Parliament, Wednesday, 18 March 2026 – The Portfolio Committee on Cooperative Governance and Traditional Affairs on Tuesday resolved to escalate a matter involving a multi-million-rand tender for water plant maintenance services in the uThukela District Municipality to National Treasury for further investigation.
The committee on Tuesday met with the leadership of the municipality and the Inkosi Langalibalele Local Municipality to assess the progress with corrective actions following concerns identified by committee members during the oversight visit in January this year.
The committee heard that the municipality is currently operating with an unfunded budget and crippling financial instability. Members heard that financial projections indicate the budget will be funded only by the 2029/30 financial year. Without a viable revenue system, the municipality is left unable to pay its financial obligations to service providers and employees. Members also flagged that the municipality may be in contravention of the Municipal Finance Management Act (MFMA).
The Chairperson of the committee, Dr Zweli Mkhize, said the state of affairs is deeply concerning. “What we are seeing is not only instability, but a failure of fundamental financial governance systems that must be urgently addressed,” he said.
During the meeting, the contract, valued at R137 million, was singled out as one of the root causes of uThukela municipality’s financial woes. The tender, awarded under an unsolicited bid, for repairs and maintenance of water infrastructure stems from the 2016–2021 municipal administration. A dispute over payment is currently before the Pietermaritzburg High Court.
Members expressed concerns about the origins of the contract, the unclear contractual terms and the municipality’s lack of oversight of the project. They were also concerned about unverified invoices and a settlement agreement that may not have been adequately approved by the municipal Council.
“The RASP contract shows a serious breakdown in financial governance,” the Chairperson said. “We do not see evidence proving that there was adequate oversight over the project. The municipality also appears to have been placed in a position where it could not adequately protect its own interests,” the Chairperson noted.
The committee will now request that National Treasury spearhead an investigation into financial management practices related to the RASP contract. “This matter is far too serious to be left unresolved. We must protect the municipality from further harm,” the Chairperson said.
Members were also alarmed by how the municipal leadership responded to financial challenges. The actions members highlighted as concerning include the use of third-party bank accounts to manage the municipality’s revenue and questionable borrowing practices. The committee noted that these borrowing practices, among others, may be in breach of the Municipal Finance Management Act (MFMA) and expose officials to potential personal liability.
The Chairperson reiterated members’ concerns and emphasised that the use of third-party accounts to manage the municipality’s funds casts doubts over uThukela’s financial integrity. “It is a practice that raises serious legal and governance risks and undermines transparency.”
The committee directed the municipality, in line with a directive issued by the provincial MEC for COGTA, to provide details of all transactions, including authorisations and legal justifications. The municipality’s leadership must also indicate whether this was done with or without council approval. The Chairperson asked the municipality’s leadership to send this report to the MEC within three weeks. A copy must also be submitted to the committee.
“We must further indicate that, based on our assessment, the handling of this matter may warrant referral to the Office of the Auditor-General,” the Chairperson said. “There are indications of potential transgressions that could result in a certificate of debt being issued. The question of whether the Council properly authorised these actions remains critical, particularly where retrospective ratification is concerned,” Dr Mkhize noted.
In addition, the committee asked the municipality to provide a detailed financial recovery plan within three months that must clearly outline how uThukela municipality intends to stabilise its financial position, improve revenue generation and strengthen its financial management systems. The municipality must also submit to the committee a comprehensive report on how it will act to effect consequences and hold accountable those implicated in unauthorised, irregular, fruitless and wasteful expenditure. The Chairperson said the report must also outline how these matters are being addressed to ensure that they do not continue into the next audit cycle.
The committee will continue its assessment of the Inkosi Langalibalele Local Municipality today.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, DR ZWELI MKHIZE.
For media inquiries or interviews with the Chairperson, please contact the Media Officer:
Name: Alicestine October
Cell: 083 665 4345
E-mail: aoctober@parliament.gov.za
Arrange a tour