OR Tambo District Municipality says it has clawed its way back from the brink of financial collapse, reducing irregular expenditure by more than R1.3bn while extending water and sanitation services to thousands of households over the past five years.
Delivering what amounts to the outgoing council’s final State of the District Address on Thursday, executive mayor Mesuli Ngqondwana said the municipality was now seeking to move into the sustainability phase of its financial recovery plan.
Ngqondwana used the address to account for the council’s five-year term and outline spending priorities for 2026/27 before the November 4 local government elections usher in a new council.
He said the council had inherited a municipality unable to pay more than R400m owed to creditors, with service delivery projects stalled and National Treasury withholding funds under section 216 of the constitution.
“It is clear Madam Speaker that we inherited a non-viable municipality,” Ngqondwana said.
The municipality had at the time also been identified as a candidate for formal intervention under section 139(5) of the constitution.
Ngqondwana said irregular expenditure had since fallen from R1.678bn in 2021/22 to R322m at the end of 2025/26.
He said no irregular expenditure had been recorded on new contracts, with amounts still on the municipality’s register relating to older contracts.
The district received an unqualified audit opinion in 2022/23, which Ngqondwana described as its first since the advent of democracy, and had maintained the outcome for three consecutive financial years.Ngqondwana said the provincial executive council moved OR Tambo from the financial rescue phase of its recovery plan to the stabilisation phase in May 2025.
Of 150 activities contained in the implementation plan, 71% had been completed, 25% were in progress and 4% had not started.
Provincial Treasury made a submission in July for the municipality to move to phase three, the sustainability phase.
“This will take us out of the financial recovery to monitoring, and we will be the first municipality in the country to achieve that,” Ngqondwana said.
The district’s annual budget had grown from R2.6bn in 2021/22 to more than R3.3bn for 2026/27, while its collection rate had improved from 54% to 66%.
Ngqondwana said creditors had peaked at more than R441.7m in 2022 but had since been settled or brought under payment agreements.
The mayor also used the address to highlight progress — and remaining backlogs — in water and sanitation, one of the district’s core responsibilities.
He said more than 4,372 households had received water through completed water-supply projects during the council’s term, while the completion and refurbishment of larger schemes had provided water to more than 23,000 households.
Almost 21,708 households had received ventilated improved pit toilets.
Several wastewater projects remain under construction, including the refurbishment of the Mthatha wastewater treatment works.
The Tsolo wastewater treatment plant and reticulation have been completed, while the Qumbu plant is 98% complete and work continues at Libode.
Land disputes have stalled planned wastewater projects in Port St Johns and Mqanduli.
Ngqondwana said spending on operations and maintenance had increased from R44.9m in 2023/24 to R96.9m in the current financial year, excluding electricity costs.
A further R24m had been allocated for fuel to operate water schemes and R16.9m to buy municipal water tankers.
Vandalism remained a major threat to water infrastructure, with the municipality increasing security spending to R91m to protect critical installations.
The district also plans to spend more than R8.7m on livestock improvement and crop production in 2026/27 and R11.3m supporting SMMEs, cooperatives and informal traders.
A further R4.9m has been earmarked for tourism development and promotion.
Ngqondwana said agriculture remained one of the district’s principal opportunities for tackling rural poverty.
During the term, 470 rams had been distributed to more than 400 farmers to improve wool production, while 630ha of maize had been planted for 55 farmers.
Agricultural support in the 2025/26 cropping season extended to 5,450ha of maize production across the district’s five local municipalities.
He also highlighted progress in the ocean and forestry economies, saying seven Port St Johns fishing cooperatives had exported two consignments to international markets while a 17ha commercial forestry project at Malangeni in Lusikisiki had recorded its first harvest.
The municipality’s organisational structure had meanwhile been reduced from 11 to six senior management positions and from 2,054 to 1,745 posts overall as part of its restructuring programme.
Reflecting on the municipality’s position when the council took office in December 2021, Ngqondwana returned to a metaphor he had used at the start of the term.
“On 01 December 2021, I pleaded with everyone that we will be ‘teaching the elephant how to dance’.”
He said that by 2023 there had been signs of movement.
“To date everyone can attest that the elephant is dancing. The elephant can hear the music tune and maintain the rhythm.”
Ngqondwana said the turnaround had depended on collective leadership.
“What has been important is collective leadership and wisdom to achieve what one couldn’t believe cannot be achieved.”