Today (March 17), the Parliament Portfolio Committee on Co-operative Governance & Traditional Affairs (CoGTA) listened to uThukela District Mayor Inkosi NB Shabalala and Municipal Manager Mr Jili trying to explain how they allowed themselves to be voluntarily bound by a consent order committing uThukela to repay its debt plus 11% interest if they defaulted on any single payment of the R137 million they owed to RASP Consultants.

The committee that sat today appeared visibly baffled by how uThukela management could have agreed to the clause.

Committee chairman Zwele Mkhize seemed taken aback when he heard that the municipal manager had signed the contract without fully reading it.

Jili admitted he was unaware of the extent of the order and further admitted, on questioning, that it was a highly irregular order to sign. He added that he based his decision to sign it on behalf of the municipality, on legal opinion.

“As the municipal manager, you were not aware of the clause?” asked Mkhize, to which Jili responded, “I was not aware of the clause, chair.” Mkhize responded, “But you signed the agreement.”

Financial woes

Adding to their woes, they were bombarded with questions from the committee about whether municipal councillors were aware of both what he had signed and the borrowing of money to pay salaries at the end of February after their bank accounts were frozen by a court order.

Their bank accounts have been effectively frozen. According to uThukela management, this is because they failed to meet a payment arrangement they had with RASP. From Wednesday, January 21, a court order was obtained, freezing all uThukela bank accounts.

On December 15, uThukela was supposed to honour a court-ordered repayment arrangement approved by the High Court in October 2025. Despite them failing to make the payment, their creditors initially withheld the full implementation of all possible legal sanctions.

Before uThukela lawyers successfully challenged the ruling in court and got interim relief, they were faced with the dilemma of paying staff salaries. The municipal manager confirmed that the municipality had loaned monies from Inkosi Langalibalele Municipality, which were paid into a non-regulated municipal account. They also borrowed monies from four other entities.

In an earlier press release, the DA demanded answers and questioned who authorised these transactions and bears liability for any irregular, unauthorised or fruitless expenditure arising from this mechanism, including potential personal liability under MFMA section 32(6) or Public Audit Act section 5.

Quoting from a press release from MEC for Provincial Treasury Francois Rodgers, Mkhize warned about the legality of borrowing monies and that if councillors were aware of what they approved, they could be held collectively responsible should the Attorney-General (AG) find that there was a financial cost.

In his conclusion, regarding council’s ratification of the municipal manager’s decision to borrow money to pay salaries, Mkhize referred the matter to the AG.

He expressed little confidence in the municipality’s handling of the whole RASP issue, saying it needed to be put in the hands of both National and Provincial Treasuries to sort out the matter once and for all.

DA response

Thys Janse van Rensburg, DA uThukela, had this to say: The chairperson of Parliament’s CoGTA Portfolio Committee has resolved to refer uThukela District Municipality to National Treasury for a full investigation following today’s hearing.

The move comes after the Democratic Alliance presented evidence of alleged large-scale irregularities, including the secret settlements, the failure to pay despite R12 million being available in December 2025, and the municipal manager’s repeated refusal to answer official councillor questions.

The referral follows years of warnings from the DA that triggered the original section 106 forensic probe in 2023. Committee members expressed serious concern over the ongoing financial collapse, frozen bank accounts and service delivery failures that recently forced Dunlop Tyres to halt production.

National Treasury is now expected to launch a detailed probe into governance, supply chain management and financial controls at the municipality.

The DA has welcomed the decision and says it will submit further evidence. Local councillors have been urged to unite across party lines to restore accountability.

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