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The City of Johannesburg, plagued by water and electricity outages due to infrastructure degradation and a lack of maintenance, had only spent 49% of its R8.43bn capital budget for 2025/26 by end-March, significantly below its 70% target by this stage. But MPs were assured that more of the budget would be spent in the remaining months of the financial year as budgets are reallocated and projects come on stream. In parliament on Tuesday, Johannesburg mayor Dada Morero described the city’s challenges as “structural, systematic and financial”. He stressed in reply to a question by ActionSA MP Alan Beesley that MECs had to be appointed on political grounds based on their political ability to deal with matters affecting the city rather than being experts in a particular field and that they are expected to “learn on the job”. The decaying infrastructure and lack of maintenance contributed to a total revenue loss of R8.5bn in the 2024/25 financial year, R5.7bn due to electricity and R2.8bn to water, consuming about 10% of the financially distressed metro’s budget and placing its future sustainability in jeopardy. However, there was a sharp improvement in electricity revenue losses from 40% in the first quarter of 2025/26 to 28.4% in the third quarter. Morero noted that Johannesburg Water faced losses of about R3.8bn in nonrevenue water (44.7%) and City Power’s total losses on electricity were about R5.7bn. The mayor gave these details in an engagement between a delegation of Johannesburg city executives and parliament’s standing committee on public accounts and the co-operative governance and traditional affairs committee on the city’s audit outcomes for 2024/25. Beesley said the city’s performance on infrastructure development is an “indictment” but city manager Floyd Brink emphasised that the city is working on renewal. Group CFO Tshepo Makola said the end-March position in capital expenditure was due to delayed procurement, site constraints, contractor performance and project readiness issues. He stressed the need for funding for investment in electricity and water infrastructure to reduce the losses, noting that the capital investment backlog at Johannesburg Water is about R32bn over the next 10 years and City Power at about R45bn. “Those numbers cannot be only financed from the balance sheet,” Makola said. Addressing the R10.3bn wage agreement, which finance minister Enoch Godongwana said in a letter to the city was unaffordable and contrary to the Municipal Finance Management Act, head of group corporate services and shared services Mbulelo Ruda said that the agreement was about justice, redress and institutional stability. Payments under the agreement were made conditional on the affordability and sustainability of the city’s finances.Brink said expanding revenue and improving cash collection are being implemented to improve liquidity, reduce impaired debts, and put the city on a path of financial recovery. Collecting debt is critical, he said. He noted a big improvement in revenue collection from 71% in January to 90% in April, with the trajectory looking positive. The city is working with the SA Revenue Service (Sars) to improve its revenue collection. Creditors at end-May stood at R7.5bn. A council-approved turnaround plan is in place for City Power focused on losses, billing and collection and expenditure control and Brink is confident that the entity can be turned around. Also under focus was the R13.3bn in unauthorised, irregular, fruitless and wasteful expenditure in 2024/25, down from R23.6bn the previous year. However, new unauthorised expenditure remains at about R9bn annually, which MPs were told indicates systemic financial management challenges in the city.Makola told MPs that the city has been engaging with the Treasury about this expenditure. It will table a strategy to deal with it with the council at month-end, thereby avoiding the Treasury withholding its July equitable share allocation.
