Funding for the Dukuza Substation remains uncertain as the municipality explores loan options after failing to secure grants.

KwaDukuza acting municipal manager Siyabonga Khanyile said efforts to secure national grant funding have so far been unsuccessful.

Speaking at the mayoral imbizo held at the iLembe Chamber last Wednesday, he said the municipality had not yet accepted the loan option, as it is still engaging with provincial and national Treasury to determine the correct procurement process.

“We must first establish whether we must go through a competitive bidding process with banks or whether we can engage directly with the Development Bank of Southern Africa,” he said.

Khanyile said the municipality had tested the market through a tender process and is now comparing financial proposals to identify the most viable option.

Despite the setback, Khanyile said there remained a strong case for government support, noting that the substation is critical for unlocking economic development.

“We believe that if we present a strong business case, there should be a way to access some form of grant funding because the return on this investment is significant,” he said.

He suggested that a blended finance model, combining grant funding and a loan, may be the most practical solution, although borrowing would increase the municipality’s financial burden.

The funding challenges come amid growing public scrutiny over the project. In October 2025, the Dolphin Coast Residents and Ratepayers Association (Docrra) sought legal intervention to obtain full details of the substation tender.

The project, located on the P445 between Umhlali Country Club and the R102, is one of the municipality’s largest infrastructure investments. According to Docrra, KDM has spent R320-million on the project and still requires a further R180-million.

The ratepayers association argued that access to tender information is necessary to confirm whether proper procedures and competitive pricing were followed.

The substation is being developed in phases. The first phase is funded through National Treasury grants, while the second phase, which includes key electricity supply infrastructure, remains unfunded.

Once completed, the Dukuza Substation is expected to ease pressure on existing supply points and support growth in Ballito, Tinley Manor and surrounding areas.

Khanyile acknowledged concerns about transparency and public trust, emphasising the need for stronger collaboration.

“We are aware that public trust has been shaky. We want open communication and to work closely with business and the community,” he said.

He stressed that addressing infrastructure challenges like the Dukuza Substation will require partnerships between the municipality, private sector and residents.