The metro is preparing to sign a Memorandum of Agreement with the Social Housing Regulatory Authority (SHRA) as part of a municipal support programme intended to accelerate its Affordable Rental Housing Strategy.

While the initiative seeks to address growing demand for affordable housing, councillors have raised serious concerns about the metro’s capacity to implement the agreement effectively.

Freedom Front Plus councillor Lenor Janse van Rensburg highlighted the risks at a council meeting on March 5. She said that, despite the strategic importance of the initiative, significant doubts remain about the metro’s readiness to fulfil its obligations.

Janse van Rensburg pointed to weaknesses in the metro’s financial governance. She said several provisions of the Municipal Finance Management Act (MFMA) are reportedly being breached or only partially complied with. She also cited instability within Supply Chain Management and non–compliance with the authority’s funding requirements.

Expenditure management is another area of concern. “The city has struggled with late payments to suppliers, overspending on contracted services, and under-expenditure on infrastructure maintenance,” she said. “These trends point to weaknesses in financial discipline that could affect the metro’s ability to manage future obligations arising from the agreement.”

If these governance gaps are not addressed, Janse van Rensburg warned, the metro risks failing to meet the authority’s grant conditions and may face adverse audit findings.

She also raised concerns about governance instability. Key senior management positions remain vacant, contributing to an overall vacancy rate of about 27%.
“This weakens oversight and raises concerns about the metro’s capacity to meet the reporting and governance requirements expected by SHRA,” she said.

She added that the lack of stable leadership could expose the metro to irregular or unauthorised expenditure should the agreement proceed without strengthened internal controls.

Janse van Rensburg urged the metro to consider its legal responsibilities before committing to the agreement. “Failure to implement the programme effectively would not only delay much-needed affordable housing but could also damage the metro’s reputation with national government and potential investors,” she said.

She concluded that urgent action is needed: internal controls must be strengthened, leadership positions stabilised, and MFMA compliance improved before the metro enters a legally binding agreement.

Addressing these governance challenges is essential to protect the city from financial and legal risk and to ensure the Affordable Rental Housing Strategy can be implemented successfully for the benefit of Pretoria residents.

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