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A total of R31bn — that is how much is needed to get Nelson Mandela Bay back on track, arrest years of collapse and rebuild some of the failing infrastructure.
The figure is drawn from a situation analysis report on the municipality dated February 28.
The amount does not include the long-term projects listed in the report for infrastructure and engineering, as well as roads and transport.
The report sets out a stark account of a metro buckling under years of political instability, financial mismanagement and collapsing infrastructure.
It was prepared by the Section 154 team seconded to the city by the Eastern Cape co-operative governance department to bring about administrative stability and improve service delivery within 24 months.
The 10-member team was deployed in December and tasked with stabilising governance, improving service delivery and submitting two progress reports by March 2026.
The report was meant to be tabled at Thursday’s council meeting but it was postponed to Thursday next week.
The team warned that years of governance failures, weak financial controls, infrastructure neglect and leadership instability had pushed the municipality into a deepening crisis marked by water losses, failing sewerage systems, deteriorating roads, rising debt and recurring audit failures.
This has resulted in diminished public confidence, constrained economic activity and widespread service delivery disruptions.
Some of the R31bn is needed for:
- Upgrading the Churchill water treatment works (R850m) and phase 4 of the Nooitgedacht water treatment works (R3.6bn);
- Various wastewater projects (R8.2bn);
- Construction of the 132kV Chelsea–Summerstrand overhead line, refurbishment of substations, and replacement of medium-voltage switchgear (R105m);
- Fixing the city’s roads and pavements (R4.7bn);
- Rehabilitation of waste disposal sites (R4.9bn); and
- Improving public transport (R1.8bn).
The report forms part of the first phase of intervention by the national and provincial government aimed at stabilising the metro over 24 months.
The intervention team believes the municipality’s failures now threaten not only residents but also the regional economy.
The city has had four mayors since 2021, with the report highlighting that coalition politics had caused the instability.
“The numerous delays and breakdowns in council meetings have severely impacted the operational effectiveness of the municipality.”
After the council meeting, mayor Babalwa Lobishe said the metro had an action plan.
“It is good to have a diagnosis and what you are curing,” she said.
“We brought the Section 154 team.
“We raised our hands and asked for help.
“We requested engineers and a focus on finance.
“There are critical issues that ought to be dealt with.
“We are not naive about the issues.
“We will save the municipality.”
The report says the city is in deep financial distress, with officials warning that the municipality is struggling to meet its financial obligations as basic services continue to deteriorate.
Despite urgent infrastructure backlogs across the metro, the municipality has also failed to spend hundreds of millions of rand in government grant funding.
Among the biggest concerns raised is the sharp decline in the city’s cash position.
According to the report, cash and equivalents dropped from R4.4bn to R3.8bn, a R600m decline that points to growing pressure on the metro’s ability to meet short-term obligations.
At the same time, the municipality’s creditors’ bill of R5.8bn exceeds the available R3.8bn by almost R2bn.
“The municipality remains technically solvent but faces severe liquidity pressures,” the report reads.
“Declining debt-servicing efficiency, growing arrears and persistent delays in supplier payments pose significant operational risks.”
In another warning sign, the intervention team found the city had recorded operating deficits in both 2024 and 2025 — meaning it was spending more money than it was bringing in.
The metro’s collection rate sits at just 71%, far below the roughly 95% benchmark municipalities generally aim for, according to the report.
“The municipality faces persistent leadership instability, with extensive acting appointments in senior management positions and protracted disciplinary processes weakening accountability, oversight and decision-making,” the report reads.
“The municipality is experiencing a deep and multi-system governance, financial and infrastructure crisis that now threatens economic stability, essential service delivery and public confidence across the metro.”
The intervention team found that the city’s infrastructure was characterised by systemic decline.
“Waste management, stormwater systems and disaster management functions show severe operational backlogs, further exacerbated by vandalism, climate impacts, unfunded maintenance and years of underinvestment in asset renewal.”
Water losses have climbed to more than 56% while wastewater treatment plants are operating at or near minimum compliance levels.
Electricity losses now exceed 30% and large parts of the metro’s road network are in urgent need of rehabilitation.
“The evidence presented in the document paints a clear picture of a municipality facing a multi-system infrastructure collapse, with water, wastewater, electricity and stormwater systems simultaneously deteriorating.
“Across all sectors, a recurring pattern emerges: ageing infrastructure, chronic under-maintenance, escalating vandalism and severe operational failures.”
The report also highlights critical vacancies in several service delivery departments and a significant lack of executive directors.
On the positive side, the report shows the municipality accelerated its land development and building control, achieving an 83% success rate in adjudicating 541 applications during the 2024/2025 financial year.
However, land-use governance is marked by significant fragmentation as the municipality operates under 11 outdated zoning schemes, leading to confusion, uneven enforcement and bottlenecks in development approvals.
“Inner-city decay is accelerating, with problem buildings becoming hubs for crime, unsafe living and further urban decline.”
Armed break-ins at depots have cost the municipality more than R5m in stolen tools and equipment, directly obstructing water and sewerage system repairs.
Road safety has also declined, with the R75 identified as one of the most dangerous due to non-functional traffic signals.
The supply chain management division is operating under significant capacity constraints, with a heavy reliance on Expanded Public Works Programme (EPWP) administrators rather than qualified SCM professionals.
Legal fees totalled R50m in 2025 and R30m in 2024, a sharp increase that was flagged by both the Auditor-General South Africa (AGSA) and the audit committee as a concern.
They recommended that the municipality review its internal capacity to reduce reliance on external legal services and curb escalating costs.
The municipality is heavily reliant on procurement deviations and other non-competitive processes, often using them to extend existing contracts.
The report also highlights repeated breaches of supply chain regulations, including failure to invite competitive bids where required, improper approval of deviations, inconsistent evaluation criteria and inadequate advertising periods for tenders.
In some cases, procurement thresholds were circumvented by splitting contracts, while emergency justifications were used without sufficient basis.
Dead people were found on the indigent household register and had received subsidies on municipal service charges.
The same register also included those employed in government who were granted indigent rebates.
In addition, people with declared interests in companies supplying goods or services to the government or the municipality were found on the list.
“The situation in the municipality is critical but recoverable.
“The challenges have compounded over several years and cannot be resolved through incremental improvements or isolated departmental actions.
“A co-ordinated, high-impact and technically robust turnaround strategy, anchored in strong political support and leadership stability, is now essential.”
Core priorities include stabilising senior management, strengthening financial and supply chain management controls, reducing water and electricity losses, accelerating infrastructure rehabilitation, professionalising institutional systems and enforcing consequence management.
“The municipality stands at a pivotal moment — requiring decisive action, strengthened leadership and a unified commitment to turnaround."
