(Photo: pixabay)
“The Tshwane Metro Council’s budget for the 2025-26 financial year was flawed from the outset and the latest adjustment budget has further exacerbated the metro’s financial pressure.”
So says Grandi Theunissen, FF Plus councilor in the Tshwane metro council, who believes residents are now faced with higher rates while service delivery is deteriorating at the same time.
“This budget covers up a structural deficit and failed projects. Residents pay more, but receive less. This is not a sustainable financial plan, but an attempt to cover up the reality with numbers.”
Although the illegal cleaning charge was eventually removed, Theunissen warns that the metro is now trying to fill the financial gap with other artificial adjustments.
“The metro tries to compensate for the loss of income through upward adjustments to fines, rental and interest. This creates a paper exercise that hides the real deficit and offers no sustainable solution. It is simply a shift of numbers without real financial recovery.”
Grandi Theunissen (Photo: Tania Heyns/Maroela Media)
According to him, the core of the problem is an unrealistic collection assumption of 92% on which the financial plan is built.
“This assumption simply ignores the extent of arrears and the warnings of the auditor general (AG). A more realistic collection rate of 85%, as indicated by the AG, means that the expected income drops drastically and a loss of R2.2 billion arises.
“When a further R534 million increase in bad debt is added, the total deficit rises to R2.7 billion.”
Theunissen says the situation is even more serious when electricity collection is taken into account.
“The metro calculates collection only on invoiced consumption and excludes the actual extent of theft and distribution losses. In reality, the collection rate is closer to 75%. This means the metro’s income could drop to around R45 billion and increase the net deficit to R8 billion or more.”
He warns that the consequences of this extend far beyond financial figures.
“Electricity theft overloads substations, causes blackouts, accelerates infrastructure collapse and reduces the amount of electricity the metro can bill residents for during load shedding.
“As a result, paying residents are forced to bear the cost of this theft through higher rates, while the quality of services continues to deteriorate.”
According to Theunissen, water losses put further pressure on the metro’s finances.
“Water losses increased bulk purchases by R273 million. Instead of tackling the core of the problem, R15 million is allocated for the rental of water tankers. This is an expensive emergency measure that does not solve the problem.”
He says this further weakens collection efficiency and mainly benefits those linked to the contracts, while residents bear the consequences of deteriorating service delivery. Moreover, several municipal entities are already showing clear signs of decay.
“The Tshwane Economic Development Agency’s (TEDA) grant has been cut by R4.1 million, putting economic development in jeopardy. At the same time, the Tshwane Housing Company’s (HCT) cash flow has been cut by R569 million, seriously undermining housing delivery.”
He warns that these cuts could have long-term consequences for growth and job creation.
According to Theunissen, one of the most worrying aspects of the clean-up budget is the metro’s cash coverage.
“The metro’s cash coverage is currently only 0.1 month – about R443 million, which is equivalent to three days’ operating costs. This confirms a liquidity failure and shows the inability to absorb any financial shock.”
Theunissen further points out that salary costs rose by R229 million after a settlement with unions for a retroactive increase of 3.5%.
“While this brings labor stability, it is achieved at the expense of fiscal sustainability. In the current financial climate, it deepens the metro’s financial collapse.”
The FF Plus is now demanding a complete review of the budget.
“The budget must be based on realistic collection rates, strict expenditure discipline and urgent action against illegal power and water connections. Investments must be focused on sustainable infrastructure and not on expensive emergency measures such as water tankers.”
He says the people of Tshwane deserve a budget that is “really sustainable, protects service delivery and manages taxpayers’ money responsibly”.