans are not being achieved. H what is expected is that uh the the outcome will improve and also will minimize the repeat findings as we move uh forward and also we will uh comply with uh the laws and regulations and with improved governance and financial management controls.
uh over the past uh five to six years we we have received about 13 material irregularities.
Uh those material irregularities that were raised about five of them h have been closed or resolved. Uh we are dealing with about eight of them and the progress as far as the eight that are outstanding uh is as follows. Starting with the the treatment works h the northern works h the we've provided all the required information to the auditor general and they are in communication with the department of water and sanitation. Uh that is also applicable to umbilo wastewater we are awaiting feedback uh from water and sanitation national department. H the team the team from our water and sanitation is also engaging with the national uh the next one is EP WP uh this one as well was raised as a material irregularity uh the progress we've pro we've provided the progress report to the auditor general last month uh we we are we are also expected to uh provide the report before end of June that will indicate the progress But the matters have been investigated by our CIU or CID which is an investigating unit within uh the city uh where recommendations were made to recover or to discipline uh disciplinary process processes are currently in progress and our legal is assisting us to recover monies where it was recommended that we must recover. However, though I must indicate that there was a challenge as far as the WD pass where auditor general found noted that some of the EPWP uh people that were on our payroll were also on the payroll of uh uh the the provincial and and national uh departments. So we are trying to get more information so that we can be able to then h issue summons to those people that were found to be uh double dipping.
We are communicating with the departments and national and provincial.
H we are getting the information slowly.
We also ask the general to assist us with more information so that we can be able to uh recover those uh those monies.
Uh and then the the the next one is with respect to what DGA transit camps where it was found that the the the ablution were not in good condition. uh we've already intervened there where the brick and motor uh structures were put in place and that program is now planned to be roll out to the others as well that we've identified as not in a good condition and it will be implemented over the next 12 months. And then uh the next one is water meters not being repaired. H we are replacing there's a program to replace a number of meters a budget has been provided in the current financial year and also in the next financial year there is a budget for meter replacement h so this finding uh we are dealing with it in that manner and then the next one is Namibia stop 8 we've provided the information to the auditor general and they've noted and there was a plan to uh relocate about 20 uh 20 uh beneficiaries and that plan is being implemented as we speak.
Uh the next one is a overp payment of service provider for water tankers. Uh this one uh there was an amount that was noted by a where they were of the view that there was a an overpayment. We refer this matter to our investigation unit. But at the same time, some of the amounts that were noted by the H as per our investigation, we noted that they were already identified by the system and recovery had taken place. But the CD is currently investigating uh the matter and we will act as soon as we uh receive a report on this matter. uh we did the report to the auditor general and we will continue to update them as we continue uh with the implementation of uh the commitments that we made. Uh but regarding the water tankers, council took a decision over the past uh I think about 2022 23 financially uh to insource to acquire water our own internal water tankers. Uh last year we acquired 100 water tankers. The year before another 100 and then before that I think it was about 55. So we've got our own water tankers now. Uh we no longer relying on the external service providers.
Uh and then uh the the next one uh number eight also deals with the the water tinkering.
uh on the infrastructure uh uh project uh uh we we we've been consistently uh spending our approved budget uh it's around over the past 3 years around 90%.
The last financial year we were about 96%.
Uh this is in line with the norm as indicated by national treasury that we should be spending at least 90% of our budget.
uh we are already uh planning for the next financial year. Uh there is there are procurement plans that were tabled with the budget as end of March and in terms of uh procurement with respect to those plans we are already 65% in terms of completing and 18% of the project are are in progress and some of them will be implemented through uh the 750 and below process.
uh with respect to the current uh uh current financial year uh we are expecting to spend around 90% again uh the project 97% of the project are already being implemented because the procurement is complete h they there was 3% uh that was in progress in terms of procurement uh when we reported but as at as at the end of last week is only 2% now that is remaining but we are confident we should be able to spend and around 90%.
Uh in terms of the norms, our capital budget to total budget is about uh was about 11.26 for 2526 that is our target.
Uh this is in line with the norm uh by national treasury which requires us to be around to be between uh 10 and 20% in terms of investing on infrastructure over the total budget. Last year 2425 we we had spent about 10% the year before about 10.64%.
And then our investment in terms of the key service delivery unit which is your uh trading services uh trading services your electricity water sanitation and uh solid waste uh and also you've got your roads and housing. uh about uh 76% of the budget uh is dedicated uh to those infrastructure uh uh units. So it's only 20 uh to 24% that is allocated to the other department. So there is a specific focus uh as far as our budget in terms of dealing with the infrastructure challenges and with respect to uh repairs and maintenance the norm is to spend around uh 8% of your budget. uh for the current financial year we are planning to spend about 7.48% in the previous financial year it was about 7.37%.
Why we are bit low is because we are still recovering from floods. There is number of pipes board sewer and water that are being replaced. So those are not repairs and maintenance as such but they are classified as upgrade and they are capitalized accordingly. So if you add the those upgrades to this number, we are above the the norm of 8 8%.
And then when it comes to our infrastructure delivery and service delivery oversight, uh we do acknowledge there are challenges in terms of implementing infrastructure uh project and also rehabilitation.
uh we do acknowledge the challenge of edging infrastructure as we invest on new. Sometimes uh we also need to uh deal with the with the old. So we've been a challenge in terms of striking that balance and maintaining and also investing on the new. Uh the flood damages as indicated there was a a huge impact in terms of our infrastructure.
the uh the the cost that were estimated as per the last flight is over 10 billion that was incurred. We do appreciate uh the support that we received from national as far as the disaster grant but we are also using our own resources in order to catch up as far as these infrastructure challenges are concerned.
uh the progress uh with respect to the infrastructure delivery uh challenges.
Uh there is oversight as already indicated and the project are being monitored. Uh the portfolio committees on a monthly basis are given the list of project that we are implementing and they are able to then monitor and ask questions where project are not moving.
Uh we are also improving uh the coordination through uh program management office. We've just appointed a director responsible for program management office. So there is there's better coordination now as far as implementation of a of a project.
There's also increased focus on proactive maintenance and also rehabilitation uh planning.
Uh we are monitoring uh teams across uh wastewater treatments, housing because in some cases there are delays as far as the implementation of houses.
Uh the water meter maintenance and also flood damaged uh infrastructure. H oversight again there's a intensified oversight as far as this matter. As I've said monthly we reporting to portfolio committees esco meek and also council they are able to uh see how we progressing as administration.
Uh these are the uh uh infrastructure project that we are implementing across the city at a high level. Uh with respect to electricity, uh we are dealing with the ongoing refurbishment and maintenance of our substation to ensure that we stabilize our network so that that electricity can keep generating monies for us. And also we are dealing with the replacement of our cables. As I've indicated the issue of vandalism is a challenge. So continuously we are replacing our our cables whilst we also improving our capacity to secure some of this infrastructure. We are implementing a loss reduction strategies as approved by our council last year as part of the trading services reform and also we are strengthening our controls in terms of managing uh our contractors. We now again through oversight reporting to our finance committee in terms of performance of all our contractors. So where there is a non-compliance with respect to the uh terms and conditions of contract the processes that is articulated in contract are being followed and those processes also include blacklisting uh where there is no where the performance is not being corrected.
Uh with respect to uh water h we are implementing the the turnaround strategies in order to deal with our non riven water which is quite high at about 50 at 3%. So the strategies are in place are being implemented and uh we are funding them as well as we move forward.
Uh leak detection pipe replacement and pressure management interventions those are being implemented as we speak and will continue in the next financial year. uh the meter audit and replacement as indicated a raised a finding material regularity on this matter so we are attending to it uh through replacement of the uh those meters that are no longer working on waste water there is a lot of investment that we are making in terms of the uh the treatment works h also also in response to the auditor general as you might have as you have seen earlier on they raise a red flag in terms of Um treatment works and also the northern treatment works. So we are investing on those and the others that are within uh the city. Whilst doing that uh we are also replacing our networks. Some of the pipes got washed away uh during the 2022. So they are being replaced as we speak. There is a budget allocated in this financial year and also in the proposed budget.
H we are also uh dealing with the the housing related matters. There are matters that were raised flag by the H where there were delays in terms of implementing a project and as I've indicated we capaciting ourself in terms of program management and there is better coordination with the other departments because when you put a house you must still ensure that that house has got electricity has got water has got other services which are rendered by the other departments. So our program management office uh is going to assist us in improving that coordination. And then on roads uh there is ongoing rehabilitation of uh flood damage roads and also storm water infrastructure. Uh the budget is available although it's not enough but is available and is being implemented as we speak. There is a portal repair program that is being implemented and also our storm water system are being maintained. As we continue uh on the water loss intervention as I've indicated there is a a turnaround metro traing services strategy for water that was approved water and sanitation and as part of the strategy h there are interventions that we want to uh that we are implementing in order to deal with the uh the water loss and uh some of those they include the cleansing of our data uh improving our billing and reading and also So procuring a performance-based contract in order to assist us in uh dealing with non-revenue water and also uh the awareness as far as water conservation and also improving our technology in terms of monitoring uh the system. Uh the repairs of the uh the leaks that are being identified. H also managing the pressure in order to ensure that if there are leaks at least we do not lose as much as uh we could the pipe renewal and rehabilitation they are budget in place although they are not adequate but they are budget we are renewing some of the pipes in order to ensure uh that we minimize the leaks one of the big one is southern aqueduct which is supplying uh the areas in the south chasmlazi following and all those areas. I've already spoken to the uh meter replacement and also we are doing a meter maintenance uh because some of them uh when we do assessment uh we don't have to replace but we have to maintain so that they continue to provide accurate uh readings uh to our consumers.
And then the next one is unauuthorized irregular, fruitless and wasteful expenditure.
Uh during the uh 24 25 financial year we do acknowledge there was a spike uh that spike was as a result of uh uh three areas.
uh one of them uh is with respect to uh the local content requirement in line with the 2017 uh uh triple PFA regulations. Uh we're expected for certain categories when we advertise to indicate uh the local content requirements. H however because of the challenges some of those contract uh were not were either not advertised with those requirements or where they were advertised with those requirements the the tender documents were not appropriately h completed. H as a result those contract were found wanting h in terms of complying with 2017 regulations but as we are aware uh we now implementing 2022 uh regulations and we've aligned our policy with the 2022 regulations however we still have contract uh that were procured in compliance with the 2020 2017 with 2017 regulations. H the last contract from electricity the expiry date is which is a rate based contract is end of January. H so we think by end of December if not January we will then be able to uh have zero after after that period we'll have zero irregular expenditure coming from the local content. We did consult with COA previously as as to whether it's possible and also national as to whether it's possible to regularize a contract and the view was that you cannot recognize a contract but you need to regularize the expenditure itself. So hence we continuing to regularize as we as we we incur. And then the second big item is with respect to the h plumbers is over half a billion as well. I think it's about over 700 million. H so what happened with respect to the plumbers back in 20 2012 h the council had taken a decision to h set up a panel of plumbers in order to uh create opportunities for small plumbers ac across the city. uh that was informed by a policy h and then that panel was created and we've been using that panel since then. H however because it did not follow the the the section 217 of the constitution the those principles h this contract was found to be not complying. So uh as indicated we've uh gone out to uh to the market in January.
We were interrupted by the court processes. Uh we are now about to conclude that process. So it is irregular. We've acknowledged that but we are putting a corrective action as far as that matter is concerned. And then the next big one is on the water tankers where the AG was of the view that the extension of the that contract which was procured I think it was in 2023 h was not fully complying with the with the requirements. So as a result the expenditure linked to that was then considered to be irregular and we accepted that as management. H we did indicate though that council had taken a decision uh to insource hence we did not go back to the market for another long-term or three-year contract because we're of the view that that contract might not be required. So those are the three big items that are that have resulted in our irregular expenditure uh increasing.
Uh as far as the balance of the 32 billion it relates to the 64 items as at 30 June 2025 and they've been submitted to me. uh 689 million of this balance has been uh uh considered by me and written off by council and uh 657 relates to the issue that I've just explained of the water tankers. As I've said, we're no longer using the uh the service providers. We've got our own water tankers now. And then the 799 million it relates to the procurement of plumbers as a result of that 2012 cancelled policy uh that we were were implementing. And then we've got some items uh with respect to the splitting of orders. Again I've indicated there are uh processes to deal with this matter as we move forward. And then the local content that I explained about 1.9 billion was reported in the 2425.
So with respect to the local content we had gone out to tender but uh the specification was not 100% in compliance with the 2017 uh regulation. That's why then it was found wanting.
uh and then if you then unpack the root causes uh of the the UIFW uh the first one uh is a issue of demand management as you've already seen we are intensifying our effort in terms of dealing with the procurement planning we now enforcing uh the planning uh early before the year can start so with that we're hoping that we'll be able to reduce irregular expenditure. Uh SCM teams have also been capacitated to to support various directorates. Uh the inadequate procurement plans I think I've already spoken to that one and you've seen the progress for the current and also for the next financial year. a poor planning contract procured with the use of section 36 uh again that talks to our our planning and we are dealing with the procurement plans as indicated but at the same time the automation of contract management uh or the supply chain management system uh is on. We are able to pull out a report now uh with all the contract and able to identify those that are due to expire soon. Uh some of the measures that are being implemented is the automation of conduct management that I've already indicated. Uh we're also reviewing the report for compliance before they go to h committees. Uh there's also procurement planning as I've indicated internal audit is also uh assisting in terms of h reviewing some of the procurement transactions as part of their plans. H the online invoicing in order to deal with the uh the 30 days issue is being uh implemented and the accounting principles of issuing orders uh prior to work being done are being uh uh enforced.
And then when it comes to uh deviations and contract extensions uh deviations is where we are applying regulation 36 or section 36. Uh so again uh we are emphas we are putting more effort in terms of procurement planning.
As you can see uh uh during the current financial year the section 36 or deviations are only about 557 uh million h and then they they equate to about 7% compared to 30% in the 2022 23 uh financial year. So uh we think our our our interventions are assisting in terms of only in terms of reducing section 36 or deviations or or using deviations. Uh and then as far as the variations or increase in in scope that one is still a challenge as at end of as during this financial year we are currently at slightly over 1 billion and that's request to about 14% uh but uh 2022 23 we are around 3% at about 205 million. uh during the current financial year the uh the the the the big uh uh spike was as a result of our fuel contract which is a more than three-year contract. Uh that contract requires us to install uh devices so that we we minimize the stealing of fuel. So that process took longer than expected. It was concluded in December.
So we had to extend the old contract whilst the installation was taking place. H but at the same time uh we are uh upgrading our rehabilitating our Moses Mida stadium. H we had to extend the scope of our OEM uh through a variation of the amount is about 285 million. So those two items alone are over 50% of the over 1 billion variations. But there are controls as already indicated that are being implemented to contain or to avoid using variations or using uh deviations.
And then with respect to the uh the audit action plans, uh the auditor general as indicated in our audit report, we had 13 uh findings. H however they also issued us within within within a management report and in total uh the findings that we had 107 so 13 is at the order report level and the rest at the management report level classified as other important matters. Uh as already indicated we concluded our uh audit action plan as management by end of December. They were then reviewed by internal audit and they are being monitored as we speak. Uh the implementation of the action plan is in progress. Uh 37% of the findings have already been uh resolved and 63% of the findings are in progress.
uh greater than of the 63% 80% erh more than uh 79 are more than 80% in terms of the implementation and then 20 of them are between 61 and 80% in terms of the implementation. Uh 26 of them are between 41 and 60% in terms of implementation.
uh 17 of them are between 21% and 40% in terms of implementation and then 28 are between zero and 20% in terms of uh the implementation. So uh we've closed 37 uh the rest of the findings are being implemented and they are in various stages of implementation as as already indicated these are being tracked uh by the uh various oversight structures.
Uh with respect to the law enforcement uh agencies uh uh there are cases that have been reported uh to subs as as already indicated we do have an investigation uh unit within uh the city is called CI.
uh when they pick up possible criminal elements during investigation uh those things are then reported to subs there is about 55 of those cases that have been reported they are engaging with the subs on a continuous basis as far as those cases uh the cases that have been reported they relates to fraud and also fraud and corruption And in some cases system breaches some cases relates to theft and there are related irregular appointment issues and illegal electricity connection and illegal sale of municipal properties.
Uh chair I think that is the last slide slide 29. Thank you very much.
>> I just want to be sure that you remember you had sections there. So there's the section marker after this. I just want to be sure that we are on this. Oh yes.
Yes. Then we get to the additional information requests. Okay. Uh honorable executive mayor, can I hand back to you?
You might want to to address some some issues. Uh before we get to to questions and you city manager, it's it's it's entirely up to you.
>> Thank you very much uh chair uh for the opportunity. Once again, let me thank the C CFO for the the presentation. I actually I actually asked him to skip uh slide number five that deals with the political leadership and administration and um we can go back to slide number five.
We we we simply present uh the fact that um all council committees are fully functional.
We meet at least once council meet at least once a month and all uh portfolio committees uh meet at least once a month as well and we have a a critical stakeholder in our city. We are 60% rural. I think people most people uh don't know that 60% rural and um we have 18 uh traditional communities headed by traditional leaders and we have a good working relationship uh wi with them and all committees play their oversight role. But the point I wanted to make chair is that our priority as the political leadership was to ensure that there stability both at a political and administrative level. Well, I think we've achieved that um because uh the intention was to strengthen and restore and uh systems and um monitor compliance and ensure um uh consequence management.
Erh, we we we thought we could achieve that by maintaining an open and an accountable uh system of of government and um thereby try to improve service delivery and create an enabling um environment for growth. Just this last year alone, just um as I learned uh the city received in excess of 50 billion rand investment in our economy and we're excited about that and with further pledges being made into our economy and the business confidence has actually increased. There's a survey that um is conducted by the University of Kazum Natal with business that shows that business confidence has increased from 52% to in excess of 63% in the city and the tourism numbers of increased in the city which is a sign that we are recovering from the previous incidents of disasters. I thought I just make that point. We are a city recovering. Thank you very much.
>> Thank you very much. Executive Mayor CM, you're good. The leadership has spoken.
>> I can speak up.
>> Okay, that's fine. No, thank you very much. So, uh what we we are going to do is we going to take a break so that we when when we restart, we will not stop until we are stopped by the bell. So, it's important that everyone gets to Yeah. to to to get a body break especially you you and your team because unlike the members you can't walk in and out during the meeting when we come back uh each of the members will have 15 minutes for a direct interaction with you h so what I will say is that I think what I would like to encourage is uh short sharp questions and short short sharp answers because the members are under the whip from me and once their time comes I will then have to cut them off so that everybody gets an opportunity. We will not do all the members in this session. Whoever has had a chance will then get to to have their chance uh later on when we reconvene. So can I ask that we are back here starting to talk at exactly 11:00.
Thank you.
Honorable members, shall we begin, please?
Thank you very much. Uh so as I said, we we're going to give our uh we're going to give our our honorable members a 15 minutes with each of you.
So short sharp questions, honorable members short sharp answers uh to our guests. Um I also believe that you may have noticed executive mayor that uh a lot of your compatriots from uh from here. Honorable Basley who I'm going to start with is from there's quite a few people.
Uh there's time for family business.
Honorable I am going to start with you. We're just going to go and unfortunately today there is no second role. So everybody gets a chance as we as we speak. So your 15 minutes uh will begin now.
>> Um thank you chair. Wealth honorable Isak was out the room. He donated his 15 minutes to me. So um yeah but just um greetings to my my um yeah my fellow residents from so glad you could have.
And for the record chair I'm going to say is the best city in South Africa.
It's broken but it can be fixed and it is beautiful. And it really is. We've got beautiful people, beautiful coastline, and we've got so much going for it. So, it really really is a beautiful city. And also, Ch, I'd just like to compliment the the team on their presentation. I think it's one of the most open and transparent presentations that we've seen so far. So to complement them but I'm going to go straight into the questions and I'm going to start off with insure buntu and I I was the one that put those questions forward and and the reason why I do as a resident as a rate payer it appears that the law and order of our city has been outsourced to people operating outside of the law and order and as a resident and as a South African I have a huge issue with it and I'm sure mayor this question is directed to you. Did you see the video of of and I'll just share with my colleagues there's a video that circulated of this this company outsource company horrifically and when I say horrific got to the point where I couldn't watch a chair of them beating a helpless person for about 5 minutes and he was beaten and then he was beaten again and then he was beaten again by service providers of Etiqu. So I want to ask you mayor did you see that video?
Uh yes, I did. Thanks.
>> Thank you. And what was your response to that? That that what action did you take in response to that?
>> Sorry. I think it's a criminal uh act and the person who brought it to my attention is the CEO of the Dennis Hel Center and he said to me he had reported it to the police and and he was still waiting for the action on the part of the police and I remember maybe that the matter is reported to the law enforcement um agencies for investigation and action. Thank you very much.
>> Um yeah, but as a city as a service provider, what has a city done in terms of them as a service provider? It's for me like having my house fixed and I employ a contractor and the roof falls down and then I try and sue them and they say no, the the guys who are doing it have have resigned that they they they're responsible. What action did you take against insure?
Well, yes, in terms of uh you know, in terms of let me not say yes. In terms of Vicara's responsibility, I can't say for sure. Uh the company management, it's um it's responsible because I'm not quite certain if those two police, those two security officers were really acting within their scope and the cause of their employment. But what they what I heard when I got I I inquired with the team here is that they have since been uh dismissed or resigned. I think they were dismissed the two. They resigned.
Yes, they they resigned and uh and therefore the matter is left for the police um uh to to to act on it. Yeah.
Well, I I fully disagree with that, mayor, because they are a service provider and if they've that's your contract is with the service provider, not with those employees. So, I fully disagree and again, I come to the fact that you've outsourced the law and order to people outside outside the law and order. So, I think your response and I think as a mayor, you should have publicly denounced the the issue. It should have been in a press statement.
And has any other matters by Abuntu been reported to you?
>> I did denounce it. on that part. I've done it, but they will tell the city manager will tell you on what how they dealt with it administratively. Thank you very much.
>> Honorable Beasley, I want to start off by categorically denying that we have uh outsourced the policing responsibility to an external company. that company. Uh can I uh refer the members? Yes. To that particular page and the next one which is uh page 80. That particular company was appointed as part of inner city regeneration. So that it provides security and beyond security a topup service in terms of public realm upgrade and things like that. They work in tandem with our metrop police and subs.
So after this particular video uh of a beating of a homeless person, we exercised our right to invoke relevant sections of the contract that we have with them to ask them to explain to us and they've basically explained what happened and what are the corrective measures that they have taken to ensure that an incident of this nature doesn't recur. They also implemented consequence management to such an extent that those people resigned even before they were they were taken through that particular process. They have apologized. If you look at those four points in that particular report that says corrective measures implemented. I'm not going to read them as they are but um there was an investigation they did um uh they engaged the people who had launched a complaint. uh they did a refresher course and they installed cameras, dash cams on all vehicles and on all security uh people. But in so far as the mayor denouncing the event on the 14th of February 2026, the mayor publicly denounced the incident of violence against homeless at Dennis Haley Center AGM which you know is attended by a number of people and and and their report gets to be widely circulated. On the 19th of March 2026, the department also denounced all acts of violence and any abuse of human rights by any service provider at a meeting which was held with the concerned civil society and academia. So we have not outsourced it.
They they are working in tandem with the police um infrastructure in the city.
Thank you.
>> No, thank you. And then just in terms of the homeless one before we move on, a shelter is being built in Elova and I don't know who came up with this idea but building a home homeless shelter 35 kilometers away from the CBD is nonsensical because the homeless people aren't going to go there. They're going to come back. So very 30 seconds reason why it was built 35 kilometers away from the CBD because homeless people come to the CBD looking for jobs and that they're not going to go and stay 35 km away. It's not like a holiday camp. Just 30 seconds then I need to move on to something else. Thank you. Remember honorable uh Easley homeless people are not only in the central business district of Deben they are in either six different primary and secondary CBDs and one we've located them there because that was the site that was owned by the city suitable already have services and next to it there is a a a a capacity building a center by the ben h business uh directory operate. So the plan was to ensure that we link them with the opportunities so that we reintroduce them back to the to the community. I I don't support the view that says it is nonsensicalally. It was >> that's fine. Then just moving on there was an SIU proclamation R9 2021 regarding the the infilling housing um policy particularly in Phoenix and the the conclusion of the SIU. I mean, you read it, it's it's it's it's yeah, it's terrible reading. I mean, everything wrong could have gone wrong. And my concern is that people of Phoenix, particularly the the poor, the marginalized, have been abused through corruption, but this is continuing. And I want to know how many of those contractors that were identified by the SIU in that report have been blacklisted by ETA and blacklisted by National Treasury.
Thank you very much. Uh according to my knowledge, uh that particular investigation has not been fully concluded and we are still expecting us don't don't read what the complainant said. I'm talking about the actual SIU report. With all due respect, I've read the SIU report and it said they must be blacklisted. And we have the the SIU coming here time and time again and they've given recommendations for people to be blacklisted and they're not. And the corruption continues unabated. the SIU in the report and this is not I'm not reading this. I read the SIU report.
It says they must be blacklisted and I've gone on to your blacklisting thing and not one of them have been blacklisted and not one of them on national treasury. So they are still free to do it and my understanding they're doing developments in Phoenix again and that the the and that there's a park that's and I'll give you that the addresses 338 view haven drive um Renmore Crescent and Revatton Place. So the the marginalized are being this is continuing even though the SIU have issued a issued a report and you got a copy of the report. How can this be?
>> Yeah. Uh chairperson, can I request uh Mr. P uh to respond to the specifics in so far as that investigation is concerned. Thank you.
>> Good morning once again. uh honorable to my understanding there's no report or a contractor in the ones that are working in Phoenix that an outcome has said they must be blacklisted instead what is in the report is to fast track the ownership of the people in the houses so that they can get the full ownership it's the concern and this was happening even on our consultation with the budget fasttracking those people to get their tile deeds ownership in the which is what city is addressing through planning thank you >> yeah just a point and then I'm going to move on because I've running out of time is the SIU proclamation recommendations haven't been implemented by the city and we see it time and time and time again and the and the poorest and the most marginalized and those particularly in Phoenix are suffering the consequences for that. So I urge you, mayor, please implement that report next time you come. We're going to go through the six items and see how many have been implemented. And then an issue very very close to me is a suridge issue. I surf.
There's certain days I can't surf when it's raining, when the northeast has been blowing, and when a when a sewage treatment plant is down. But at the moment there's absolutely chaos in Durban's harbor. It's an absolute disgrace. It's going around the world.
What is the status on that at the moment? Because that goes into the sea.
Now the southwest blows and then we nobody can go in the water and you talk about tourism that is going around world news the amount of suridge that's going into the into the harbor and and and you know it's action essay it's not a political statement we took you guys to court we won the matter and I hope you're not going to appeal the matter rather use the money to correct it but if you can just advise what's the latest on that harbor discharge because it's it's bringing our city our beautiful city into disrepute and it doesn't deserve that. The people don't deserve that.
>> Thank you. Uh honorable, I'm going to request at Nikimueli uh to just respond to that. Please don't go on to the court order stuff and the background. Just give a little bit of background, but be straight to why what is the progress till now. Thank you.
>> Yeah. Well, thank you Sam and greetings to the committee. the recent incident that affects that that pump station is called Mahatma Gandhi pump station. Uh it's a very unique uh design because of the location where it is. So we're dealing with a very particular challenge there that we don't normally face. Um where because of its location, the actual pump station, the big part of the pump station is is is below ground.
So what we what we found is one of the of the flaws that we found with the pump station was that because of it being below ground there there are gases that develop underneath that um because it's not I think it's a first that we experience something like that. So the design at the time did not sufficiently cover for that possibility of the of the acids. So those assets then corrode the the equipment underneath. So that's what we are dealing with. It's not a normal problem. It's not something you encounter on a daily basis. So, as a result, we we really are working flat out. Our guys are there 24/7 literally and they're working on that. So, there I without going into too much detail, we I'll just indicate that you fix the pumps because it's the pumps currently that are affected through this corrosion that I'm talking about the the damage from the acid and so you you recover them and they work for a while and then from time to time we lose them as again.
So, but the work is currently happening.
The teams are outside as we speak.
They've been there for hours. Yeah.
Thank you.
>> Sorry, just >> No, no, I was saying carry on. We still have a few minutes still. Yeah.
>> Chair. Um um and then the the water crisis. It's it's it's a matter massive crisis and and and chair, I just like to read this number into the record. 676 million L of water is lost in etiquini a day. 676 I mean you wonder how many of these it'll probably it'll be trillions.
That's how much water is lost today. 58% water losses. I was in a the council couple years ago and what's been put up here is what I saw 3 years ago. The water losses are getting worse. There has to be a solution, but it can't be the same old, same old, same old. And and what's happening now, residents are suffering, businesses are suffering. 58% water loss. And you'll say, well, some of it's not build. The majority of that is going down the drain. 676 million L of water is going down the drain intui every day.
>> Thank you very much, chairperson. Uh just to just to clarify uh something that the honorable member raised earlier on. I have it on record that we don't have the SIU report yet on Phoenix. H I've confirmed it with the team. Uh in so far as uh the water loss uh Mi can you please uh respond to that quickly.
Thank you.
>> Okay. No, thank you. I think the numbers that have been given are correct. But one of the biggest contributors to maybe the top two that I would put that are contributing to our high water losses is the age of our infrastructure in in which the council has identified and is now dealing with. If you look at the investment that is now going to the water and the sewer infrastructure in the I would say in the past 3 years it has been bumped up significantly and that is to to address the challenge. His worship the mayor mentioned earlier on that we are 60% rural. So you you have to do that and balance with dealing with this backlogs in terms of people that did not have access to water and and sanitation. And that that poses a particular challenge because if we didn't have those backlogs obviously all the funding that's available would have just gone to upgrading infrastructure and if you did that you wouldn't have this problem that we have prior to to the UNI city being formed when we had the local councils uh because those local councils did not have this component of the rural areas. If you would go back and check you you'll see that their water loss figures were very low. So if you looked at Poundtown, Pinetown Barrow, if there's a correct way to pronounce it, go back and look at their water losses at the time. They didn't have the surrounding rural areas.
So the water loss was low. The minute you bring on bring in the the rural areas, then you start to have the challenges. But there is a concrete program to to address the nand water issue. and the CFO when he presented he mentioned the national treasury program the turnaround strategy that's being implemented that strategy prioritizes dealing with this because it is indeed a low hanging fruit that if we can stop the bleeding there we will then have the money to do other work >> last one >> yeah thank you and I mentioned the blacklisting earlier I've gone on to the municipality and there's about 24 suppliers is blacklisted. For me, it's it's bizarre that people who are committed fraud, incompetence, poor performance, that there's only 24 on Etiqueen's um blacklisting. But why aren't one of those on the national blacklisting thing? Because that is a requirement of the law that that it needs to go to. So you can't put something on your blacklisting and not report it to national treasury because that's the whole purpose of having a blacklisting database is those people should be prevented from dealing with with the state in any cap any capacity. So I just want to know why it hasn't been elevated up to national treasury please.
>> Yeah. No thank you. Uh with respect to blacklisting uh we've got our own policy uh that we follow and in terms of that policy uh when we've identified the challenges regarding the contract we then write to them to indicate that these are the issues please uh justify as to why you should not be blacklisted.
H once you get a response the committee will assess those if they decide to blacklist then they will make that decision. H that information is then submitted to national treasury. H in the past there's been a challenge information was not submitted there but we've been engaging with them so now we are submitting information I think I'm not sure about their process whether they once they receive from us they then rely on our decision and and upload it on their system or they follow their own process before they get it on on their database but from our side we acknowledge there was a challenge in the past but now we are communicating our decision so that they can then be able to take them forward thank you. All right. Thank you very much. We'll we'll also mark this for further discussion.
Honorable Beasley, your your time is up, so you will get a bite later on. H Thank you very much. Honorable Issach, you're in my good books today.
You should sit outside more often.
>> Thank you, Chippers. And yeah, the sun is shining nicely outside. So awesome.
Uh good morning, colleagues. Thank you so much for being with us Durban. Yeah, colleagues from Scopa.
It's great to be back here again. I was saying to Mr. Beasley uh yesterday, you know, it's it's not only emotionally taxing when you're at Scopa, it's become psychologically disturbing when you have to listen to these kind of reports every day, week in week out. So colleagues, just bear with me. But Mr. Bizley has covered uh one or two uh key issues and I suppose colleagues will um I'm going to go as quick as I can. Um okay, let's just start off here. Put aside these other ones. The IC and the um Ushaka Marine.
Okay. Now obviously these belong to the city or they're entities of the city if my understanding serves me well and that you need to supply separate financial statements for these entities. Now what I'd like to know quickly is uh what is the current return on investment on these two uh investments and are the audited financial statements being uh given and supplied and done in terms of the act uh for both Ushaka and for the ICC. Shall I take the answer chair person and then move to the next one?
All right. So please engage me on that sir.
>> Thank you very much. Uh CFO will respond.
Uh thank you Shagam Marine and ICC they are submitting financials on a yearly basis to us and also to the auditor general. H last year they both of them receive a clean audit. However in terms of their financial performance h they do have challenges. There is a report for USA Marine that is scheduled to go to council. In terms of that report we are recommending uh some sort of intervention. Hopefully that report should go through either this month or next month. With respect to ICC there are also initiatives to uh enhance their revenue but currently they do have challenges but as far as the audit they've got clean audit h we don't have any concerns as far as that is concerned. Thank you.
>> Okay. So I won't get into a debate about those two issues. I touched on them because I think many individuals and if you look at what's going on in the press etc those two entities are problematical for the city of Derban and I think you realize that as management we know that okay but let's just move on because uh in the interest of time uh CFO if I might pose a question to you I I read you know in the presentations that were forwarded to us. Now, this is this is a it's a hard-hitting statement and difficult for me and South Africans out there listening to digest, but the ASA says as the accounting officer, you sir are not implementing recommendations relating to monitoring and oversight compliance.
multiple repeat transgressions with laws and regulations. Now sir, those are not my words. I am quoting from the AGSA's report. You as the CFO perhaps you could just tell us as the committee in South Africans listening out there. What are your comments to what the AGSA is saying about these multiple trans transgressions?
>> Uh thank you very much honorable Isak. My name is Mosamb. I am the accounting officer of Eguin.
The statement by the auditor general is is correct.
H in a sense that it does reflect an unsatisfactory progress in dealing with some of the findings that they have they have raised. But um I'm happy to submit that through the presentation uh you can see that we are improving in that particular process. Uh just to ensure that uh we get the organization to be anchored uh into the culture of accountability. We are doing consequence management for those people who are not uh complying. So we are doing all the best we can to ensure that we change the situation around. Thank you.
Okay, if I might continue with your permission ch and so as you just said now anchored in the culture of accountability.
So based on the anchored in the account or in the interest of accountability then how does how does one then explain how does one explain I mean 4.84 billion run of irregular expenditure in 2023 24 you had 1uini had some 1.6 6 billion run of irregular expenditure.
Okay. So in 24 months in 24 months 6.43 billion run was written off in two financial years in the interest of accountability and culture as you might have mentioned. How do you account for 6.43 billion run being written off in 24 months? I mean, has there been any investigations?
Who is responsible?
What is what is going on? Just give us a short synopsis of then I'll move on to the next one. Mr. Chairperson will cut me off quick quick when my time.
>> Thank you very much. Uh thank you very much uh honorable member. Uh we've reflected in our presentation how those uh uh irregular expenditure have come about. But I'm going to request the CFO to give further details. Thank you.
Uh yeah. Yeah. No, thank you. Uh uh with respect to uh the irregular expenditure, the council does have a a policy and the reduction plan that was approved back in 2021. H however, if you look at the numbers during the presentation, I did indicate that there are three big items.
One of those items is your local content. H we had the 2017 tripfa uh regulations which require I think is regulation 8 which required that when we advertise tenders we must stipulate the local content requirement for certain categories. So during uh those years when the regulations were applicable uh because of the challenges that the technical teams had in some cases when we advertise the specifications we did not have we did not stipulate those requirements and then secondly when we receive responses in some cases the biders will not indicate compliance with the requirement. As a result of that uh those were found to be in breach of 2017 regulation. We then had to review all the contract that are subject to uh 2017 regulations and we've got a register h those were then declared as regular expenditure and on a yearly basis as we incur the expenditure we then declare it as regular because initially as I've said we consulted with the province cocka and national as to whether we can regularize contract instead of expenditure and the view was that we can only regularize or condone the the expenditure not the not the contract. So there's a big big chunk if you look at 22 23 and 23 24 the big chunk of that expenditure relates to the local content. However, in the last financial year, h the two items, one is the plumbers h the plumbers as I've indicated council back in 2011 2012 had resolved on a policy uh dealing with the plumbers and that policy basically if you look at the principles they wanted to empower local plumbers within order to participate so that they can participate uh in assisting us to repair the infrastructure. So that police internal police policies were required to advertise get the plumbers to submit their bids and then put it at database.
So that has been in place since then.
However, there have been challenges with respect to that and we acknowledge that in terms of the MFMA, your conduct should only be up to 3 years. If not 3 years, there's a process you need to follow. So we acknowledge that that process was not complied with. As a result, it was declared irregular. It amounts to about 800 million of the billions that you are you you are you are referring to. And then there's an issue of the water water tankers where we decided not to go back to the market for a three-year contract because council had resolved that we must insource. We had already bought about over 150 tankers. So we decided not to uh go back to the market. We instead we decided to use section 116 of the MFMA which allows us to extend the contract but there was a view that uh that provision of the MFMA should not have been used. So we accepted it and we then declared it as regular expenditure.
these irregular expenditures in terms of that framework I referred to before they can be written off there is an investigation that is done in line with the section 32 of the MFMA and in addition we do have a financial mis misconduct board that financial misconduct board is made up of internal executives and also external people from is shared by an external legal person and also there is a representative from provincial government. So they are sitting on a monthly basis uh to assist us as far as the financial misconduct is concerned. So the cases are being investigated where consequence management is required is being implemented. So that's a summary of what we're doing as far as irregular. So as I've said regarding local content the last contract is expiring end of January. So after January you should not have any other irregular as far as the local content is concerned and the plan being you still find it this year because AG brought it to our attention in November last year the conduct was still being used for the current financial so we still find it we did go out to the market in January as I've said but because people were not happy they wanted to continue to participate they took us to court h two weeks ago we got a decision that we can proceed with that process so we are proceeding with the processes So we are working on these matters and hopefully they will be eliminated soon. Thank you very much.
>> Okay. I'm not sure how I'm doing for time.
Can I go ahead quickly? Um I'm uh well well thank you for your response but I'm sure with with due respect that when we come back this evening uh if we could interrogate these matters even further because I don't think that we'll just going to settle for a discussion off the top in terms of those responses. So I'd like us if we could come back this evening to this issue very issue because you know you you you talked a little bit of investigations but just give us a very top slice we want to get into the meaty bony stuff on the because you know we spoke of irregular expenditure I mean now we're going to move I just want to quickly slip in a comment on fruitless and wasteful expenditure which we still need to get an explanation on that one too which is separate from irregular expenditure but we'll talk about that one and then I I I want to understand and perhaps you could explain to the committee and colleagues deviations. Now uh then my thereafter have one last question shared uh the deviations if I might ask what are these exceptional cases uh which the AG talks of uh which the municipality finds uh impractical or impossible to follow procurement processes.
uh why do you find it so impossible I mean to follow procurement processes this is not rocket science it's a big metro I mean dealing with billions of run you've got systems and people in place so you want to talk to that quickly and then I with due respect chair person I after that reply I just have one question and then I'll step off thank you >> thank you very much chair person before a CFO zooms into section 36 which is uh the section that caters for deviation but On the point of anchor on the culture of accountability in responding to the original question if the members can quickly be referred to sec uh to uh slide six you will see in slide six that the matters affecting audit report are significantly declining. In the year 2022 2023 there were 25 23 24 25 last financial year they are only 13.
That is a a one. Then if you look at um uh the slide that we had right now there um if you look at the deviation which is uh that impracticality emergency and things like that you will begin to see that uh now it has declined having started from 30% 22% the following year 15% and now it is sitting at 7%. These deviations are the source of this irregular expenditure and you can see a significant decline. Then if you look at the variations the section 1163s and so on the variation of scope you will also begin to see that had it not been for those two contracts the fuel contract and the Moses Mida stadium would be sitting at something less than 3% as well. So I'm referring members to this so that they see this culture uh of uh improving from what we were to encou the the one that is as you've correctly said the one that is normally a problem is where we're using the clause that that is called the impractical and not possible to follow the normal processes. In most cases there you'll find that for example the issue of the Mahatma Gandhi you'll find that there is a a challenge where we need to intervene urgently and if we had to follow an SCM process normally takes between six uh to uh to 8 months but then when we review there will then be a view that if we had planned appropriately we would have avoided following that section section 36. So in most cases about those but in some cases you will find that the contract has expired and we did not activate the tender process early enough whilst there is no a valid contract we then explore the section 36 once the tender processes is on. So it's those cases that we are dealing with but as I've said we are improving on procurement planning so that we are more proactive as far as these matters are concerned. Thank you.
Okay ch my last one for now. Yeah. I I just want to understand and with due respect is uh how do you how do you justify a CFO or maybe even uh city manager can maybe respond. This is how do you justify the municipal manager's salary increase from 3.84 million run in 2324 to now 5.36 million run in the current financial year.
I don't know how do I justify my salary but let me start off by correcting the figures. I don't earn 5 million per anam. I earn 4.3 million perom.
>> It says yes sir.
>> Yeah I'm I'm correcting it. I'm saying it is it is not there yet.
>> Sir with due respect then you should have corrected it with the AG before this report came to us. You cannot come and correct the figure and the number here to us as the committee when the AG sends us report and says well you sell your salary has gone up from 3.84 84 million to 5.36 million in 12 months or in the last between the last financial year and this financial year. So for you to come and correct it. Yeah. The committee when I am reading something totally different from the AGSA I don't know but go ahead maybe chairperson you want to say >> no no no he can answer it. That was your last question.
>> Yeah thank you very much a chairperson I think it is proper that I don't debate my salary and justify it here. I must allow the CFO who budgets. Thank you chair.
>> No, let's resolve it this way. Where where did do you find this honorable >> our report?
>> Our briefing document. I see. Okay. But you you are going to answer.
Yeah. Yeah. Yeah. No, thank you very much. Chair. So, so as you know h the salaries of senior man managers in local government are regulated.
uh so the salary that is reflected there I'm assuming you are looking at the financial statements h it also covers the approval that was done I think it was the the minister at some stage so it's not for one year but there's a catch up that is there is correct that his salary for the year is as reflected >> all right thank we we can deal with it later as well honorable is So, thank you very much, Honorable Dagma. Welcome.
>> Thank you, Chair. As you know, I'm standing in for one of our members, but it's good to um watch all the work that this committee is doing, even if it's from afar. But I would like to start off um with a question to the mayor. Um I think all of us here are aware that in April 2024 the president launched the etiqueni working group and that those areas listed in terms of interventions were water and sanitation the disaster response, safety and security and also economic growth and tourism. And we have also seen uh public statements where the um this intervention the working group um has definitely led to a situation which could be described as moving from quite a lot of uncertainty to a more stable situation. I think I agree with many of my colleagues the consequence management those issues are serious but it does seem we've reached a more stable situation in Eequeni which I think is one of the key metros in our country I think everyone is welcoming that but also I think everyone is also demanding um you know that those areas pointed out um and raised by colleagues are attended to but um what I would like to ask is um since April Could you just give us a sense mayor about how does this uh working group um actually work? What is the involvement of the provincial government um the national government?
And from your perspective, what are the outstanding commitments from both the provincial government as well as the national government that would um assist the city in in in achieving those defined objectives as set up by the the working group? And obviously the context is this auditor general's report. Um but we are aware that the working group started in April of 2024. So that's an initial question. Chair, thanks.
Thank you very much chairperson. Thanks for the question. I will just deal with broad issues and then leave the technical issues to be dealt by the city manager and and the team. Um indeed the the president um appointed uh the presidential working group.
Um it is cultured uh by former MC Mr. Muya Kulu as well as the the DG in the office of the of the president dire sorry the director general uh in in in the presidency DG Balini and all other working groups are also co-chered uh by senior government officials but that details will be presented by by by the teams they will also indicate how many work groups uh have been appointed. Uh they they really have um I think they work in a it's it's a different model of a a DDM uh which is in my view I've not seen a a DDM model that as effective as as this one because we have seen uh practical um uh results arising from uh this relationship as it were. One of the examples I'll just talk examples is the unlocking of um infrastructure investment as as it were on the issue of water and sanitation particularly on the issue of water and through their intervention. We now can speak of a a a a a new dam that will be built and that will be supply the whole of Kz with the city of Deen becoming a major beneficiary for for from it is the in the on the upper and upper dam is a 400 million rand dam and in the lowcom it's there's a another water scheme that is being developed there is in excess of 2 billion rand and um that would actually produce uh in excess of 100 megal liters of water a day 70% of that water will come uh to to the city we are working within but it's through the intervention and the department of water and sanitation and ourselves and um as it were so it will augment our water supply in the city And again there was also intervened uh when it comes to the the the issue of on the sanitation front and um uh we in the city we have 27 waste water treatment plants 10 of them are responsible for 90% of our sewer uh sewage and um now within they are helping us again with the inter through their intervention as well uh to deal with um to to to to repair and ensure that they don't discharge uh untreated affluent to into into our rivers and and pollute the sea as it were. That's the reason why the our beaches were able to open all our beaches in the last two years. 23 out of 23 were open and safe h for for swimming is owing to this um working arrangement with the with the last year alone the the visitors to the city domestic visitors um increased to 2.8 million uh visitors between January and May with a direct um spend in the economy of about 4.8 8 billion rand and we also received 136,000 visitors and this festive season the one that has just passed the numbers grew from 950 uh,000 visitors to 1.2 million. So we are really working uh with them and on the disaster and and the responses. I mean as you know the city has been visited by a number a series of disasters I mean from 2017 but I must say even though they assist us in unlocking investment from national government but we have not received an investment or a budget that is commensurate to the amount that is needed to fix the damaged as a result of disaster. Was it last year we how much we requested from national he gave us 1.5 billion randest over three billion >> we requested over 3 billion rand and they gave us 1.6 >> about 1.6 6 billion rand. So a lot of it had to be had to be funded from our own resources. It means that we have to rep prioritize our budget and delay some of the projects in order to fund the the infrastructure that was what to um impacted upon by by the disaster. I'm saying I think it's it's working very well in my view. I've seen results but the team can then elaborate on the point.
>> Thank you very much.
I think thank you very much. Uh honorable tagmo proceed. Sorry.
>> Thank you very much person. Uh this presidential working group has worked wonders. In actual fact we feel like uh we can't wake up from this dream. It sounds like a dream. So what they've done is they've been able to bring on board all stakeholders which previously it was very difficult to bring them on board no matter how hard we try through a number of reasons but business civil society they are also participating directly in the metro programs and some uh are participating by also uh directing money uh to the city. uh those vehicles to police the beach h came out of the tourism work stream as a result of it being facilitated under the presidential working group. National and provincial government departments erh are also participating. Some of them are chairing are co-chairing the workstream like the west work stream of tourism for example it is being chaired by the DG tourism but also his counterpart in the city. So there's co-generation of ideas and co-unding of those particular programs. This improvement that they've brought about uh has also led to the commitment during the last presidential investment conference of 69 billion range commitments and some of them are already on the ground where of investment down there.
It has now become very easy uh honorable DMO to access the executives uh in stateowned enterprises and national government departments whereas previously as a local government accounting officer it was extremely difficult to do that. They facilitate those meetings. they ensure that there are results coming from those ones. But also more importantly um what now we still need to do is to strengthen uh a follow-up. There are so many programs uh but what we need to do what still needs to be done is to ensure that consistently there is a follow-up to ensure that some of them happen on time as opposed to them uh mostly remaining in the pipeline. but those that have been operationalized are are yielding positive results. Thank you.
>> Um, thanks J. Just a a followup. Um, so the mayor indicated that an example of additional support still requested um would be the amount in regard to the disaster relief that you asked for three, you got 1.6. Um could I just try and ask in terms of from the side of the city um the specific um financial um needs. I mean the colleague raised for instance the the leaks problem um and it seems that this is an issue in many many municipalities where you need a fundamental um rehabilitation of of uh infrastructure to deal with leaks. What I'm trying to get to is if you had to are you able to quantify um besides your own revenue, besides your um equitable share and all of that, the additional amounts that have been requested from the province or other national government departments that would help.
Have you got that amount listed? Um and I I hear the mayor indicating that this is kind of almost a special kind of a DDM. It's not quite you've got the presidency directly involved and that helps and it's encouraging to hear that paristatals are now responding but you know sometimes the the issue of the actual financial um shortfalls that that you are facing especially is it simply just the 1.5 billion or is there other amounts that have been requested?
>> Sorry I let me request the the the city manager to deal with it. It's quite a lot but they will just give you the the figures if they've got them with them.
Thanks.
>> Thank you very much. Uh your worship.
Yes, we do have the figures and uh when we when we submit a business plan, we always specify which areas uh need to be funded, how much does the city have, what is the shortfall uh to to answer the question in simple terms. But uh Ednik, I'm not sure if you want to add.
Do you have those specific numbers quickly for honorable DMO?
>> Okay, thank you. These numbers was the CFO earlier spoke about the reform program. This is where it's within that program that we've uh submitted some numbers. I might not have them accurate, but it's in the order of about 3 billion over the period because this is a six-year program in the operating budget, but I could be one of, you know, a couple numbers out and I think about five billion or so or maybe a little bit more on the capital side, but there are numbers there. I might not be accurate.
I don't have it in front of me right now. Yes, >> that's fine. I think getting towards the end, chair, I'm also I've counted that I'm on 12 minutes. I don't know what your but um I'm not sure if I missed it in the um in the detail of the presentation but it has been raised by colleagues and it's in the auditor general's report and I'm not detracting from a sense that I also support the view that there is a stabilization in the municipality and improvements but I think the real issue appears to be and some of them are legacy the issue of consequence management remains slow and incomplete. I just wanted to ask, do you have a list of specific disciplinary um or criminal actions um disciplinary actions that have been taken uh against officials responsible for these transgressions? I mean, can you provide evidence of the outcomes?
It's like there've been so many disciplinary hearings. This person was warned, final warning, this person was.
I mean, is there a record of that for the year um under discussion? Is it in the document that I might haven't seen yet or can you provide that to the committee? So, actual specific disciplinary or criminal cases that have been laid against any officials of the municipality responsible and is there actually evidence of what are the outcomes? is safe. This case is still ongoing. That case is completed because I think I just want to stress that I I really would like um the municipality officials to accept the view that I think citizens generally would support improvements which are being made. But what frustrates a lot of our people is when they see things that are done like there was this whole story about that feeding scheme and maybe someone would just like to mention what happened about that where apparently there was complete overcharging you know those are the kind of things which create um disillusionment in the integrity of government. So I think it would help if we actually had a breakdown of the disciplinary steps and criminal charges you may have laid.
Yes, chair. Thank you very much. Uh, consequence management sits close to my heart because unless we have um uh we you know we apply disciplinary measures at at work, we would not get the the results that we need. But the city manager has got some information with you. I'm sure he can share it with you. Ever to you city manager?
>> Thank you very much. uh honorable Darkmore. Yes, we have that at detail per person per uh progress per case and even in cases where we if you look at uh at page 73 for example, honorable uh members, we are highlighting the the people that we have suspended uh as a result of uh of them having you know as part of consequence management.
I do know that we were responding to something here which is the question that was raised by the members of the committee but it also helps to reflect that uh that is part of the consequence management process. I have also another one here that reflects that all this information we can share with the honorable member is very detailed. It's also reflecting how long has a particular case taken. uh we we guard against all these cases of people being suspended indefinitely. We guard against uh these cases going beyond six months.
All that information will be available to honorable DMO. Thank you.
>> Thanks chair. I'm going to um pass on from there. Thank you.
>> No, thank you so much. So before I go to honorable Scosan, I just want to uh honorable city manager and CFO uh just can you just uh kill your your mic? No, no problem.
Thank you very much. Okay. So remember the the the salary issue that uh honorable Isach dealt with. So both of you are correct uh believe it or not. So but we can deal with it later. Let let me just say because it gives you time to just pull out the data. So the base salary remained the same. Other allowances grew, right? So we can talk about the other allowances later on. Uh thank you very much honorable Kosan.
Yeah. No, thank you very much uh honorable chair and uh good afternoon to all honorable members uh from Scopa and uh from the portfolio committee on COA.
Uh the the team is led by the honorable executive mayor.
uh our support team uh the team from the HSA and other stakeholders present.
No, we we really appreciate uh this opportunity to have a conversation uh with you uh based on the reasons that the chair outlined at the beginning of uh uh this particular meeting.
Um just few questions from my side. uh on the issue of uh ineligible uh beneficiaries of the EPWP that the CFO spoke about earlier. I think CFO you spoke about uh the fact that there are some beneficiaries who were also uh benefiting from other uh provincial government departments programs.
Uh so apart from them are we not having are you not having any ghost beneficiaries?
uh uh and maybe deceased people who were also benefiting from the EPWP. Apart from the people who are there uh working but they are also maybe getting some maybe they are receiving SASA or UIF or other benefits from other government departments. Are you are you not were you not having ghost who are benefiting and were you not having deceased people who are also uh said to be h part of the EPWP employment and therefore benefiting maybe before uh C for response uh I wish to highlight the fact that this is one of uh the material irregularities that have been identified by auditor general and we have been engaging with them on it. Part of what they were quering was uh the lack of improvement in the internal control to ensure that uh we we prevent ghost emerging um you know as it happened in the past and they made some six recommendations on that. uh we have responded to them in greater detail about what is it that we have done to prevent the the recurrence but if CFO wants to add anything over to you SEO.
Yeah. Yeah. No, thank you very much.
Yes, we did have those challenges, but uh the reason why I emphasize on the uh the the employees with the other organs of state is because that's where we are challenged in terms of taking the matters forward. H because the employees where they were identified there there's a process of recovering from the uh from the legal. So that is not a challenge.
We are implementing a consequence management. Uh thank you.
Can I just make a quick point on on this issue and um I don't know how quick uh DPSA is um is DPSA department of administration and yes um in removing uh people um from PESAL some years back there were people who were engaged in the ambassadors program in the office of the premier you know just youth young people were on that ambassador program and uh some few years later she calls me I think two of them different occasions that hey um each time when I look for employment it pops up that I I I I I have a personal number you know and uh so it pops up that I have a personal number and uh I just could not understand how that happens and um sometimes it could be that sometimes you go on this you get registered on government system but when you leave this your your name remains behind and this thing follows you all all all all the way. I thought I'd just make that point uh in passing that look because in this case we're not dealing with people who are in in high positions or just dealing with extended public works program people who move from this program and that program and that program that program you get captured here you leave but you your name still remains uh on the previous system I thought I would just make that point.
Thank you.
Yeah, just a follow up then on that what what are you doing currently to strengthen your system to make sure that in future you you don't have the same challenge >> yeah yeah no no thank you so so as far as the EWP is concerned uh with respect to the historical matters as I've said we are recovering we've opened the matter matters were investigated by CIU or CI ID. We've opened cases with subs because in some cases they are criminal elements. However, with respect to the current EPWP workers, we are doing a verification on a monthly basis. H there are register that registers that are signed to confirm that attendance registers to confirm that uh people are are actually working and there are reconcilations as well that are being performed between finance and HR to ensure that we pay people that are actually working reconciling back to the attendant. So those are the controls that are currently in in in place but the historical issues chair we acknowledge they were there and we hoping they will not come back with the controls that you've introduced. H thank you.
>> No thank you very much. Now on a different matter now uh how do you reconcile the fact that you had a surplus whilst at the same time you are facing a massive water and electricity loss and poor infrastructure and unreliable building challenges. How do you reconcile the two?
Uh I'm I must say I missed the question.
What is the >> sas?
>> Oh sas. Sorry. Sorry honorable member. I didn't get it. Seo I'm sure you can handle that. Over to you. Thank you.
>> Yeah. What what is important?
I think as you are aware national treasury they've got norms that we are all expected to adhere to. H. So if you look at our financial statements, the cash on hand is about 5.5 billion and that cash on hand we we are between 30 uh to 45 uh days and the expectation is that your cash should not be lower than uh 30 days. H so we are close to between 30 and 45 days. So there is a need for us to maintain a cash level at that at that level. So we appreciate that there are these challenges in terms of infra infrastructure.
However, when we invest, we must also take into account that there is tomorrow and there's next month must still be financially sustainable. So we always trying to strike a balance between investment and also holding cash so that we can continue with the with our operation. So surplus is there. If you're looking at the surplus from the income statement or statement of financial performance, not all of it is is fully funded. I think what is important is the cash in the bank which is about 5.5 billion. So we have to use that cash wisely to ensure that we are able to sustain ourself.
Thank you.
>> Okay. Thank you very much.
Uh now coming to the issue of the the implementation of the audit action plan.
Uh I think the audit the HSA is flaking the fact that uh there's a slow implementation of the audit action plan on your part and I think you also did indicate that only 37% of audit findings have been resolved and then with 63% still in progress. uh why are you so slow in in in resolving uh these particular matters? Uh I see that you have been on an unqualified audit opinion at least for the for the last 3 years, three consecutive years.
uh I think we we are noting that there are improvements in terms of the findings that for instance in 20 I think in 2022 23 you had 25 findings and then in 2023 24 were reduced to 20 and 2024 25 they were reduced uh to to 13 but now my concern is the fact that uh h you are very slow in terms of the implementing the the audit action plan.
We should assist you to quickly move to a clean audit. Why are you moving so slowly in that regard?
>> Uh thank you.
>> Uh yeah no no no thank you. Uh so so if you look at 2425 uh the action plan that we had implemented during that year was for 23 24 h but I must indicate that there were challenges in terms of concluding that one timeously I think it was concluded around March 2020 2025 as you know the report from the or general is normally out around November December so from then then we started working on it but what we've done in order to deal with that matter to ensure thought that we're not accused of h implementing these actions slowly. H we concluded the action plan arising from the 2425 uh audit in December as management and the focus was then come January January we must then focus on implementation uh because if we delay it later than that 3 months is not adequate for us to implement all the actions. So with that we're hoping that we will be able to improve but as as indicated by uh our mayor before there is now uh more oversight in terms of these action plans unlike in the past where they were monitored only at executive management level there's now more accountability that is expected from us.
Thank you very much.
Can I uh just uh add one more uh uh uh point uh honorable Novab uh the his worship the mayor has been so uh a forright in saying that um uh we must be able to deal with this thing and and move quickly to a clean audit situation. So he has emphasized that um my performance uh the issue of dealing with auditor general issues are are given a higher waiting uh which has translated down to the executive directors and and and the directors to ensure that people spend more time focusing on on on dealing with this particular challenge. So we hope that we will improve this one over time.
Thank you.
>> Yeah. No, thanks. Uh my my last question uh uh to to the executive mayor and or to the chair of the the erh with regards to the the writing off of the 6.43 43 billion rand of irregular expenditure.
Uh is the is the council satisfied that uh uh all investigations were done to the satisfaction of the council that uh this 6.43 billion rand can be written off. Is the is is the council really happy and satisfied that all the necessary investigation were done in this in this in this particular regard?
Thanks >> chair. Thank you. Thank you. Thank you very much for for the question.
We assist with the the issues as you um mentioning them, honorable member, that we have agreed that um an increased capacity uh must be um provided to our CID a cities integrity and investigation um uh department or you Yeah. department. Yeah. And um because uh it gets inundated with the issues for investigation.
We have since um the the city manager as well as the CFOs just in the last few weeks they reported to me that they've um added more capacity to the team so that they can be able to uh delve into matters of investigation into UFW matters. some of them um dating back uh many many many years back and uh it was because of the issue of capacity as as as it were and uh but I'm sure in in the in the next few months we'll be able to report progress on on that front and um just in the last uh ESCO not this ESCO that other ESCO was it I think it was in the last finance committee meeting uh which I chair As the mayor, I invited the head of the of this CID unit to come and uh present progress. I'm not happy with progress that's been made so far, but there's promise that the situation is going to pick up with with the portfolio committees and ESCO taking keen interest in following up on uh the implementation on the audit action plans as well as uh attending to matters of um UIF.
I think we'll get somewhere. I thought I should just make that point. Maybe the the chair of EMP may want to add one or two things. Thank you very much chair.
>> No thanks bab mayor and greetings to the chairpersons both the chairpersons of and also uh scope h and also greetings to all the members of scope and also cocka and also greetings to our officials. Um I agree with the mayor. Um when it comes to the the UFW as an impact committee there are two our duty as an impact it's to make sure that uh we write off or recover but before we take a decision we satisfy ourselves through uh investigation. And there are two safety nets which is our financial misconduct and also our CIU who are investigating on our behalf to make sure that before we take that decision we take an informed decision that uh whenever we uh take a decision of of writing off it's a it's a correct decision. So we make sure that there's a value for money. We don't just take a decision to write off. We satisfy ourselves whether first whether there was a value for money or not.
At times we refer other issues. If we are not satisfied we will refer those issues back to our CIU to investigate further before we can take a decision.
So I agree there is an improvement when it comes to our UFW.
Uh but there are areas where there are still gaps but um through our um internal controls were improving on those gaps. Thanks.
>> One more honorable scosan unless you are done.
>> No I'm done.
>> Thank you honorable scosan. I will richly reward you one day with additional time. With additional time, thank you. Uh honorable Maduna, >> I will also not take the entire time chair so that next time I'm rewarded also.
>> May I warn our visitors not to believe that statement.
>> No. Uh h thanks chair. Uh uh morning to you chair and the chair of coza honorable membership the mayor of with your city manager and your management.
No thank you as well. One must start by appreciating the presentation uh received. uh it's quite detailed uh if you read it especially with the information that we would have received as a as as as as an addition to it. So I think my my my first question mayor briefly would be around given that we are we are always interested especially where young people uh seem to be the main beneficiaries on the issue of the the metropolis.
I see that you have you have you have detailed it very well in your presentation in terms of uh how the process h happens. H but my I think my question around it would be and and also acknowledging that you know when you just looking for people that are less than a thousand and you receive more than 120 application that tells you that we really have a problem of unemployment in South Africa and I think as leadersh to to come up with a solution to to that. It's really a sad situation.
Erh now I I just want to check in the processes that are outlined for instance from when uh you are doing the the screening of the application to the next process to the physical assessment to when they proceed to interview. I just want to check the people who do these processes are not the same people, right?
>> Let me let that uh answered by the city manager. I'm sure we'll ask the the chief of the police who's also present this meeting to deal with it. Thanks.
>> Thank you very much. uh honorable member, I rather give the uh acting uh corporate services uh uh executive director to respond to that one. Thank you.
>> No, thank you. Let me start by giving the the process when we interviewing we've got different steps to ensure that uh the process is done fairly. The people who are responsible for h the physical assessments take for instance for metropolis is another team. The team that does the the interviews is another team. The team that does reference checks is from HR as well. And then the approval again is done by the line management. The the HR department there about three people who are responsible for the approval and then the final signary comes from the city manager to ensure the process is fair and we have checked and did all the auditing that is required. Thanks. No, this is important because you know our people tend to believe that when we when we employ these things we just wake up and appoint there's just one person that says come I'm putting you in traffic. So it's very important that we ask and then you clarify us that there are different steps and that they are done by different people. Now I want to check after you would have then um approved the 512 which would have ended up being a 486 uh due to others obviously not making it through the disqualification then what is usually the process to ensure that you fill that 26 I mean you had 120 applications 20,000 applications so that's why I think it's important that I must ask or you just leave it like that and then you move on >> you can respond.
>> No thanks. The we had 512 that were recommended the number came down to 486.
It means 26 people were disqualified. H there were reasons why they were disqualified. Some is because of the verification as well because have to look at whether they they have any criminal records. others we have to look at their qualifications that they have claimed and so forth. So unfortunately not much we could do for someone whom can has been disqualified through the process unfortunately and we coming from 120,000 people who would who would have applied in the beginning.
>> Okay. No, I'm I'm I'm I'm asking that the 26 is disqualified. You don't replace it. Go to the same process and pull another 26. I mean that's what I'm asking. I'm not sure if I'm making sense.
>> Respond. I think the question or maybe can we give the the metrop police chief.
Thank you.
>> Thank you. Greetings chair and the leadership and all honorable members uh and the colleagues. Yes, I I I understand the question. honor member.
However, at that at the time when we make that decision to say we've got 488 and you've got problems with 26, we we we make a decision to say we can't have 26 holding the bus because we are running on the timelines of the financial year and all of that. These appointments needs to be made at a particular timeline. So if we realize that now we've got this chunk of 488 which is clear and only problematic 26 if we rerun the process this the whole bus may be held back so we make a decision to say let these ones go we will then carry over the remaining post for the next advent.
>> No I think that answers me. Uh no no thanks. H I think that is important uh for us to ask you know uh especially because it touches us as young people h I think in in in follow up on a different matter in follow up on the fruitless and wasteful expenditure I think it was honorable I'm not sure who have asked I want to check out of all the cases especially in your presentation that you would have outlined whereby especially I see that you have you had a challenge of a failure to pay invoices within 30 days.
Well, I know you have a bill back of invoice, but you do you did have some some challenges and and and and some to us it would appear as as as as amounts that would not be acceptable.
Now, I want to check especially on this one. Let's just make an example with number one. You are saying that you had finalized it. You suspended someone for 10 days, the other one got a warning and so on. H but did you end up recovering the money?
That's what I want to check.
Yeah, on on that one, I think we'll have to come back with the details because the matter is recent as to whether that money has been recovered.
Okay. No, thanks for I'm asking that I believe that would also know that most times when an interest occurred because someone kept an invoice in their desk, it usually ends up in them paying the interest. But I don't know how you deal with your matters especially because it says that you have finalized it. So that's why I thought it's important that I must ask uh on the issue of CM on the issue of um your bid committees. I want to check how many bid uh evaluation committees do you have? I would assume given the the size of the municipality that it's not one.
Yeah. Thank you very much. I'm going to request the CFO to respond.
Yeah. No, no, thank you very much. The bid evaluation, we've got two committees. Uh there is one that deals with the trading services. Uh trading services meaning water, sanitation, electricity and solid waste. And then there's another one that deals with the all the other departments that are under rates in general. H and also you we do have a dedicated uh bit specification uh which is feeding into the trading services. So there's two bit specification and two BC and then BAC is one BAC is one. Yeah.
>> Oh okay. No I wanted to check that uh or on the issue of local content as well where I would have wanted clarity. H I see that it was I think the it was 2017 but now I want to check these contracts they were for how many years will respond?
H the contract were initially for 3 years h but in some cases where a project could not conclude they were then extended because we we could not terminate if we had terminated would have incurred additional cost for example uh reestablishment cost but as I've said the last one from electricity is expiring which is a rate based contract is expiring in January uh 20 uh January next year >> so I would I assume these are contracts that would have been appointed after 2017 but before 2022 because then they would have you would have another PPR in 2022, right?
Okay. So, so uh remember in 2022 we had new regulations after the conal court.
So these are the contract that were advertised before the new regulations.
So they might have been advertised in October 2022 and the tender might have been concluded in as I've said it's about 6 to9 months might have been concluded in 2023 May June somewhere there for a period of of of 3 years.
>> Okay. I wanted because I I wanted to just make sense of it would how come you still have some that are going on up until next year. So because I wanted to do the calculations in my head. So h that's why I was I was I was I was asking that and then uh on the plumbers issue I must just say that you know part of what we always say we want to achieve is building the capacity you know our our institutions will have capacity and so on and so on and I understand that this would have been a council decision. Um maybe to the mayor I would love to check is this still the position that you you you intended in the long run to keep h outsourcing plumbers.
>> Let let me ask the team if you don't mind to to deal with it but the we there's a move to insource uh plumbers but they'll tell you the extent to which we have gone on on that aspect. Um Tim >> thank you very much. I'm going to request Nongalo to respond directly.
Thank you.
>> Thank you. Yeah, I think the answer is sometimes not straightforward, but the the the plan and the strategy is to balance the two, the insourcing to the outsourcing. You you'll always have a certain amount of outsourcing because if you don't do that, you might just end up with excess internal capacity. So we will build up sufficient internal capacity for our normal demand that we have in terms of plumbing capacity. So so there's going to be it's going to be a bit of a hybrid but indeed we going forward there's going to be a reduction in terms of the extent of outsourcing that we have now. So we are going to reduce we will use some of the budgets that we currently use for outsourcing to to appoint our own uh internal members.
We found that the there's improvements that come with insourcing in terms of the workmanship, the quality of the work. There are other advantages and in people being more accountable. So we will we will have more insourcing than outsourcing. Thank you. Maybe just to say that it's a question of building our own internal capability and augment it as and when that becomes necessary. Thanks with the people from uh the private sector.
Thanks. So I would make an assumption that this is the current current council position on the matter.
We we don't want issues when it comes back in the next year. H tells us that you appointed plumbers while the council did not approve it. So that's why I'm asking.
>> Yeah. Yes. is is our position as to whether that requires amendment to policy. It's a matter because like they saying there was an existing province.
It's a matter to to look at but that's the best way of moving forward. Build your own internal capability even in the presence of the of the policy. Nothing stops us from building our own internal capability and then go out into the market as and when it necessary to augment the internal capability. Thank you.
Thanks. So the contracts you are saying it was started in 2011.
Were they the same contracts through up until now? I'm just trying to get that clarification or you were appointing from time to time. I'm just want to get that clarification.
>> Yeah. The the panel started around 2012.
So what the arrangement that we had was that every year we would open up an opportunity to add more people. This was around January and these are small contractors, right? So it's a one man, one plumber and two assistants. So around January it would be an opportunity for new people to come in but also if you're working for one company for you to move sometimes you'll move from this company to that company.
So there will be a little bit of reshuffleling that will happen once a year in in January. But the last intake was in 2017. Yeah. So since we actually put a stop in 2017. Thank you.
>> Oh, but you continue using the panel from 2017 and until as like now >> we have more than a thousand companies or plumbers in that panel. We've continued to use the same panel. As I said earlier, we just add to it every year.
>> Last one.
>> No, no, no. Thanks, Ch.
I think I I understand why it it it would it would be like that because I think it would have been unfair to those who became plumbers after 2017 after you have closed the panel now they can't enter in the panel while you are you know it's more like a ring fence some sort of a thing and I don't think it was it was correct no I think um there for now given that we are still going to get oh Last question, chair, because I still do have time. I want to check.
>> Let the record indicate that I said so.
Do you remember?
>> Last question, J. I I just want to get clarity, the mayor, on the issue of the sexual harassment. I want to check the the advocate that you would have appointed.
What would have been the process that you would have applied to come up with the advocate and in terms of uh the determination of the rates, the savings and the payments thereof?
>> Yes, thank you very much. It it's obviously whilst the the process of appointing um an investigator rest with the mayor in the case of the municipal manager but they must still follow the SEM process. It means that you must then rely on the mechanism inside to achieve that. H I will ask the head of legal if you need more details to finish you with um more information on it. Thank you chair.
The head of liquor is here. I'm not too sure if you want that information now.
>> Yes, >> if time permits he can just briefly because I wanted him I I did see it in the slide but I could there are some areas I did not understand that's why I'm asking it like this. So I wanted >> yes I wanted him to to talk to it but I did see it but I just wanted him to talk to it. Maybe it will close the gaps that I would do.
>> That's what the process chair let me add.
>> Thank you, Mor. Good day, chair and honorable members.
um the the the breakdown of if you note uh of the investigator it's um the normal rates that that advocate at his level charges which is regulated by the LPC and uh the bar that he belongs to and secondly it would be the de disb investments that he would have incurred because he was from Joberg. He would have traveled to Debburn. He hired um the premises uh at which he conducted uh the investigations and also his accommodation. So it it it was broken down um into in his fin and total to the amount that we disclosed.
No, we can we can follow up later.
Honorable. Thank you. Honorable.
Thank you.
Um I think chair first and foremost before I start asking any questions um I would I would like to put it to the team from Etwin is not doing well. I know um uh a lot of great stories have been told um regarding a lot of issues that uh where the municipality has done well.
Um, there's um there's an article that was in one of the local newspapers, the Bria Mail and the headline was enraged unpaid contractors accused the city of violating the truth.
I'll get into that. Um, I'm just highlighting issue. There's a lot of issues and some people are frustrated beyond with um the AG also confirmed that this issue with the water losses that my comrade u my colleague sorry on the other side was speaking about it's a that issue that issue with that with the water with the water losses um at 58.7% mayor it's absolutely unacceptable. I understand the issues around it with the storm water damages and with the with the infrastructure that has been uh aging. I would have imagined that we've got at Teeuini engineers and people who would be able to plan for those uh for the replacement for instance of the aging water pipes. So if we sit here and we're saying no, we've only just started now to plan for the aging infrastructure which we're going to replace it. The question then stands all along.
They didn't know the infrastructure was aging. Because if you've got professionals working for the municipality, you can't come now and tell us it's only now that we are replacing uh aging infrastructure for water. It's only now that we're replacing aging infrastructure for sewer.
We tend to shy away from it and we don't speak about it and we only back to that article. Contractors accuse municipality of unpaid invoices and a flawed digital invoicing system despite the city's asurances. A week after the leadership of municipality committed to ongoing payments due to unpaid contractors, some invoices as old as 5 months emerged in yesterday's, this was the 7th of May's media briefing that the city's message message was not accurate.
The briefing convened by the wastewater task team unpacked their frustrations regarding unpaid invoices dating as far back as November 2025.
Now, my first question there would be, and I'm not sure if this is supposed to go to the MM or the CFO, the was this digital system piloted before it was implemented or was it just imposed on everyone?
>> Maybe. Thank you very much, Ch. Maybe let me just deal with the first comments he made and um on the let me start with the road infrastructure that he says is is bad. I know the road they're talking about is M19 and it's not our road. is not a it's not a city road and uh there's also a Dumani Makai road is also not our road and um when our roads this roads are okay I live I've got a place in Pinetown and I believe it's not just M19 yeah that that is fine we we are both from Pine town. So we'll settle that matter in Pine Town. So we're willing to exchange numbers.
We'll exchange numbers so that I He takes me to the roads because when the road is not good, it must be fixed.
There must be no to about it. You take me to the road, you say this is the road, I will tell you tomorrow that it is fixed. So there must be no to about it because we really have a program to fix our road in it. Thank you very much.
>> And um on on the on the on the non revenue water you see I think it I think we've been trying to explain this thing a number of times that it's not like it's water that goes into the ground chain.
I accept that is water that we are not receiving revenue on. And uh I explained earlier on maybe before you walked in that we are 60% rural and we supply water to our rural communities. Maybe what is um lacking is to account for water that we supply to uh rural area A, rural area B and rural area B. so that so that we can account at the end of the day that so much water h we supply to this number of x number of rural areas we also have a number of informal segments I mean in the entire country there about 4,000 informal segments 607 of those are just in the city city alone now they're saying water is water is life >> and and sanitation is dignitate when people are there they demand If you don't give them water, they're going to burn your streets, your libraries, and your public facilities. So, you must supply them, put ste pipes, and all of that.
And again, is water that you don't get any revenue on. And some water is water that gets take out. But a huge chunk of it is that which we supply to the informal segments as well as to the rural areas. I accept there's some that goes into the ground. Now with this program on me metering you know metering uh the bulk um uh centers it will assist us to be able to account for all the water that that we actually lose as I said. Yes. The pipe replacement program is another program that we are engaged in so as to deal with the aging infrastructure because it then starts to deal with water that goes into the ground. I thought I should just make that comment before I let the team >> on that note. Mayor Bella Leo program because improvement we review it as we as we as we implement it. The team will then deal with the other questions. Thank you very much. Uh honorable Kat Zillank let me speak about that article on the Ber mail.
That article probably I don't want to interfere with how they do their journalism but they interviewed the the the disgruntled contractors.
That sounds like their views which is one-sided.
Let me briefly say that this online invoice system is required in terms of uh MC score auditor general expects us sorry national treasury expects us to do it so that we deal with the problems that AG always identifies uh payment of invoices where work has not been done where there's no proof that work has been which we picked up that that has always been a problem. What this online invoice system requires is that people must put pictures before and after they've done the work so that people don't go out and put a chevron tape and claim it eliminates that. Secondly, I received a direct message from the head of SARS in KZN saying that we truly appreciate you implementing this particular system because it helps us to be able to collect more directly because we we know right from the beginning who is being paid.
So it solves a lot of problem. It helps our communities once they complain about poor service delivery. It helps to improve the delivery capabilities of these contractors.
Now, so when we implemented it, we started with a training program right from the beginning. When we started in November thinking that we were going to roll it out, there was a huge outcry. Then we said fine, we will shift it to the 1st of April.
all the teething problems that were emerging there like the scanners and all those problems we allowed people uh to enhance their capacit before we do a proper roll out on the 1st of April.
Come the 1st of April, we had the frackers that was on the media with them damaging our infrastructure and breaking down a a city's equipment simply because there was a big push over. The big pushover in most cases you will find that it's these people whose invoices are failing the basics to reflect on the work that they've done. when we see that they've claimed for the things that they were not supposed to have claimed for.
They haven't built capacit. Now the five months invoice that has not been attended to is not about the failure of the system. It's about contractors particularly at sanitation I must say that have not really taken time to ensure that they comply with the requirement. Now as a current government we can't stop a program that is helpful just because other people are pushing back. I'm not sure if the CFO wants to add, but let me address the issue of the engineers that didn't know we have infrastructure challenges. Our engineers, they know that they've always known it if they were employed in the post at 2004. However, you can plan as much as you want, but if you are hit by floods 5 years in succession, all the work that you had done is washed away. all the time. You shift your budget. You focus on recovery because you are not getting adequate money to be able to deal with the recovery from floods.
But also another problem is that you are facing all the other issues as the whole 34 million goes down as a result of these particular problems that we are dealing with. Our CBC is recovering up that is the problem. CFO do you want to add anything?
>> Okay. Um CM now on that note uh CM uh the with that digital system I understand the digital system is approved by AG and it's good accountability and everything else. Now it can't just be good for the city. It needs to be good for your contractors as well because you need to be taking care of your own contractors.
So the reason I was asking is were your contractors adequately trained? That was one. I'll just carry on to the next two questions as well.
Was it tested before or was it adequately tested before? Maybe should be the question cuz maybe you did test it, but was it adequately tested?
Were they trained properly on the system?
And then And a very for instance because I find it not user friendly. Is it user friendly?
And as you would know regarding that as a result it's working well but just answer the honorable member thank you thank you on the testing yes there was a testing that was done h not once but uh two times because the initial test there were issues that were picked up and after we went back and we corrected those issues another test was done and then it was uh concluded then we can then be able to go ahead uh with respect to uh training uh yes uh training uh was rolled out and I know at some stage I think it was in February if not beginning of March uh some of uh the contractors came to disrupt a training session so we then decided to do them online instead of continuing with the physical because we had to get Metropolis police to support the team.
So there was a a push back even before we we went live first April. But what we've done in order to ensure that we assist the small contractors, we've capacitated all our CIA centers so that those small contractors that are not used to uh systems, they can be able to go there and upload their invoices and then from there we are able to then pay. But as indicated, we do need to ensure that we eliminate the issues that were raised by the auditor general and at the same time comply with the MCO regulations as indicated by national treasury. Uh thank you very much.
>> Um uh uh Oak >> Okay. On that note before I ask the last question, there's an allegation that there was an internal audit report which recommended against the implementation of that online system. Um so I think the last question would be um phase one housing project that was contracted to deliver 2,500 RTP houses. The contract started at 119 million revised to 265 million then a further 299 million after 11 years only 68% of the contract is complete with 162 million run spent and I'm asking this specifically because actually contacted at 9 million for 2,500 RTP houses 50,000 because I think the quantum for each unit which should cover cost should cover profit contract now at 119 million for 2,500p houses who failed was it 299 million that was a mistake now I think the question Thank you, chair.
>> Thank you very much. Uh, honorable Kat, director of human settlements, can you please assist with this one? Thank you.
>> Thank you.
when when the project of project the 2,500 sites you had to do services now when you start with services obviously avoiding you cannot build houses without services now during the time of appointment the inclusion of the top structure applicable subsidy the time is what would have been included in the contract now you would know that subsidy quantum get to be aligned almost yearly It's just recent where it's get to be aligned over two years and that the subsequentum of that time and the subsequentum of today. So that's what now when you are now currently building the houses at the time to the size that are service then that's where the alignment comes in. So if the subsidy at the time in 2023 when you're starting to build the houses is 185,000 that's when now you have to align that because you are now building houses that year because it becomes unfair to the contractor to pay him 110,000 which was of 2021.
>> So so basically the the 119 million was not for the RTP houses. It was for the infrastructure h the water the the the sewer and uh the roads is that the case >> yes and I remember you've had planning you you would have the project started from planning 2,500 is for planning.
>> Mhm.
>> So the site and you understand well the topography of ago being steep we ended up servicing 2,000 sites because some were were some of the sites had undevelopable sites. So 2,000 sites were serviced. That's why you sitting at 68%.
You said it incorrectly because we have built houses on sites that could be serviced. Now, now that's where the money goes. The the servicing of the planning, the sites servicing which was done and paid for and then the houses now following and at the applicable subsidy which now makes the alignment.
There's a misalignment there between Lindo Kumar. Thank you, chair.
>> Thank you. Thank you very much, honorable Koopa, and thank you very much to you, Mayor, and uh the CM and your colleagues. Uh there is a incidentally a cocka budget vote at at two. The the honorable Dr. McKis is part of that process. The honorable I think you're part of that process. I am. And so I am keen to to release us now so that we can attend to to that to that matter. It also so gives you an opportunity to also just reflect on the conversation that we've had. We will reconvene here at uh at 6:30 uh p.m. And then we'll we'll continue with the members and then do more follow-ups uh on the on the conversation. But thank you very much for it.
>> Sorry.
>> Yes.
>> Oh no.
Just just um when they come back, are they going to finish the presentation and then we ask or you going to just continue with us? No, no, we'll continue. So the the guidance I gave was that the members are free to ask about any part of the presentation even if it wasn't shown. They can then when they answer go to that slide. So for you you can pick any slide you like and and talk to it. Yes.
>> All right. Thank you so much. Shall we meet each other later then? Here is there is a there is also lunch downstairs. H I but the colleagues will guide you on where on where to go. We can't ask you questions and then starve you as well.
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