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Daily Maverick
29-04-2025
- Business
- Daily Maverick
Cape Town's ambitious infrastructure budget is a bold move towards sustainable urban growth and safety
Given the state of local government, it might seem unusual for any metropole, in a single year, to table a South African record infrastructure budget, major expansions to policing and cleaning operations, electricity price relief, and the most inclusive indigent and pensioner support package, all while still maintaining the lowest monthly bills for ratepayers compared with all other cities. Making all of those sums balance is no mean feat. Because of how cross-subsidisation works, this has meant some larger than usual proposed increases for more valuable properties. This has understandably generated much discussion and objection, particularly among residents owning higher value properties, and notwithstanding the extensive electricity price relief we're offering with just a 2% increase vs 11.32% nationally. While much of the discussion and criticism is reasonable and reasoned, there is also much that can be misconstrued in such a complex budget. Here I hope to address some of the common issues I've seen raised. First, I will cover what the budget is intended primarily to fund: (1) infrastructure investment; (2) large additional safety investments; and (3) additional city cleaning capacity, particularly along main arterial roads, in informal settlements and in communities with a large number of 'backyarder' residents. And why this still represents excellent value for money. Then I will cover what options we are considering to soften the impact of these increases, particularly for pensioners and for property owners in the R4-million to R7-million value bracket, where much of the public objections have come from. While we have deliberately designed this budget to protect families in the R1-million to R2.5-million property value bracket, we recognise that it is also true that those living in more valuable properties are not necessarily well off. Finally, I will cover the so-called 'utility reform programme' run by the National Treasury and its implications for metro budgets. Given the number of issues to canvass, this is a lengthy piece. I hope you'll stick with me as we discuss honestly our approach, and our recognition of the concerns raised. What this budget does: 1 Much higher levels of infrastructure investment Much bad policy results from politicians' fear of having truthful conversations with voters about the real constraints or what is really needed. So it is that our country now drifts like a boat without an engine, with no growth and no real prospect of growth. It's always easier to put off difficult things, to go along to get along. We can go on like that year after year. It will feel easier, but it's exactly the approach that has got us where we are, and it will only get worse. That is the principal reason all of South Africa's other cities, bar Cape Town, are in advanced collapse — because year after year it's been easier to hope someone else will course correct. You can get away with that for a time, because things seldom collapse overnight. Until they do. Roads explode. Entire city water networks shut down. And by that stage, it is far too late to start to fix things, because infrastructure projects take years to plan and execute. In contrast to this, Cape Town is pursuing a simple and powerful idea: we refuse to allow the same decline and collapse now ubiquitous across South Africa's towns and cities to happen here. That sounds like a heartwarming statement, and the risk is that's all it will be, unless it's matched with the firm commitment and strength of will to actually make it so. And the courage to be honest with the public about the choices. While Cape Town was actually investing in infrastructure over the past decade or two, the truth is that we simply were not doing so at the necessary scale and pace to keep up with the pressure. We can all see this. Water grid creaking Our water grid is creaking — of course still far from the widespread collapse of the water system we see in Joburg, but also far from what we need and expect. Our sewer system is creaking, with every treatment works in the City at or above capacity (with the exception of the two now being upgraded as part of this infrastructure acceleration). Fixing these things is not optional if we care about living in a functional, successful city. And as mayor I cannot in good conscience preside over a city that allows slipping standards or which knowingly underinvests. To do so would be dereliction. So we must make sure our treatment works can discharge effluent of safe quality into our rivers and oceans. We must make sure we have enough sewage treatment capacity to cater for the growth the city is experiencing. We must have sufficient fresh drinking water, of the highest and most trusted quality. We must have thousands of kilometres of new pipes in old neighbourhoods so that bursts don't become ever more common. We must have thousands of kilometres of new pipes in townships and poorer neighbourhoods so that people have better access to water and dignified sanitation. We must build new roads and new MyCiti routes to ease congestion and get people moving more freely around the city. Again, a choice to forego these things is to actively choose decay. The investments we are making (and funding) in Cape Town will guarantee that our city is able to cope with the incredible growth it is experiencing, deliver reliable infrastructure, and improve the quality of life for the poorest residents. That's why we're pushing so hard on infrastructure budgets, and why we must keep going. We are investing R40-billion over the next three years – more than all three Gauteng metros combined. It isn't enough, but it is a very strong start. Consider just some of the specific projects this infrastructure budget actually funds: two major wastewater treatment works upgrades, a water re-use project to secure Cape Town's water supply for decades, hundreds of kilometres of new or upgraded sewer pipes, 75km of replaced water pipes to bring down bursts, major public transport projects to ease congestion, road upgrades, electricity grid upgrades, and much more besides. Is there any person who surveys all that is happening in other South African cities and honestly argues that these investments are not necessary and urgent? When we do these things, we can be quite assured that Cape Town will continue to succeed, and will be well prepared for the years ahead, no matter what happens in the rest of South Africa. That is peace of mind worth paying for! 2 This budget funds two huge new safety investments For the first time we will be deploying dedicated law enforcement officers for every ward distributed equally in the city. More than 500 new officers are being funded for this purpose. This will not in any way detract from the dedicated deployment of nearly 1,000 officers that the City and provincial government jointly fund in gang and violence hotspots. This is a new, additional service that we are investing in and fully funding. For the first time each ward in the city will have five dedicated officers who will know the community, who residents will get to know over time, and who will be able to do dedicated local policing, crime prevention and by-law enforcement. While crime prevention is not strictly the mandate of the City (and we certainly won't let up on holding the national government accountable for its failures here), the fact is that personal safety is overwhelmingly the number one concern of every South African family, and we must do all we can, where we are, with what we have. Then, this budget will also be funding a new dedicated deployment of more than 220 additional officers to protect City frontline service staff, provide armed escorts to our service vehicles, and protect our construction sites. At over R100-million, this is a cost that galls, but which is now unavoidable. The proliferation of 'extortion mafia' is now so severe in poorer communities and townships that it's getting difficult to deliver even basic services there without our staff coming under attack from violent extortionists demanding payment. So, too, with our construction sites and facilities. 3 This budget funds two significant new investments in city cleaning I've written and spoken extensively on our dedication to seeing a much cleaner Cape Town. We've launched our new anti-litter campaign called 'Bin it in the Bingo Bin' led by Bingo our green bin mascot; we run a daily education and behaviour-change programme in local schools; and we've stepped up much harsher penalties for litter bugs and dumpers, and bigger rewards for those who report them. But with all of this, I am still far from satisfied, and I think most people share this dissatisfaction with the cleanliness of the city. There has been improvement, but there is still far too much litter and rubbish around. This is particularly so in informal settlements and in communities where density — because of high numbers of backyard structures — has far outstripped our current capacity to clean up. This budget proposes to invest additional funds in things we will all benefit from: more regular cleaning of water courses, cleaner beaches, and cleaner streets. It also funds a large new dedicated team to clean all of Cape Town's major main arterial routes and highways every single day. Every resident will see and feel the visible benefit this additional cleaning brings. And it proposes to fund significant additional cleaning capacity in informal settlements and areas with high numbers of backyarders. While this benefit may not be direct to you if you don't live in a township, I strongly believe most of us not only support poorer residents living in conditions of greater dignity, but understand the mutual benefit of this to our whole society. That summarises the strategic choices behind this budget and why the tariffs and charges have been proposed to fund that strategy. I am confident most Capetonians firmly support this strategy and understand both its obvious logical necessity and its obvious personal benefit to them and their families. Moral imperative They understand that we must improve living conditions for the poor, both as a moral imperative, and because it benefits everyone in South Africa to have more people living with more dignity. They understand that as the national state vacates and retreats from its responsibilities to maintain law and order, we must step up and step in to make our city safer for all. And they understand that we cannot have infrastructure degradation and slow malaise. We must invest so our services are maintained at a high standard and to guarantee the present and future success of our city. Value for money This strategy — all of this — is still delivered with incredible value for money. We have published the comparative tariffs for every major city in the country showing Cape Town has the lowest total bills of all major cities, for all common household consumption scenarios. In other cities, municipal charges go into an abyss of dysfunctionality and decay, with no clear return or value for these payments at all. While in Cape Town, the City offers all of this service improvement, functionality and investment, while still offering comparatively lower municipal bills than other cities. That is a fact, not an opinion. This remains true even when adjusting for Cape Town's higher average property values by 25%. Cape Town's municipal bills for a R5-million property are still lower than a R4-million home in Joburg, in most consumption scenarios. Crucially, the price difference is largest for middle class properties worth R2.5-million and below, who are paying hundreds of rands less every month compared with families living in properties of lower value in Joburg. Cape Town residents also benefit from the property value appreciation that occurs (almost uniquely now) in our city. For the majority of working people, our homes and pension funds are likely to be the two biggest assets we will own in our lives. When the value of our homes appreciates, while bond values go down over time, then our total overall family wealth increases too. This is undeniably a good and positive thing for social mobility and for the prospects of leaving something of value for our children one day. Property values in other cities are sadly declining, decimating the net asset value of middle-class families. This is tragic. We must never wish that on our city. Our budget is designed specifically to protect families in lower value properties in the value bracket below R2.5-million. We can see that this indeed has an effect, as most of the public concern and objections have come from residents living in homes in the R4-million to R7-million value bracket. While Cape Town has more than one million rateable properties, this R4-million to R7-million bracket represents a relatively small proportion of properties — roughly 40,000 homes. However, through cross-subsidisation, this bracket does carry a considerable share of the cost of subsidised services for poorer residents. Our City uses a strong cross-subsidisation model — designed deliberately to protect poorer families. This is quite right in our context of widespread poverty, and we are very proud that this city delivers more for the poor than any other in the country (precisely contrary to the oft-repeated propaganda about Cape Town). However, we must also ensure that this cross-subsidisation model is sustainable, and that we do not overburden those who can pay in supporting those who cannot. Concerns So I do understand the concerns honestly and volubly raised, as not everyone living in a home in this bracket is cash flush. Often the value of their homes has risen faster than their incomes. This is particularly true for pensioners. To shield these residents from the impact of these tariff increases, we are proposing several interventions that will offer meaningful help. First, we will soften the extent of cross-subsidisation in the citywide cleaning tariff, so that a smaller proportion of the overall tariff is carried by this category of homes. This lowers the impact of the tariff significantly, and should see proposed bills come down by several hundred rand a month. Second, we will extend the blanket R450,000 rates rebate that currently applies to all properties under R5-million in value, to all properties up to R7-million in value. This will lower the rates increase for those properties by roughly R250 per month, and lower the overall increase for these properties markedly. This will mean lower revenue of roughly R65-million, and will be trimmed from all of the services I have discussed above. Second, we are modelling a significant increase to the income threshold for pensioner rebates, from R22,000 monthly income to R27,000 monthly income. This means all residents over the age of 60 years and earning below the R27,000 monthly threshold would qualify for significant rates and service charge discounts. All of these interventions, directly in response to the feedback received in the public participation on the budget, will meaningfully lower the impact of the tariff proposals this year. The 'utility reform programme' I now turn to the National Treasury's so-called 'utility reform programme' and its impact on City budgets. The National Treasury is rightly very concerned about the financial and operational state of municipal utilities — water, sanitation, electricity, and waste — across South Africa. Most of them are in deep financial trouble, spending hardly anything on maintenance or new investment, and unable to raise any new finance to fund needed investment. The reform programme they have initiated requires municipal utilities to be financially 'ringfenced' — in other words, these utilities should not subsidise other services, or be subsidised by other services or by rates. They must be able to stand on their own feet financially, and be able to raise additional finance on the back of their own balance sheets to fund much-needed investment. In Cape Town our utilities, with the exception of our waste management utility, have been largely financially self-funded for some time. However, in waste management there has been a significant subsidy from the rates base to cover the costs of citywide cleaning services. These are costs over and above the costs of wheelie bin collection, which are already billed separately on municipal accounts. This reform programme is right in principle and much needed across the country. We support it wholeheartedly. It does, however, mean that we must transition to a fully self-funded waste and cleaning service that does not rely on the rates base for subsidy. Residents have always paid these costs — they have just been opaque or implicit, because they've been included in the rates account and in the price of electricity. Now they are being removed and listed clearly and explicitly on municipal bills. This is not new revenue for the City, or a new charge for residents. It is only making explicit that which is implicit. The only additional, new expenditure being funded through this tariff is the additional cleaning capacity I discussed earlier. Enormous sweetener The National Treasury has offered an enormous sweetener in the form of billions of rand in performance-based grants to those cities that get this reform project right. We are eager to do so, because it is right in principle, and because we would love to benefit from potentially billions in grants. This would all be invested back into more infrastructure, lowering the City's borrowing needs and consequently lowering costs for residents. So it's important that we get this right. At the moment Cape Town is the only one making a serious effort, and so stands to benefit either the most or first from this incentive pot (the details on how this incentive grant will be paid aren't yet finalised). It is true that the National Treasury has not immediately focused its eye (or its ire) on waste management — its initial focus is on the desperately underperforming water utilities around the country. And it's true that it has allowed for staggered implementation over the next three years. But our approach has been that it is much less confusing for residents to make the transition in one go. The alternative would be to have three years where the city-wide cleaning costs would be borne partially by the tariff, and partially by electricity tariffs, adding more confusion for residents. By definition, the cleaning tariff would also have to go up significantly each year for three years to reach its 'final' level in time. Choices I've set out here honestly the choices we've made and why we've made them. I hope that residents take heart in the firm surety of our one overriding commitment: that Cape Town will not accept that decline and failure in South Africa will define our future here. We will do what is necessary now to prevent that outcome, and guarantee our success for our city and all who live here. We will do so with respect for public money, delivering all of these services and investment at the lowest cost of all South Africa's metros, and at the highest standard.
The Citizen
23-04-2025
- Business
- The Citizen
Mayor's R173k monthly security bill sparks outcry in KwaDukuza
A leaked municipal invoice detailing a R173 068.61 monthly personal security cost for KwaDukuza mayor Ali Ngidi drew widespread community criticism earlier this week. The invoice, which included the cost of four Pro Secure security guards for 24-hour protection at the mayor's residence for March, ignited a fierce debate about municipal spending. Security costs have often been a controversial topic in council, where opposition councillors have long lobbied for specific line items to detail how the R4-million monthly spend is allocated, but have been blocked. The municipality's security tender was also flagged in the last auditor-general report. While confirming the mayor's invoice amount as accurate, KwaDukuza municipality (KDM) spokesperson Sifiso Zulu said the cost was within the municipality's prescribed tender processes. 'The security service is procured in accordance with the annual notice gazetted by the Minister for the Determination of Upper Limits of salaries, allowances and benefits for different members of a Municipal Council,' he said. 'The contract in which Pro Secure was appointed by KwaDukuza Municipality was done through a competitive bidding process. The tender was awarded in compliance with the municipality's Supply Chain Management Policy.' Pro Secure has been KDM's sole security provider for a few years and also endured some recent controversy when company owner Ferrell Govender was arrested in connection to an Umhlanga murder in January. 'Any legal challenges or criminal charges against the director of Pro Secure do not invalidate the contract entered into with Pro Secure and KwaDukuza municipality,' said Zulu. 'Contract law has its own requirements for the validity of a contract. The municipality confirms that at the time of the appointment, there was no adverse report in the data base of National Treasury in respect of Pro Secure.' As for the need for four full time security guards, Zulu said it was 'common cause' that numerous threats had been made against the mayor. 'Some of these issues are in the records of the local police station, and some are before court. It is also public knowledge that there are other councillors whose residences are protected by security personnel, due to threats that have been reported,' he said. Stay in the loop with The North Coast Courier on Facebook, X, Instagram & YouTube for the latest news. Mobile users can join our WhatsApp Broadcast Service here or if you're on desktop, scan the QR code below. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
Daily Maverick
23-04-2025
- Business
- Daily Maverick
Cash properties and new SUVs – inside Independent Development Trust CEO's R22m assets splurge
The Independent Development Trust's newly constituted board has passed a resolution calling for lifestyle audits into the entity's executive management. Daily Maverick unpacks several property transactions and vehicle purchases that might pique the investigators' interest. Trusts controlled by the Independent Development Trust's (IDT's) CEO, Tebogo Malaka, in 2023 forked out R6-million in cash for the purchase of three properties in Gauteng. This includes a plot in Gauteng's upmarket Waterfall Country Estate, where the priciest properties currently on offer sell for upwards of R20-million. Daily Maverick has established that one of Malaka's trusts is in the process of building a house on the Waterfall plot — again without a bond — and that the total cost is set to be around R12-million. This will bring to R18-million the grand total for the assets splurge that Malaka embarked on in 2023 – all paid for, or due to be paid for, in cash. Later in 2023, Malaka also forked out more than R4-million for two luxury vehicles. The IDT CEO purchased a brand-new Porsche Cayenne SUV and a Range Rover Sport, each with a price tag of at least R2-million. Unlike the properties, Malaka seemingly bought the vehicles through financing arrangements. However, the new wheels may still raise questions over Malaka's ability to service the instalments, especially when these purchases are viewed alongside the cash transactions for the properties. Malaka has strongly denied any wrongdoing. Last week, the queries Daily Maverick sent out for this piece seemingly triggered a hefty social media campaign aimed at discrediting our work. On the same day that we sent our questions to Malaka, an account on X (formerly Twitter) claimed that Daily Maverick and this journalist were part of a 'coordinated information ecosystem' that seeks to unfairly target the likes of Malaka. On Good Friday, another X account posted fake screengrabs purporting to show Whatsapp messages between this reporter and Public Works Minister Dean Macpherson's chief of staff. The falsified messages again sought to show that this reporter was acting in cahoots with dubious forces that were out to tarnish Malaka's reputation. The fake messages also made specific reference to the assets Malaka had acquired through her trusts. Speaking through a law firm that Malaka had appointed after we sent her our queries, the IDT CEO denied that she had played any role in disseminating fake news. 'Any suggestion that our client is involved in any form of wrongdoing, or in the manufacturing or distribution of the purported false information, is categorically denied. Our client asserts that she had no role in, nor responsibility for, the alleged activities referenced in your correspondence. Any such allegation is without merit and is firmly rejected,' reads a letter from her attorneys. 'Not public information' As the IDT's political custodian, Macpherson recently called for lifestyle audits into the IDT's top management. The IDT's board of trustees, now chaired by businesswoman Zimbini Hill, subsequently passed a resolution that approved broad-ranging lifestyle audits into Malaka and other senior IDT executives. The resolution comes on the back of several media exposés involving IDT contracts worth hundreds of millions of rands. In October last year, Daily Maverick revealed that the IDT had awarded the lion's share of a R836-million oxygen plants project to Bulkeng, an apparent 'ghost company' that did not possess the necessary accreditation to deal in medical equipment. The National Department of Health, on whose behalf the IDT managed the project, has since pulled out of the contracts. In light of the upcoming lifestyle audits, Daily Maverick's latest offering delves into the properties and vehicles that Malaka and her trusts bought in the space of just one year. Our report comes with an important caveat: We neither possess any evidence that the assets were purchased with funds linked to IDT contracts, nor are we suggesting that this was the case. However, the transactions detailed in this piece will almost certainly feature in the upcoming lifestyle audits. The investigators are sure to take a keen look at especially the cash purchases, seeing as the movement of large sums of money is a key consideration in any instance where there are concerns over alleged corruption, fraud and money laundering. What's more, the timing of the assets splurge may also raise further red flags. The properties and cars were all purchased in 2023. During that year, the IDT oversaw tender processes for some of its most contentious contracts, including those that were awarded for the oxygen plants initiative. We specifically asked Malaka how she and her trusts had managed to acquire the assets in such a short space of time, especially those properties that had been bought without bank loans. We also wanted to know how she would finance the multimillion-rand building project on the Waterfall plot. 'The source of income of the trust used for the acquisition of the properties in question is not public information. Our client elects not to disclose any further details in this regard,' stated Malaka's attorneys. 'It is denied that our client has, or had, any influence over the appointment of any service providers to the IDT. All appointments were made through a public tender process, in which representatives from the relevant government departments formed part of the evaluation panel,' said the attorneys. The two apartments In early 2023, Malaka set out to purchase two apartments, both of which were paid for by means of cash transfers. The properties were acquired through the Mmutla Wa Noko Family Trust. According to two sources familiar with Malaka's affairs, the IDT CEO had set up the trust to manage some of her family's assets. The Mmutla trust first forked out R1.1-million for a unit in a residential development in Fourways, Johannesburg. Deeds records show that the trust bought the property in February 2023, and that the transfer was concluded in June that year. In March 2023, the Mmutla trust bought a second apartment, this time paying R1.25-million. The unit is located in Centurion. Like the first apartment, there is no bond registered to this property, which means the trust had concluded the purchase through a cash transfer. Waterfall Country Estate Malaka is also a trustee of the Magogodi Family Trust, which was registered at the Master of the High Court in Pretoria in June 2023. In July 2023, one month after the trust was founded, it paid R3.6-million for an empty stand in the upmarket Waterfall Country Estate, located to the north of Johannesburg. The Deeds Office records don't reflect any bond registered for the purchase, so Malaka's trust would have had to come up with this substantial figure in cash. In other words, in the space of just six months, Malaka's two trusts had somehow accessed R6-million to pay for the two apartments and the Waterfall erf. Daily Maverick has established that construction on the Waterfall plot started some time in late 2024. The construction project serves as confirmation that Malaka is the controlling hand behind the Magogodi trust. We were able to establish that Malaka had briefed key roleplayers involved in the Waterfall development, and that she had personally appointed some of the key contractors. According to sources familiar with the project, Malaka's trust is set to spend at least R12-million on the construction costs, finishes and related expenses. Given the absence of a bond from a financial institution, the trust would somehow have to cover these costs in cash. Shiny rides In July 2023, Malaka bought a grey Porsche Cayenne GTS Coupé. In December of that year, she also purchased a new Range Rover Sport. The records available to Scorpio don't reflect the costs for each purchase, but the average price tag for these models is well north of R2-million. Board resolution The IDT's board of trustees was only recently restored to a full quorum after months of inactivity. One of its first decisions was to give the go-ahead for lifestyle audits on key IDT personnel. 'The reconstituted Board has made it a priority to strengthen governance and rebuild public trust in the IDT, an entity critical to the delivery of social infrastructure in South Africa. To this end, the Board has resolved to introduce a policy on lifestyle audits, aligning with the Public Sector Integrity Management Framework, which encourages the use of lifestyle audits to detect and prevent unethical conduct,' the board said in a written response to Daily Maverick. 'This policy forms part of a broader strategy to promote ethical leadership, transparency and accountability within the organisation. The lifestyle audits will not be conducted on an ad hoc basis but will form part of a structured governance approach. They will initially focus on senior management and individuals occupying high-risk roles, particularly in areas such as supply chain management,' explained the board. The board of trustees wants to use lifestyle audits as a means to mend the public's trust in the entity. 'The Board believes this step is necessary to ensure that those entrusted with the management of public resources conduct themselves with integrity and accountability. While the IDT continues to play a significant role in delivering public infrastructure, restoring public trust remains a priority. The Board is committed to ensuring that the institution operates with high standards of governance, ethical conduct and public confidence.' DM
