NMB’s R3bn IPTS grant recall by Treasury will bankrupt the Metro

26 November 2019

The governance crisis in Nelson Mandela Bay Metro has reached a point where urgent intervention can no longer be delayed. We simply cannot stand by and watch as one of South Africa’s biggest cities collapses under the coalition of corruption made up of the UDM, ANC, AIC, PA and UF, and spearheaded by the UDM’s Mayor Mongameli Bobani.

It is critical that National Government intervene as a matter of urgency. They have the Constitutional power to step in and take over the running of the Metro. But until they do, the DA will pursue every other avenue available to it in search of solutions to this crisis. I will be establishing a task team made up of DA Members of Parliament whose aim it will be to find any possible intervention that can help rescue this city from its looters.

It is no exaggeration to say that NMB is imploding. It now has the highest level of Unlawful, Irregular, Fruitless and Wasteful expenditure in the country. It has only one permanently appointed Executive Director – the rest of them are all in acting capacities. It has had six different Acting City Managers in one year. Parts of the city have already reached Day Zero as taps run dry. The city has seen 18 people killed this year alone in connection with the irregular awarding of a drain cleaning contract. And its Mayor has been implicated in at least two cases of fraudulent activities relating to municipal contracts.

But it is the latest scandal around the grant funding for the Integrated Public Transport System (IPTS) that threatens to dramatically accelerate the City’s collapse into bankruptcy. National Treasury has indicated that it intends to withdraw and recall all transfers made since the inception of the IPTS conditional grant allocation because these funds have been used outside the framework stipulated in the Division of Revenue Act (DoRA). Treasury has also indicated that the Metro flouted various Supply Chain Management processes in procuring services. It is no surprise that Bobani himself has been linked to the IPTS scandal in Crispian Olver’s book, “How to steal a city”.

The amount the Metro stands to lose here is a staggering R3.2 billion, and this will almost certainly bankrupt NMB. The DA has been warning about this for months, and National Treasury, as far back as June this year, wrote to the Metro demanding feedback on its efforts to recoup this Unlawful, Irregular, Fruitless and Wasteful expenditure. None of this comes as a surprise. Mayor Bobani’s administration has known that this day will come, but yet they have done nothing to avert it.

The list of administrative calamities that have befallen this Metro since the coalition of corruption orchestrated the removal of DA Mayor Athol Trollip just over a year ago is astonishing. Council meetings, Committee meetings and Mayco meetings are simply not held. Vast amounts of critical budgets go unspent. Housing delivery has completely stalled and land invasions have skyrocketed. Wherever you go the city is filthy, and there is no maintenance being done on street lights, road signs and potholes. No one is running NMB because looting and covering your tracks is a full time job.

In just over a year, Bobani has undone all the hard work and outstanding results achieved by the DA-led coalition that took over in 2016. Remember that during the two years of DA-led government, NMB went from being deep in the red to having a R2 billion surplus for the first time, along with a AAA credit rating – the highest in the country. In those two years, NMB gained a brand new metro police force, it stopped R615 million of corrupt contracts, it achieved the best Urban Settlement Development Grants spending performance in the country, it got Shot-spotter technology to help curb gang crime and it eradicated almost 10,000 bucket toilets.

Importantly, the DA-led coalition government also put the IPTS buses on the road – a project that had stalled for years under the ANC. But today it is this very IPTS that threatens to sink the city, as the culture of corruption and patronage under Bobani infects every part of the Metro. If indeed National Treasury does come knocking for its R3.2 billion in misspent IPTS grant funding, this Metro will not be able to repay it.

The most astonishing part of this story of the collapse of NMB is that it has been allowed to happen. Everyone, at each sphere of government, knew exactly what was happening here. National government has the power to intervene though Section 139 of the Constitution, by taking over the administration of a local government. The President and the COGTA Minister are fully aware of the looming disaster, and yet they have failed to act. Even more puzzling is the failure to act by the leader of the United Democratic Movement (UDM), Bantu Holomisa. He knows exactly what his UDM Mayor is doing to this Metro, and still he chooses to sit on his hands. This makes him as guilty as Bobani himself of the collapse of NMB.

The inability of COGTA to intervene, the inability of the UDM to recall its rogue Mayor, the inability of the ANC Speaker in the Metro to allow the democratic process of debating a Motion of No Confidence in Bobani to proceed, and the inability of the coalition partners to pull the plug on this crime syndicate have all contributed to this situation. They are all jointly responsible, and they must all explain to the million plus residents of NMB why they have forsaken them in favour of protecting dodgy deals for connected cadres.

In 2016 the voters of NMB punished a government that had turned its back on them and stolen billions of Rands of public funds. But through trickery and coercion – and very likely through bribery of a DA councillor – these very same looters orchestrated a coup of this Metro council in August last year, and are now back and installed at the feeding trough.

I assure you the DA will not let them get away with this. Our duty to the people of NMB compels us to fight this coalition of corruption until it is no longer able to steal from the people. For now, we will do so as opposition, but in 2021 we will make every effort to ensure that the will of the people is once again reflected in their Metro government, as it was after the 2016 election.

Issued by John Steenhuisen, DA Interim Leader, 26 November 2019