Robert Winn & Eric de Jager: Knysna on the brink - after 19 Municipal Manager changes…

Knysna Municipality has had 19 changes of Municipal Manager in four years. It has 111 critical positions unfilled. In this interview with Chris Steyn, The Accountability Group’s (TAG’s) Robert Winn and Eric de Jager share the alarming details revealed by a review of Knysna Municipality's January 2026 Section 71 report and the February 2026 Final Adjustment Budget: A surplus that vanished overnight; liquidity that is overstated; suppliers being paid late; repairs and maintenance below sustainable levels; staff costs signalling structural distress; outsourcing replacing capacity at escalating cost; and grants being returned unused. TAG will now use legal frameworks “to bring… accountability and make sure that we can get the answers that the residents deserve”..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 at 5:30am 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.Download and Read the TAG reports on Knysna’s budget in full here.Edited transcript of the interview.Chris Steyn (00:01.381)Knysna is at a turning point. That is according to The Accountability Group. Here to tell us more is Robert Winn and Erik de Jager. Welcome both.Robert Winn (00:13.69)Thank you.Chris Steyn (00:15.769)Robert, let me start with you and ask you what the state of service delivery is like in Knysna at the moment.Robert Winn (00:24.014)At the moment, Knysna is struggling to deliver a lot of its services. I mean, if you go across the municipal dump, it's piling up. We're struggling with our sewage pump stations that are flooding into the estuary and polluting it. And you can see that in their report to the E. coli. And with the burst pipes, getting those fixed, those have come right quite well with it, especially with our province coming in and helping us out. And that has made a huge difference to actually reduce our water consumption. The thing is without provincial help, we are struggling. In the budget you can see it, it's very clear.Chris Steyn (01:02.095)Well, you have reviewed the January and February budgets. May we start with what you found when you looked at the surplus?Robert Winn (01:10.964)When you look at the surplus, I mean, it was wonderful last year when the budget was first announced and we have a 234 million Rand surplus and it's like fantastic. Okay, great. We can start putting some of this money into the infrastructure,you know, boost our basic services. And then lo and behold, when we check the adjustment budget, that surplus has collapsed to 14.4 million. And I mean, great, we still have a surplus. But then when you take into the NEMA funds and NEMA is the National Environmental Management Act. And it's the cornerstone of South Africa's environmental law and designed to ensure that the environment is protected for us. So those fines at the moment are sitting at 30 million. And unfortunately, with our infrastructure failures at various pump stations, it's flooding our estuary. So NISA has been fined because of those violations. And I've heard via some sources that it actually could be up to 200 million plus. And when you take that into consideration, I mean, the 14 million rand surplus means nothing. So as soon as those funds kick in, we have big problems.Chris Steyn (02:13.637)So what is the state of liquidity then?Robert Winn (02:18.317)I'm going to hand that over to Eric to give us a look.Eric de Jager (02:21.631)Alright, the key benchmark in terms of liquidity is what they call the current ratio. Now, the current ratio, blow their trumpets and say that it's actually doing very well. But in reality, it takes no account of the debtors book. We've got a huge debtors book of some 600 million. Around about 400 million of that is dated. So it's unlikely to be recovered. So you've got a...It's actually not a true reflection of the situation. What you find is that you've got, even if you take your debt that is over 12 months old, you've got a current ratio of 0.82 cents. So you've got 82 cents of assets and one rand of liability. So the liquidity situation, if you take a true reflection, taking account of your debtors book, they're in financial distress.Chris Steyn (03:23.823)What is the situation with suppliers?Eric de Jager (03:27.659)There's not a lot of transparency in the municipality. The actual ageing of debtors, which should be accounted for each month, has been blank for eight months. So that particular document is just blank. If you dig around, what they have is a performance assessment that comes in at half year. And it's called the S72 performance assessment.If you look in there, you find that debtors are currently running, creditors are currently running and being paid 84 days. So people are not getting paid, it's as simple as that. The money is going to salaries.Chris Steyn (04:13.208)Meanwhile, progress is being made with infrastructure renewal?Eric de Jager (04:17.686)Very little because infrastructure actually suffers under this particular situation. There isn't any money for infrastructure. So we estimate that infrastructure should be about 194 million Rand a year in terms of renewal and maintenance.In fact, it's about 40 to 50 million. So the backlog is just growing enormously. So if you go back three years and you take 140 million Rand backlog per year, you're already at over half a million Rand, half a billion Rand.Chris Steyn (04:50.36)You mentioned staff salaries. What costs are involved when it comes to the staff?Eric de Jager (04:56.502)If you take the staff salaries, it's about 400 million, it's just under 400 million rand. Now, there's a magic number that Treasury uses, that staff costs as a percentage of operating costs should not exceed some 40%. If you just take the staff costs as they currently are and you take the debtors book, and the money that could be recovered out of the actual cash flow, you find that they're at about 45%. So, staff costs are escalating, they're becoming unmanageable, it affects the infrastructure, investment in infrastructure, and that's what happens.Chris Steyn (05:45.284)What is the state of outsourcing?Eric de Jager (05:49.931)Well, when it comes to outsourcing, again, transparency is not evident. So you don't know the exact amounts of money that are used in outsourcing. But we estimate that it's about 173 million Rand per year and growing fast. Now, outsourcing essentially is a more expensive business model. If the municipality insourced the expertise and built their own capacity, that would be the ideal world where you're getting efficiencies coming into it. They're not. They're outsourcing. And you just don't know really where the money is going.Robert Winn (06:27.597)Absolutely.Chris Steyn (06:27.908)Grants, how are those being handled?Eric de Jager (06:30.902)The grants, well if you have a look at the grants, the grants that were given to us about two years ago weren't done in the first year, so they were not taken account of in the first year, and they asked for the grants to be renewed. And when they were renewed, no work was done, the grants weren't used. And some of the interesting grants, I've got a couple of notes here which I can refer to. The municipal infrastructure grant was 4.8 million and technical services should have attended to that. The Integrated National Electricity program was 8.8 million. That was also returned. And the neighbourhood development partnership was 5.7 million. That was also returned because the work just wasn't done. There was no capacity to do the work.Chris Steyn (07:21.902)Back to you, Robert, how would you summarise this?Robert Winn (07:25.197)So in order to summarize this, I mean, like, and especially being a resident and being involved in this for quite a while, trying to understand what is actually going on behind the scenes, because you're seeing the service levels drop and seeing those kinds of things collapsing. We've seen areas without water. I mean, they spoke in one of the news things that I spoke about, that I watched was that water shedding is a new load shedding. And we're experiencing that. We have had certain locations like Brenton-on-Sea without water for four days. I mean, people canceling their Airbnbs because there's no water. So the state of affairs is really bad. And when you look at the finances, the finances and the way that they're presented, everything looks great. It looks fantastic. The budget is funded. We're so happy. But then we're not experiencing that on the ground.And that's the thing that we at The Accountability Group are trying to do is trying to create more visibility for the average resident to actually understand what is actually going on. We see the degradation. We see things collapsing. You see, I mean, last year there was a leak down the road that ran for four months, unattended to. We have 8,000 meters that aren't actually being built because they don't work. Those still haven't been replaced. They're still part of a process that they're trying to get those things now done. But I mean, it's ages now. They've known this stuff for a very long time. So when we look at this budget, it just doesn't make sense. We have a surplus, yet we're not seeing any replacement of actual infrastructure. At the moment, it looks like the municipality is struggling just to deliver basic services, like when a pipe burst, just to repair the pipe it seems that they're struggling. And one of the biggest things is once they've fixed the burst pipe, they don't repair the road. The roads remain dug up and eventually they send someone that comes out and puts a little thin painted coat of, I'm not sure exactly what it is, but it's not folded tar, it's that black bitumen that they, I think they just painted on to try and stop the rainwater washing away all the sand. So it's really bad. And I mean, if you look at our streets, it is getting worse and worse and worse. Now if we've got a funded budget, why are those things the way that they are?Robert Winn (09:44.575)Is the question that we ask.Chris Steyn (09:47.502)And why do you think that is?Robert Winn (09:50.657)Well...Robert Winn (09:57.528)The reason why this is happening is because it was actually highlighted in the mayor's report where there's 111 critical positions unfilled. So there you go, we don't have the staff on the ground to be able to actually do that. And then what's quite clear in their budget that they haven't budgeted for it, they're not spending what needs to be spent. I mean, our expenditure on infrastructure, 0.5 % and Treasury recommends a minimum of 7%. So it's very clear that the municipality is not spending the money where it's supposed to be spent. As Eric highlighted, the money actually gets spent on salaries. That's 47 % of our budget is going towards salaries when you take into account the $600 million that is basically owed to the municipality. So it's very clear that the municipality is struggling to actually within themselves get done what needs to be get done: assign the budget to the right departments and having the departments having the staff to be able to carry out the actual work.Chris Steyn (11:06.456)What is The Accountability Group doing right now? What can it do?Robert Winn (11:10.765)So what we're doing, well, essentially one is trying to create these reports to be able to give the average person an understanding of exactly what's going on. Because if you go through these reports, they're a couple of hundred pages. And to try and understand where the money is going, it's incredible. We actually had a resident who's a qualified accountant and is now retired in Knysna now. He sent through 49 questions and has not gotten an answer to one of those questions yet. And this is really concerning them. And this is a long time ago. This is already the middle of last year when the first budget basically came out. And we're like, OK, what is happening here? You've got an incredible surplus here, but we don't understand all these other little charges and figures. And we just can't get those answers. So what The Accountability Group is going to do is going to go and PAIA that information to try and dig in and actually find out and understand why are we in this situation. And hold those people accountable. mean, we've had19 changes of MMS in the last four years. I mean, how can a municipality cope with 19 changes of municipal managers? It's impossible. And that's the kind of thing we need to hold those people accountable that is not allowing what needs to happen, happen. And through legal frameworks, we're to be basically using those, the law, the way that we can in order to bring that kind of accountability and make sure that we can get the answers that well the residents deserve. I mean ultimately we are concerned residents that really care about our town and are investing a huge amount of time to try and find out why are things the way that they are because it's not necessary. Knysna was doing fine five years ago. It really was okay. It wasn't the greatest I mean but you can definitely see that it's not deteriorating at a rapid rate.Chris Steyn (13:00.92)Meanwhile, what is your advice to residents? What call are you making on them.Robert Winn (13:07.853)Our recommendation to residents is to let us know if you experience anything that's unlawful. And what we're also looking for is actually financial support, but that is going to come out when we present people with the reports. And what we're asking really residents is share these reports, attend the IDP meetings, attend the budget meetings, object to the budget, ask for answers.You know, if you don't understand, let's send them through, let's stand together as unified as one to try and find out why we're not getting what we're getting when they're telling us the budget is funded, yet we're not getting the services that we deserve and we are paying for. So ultimately The Accountability Group will continue to go into this detail and provide the reports to the residents and letting them know what we are busy with, what we're trying to find out, what we're trying to do. There's also like an augmentation fund that developers are needing to pay into. And that fund is then meant to be spent on infrastructure. And that is not actually happening. So at the moment, what we are doing is we're going to be approaching those developers and finding out for them if they would like to join in the action to make sure that that augmentation fund is actually ring-fenced and spent where it's supposed to be spent on the infrastructure to ensure that as the town grows, we have the infrastructure to actually cope rather than having it grow without any sustainability in terms of infrastructure.Chris Steyn (14:38.84)Thank you. That was Robert Winn and Eric de Jager of The Accountability Group in Knysna speaking to BizNews. I'm Chris Steyn.

Robert Winn & Eric de Jager: Knysna on the brink - after 19 Municipal Manager changes…

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