{"id":807717,"date":"2025-01-21T19:00:00","date_gmt":"2025-01-21T17:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=807717"},"modified":"2025-01-24T14:55:33","modified_gmt":"2025-01-24T12:55:33","slug":"one-of-south-africas-most-important-secondary-cities-crumbling-in-front-of-peoples-eyes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/807717\/one-of-south-africas-most-important-secondary-cities-crumbling-in-front-of-peoples-eyes\/","title":{"rendered":"South Africa’s ‘Platinum City’ is crumbling in front of people’s eyes"},"content":{"rendered":"\n

The Rustenburg Local Municipality (RLM) is experiencing a severe service delivery crisis, with residents grappling with persistent water and power outages and a decline in essential services.<\/p>\n\n\n\n

Rustenburg is the most populous city in North West province, home to ~600,000 people, and was one of the official host cities of the 2010 FIFA World Cup.<\/p>\n\n\n\n

It is also home to the world’s largest platinum refinery and some of the world’s largest platinum mines, which is why it is known as the Platinum City.<\/p>\n\n\n\n

Nestled at the foot of the Magaliesberg mountain range, Rustenburg is a key regional commercial and economic hub and a significant city to support the surrounding businesses.<\/p>\n\n\n\n

Concerningly, the city is facing mounting reports of financial and political woes, coupled with ageing and neglected infrastructure.<\/p>\n\n\n\n

These problems have created a perfect storm of service delivery challenges, bringing many residents and businesses to their knees.<\/p>\n\n\n\n

BusinessTech travelled to Rustenburg to speak to residents and see the city\u2019s problems first-hand.<\/p>\n\n\n\n

Residents and business owners told BusinessTech that the supply of water and electricity is intermittent, and sanitation services are subpar.<\/p>\n\n\n\n

“We had to dig deep into our pockets to get generators and borehole water. If it was not for that, our business would have had to close ages ago,” a Bed and Breakfast owner said.<\/p>\n\n\n\n

“Our streets are in the dark at night, which is very unsafe, either from power cuts that can last days or from cut down street poles that never get fixed,” street vendor Prudence Makgadi said.<\/p>\n\n\n\n

Two families said their house floors had been covered in sewage after municipal drains were blocked, and it took several days to repair.<\/p>\n\n\n\n

Ward councillors echoed these woes, raising concerns about the impact this has and will have on the business environment.<\/p>\n\n\n\n

DA Rustenburg caucus leader Luan Snyders told BusinessTech that the party believes that Rustenburg is on the wrong track.<\/p>\n\n\n\n

“Service delivery has seen a significant decline, and this is hurting both residents and businesses,” said Snyders.<\/p>\n\n\n\n

“Rustenburg is following in the same footsteps of Lichtenburg, where Clover had to close up shop because of a lack of electricity and water,\u201d councilor Nelio Nhacuangue said.<\/p>\n\n\n\n

They added that the city needs to urgently turn this around if it wants businesses and investors to pick the city as their home.<\/p>\n\n\n\n

Ageing and poorly maintained infrastructure<\/h2>\n\n\n\n
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The official opposition in the council and province, the EFF, has recently claimed that many basic municipal functions like service delivery “had collapsed.”<\/p>\n\n\n\n

Many of Rustenburg’s service delivery challenges are said to stem from ageing, poorly maintained infrastructure, and a significant revenue shortfall due to non-payment and inefficient revenue collection.<\/p>\n\n\n\n

Non-payment costs around R140 million monthly, and an additional ~R50 million is lost due to bulk service distribution issues. Together, these amount to nearly R2 billion annually, or around 25% of the revenue budget.<\/p>\n\n\n\n

The long-term financial plan (LTFP) for RLM prepared by INCA Portfolio Managers highlights this, and notes an “alarmingly low collection rate, deteriorated from 86% in FY2018 to 69% in FY2021.”<\/p>\n\n\n\n

The Rustenburg municipality’s infrastructure index of 0.77 also shows that it cannot meet the growing population’s needs.<\/p>\n\n\n\n

The LTFP stresses the importance of addressing revenue collection and cost containment to fund infrastructure repairs and increase investment in maintenance for sustainable growth.<\/p>\n\n\n\n

Councilor Pieter Malan argues that a lack of political will to enforce payment and implement service cuts worsens the situation, leading to further underfunding and deteriorating infrastructure.<\/p>\n\n\n\n

Rustenburg also faces issues with incomplete projects, which significantly impacts service delivery.<\/p>\n\n\n\n

This was evident in several delayed or unfinished projects across the city, where the money was essentially wasted.<\/p>\n\n\n\n

One example is the Rustenburg Rapid Transport system, which is not yet fully operational thirteen years after its official launch in 2011.<\/p>\n\n\n\n

The project has surpassed the R3 billion budget, and only certain segments have been completed. In October 2024, the RLM said the project “will soon be finalised.”<\/p>\n\n\n\n

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Big projects more susceptible to corruption<\/h2>\n\n\n\n

Malan said the preference for capital projects over operational expenditure further exacerbates infrastructure issues.<\/p>\n\n\n\n

Often funded by national government grants, capital projects are perceived as more susceptible to corruption.<\/p>\n\n\n\n

This focus on capital projects comes at the expense of crucial maintenance work, leading to a backlog in infrastructure upkeep.<\/p>\n\n\n\n

Currently, the municipality spends only 1% of its installed asset base on maintenance, falling far short of the National Treasury’s 8% directive.<\/p>\n\n\n\n

While Rustenburg does not owe any outstanding amounts to bulk service providers, it remains trapped in a stagnation<\/strong> cycle due to the abovementioned issues<\/span>.<\/p>\n\n\n\n

The audit of Rustenburg Local Municipality’s financial statements for the year ended June 30, 2024, resulted in a qualified opinion due to multiple material misstatements. <\/p>\n\n\n\n

Key findings include:<\/p>\n\n\n\n