Delivered by Amathole District Municipality (ADM) Executive Mayor Cllr

Khanyile Maneli on 13 January 2021

Thank you for coming and good morning

On the 8th of January this year, ADM through the Accounting Officer issued a circular
advising our staff and Councillors that the municipality will not be in a position to pay
salaries for the months of February, April, May and June citing the root causes and
the cash constraint challenges being faced by the municipality which had been
continuously raised in the diagnostic report that led to the adoption of a Municipal
Turnaround Strategy by ADM Council. Already, I had brought this matter to the
attention of the relevant National and Provincial Government Ministers and MEC
seeking assistance.

This is obviously an unprecedented situation in the history of this municipality and it is

no wonder it has generated so much uncertainty not only to the workers of this
organization but to the community at large about the ability to render services in an
efficient and effective manner under these circumstances.

We have, on a number of occasions, sought to give a detailed background as to how

the municipality has found itself at this unfortunate point and I want to take this
opportunity as the leadership of Amathole District Municipality to bring to confidence
the ADM Community at large on initiatives to deal with the root causes which mainly
emanated from 2013/14 fiscal affecting the financial position of the municipality.

I know that many of you would be familiar with these issues precisely because we
have been honest and transparent about them and have on numerous occasions
conducted interviews talking to them in greater detail, these are;

1. The re-categorization of the municipality from a Category 6 to a 7 as per salary

scales set out by the Bargaining Council

2. The Standardisation of salaries

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 3. The introduction of the Essential Car User Scheme

4. The non-payment of Amatola Water Board debt for services rendered

5. The Non-payment of R50m due to Department of Water and Sanitation

6. Employment of over 900 people between 2013/14 financial year to 2017/18

resulting in an inflated organogram and includes functions not strategic to the
operations of ADM.

7. Low revenue collection due to drought as it limits the ability to provide reliable
water supply.

It is these key decisions which were inherited in the commencement of the 5th Term
of administration that had and continue to have direct and indirect impact to the Cost
of Employment.

The adoption and implementation of our Municipal Turnaround Strategy with its eight
development pillars has mainly focused on the Institutional Development and Design,
Quality Service Delivery and a sound financial organisation. One of the key
instruments which we have been utilizing is the 3 year financial recovery plan that we
developed with the Municipal Infrastructure Support Agent (MISA) in consultation with
provincial treasury. However, the key cost drivers as stated earlier continue to put the
institution under pressure hence we are in this position.

Some of the key decisions which we have taken as ADM have been the review of
Employee Benefit policies with the intention of bringing down the high cost of
employment. It is unfortunate that in its implementation there has been an interdict by
the Labour Court and as such we have to comply with.

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We have entered into payment arrangements with our top ten creditors including
Amatola Water Board to ensure there is no disruption of services to our people in areas
which they service.

The strained relations between management and labour remain a focal point which is
being addressed in order to navigate these challenges as they remain a key resources
in ensuring that the mandate bestowed by ADM Communities is realized. The unlawful
industrial action by ADM employees affiliating to SAMWU has set back the institution
by R19 million. This amount was for additional capacity in an effort to ensure business
continuity in terms of rendering of services to our communities, whilst some was
directed to the deliberate infrastructure sabotage that was on the rise during the strike.

With reference to service delivery, with challenges caused by the persistent drought
disaster which has been declared since 2015 and now COVID-19 pandemic, Amathole
District Municipality has taken strides in accelerating services to the community
through the initiatives such as installation of plastic water tankers, carting of water from
the various sources to bring it closer to our communities.

The drilling and equipping of boreholes has been conducted with its own challenges
such as boreholes that produce water that is not fit for human consumption, dropping
of a yield in some boreholes thus giving less litres of water than what is
required. Water conservation and Demand management initiatives have been
implemented throughout the District.

ADM has identified long term sustainable water solutions in each of the local
municipalities and through the District Development model we have had a
breakthrough in realization of these sustainable solutions. These include the
Ngqamakhwe Regional Water Scheme, which will address the challenges faced by
Mnquma Local Municipality residence and the gazetting of the construction of
Foxwood Dam in Raymond Mhlaba Local Municipality which will bring much needed
relief.

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We are continuously lobbying for financial and non-financial support and working
together with Department of Water and Sanitation that with the limited resources these
projects are prioritised and funded.

Let me say that ours as political leadership is to provide leadership and leave no stone
unturned in finding solution to all challenges which have a potential to deliver the
municipality into a state of disarray.

We will never stand on the sidelines and watch workers plunge into debt and
poverty. Hence we have always maintained the need for open and honest discussions
between all parties involved to work together to find common ground.

When we took office as this council, our mandate was a clear one - to restore the
district to its former glory.

The envisioning of an Amathole Smart District towards 2058: Building a Smart District,
enables us to make strides and continue regardless of the challenges and limited
resources that we have at our disposal. This is the promise we have made to the
people of Amathole and we dare not fail.

The situation we are facing today, forces our hand to act fast and implement what I
want to call 'Life-saving decisions'. Decisions to save the Institution and protect the
workers and their families.

Interventions from the Provincial and National government and other partners must
find people that are willing to self-correct and people who are honest about their
challenges. This is where we are.

We want to assure our workers that we will continue to engage with their labour
representatives to find another and work together to get out of this quagmire.

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We want to assure the people of Amathole that even under the difficult we face; we
will continue to provide quality services to our communities. This, I say, knowing very
well the challenges we are facing which are not insurmountable.

No matter the challenges, no caring government will allow a situation where our
institutions of government collapse and workers suffer.

As the political head of the executive I have full confidence in the leadership of the
municipal manager and his entire executive in the implementation and monitoring of
vision 2058 and municipal turnaround strategy adopted by council

Together, we will navigate these storms and emerge wiser and stronger. I Thank you.