In his fourth quarter report to council, KwaDukuza Mayor pays tribute to Anton Lembede as this week marks the 79th anniversary after his passing

I greet you all on this beautiful day as I deliver the Section 52(d) Fourth Quarter Budget and Performance Assessment Report as required by the MFMA.

I table this report on a day that carries real weight in the history of the nation. It was in the last days of July 1947 that Anton Lembede died in Johannesburg at only 33 years of age. This week marks the 79th anniversary after his passing. Lembede gave his life under the conviction that Africans must be the architects of their own destinies in doing so, he shaped the generation of Mandela, Sisulu and Oliver Tambo who carried that conviction into the Programme of Action and, ultimately, into the democracy that we serve today.

A young man's life's work, cut short so early, he could still be steering the direction for the people decades later. We table the Fourth Quarter Assessment in that same spirit of discipline and accountability, the belief that the day-to-day work of governance, done honestly and consistently, is itself a continuation of the struggle that built democracy.

I present this report at a time where we have just successfully marked the 10^th anniversary of the Luthuli Fun Run and Walk at the weekend.

Importantly, 21 July 2026, marked the 59^th anniversary since the untimely passing of Chief Luthuli and it was a real privilege to have participated in the wrath laying ceremony in honour of the weight of Luthuli’s lifework. We are proud to have Luthuli as our guiding light as we continue to build on his footstep, the future that he had envisioned for the people.

Therefore the presentation of this report is timely as it coincides with special historical moments that fill us with gratitude and hope for a better future.

Madam Speaker, during the period under review, the Rapid Response Task Team was established and one of the key programme that we have been rolling out has been Operation Siyahlola to various communities where there have been extreme service delivery challenges. 

We launched this important initiative to monitor progress, identify blockages, and resolve key service delivery challenges affecting our communities. We will be reflecting on the successes of the programme in due course and rightly before the end of the current council tenure. Operation Siyahlola undertaken by the Rapid Response Task Team and Wenzani Makhelwane campaign are part of the Turnaround Service Delivery Improvement Plan and both programmes are responding directly to the needs of the people. 

Madam Speaker, I must point out that the report is based on the quarter which commenced on April 01, ending June 2026 and the municipality has been operating under significant pressures however our financial position remains stable.

 

The report indicates that the total revenue billed and collected to date amounts to R2,892 billion against an adjusted budget of R3,009 billion which is a negative variance of R116 million (-4%).

Total expenditure amounts to R2,911bn against an adjusted budget of R3,228bn, representing under-expenditure of R316,744m (-10%), largely attributable to invoices and accruals for June 2026.

Ladies and gentleman, our debt collection rate improved to 99.34%, up from 98.89% in the 2024/25 financial year, reflecting the impact of ongoing revenue enhancement initiatives including collection drives, faulty meter inspections, refuse back-billing and consumer deposit reviews.

Cash and investment coverage improved to approximately 2.16 months as at 30 June 2026, up from 1.73 months at the close of the 2024/25 financial year, with an investment portfolio of R539m held at year-end.

Property Rates revenue exceeded the adjusted budget by R11,1m, driven largely by the supplementary valuation roll and zoning changes on residential vacant land.

Refuse revenue exceeded budget by R2,9m following an updated commercial refuse billing exercise for the southern area.

The electricity meter amnesty programme has replaced 2836 meters to date, of which 40% were previously bypassed, generating R5,5m in additional billed revenue and materially reducing electricity losses going forward.

The migration to a daily prepaid electricity vending transfer arrangement generated R707,723 in additional interest income over the financial year, and an average of 40% of prepaid purchases from indebted consumers is now automatically recovering arrears through partial meter blocking.

The Municipal Infrastructure Grant (MIG) programme reflected 80% expenditure, with R42,1m spent on MIG-funded projects.

86% of total grant funding was spent, reflecting strong overall grant absorption.

Notable capital project milestones include completion of the Vlakspruit Cemetery project, the Darnall Sports Field upgrade, and continued progress on the Beach Facilities and KwaDukuza Taxi Rank refurbishment projects.

Just last week, KwaDukuza hosted a success provincial cabinet Imbizo led by the Premier. I was along the MEC for Transport in Ward 02 where we rolled out Operation Siyahlola in the now completed Darnall Sports Field upgrade project and we were all impressed by the good work that was done by the Community Services Business Unit. This facility must be protected and it is to be unveiled soon.

Madam Speaker, there are areas that require our collective commitment and focus.

Electricity losses continues to threaten our sustainability. Cumulative energy losses stood at R441m (25,93% of electricity purchased) as at 30 June 2026, worsening slightly from R386,9m (26,73%) the prior year and running at more than double the industry norm.

Bulk purchases reflect under-expenditure of R128m, driven by the timing of the June Eskom invoice (R175m) and billing cycles rather than reduced consumption. Council should further note the compounding effect of Eskom's revised tariff structure, which is estimated to add approximately R85m in additional cost pressure compared to the prior year.

Employee-related costs reflect a variance of R38,643m, linked to the timing of filling vacant posts, resignations and the still-to-be-finalised grading review; overtime costs, by contrast, are trending over budget and require a formal reduction plan, as previously requested by the Budget Steering Committee.

Irrecoverable debt write-offs of R11,028m have exceeded the adjusted budget allocation of R3,8m under the Debtors Incentive Scheme, resulting in likely unauthorised expenditure in this line item.

Council-funded capital projects reflected only 36% expenditure (R104,3m of R162,138m), with a number of projects showing minimal to no spending pending the finalisation of accruals.

Consumer debtors closed the year at R458m, a 1,44% increase on the prior year, with the majority of the debt over 150 days in arrears; 1,444 accounts (approximately R260m) have been handed over for legal recovery. Continued economic pressure on households makes a material reduction in this balance unlikely in the year ahead.

Total creditors outstanding amount to R262m, dominated by the June Eskom bulk account (R202m), which is invoiced only after month-end and will be settled by 30 July 2026.

Two grants were not received in full: R2,1m of the Neighbourhood Development Partnership Grant was withheld by National Treasury following non-approval of the adjusted gazette, and only R5,2m of the R7,7m Housing Accreditation Grant allocation was transferred.

Ladies and gentlemen, notwithstanding the pressures set out above, the municipality's overall financial position remains stable.

The improvement in cash coverage to 2,16 months, a collection rate above 99%, and a surplus outcome R138m better than the adjusted budget all point to a municipality that is managing its in-year finances prudently.

Our sustainability over the medium term depends on decisively addressing electricity losses, strengthening the utilisation of the costing system for accurate cost recovery, improving in-year cash flow reporting to eliminate the current overstatement on the Cash Flow Statement, and ensuring that Council-funded capital projects are implemented within the financial year rather than repeatedly rolled over. Administration is being directed to prioritise these areas in the current financial year.

Madam Speaker, with those words, I wish to thank all members of the Budget Steering Committee, the Acting Municipal Manager and his teams for their work in compiling this assessment. I hereby present the Fourth Quarter Budget and Performance Assessment Report for consideration.

Thank you!