BNC#8: South Africa is breaking — Cilliers Brink on the collapse no one wants to talk about

Speaking at BNC#8 in Hermanus, Cilliers Brink - DA mayoral candidate for Tshwane - delivered a sharp warning on the growing threat of collapsing municipalities in South Africa. He argues that failing local governments undermine personal liberty by wasting taxpayer money and neglecting critical infrastructure. Drawing on his experience in office, Brink highlights mismanagement, political instability, and shrinking capital budgets as key issues. He proposes increased private sector involvement and long-term partnerships to restore service delivery, rebuild infrastructure, and prevent further economic and institutional decline..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the keynote speech.Alec Hogg (00:08:28 - 00:20:26)The last Neil de Beer Liberty Indaba contribution for today is the DA's candidate mayor for Tshwane, Cilliers Brink.Cilliers Brink (00:31:49 - 00:57:09)It is a wonderful privilege to be talking to the BizNews tribe in person. Although, Alec, as you mentioned, you put me between the tribe and food and drinks. But I'll try and make it worth your while. I do just want to pay tribute to the person whose idea was to have me here, and this wonderful, kind hearted, passionate South African, Neil de Beer.Cilliers Brink (00:57:17 - 01:06:41)And I think we can give him a round of applause.Cilliers Brink (01:06:45 - 01:49:10)So the ANC is wonderfully considerate in one sense when it wants to threaten our personal liberties. It packages its intentions in three letter abbreviated form. So if you notice this EWC , NHI and BEE. But I want to talk about a less obvious threat to our personal liberty. And that is the threat that arises because of collapsing municipalities and the inability of local government to turn tax into public goods, in particular infrastructure.Cilliers Brink (01:49:22 - 02:16:33)It has been a theme here today. Some people say we need more enclaves. Others say we need more. I don't know, Western Cape independence. And those things are good. Must happen. But I want to talk about not just the problem of the inability of municipalities to get value for taxpayers money, but some of the solutions. That doesn't necessarily depend on enclaves because unfolds must happen.Cilliers Brink (02:16:33 - 02:44:19)And folks who do things for themselves to protect themselves against state failure, that must happen. But I would much rather prevent the system from collapsing entirely. Entirely. Because if we're honest with ourselves, we're here. And I had a minus. If you've got a lot of money, you can protect yourself against state failure. But even in some instances, people with a lot of money lose that money because their businesses aren't rigged.Cilliers Brink (02:44:31 - 03:17:03)Not the type of businesses that can survive the collapse of a municipality. So I want to talk about that. But let me start with my experiences as mayor of Tshwane. I served in that, a position for about 18 months, very intense and consequential. I was removed from that position, as were the DA and our coalition partners by, an alter ego of a gentleman who spoke to you earlier today.Cilliers Brink (03:17:07 - 03:49:23)Alter egos, called ActionSA. And, since they've taken over and and basically handed over the city to the ANC and the EFF we've had more power outages since Eskom load shedding, the money spent on water tankers, as opposed to water in your taps has increased from less than R200 million to more than R777 million in that one year in which the ANC took back its 20.Cilliers Brink (03:49:27 - 04:18:01)They gave us a deputy mayor who openly does business with the city, openly benefits from contracts and Herman Mashaba's mayor does nothing. So please, I want to warn you, stay very, very far away from that gentleman, because whatever he does with donor money, whatever he achieves, whatever he achieves with donor money in politics, he promptly then hands over back to the ANC.Cilliers Brink (04:18:05 - 04:40:17)And if you know people from Pretoria, they'll tell you that. But let me get back to the point. I was elected late on a Thursday evening, and the very next day I had to appoint a mayoral committee, and our first order of business was to put together a budget for the city. In the turmoil of our coalition politics.Cilliers Brink (04:40:21 - 05:21:29)The city was without a mayor for two weeks, but also without a draft budget. And at the mayoral boardroom table, there was a, bespectacled man from National Treasury whose appearance was as bleak as his assessment of the city's finances. And he basically told us, you guys don't have the cash flow and the revenue to sustain, or to pay a 5.6% salary increment to municipal staff that had been negotiated, by collective agreement at national level.Cilliers Brink (05:21:33 - 06:14:18)He didn't have to tell us. We thought we knew it. And from that came a very difficult decision, which defined much of my mayoralty, and that was to apply to the bargaining council for an exemption not to pay this 5.6% increment, about 600 million rand. What followed was that all hell broke loose. We had a three month long, violent unprotected strike with trash heaping up on the pavements, but ultimately we won in the labor court and that saving of 600,000,000 in 1 year enabled the city to reach a favourable payment arrangement with Eskom because, by the way, they wanted salary increments while the city was in arrears with Eskom.Cilliers Brink (06:14:22 - 07:01:11)But that entire experience also opened my eyes to something else that is very consequential. If we look to the future, the decision not to pay the increment wasn't just a budgeting decision, it was a moral decision. Because tax, if salary increases for municipal officials, doesn't come from a municipality, it comes from increases in rates, tariffs and charges. And the more money you spent on consumables as a municipality, salaries, contracted services, water tankers, the less money you can spend on infrastructure.Cilliers Brink (07:01:15 - 07:33:02)And if you want to understand the municipality, it's at its best. For instance, this municipality. It is because it is an engineering organization. It prioritizes the spending on infrastructure. And over many years, money has been spent on other things, except for putting stuff in the ground that sustains the services. So how did we get here? Not just in 20, but municipalities in general.Cilliers Brink (07:33:06 - 08:06:31)Helen Zille would probably say it's politics, stupid. And that is exactly the background in Tshwane. Until 2016, Swan was governed by a series of ANC mayors, each of them had a majority in the council to make the most consequential decisions for the municipality budgets, personal discipline, long term contracts, all of those things, and made all of those decisions unmade by the mayor.Cilliers Brink (08:06:34 - 08:34:33)They are made by the council and the ANC in that period of time shaped Tshwane as it did many other municipalities, in ways we are still trying to undo after 2016, when the ANC lost its majority and Tshwane in many of these other cities, they were replaced by DA mayors and coalitions who might have had very good intentions.Cilliers Brink (08:34:33 - 09:09:32)And I can tell you, I was part of Solly Msimanga's team. Very good intentions. But we lacked the council majorities to undo the entrenched corruption and the changes to personnel and policy needed to move the city forward. You had chaotic coalitions, and when we finally did get coalition partners, that gave us a majority like Mr. Mashaba, he promptly, at the first opportunity, handed power back to the very people that had broken the city.Cilliers Brink (09:09:36 - 09:31:00)But let's move on from the politics, because if you want to understand what's really going on in a municipality, the predictor of whether things are going to improve or not, you look at the size and size matters in politics, but you look at the size of the capital budget.Cilliers Brink (09:31:04 - 10:12:28)That is the most important indicator of your success. It is the money that you use to build and upgrade power grids, water networks, landfill sites, roads, all of the stuff that delivers the services. And it's also the surest sign of whether or not a municipality has the capacity to turn tax into public goods. Because remember, as I said, once a municipality loses that capacity to turn tax into public goods, it becomes very difficult to fix the place.Cilliers Brink (10:12:32 - 10:26:03)And then tax becomes a kind of an arbitrary deprivation or arbitrary, deprivation of property, property rights.Cilliers Brink (10:26:07 - 10:57:28)And I want to use the size of capital budgets. Comparing Cape Town to Tshwane. In 2006, Helen Zille was elected mayor of Cape Town. At that point in time, Cape Town's capital budget. Remember the pot of money that you have for putting stuff in the ground that sustains the services? Cape town's capital budget at that stage was about 2.6 billion rand and Swann is capital budget was about 1.9 billion rand, 2.61.9.Cilliers Brink (10:57:32 - 11:30:35)This is in the year 2006. So Cape Town a little bit bigger, but almost there. Ten years later, in 2016, Cape Town's capital budget was 6 billion and so on is capital budget was just under 4 billion. So the gap had narrowed a little bit, but it's almost in the same range this year. 2026 Cape Town's capital budget is 13 billion.Cilliers Brink (11:30:39 - 11:58:06)And guess what? The city of Tshwane is 2.5 billion. Jordan Hill Lewis tells me that Cape Town spends more capital budget in Bellville than the entirety of the capital budget of the nation's capital, and that is the result of, on the one hand, years and years of good financial management. And you want to ask me, where is the DA on malfeasance?Cilliers Brink (11:58:10 - 12:23:40)Well, where we govern, we shut it down, we shut it down. And the proof of that is in the city of Cape Town. We can have another conversation about the Government of National Unity if you give me another half an hour. But I don't only have 13 minutes left. So what Cape Town did is they took water money and they ringfenced it and they reinvested it in the water infrastructure.Cilliers Brink (12:23:44 - 13:02:16)They took electricity money, they ringfenced it and they upgraded the electricity infrastructure. They took waste collection money, they ringfenced it and they upgraded the landfill sites and the other infrastructure to keep the streets clean. In Tshwane and most other places. That money went into a big pot and they also called trading services the money that you are meant to reinvest in the underlying infrastructure went to subsidise stuff paying salary increases, paying contracted services, blowouts on security companies and water tankers.Cilliers Brink (13:02:20 - 13:34:26)And that is the fundamental difference. But we are not Cape Tongue in 2006, I can't just take Helen Zille as plan of government, which she adopted back then and dusted off and try and fix the institutions of Tshwane municipality. And the same is true, probably of Johannesburg. Helen Zille can't implement the Cape Town plan of 2006 and hope to succeed in Cape Town and in Johannesburg in 2026.Cilliers Brink (13:34:30 - 14:07:36)We have to find a way of getting massive increases in capital investment and upgrading infrastructure in a short space of time, because the time is so limited and the state of the infrastructure is in such a state of decline, we don't have two decades to fix things. The the pull yourself up by your bootstraps kind of way. So and this is what I want to share with you a new approach to infrastructure.Cilliers Brink (14:07:40 - 14:44:48)What is Operation Vulindlela. Now, I know this gathering here is not very warm and fuzzy towards what's happening in national government, and with good reason. But at least the thinking and the arguments, the concessions are being made in national government that the state by itself cannot fix the ports, cannot fix the railways. We need to do what the rest of the world does, and put private concessionaires in charge of these assets to unblock the traffic, to get the trains going, to make sure that our goods on stuck in the harbours.Cilliers Brink (14:45:02 - 15:24:23)That is a key to getting our economy growing. And that is a very important concession made by a statist and power hungry ANC in government. The same thinking we are going to have to start applying to very complex municipal functions. We will have to bring in private sector investment, but more importantly, private sector operational control into municipal water, into municipal electricity and into municipal waste collection.Cilliers Brink (15:24:27 - 15:51:32)Having made this decision that your trading services have to be ring fenced and that that money must be reinvested in the underlying assets it own, it is only logical that you would get expertise that you don't currently have in government. Now, this is not the same as saying let's just give another contract to a tender pioneer. This is saying 15 to 20 year public private partnerships.Cilliers Brink (15:51:44 - 16:25:35)Public private partnerships are very, very overregulated and complicated. Treasury almost has a veto on whether it likes the triple b or not, but you can structure it in other ways that involves a private sector operator. And this is not just a libertarian fever dream. We have seen this being implemented in parts of our country. South Africa has got two private water concessions, both concluded in 1999, before the very a complicated Municipal Finance Management Act.Cilliers Brink (16:25:39 - 16:37:47)And if you look at those two jurisdictions, it's Ballito and Nelspruit . By the way, anyone here from Ballito and Nelsprit. Okay, at least one person.Cilliers Brink (16:38:00 - 17:10:04)And the blue drop status of water in those jurisdictions, or the status of water in those jurisdictions is blue drop. Oh, I know most people don't know what that is. It means the water's fairly clean. It's good. The water losses in those jurisdictions are lower than most municipal, water service providers. And importantly, the collection rate, the payment rate which you need to sustain that infrastructure is, on average, higher.Cilliers Brink (17:10:08 - 17:43:32)So that concluded in 1999 there, I think, to expire in 2029. Not perfect. I think they have to be renegotiated a few times, but it's amazing how in with the unrest in KwaZulu-Natal and the plague that hit them, the floods and all sorts of things, Ballito municipality was able relatively quickly to rebuild its systems, while the neighbouring Durban Municipality, I think now still has damage it hasn't fixed.Cilliers Brink (17:43:36 - 18:17:22)I want to mention another example, and that is electricity on a smaller scale, but there are two dorpies in the Free State way. The municipalities, not the municipalities, decided to grant management agreements to a private company called Rural Maintenance. Now I have no interest in rural maintenance. My only my only interest is in what can be done to actually upgrade infrastructure handed over the electricity networks to this company.Cilliers Brink (18:17:26 - 18:43:17)They took over in one instance, I think the instance of Frankfurt, Mafube, they took over some of the municipal staff. They didn't just fire people, they took over the municipal staff. They use technology to detect where electricity was being lost. They upgraded piece for peace parts of the network. They installed meters to actually see whether the municipality is getting a fair deal from Eskom.Cilliers Brink (18:43:21 - 19:13:17)And they got a great deal more productivity from folks who, in ordinary circumstances would be said, no, you are incompetent, you can't do the job, etc. and within months they were able to reduce, electricity distribution losses. In, in that municipality. And it was more recently done in Springbok as well. I think the, I think the name of the municipality is called Nama Khoi.Cilliers Brink (19:13:21 - 19:50:13)So these are small places, small examples. But if we are serious about rebuilding infrastructure, reducing distribution losses and making sure that we don't, we are not trapped with our assets in in failing municipalities. It's the kind of thing we have to explore going forward. It is a very important question that I have asked myself. What would you do differently if you had the opportunity to come back as the mayor of Tshwane?Cilliers Brink (19:50:14 - 20:22:38)It's an important question. It requires a great deal of self-sacrifice and, self-reflection and honesty. And I can tell you that is what we have to do differently. It's the only way we're going to get upfront capital investment and the expertise which government now doesn't have the technical engineering expertise required to improve services and infrastructure in a short period of time.Cilliers Brink (20:22:42 - 20:59:46)And I will give you five minutes to spare. But let me conclude with this. I am hopeful for South Africa. I am optimistic, despite all of the bad stuff and the negative vibe that that unfortunately, is part of the reality of being a South African. We have some pretty impressive people in this country who love this place, haven't left, and whose skills and expertise can be used to make this a better place and to create a future for our children.Cilliers Brink (21:00:00 - 21:23:34)There is nothing wrong with South Africa at this point. We might we might still get pretty bad if we don't do things differently soon. But at this point in time, in this year of a local government election, I am convinced that there is nothing wrong with South Africa that cannot be fixed with what is right with South Africa.Cilliers Brink (21:23:46 - 21:25:20)Thank you very much.

BNC#8: South Africa is breaking — Cilliers Brink on the collapse no one wants to talk about

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