Retief Odendaal ran Nelson Mandela Bay for eight and a half months before a no-confidence vote removed him in 2023. Three weeks out from the 4 November local elections, with a new poll putting the DA and ANC almost level in the metro, the DA's mayoral candidate told Alec Hogg why his party has gone to court to make mayor Babalwa Lobishe personally liable for leasing a R25m municipal transformer to a private company. He laid out how a metro with cash in the bank keeps handing infrastructure money back unspent, why he says its top management posts sit empty, and why he will not sign up for another ten-party coalition. He also explained why, despite all of it, he still calls Nelson Mandela Bay the country's most fixable metro..Listen here.Edited transcript of the interview.Alec Hogg (00:02) A R25 million transformer, R250,000 a month, a lease signed in three weeks with council told afterwards. And now the Democratic Alliance wants the Nelson Mandela Bay mayor to pay from her own pocket. Accountability? Or is this just a court case that's perfectly timed for the ballot box, with voting three weeks away? Former mayor and DA candidate Retief Odendaal is with us in studio this morning. Retief, before we go any further, how long were you mayor for?Retief Odendaal (00:36) For eight and a half months. And good morning, I think I should start there. It's good to see you again, it's good to be on the show again. Yes, I was mayor for eight and a half months, and I am still the only mayor in the last 14 years that could secure an unqualified audit opinion for Nelson Mandela Bay. Very proud of that.Alec Hogg (00:54) How did you do that in eight and a half months?Retief Odendaal (00:57) Well, we got elected, and by the end of the first financial quarter we were spending at 1%. I didn't have an MMC for finance; I kept finance in the mayor's office, and I dealt with the audit queries together with the then CFO myself. And obviously, I think everybody knows that we were ousted a couple of weeks, three weeks, before the end of the financial year.So I think it's safe to say that we secured that unqualified audit opinion. A lot of work went into it. But since then it has regressed. The CFO that we then had was chased out of Nelson Mandela Bay a couple of weeks after we were ousted, and he is now the CFO of the Mossel Bay municipality. And of course the city has regressed back to qualified audit opinions, with, unfortunately, issues that haven't been dealt with.Alec Hogg (01:57) Irregularities. Yeah. I think the Mossel Bay guys are probably very happy about that. But in plain English, just tell us what's going on. You say everybody knows; not everybody knows about what's going on in Nelson Mandela Bay, Gqeberha, PE. We know you change your names a lot, but apart from that, we don't follow it quite as closely in other parts of the country. But it is an interesting place. A hell of a battleground for the election, with you and the incumbent mayor both polling at around 37%, and then there's a whole group of other parties which could well swing it one way or the other. I'm going to get into that in a moment. But this whole thing about demanding accountability from the mayor for a transformer, just tell us the story.Retief Odendaal (02:43) OK. In order to understand that, you need the background. Nelson Mandela Bay, according to a lot of people, but according to me personally, is number one for looting from the state when it comes to circumventing supply chain processes. There's about R32 billion in irregular expenditure on our annual financial statements. Now, in Nelson Mandela Bay you do not see contracts being awarded very easily. What happens is supply chain has been broken by design, and although contracts are advertised, somewhere along the line they all become non-responsive, and then contracts are appointed on deviation, mostly going back to the people that had the contracts in the past. And that's of course how you loot from the state. You make sure that the people you've got connections with continue to get the contracts, and all of those deviations incur irregular expenditure. We are number one for irregular expenditure in the entire country. Now, what Nelson Mandela Bay has done...Alec Hogg (03:51) Just stop there a minute, sorry, just to get some context. So there's more irregular expenditure in Nelson Mandela Bay than elsewhere. Where would you rank as far as budgets are concerned, compared with the other metros?Retief Odendaal (03:59) Absolutely. Well, we are obviously bigger than East London [Buffalo City]. I think we're the fifth-biggest metro. We've got a R23 billion budget, and that's nearly R52 billion in irregular expenditure, more than our annual budget at this stage. So it's a massive problem.Alec Hogg (04:24) How long does that go back, that irregular expenditure?Retief Odendaal (04:28) Some of it goes back about 15 years, so there's a significant amount of money there historically, but the city hasn't been able to deal with it. And there has been a resistance to giving effect to the MFMA [Municipal Finance Management Act] in trying to recover any funding. If I'm going to be brutally honest with you, I can't remember the last time MPAC [Municipal Public Accounts Committee] actually made a recommendation that a single cent be recovered from an official, notwithstanding this massive amount of irregular expenditure. So this city always had a stance where, if a matter was procured via a deviation and it went to irregular expenditure, but the city still got value, then it should not be recovered from an official.But you will know, probably, that there was a leading court case towards the end of 2024, which also originated here in Nelson Mandela Bay: Mbambisa and Others versus Nelson Mandela Bay Municipality. And the Supreme Court of Appeal held that no, even if the municipality got value, that irregular expenditure still needs to be recovered from officials. Now why is this? Because very often these emergencies are created. If you are responsible for the procurement of chlorine to treat our water, and as an official you make a stuff-up, you just say, well, sorry, now I've got no choice, I have to continue with the contract I had, because we would be sitting without chlorine if we don't continue with that contract.And of course that almost makes sense. You can't have a situation where there is no chlorine to treat your water. But the point is that that official deliberately caused this emergency, and now the deviation continues. And in order to act as a deterrent against irregular expenditure, the court said no, you have to recover from officials.Retief Odendaal (06:43) Now the plot thickens. About two months ago, Nelson Mandela Bay municipality, knowing that this Supreme Court of Appeal judgment should now actually be followed in all municipalities, tried to write off in the region of about R22 billion, if I remember correctly, in irregular expenditure without investigating it. And notwithstanding the fact that National Treasury wrote an advice to the mayor to say, hang on, you can't do this in terms of the MFMA, there have to be investigations, you have to consider the paperwork, you can't just have a blanket approach of writing off. Notwithstanding that advice, it was tabled in council, and luckily defeated by the DA and other opposition parties, so it wasn't written off.And it's against this backdrop that this issue of the lease of the transformer came up. If you allow me to go there, it's just the strangest thing. The mayor decided, together with the acting city manager at that stage (also remember that Nelson Mandela Bay has had even more acting municipal managers than mayors), that they were going to lease this asset to a company in Nelson Mandela Bay.And they didn't follow procurement processes. They didn't ask for expressions of interest. They solely decided that that company could use the asset. There wasn't really any investigation as to what a market-related value should be for leasing it out. They decided on 1% of the asset value, which was R250,000 a month, and then entered into the lease and alienated council's asset without even taking it to council. It's absolutely extraordinary, acting on delegated powers which clearly the mayor doesn't have. You can imagine what chaos you'd have if mayors all over the country decided they could just alienate the public's property. And as a result, because there was a lot of pushback in council, even from certain individuals within the ruling coalition...Alec Hogg (08:57) Yeah.Retief Odendaal (09:08) ...council decided to review it: a legal review, an administrative review from council's side. And this is where we said, well, we need to ensure that every cent incurred by the municipality in respect of this lease agreement, including the legal costs that council now has to incur, is recovered from the mayor and from the acting city manager, or the former acting city manager, because he's long gone. The reality is that we can't allow this to just go by without there being consequences.In addition, it would also be a case... because we're asking the court to make a declarator on whether it actually incurred irregular, unauthorised, or fruitless and wasteful expenditure, which we believe we've got a prima facie case that it does. And then to make it clear that the municipality must quantify that and must recover it in their personal capacity. And this will also be a leading case, if we get this outcome, for other municipalities, in respect of the recovery of these types of expenditure, but also personal recoveries, and making officials and politicians account personally. Because I think that over the last couple of years, regardless of where you are in South Africa, we have not really seen officials and politicians feeling the pinch. And that is what we need, in order to act as a deterrent, to make sure that those people who are guardians of the public purse act with care and protect the public purse.Alec Hogg (11:01) Yeah, it's quite a mouthful you've given us. And I think there are very few people in the BizNews tribe who would be against holding officials personally responsible. But in this case, it's such an important case. You don't want to blow this one. And the other side says Coega Steels was losing R700,000 a day, and it contributes R30 million to the public purse in the electricity that it buys. So if it's not buying electricity, Nelson Mandela Bay would actually be worse off. And the mayor's arguing that, hey, I was actually saving money for the council. You've heard that side of the story. How would you respond?Retief Odendaal (11:44) Well, I am an attorney, I'm still a practising attorney, and one has to adhere to the law. There are many arguments, service delivery arguments, that are heard here on a daily basis, companies that cry foul over municipal failures, and one can't just circumvent the law. Imagine the chaos that would ensue if we allowed politicians and officials to circumvent the MFMA and not adhere to the legislation. The opportunity for corruption, the opportunity for mismanagement: it would be absolutely chaotic.But more importantly, there were obviously recourses available to Coega Steels, and that issue should have been brought to council. An informed decision could have been taken by the entire council that could have bound the municipality, that could have obtained legal advice from National Treasury, from a legal service provider. None of that happened. And you have to ask yourself: is it because of arrogance? Is it because certain individuals thought that they're above the law, or that they've got these sweeping executive powers, which is just a myth?I find this very often. I've said perhaps our politicians also need a lesson in what kind of powers they actually have under the set of delegations that comes from council and from government, because you don't have sweeping powers, and you can't interfere and overstep the legislation and the municipal policies and bylaws. So that's very important. So no, that argument won't hold water. There were due processes that could have been followed, and it could have been done in a couple of days, and then this wouldn't have been a problem.Alec Hogg (13:44) OK. Well, that's the important part. I guess from the mayor's perspective, she's saying, I wanted to save the jobs. I was a bit panicky because Goodyear had just lost 800 jobs for the city. We wanted to make sure we didn't lose these guys, and so that's why I acted. But you're saying that she could have gone through the correct route, it would only have taken a couple of days, and she would have got the thumbs-up anyway.Retief Odendaal (14:11) Absolutely. And she would have done so on legal advice, and she would have done so with the backing of council. Remember, here's the thing: council could have taken this decision, an informed decision, and it would have been in the public domain. None of what has happened was in the public domain. And I think that with these types of things, there's a specific reason why councillors are prevented from interfering with supply chain matters and hand-picking service providers and beneficiaries of contracts. We've seen that even the deputy mayor at this stage is facing a criminal trial for hand-picking a service provider when he was the speaker of council.That, of course, is a criminal issue; this is a civil matter. But it just goes to show that it's a bit of the Wild West here in Nelson Mandela Bay, where politicians think that they are a law unto themselves.Alec Hogg (15:18) Yeah, it's interesting. It's not always the issue that's the issue, and I'm glad you painted the context for us. The most irregular expenditure of any metro in South Africa, although it's only, as you said, probably the fifth-biggest budget. And your budget's a lot smaller than Joburg's and Cape Town's, that's for sure. And with Joburg doing what Joburg's doing, to be even worse on irregular expenditure than that at the moment is quite hectic. But this has been going on for a year already, and the polls are still showing that you aren't cruising home. So what's going on? Why are people still supporting the mayor? Are they buying a story?Retief Odendaal (16:01) Well, I don't always pay too much attention to the polls. I think that in the past we've also proven some of the polls wrong. I think it is important to take note of them, but it's not the beginning and end of everything, because at the end of the day it's all on a similar turnout. I've crisscrossed Nelson Mandela Bay. We've been busy with the most comprehensive DA campaign that the city has ever seen, and it's been ongoing for 18 months. I started campaigning when I was a young man, Alec. But the reality is that on the ground people are excited. And I think that what we are going to see is that DA and opposition voters are going to come out on election day, and that ANC voters are going to stay away, or they're going to vote for alternative options.And again, I say we can't ignore the polling, and it's always been a closely contested race here in Nelson Mandela Bay between the ANC and the DA. But this time around, I do think there's tremendous momentum on the ground, especially behind the DA. But here's the thing that we must also remember: every single day in Nelson Mandela Bay, tens of thousands of people are sitting without water or electricity. We've got infrastructure collapses that are really causing havoc in the city.And my colleagues always say, but Retief, it doesn't make sense, because we see Nelson Mandela Bay actually still has money. We are one of very few big metro municipalities, if not the only one outside Cape Town, that actually still has cash reserves. And we have lost about R2 billion in conditional infrastructure grants just over the last three financial years, unspent because we haven't got the skills to spend that money. So here's a metro that has got money, that theoretically can use that money to fix its infrastructure, but just doesn't have the skills.Not a single one of our executive director positions is filled. They're all vacant. The entire top management is vacant. And we've also had a city manager that has been sitting at home for the last 33 months, earning R270,000 a month. So that tells you everything you need to know about the dysfunctionality of the city. There's nobody who takes the decisions. The politicians meddle in the administration, and the whole city is in a state of paralysis.And that's why I believe that the ANC is definitely going to find it very, very difficult to get even die-hard supporters out to the polls next month. And we have seen a remarkable growth for the DA in all communities. The question is just: are people going to pitch? Are they going to come out, or are they fed up and depressed because of the situation that we find ourselves in, not just in this metro but in other metros as well?Alec Hogg (19:32) Let's just say that the polls are right. Just humour me for a moment, and you do come out with 37% each. How strong is your relationship with the other parties? And I mention this because you've got the PA, who have a position... excuse me. You've got the Freedom Front Plus, who are there as well, and there are other parties, smaller parties, local parties, that may or may not support you. Now, you've had the experience of eight and a half months, as you told us, of running a council, and then the PA pulled the rug out from underneath you. Would you go into a coalition with them again, given what happened?Retief Odendaal (20:19) So first of all, we weren't in a coalition with the PA. Mr Gayton McKenzie just offered the position of mayor to one of our coalition partners, Mr Gary van Niekerk of the National Alliance. But it was a 10-party coalition, and I want to tell you that it was extremely difficult to manage that coalition.It was at that stage the largest coalition that South Africa has ever seen. And all of my colleagues in the DA said to me, Retief, that's not going to last, and they gave it a couple of weeks. It lasted significantly longer, and lo and behold, we could make some significant progress in that period. But here's the thing: it is impossible to govern in such a large coalition.So if we see that type of scenario again, the chaos in Nelson Mandela Bay will just continue, because we've seen nine coalitions in 10 years. Nine coalitions in 10 years, and none of them lasted. The one that's currently in place, between the ANC and the NA, is so rocky and so broken that they can't even [make a] quorum for a council meeting, and they write the most ridiculous letters and attack one another in public. So that's also a failed coalition.So in order to ensure that we stop the chaos, we need to have either an outright majority or a workable coalition. Now, what's a workable coalition? A workable coalition would be between as few parties as possible, and of course parties that have similar values and similar principles. On your question of what my relationships are like: well, I've made a point personally of not attacking any political party except the ANC. I highlight their failures because I believe that they are responsible for the downfall of Nelson Mandela Bay and the destruction of our economy. And I would say that my relationships with other parties are fairly sound, and I'm sure that should we need to put a coalition together, we will be able to put a coalition together.But I want to make it clear: we won't be able to go into a 10-party coalition again, or a nine-party coalition. The likelihood of that bringing stability to Nelson Mandela Bay is almost zero. We've been down that road. We've seen the outcome. We need to be able to get a better result. And I am confident, I'm absolutely confident, that we are going to see a better result come the November elections.Alec Hogg (23:10) So how far are the polls out?Retief Odendaal (23:14) Well, you're asking me very, very difficult questions, making me uncomfortable to answer.Alec Hogg (23:19) That's my job.Retief Odendaal (cont.) No, I know. I want to say that we are very close to that outright majority if we get a 70% turnout in our traditional support areas.We have shown that we could create structures and grow branches and excite communities where the DA has never had strongholds, where we never had strong support, purely because of collapsing services. I don't think that people understand that some communities in Nelson Mandela Bay, certainly informal settlements, are sitting without water, sometimes for months at a time, and without electricity for months at a time. And this is not some obscure, small, bankrupt municipality in the rural hinterland. It's a metro municipality. It's got no shortage of funds, theoretically, because it's sending money back to National Treasury.So I think that what we are going to see here is a very, very exciting result. And I am working flat out to try and get the DA as close as possible to that 50%. As I say, the reality is that it's not going to be easy. We know that, and we have to take note of what the polls are. But I think that we also realise that the polls are done on depressed voting patterns.Alec Hogg (25:10) What is the one most obvious, measurable thing that Nelson Mandela Bay residents would see should you get elected mayor, or re-elected mayor, after your last stint?Retief Odendaal (25:23) OK, the first thing, and I can't say this enough: we need to professionalise the administration. The sad reality of the situation we find ourselves in, with the entire top management vacant, is that it is, I think, the only municipality where, if there's a change of government, you get a blank slate. We will immediately start headhunting qualified individuals to apply, because obviously we don't just hand-pick people; they still have to go through the processes. But we'll go and headhunt qualified people to apply for these positions, to head up our departments and to be the city manager of Nelson Mandela Bay. We need to bring the professionals back, make sure that we have competent administrators who are appointed based on merit, not on their connections to politicians: headhunt engineers, headhunt town planners, artisans, plumbers, electricians.Just one statistic I can give you: in our water services department, we've got the highest non-revenue water in the country of all the metros, 60%. Now, this is an area that goes into cyclical droughts every five or so years. 60% non-revenue water, it was 40% when we...Alec Hogg (26:42) What does that mean?Retief Odendaal (cont.) 60% non-revenue water means that 60% of our water is unaccounted for. We don't know where it goes.Alec Hogg (26:50) Wow. OK.Retief Odendaal (26:50) So that's a massive, massive problem when it should ideally be in the vicinity of about 20%. As I said, it was 40% non-revenue water, which was already high, when I left the office of the mayor. But just in the water services department, there's a 66% vacancy rate for engineers, plumbers and artisans. So you cannot provide proper services if you haven't got the necessary skills to do the work.And coupled with that, obviously, we must make sure that we invest heavily in maintenance and repair programmes for our infrastructure. Again, I can highlight the fact that the mayor the other day shared that her government retarred seven kilometres of tar road over the last two financial years. Well, I quickly did the calculation. There are 2,000 kilometres of tar road in Nelson Mandela Bay, and at 3.5 kilometres a year it will take her 570 years before she's able to retar all of the roads in Nelson Mandela Bay. So those types of numbers are Mickey Mouse numbers. We need large-scale maintenance and repair programmes that can be overseen by professionals, engineers, where we've got plans that are costed and implemented on a short, medium and long-term basis.And then the last thing is the obvious, and I have to mention it: we have to stop the corruption. Supply chain has been broken by design, so that no tenders and contracts can go through our supply chain processes. We need to overrule that, and we will ask National Treasury for assistance, to second some individuals here, because we need to clean house and make sure that we stop the rot there, so we can get the engine room of the city working again. Otherwise we'll never be able to get out of this quagmire of corruption and deviations on contracts, meaning that the same people get the work over and over.Alec Hogg (29:02) Has the penny dropped? Because if the polls are right, there's a heck of a lot of people for whom the penny hasn't dropped yet. Has the penny dropped among those that you are speaking to when you crisscross the area? Do they know now? Do they actually, as Pravin Gordhan used to say, join the dots?Retief Odendaal (29:27) Well, certainly the people that I speak to. The fact is, I try and shake as many hands as possible, meet as many people as possible. I mean, can you ever meet absolutely everyone in a metro of 1.3 million? But certainly with the people I speak to, people do believe that corruption is a massive problem. And they do believe that the ANC has failed the people of Nelson Mandela Bay and that they are unable to deliver services. I do think, however, that one has to be mindful that the Eastern Cape has always been an ANC stronghold. But to see the ANC slide back to those types of results, or polling, indicates that they've lost a lot of ground.And as I say, I anticipate that they are going to struggle very hard to get the electorate to go and vote for them. Because it's one thing to say that you'll vote, or that you'll vote for a specific party; it's another thing whether you're actually going to make the effort to pitch up. And that's obviously also why I've spent a lot of effort trying to excite our voters and to be positive. And maybe this is something I have to say, if you allow me.Notwithstanding all of these problems that we've highlighted, Nelson Mandela Bay remains the most fixable metro of all of the metros, because all of the Gauteng metros are bankrupt. And when you've got a bankrupt city, it takes you a long time to be able to start investing in your infrastructure. All of the Gauteng metros are borrowed to the hilt in long-term funding. They owe Eskom billions of rands. They haven't got significant cash reserves. Nelson Mandela Bay doesn't owe Eskom a cent.We don't have any long-term debt on our books, and we still have cash reserves, which means that theoretically we should be able to turn this municipality around far quicker than any other municipality in the country. But the only thing that we need is the skills. We need to professionalise our administration again. If we can do that, I'm telling you, over the next couple of years Nelson Mandela Bay is going to become the next big thing in South Africa. And it should be. It's a wonderful city to live in.Alec Hogg (31:48) Retief Odendaal is the mayoral candidate for the Democratic Alliance. And the way I see it, and I'm not going to ask him to comment on this, is that there are lots of little honeypots, and the contracts were allocated (this is the dots that I'm joining) to friends. But it gets more difficult to do that when you have more people watching it. And unless the friends are going to step up and get those contracts, then you don't issue them. And as a consequence, you have this terrible spiral, which he's now outlined for us, where it's even worse than hectic corruption: things just don't get done, because you can't find the right partners. It's a strange country we live in, and we have got a big chance on the 4th of November. The local elections are here, and one of the battleground metros...Retief Odendaal (32:33) Absolutely.Alec Hogg (32:45) ...is Nelson Mandela Bay. We'll be following that one very closely. The polls have the DA and the ANC level pegging at the moment, at 37% each, with a bunch of other parties who will have the weight thereafter. But as you heard from the mayoral candidate of the DA, he doesn't believe those polls. I'm Alec Hogg from BizNews.com..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. 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