The Tshwane metro has provided an update on its approach to the South African Local Government Bargaining Council (SALGBC) ruling that compels the municipality to implement salary increases dating back to 2021 and pay up to R1.6-billion in backpay.

The ruling, handed down on October 31, dismissed the metro’s application for exemption and gave the metro six months to comply.

According to Tshwane Mayor, Dr Nasiphi Moya, the metro has since been working to ensure that implementation takes place ‘in a responsible and sustainable manner’.

She said they are currently engaged in constructive discussions with organised labour to determine the most appropriate and financially prudent way forward.

“These engagements are progressing well and will guide a balanced solution that protects the city’s financial stability while meeting its obligations to employees.

“It is important that this process is allowed to run its course, as it will inform the final implementation plan,” Moya said.

Moya stressed that the metro remains committed to maintaining a funded budget while honouring all its financial obligations.

She said this includes the payment agreement reached with Eskom last year.

“Ensuring that the city continues to honour its commitments to Eskom is central to long-term financial sustainability and to the protection of essential services,” she said.

To manage the financial implications of the ruling, Moya said the metro is using the 2025/26 adjustments budget process, as provided for in law.

She reassured residents that the metro has “no intention of passing on the cost of implementing the ruling through unreasonable increases to rates or service charges”.

“Alongside this work, the city continues to closely monitor revenue performance, liquidity and cash flow to ensure it can meet all its obligations, including creditor payments and debt servicing, without compromising service delivery.”

According to Moya, despite longstanding financial challenges inherited by the current administration, including the wage backpay burden, they have made steady progress in strengthening its financial position over the past year.

Some of the key achievements highlighted include: adoption of the first fully funded budget since 2021, record revenue collection of over R4-billion in October, and a reduction of more than R1.1-billion to the inherited R6.67-billion Eskom debt.

The metro also achieved full settlement of the R4.63-billion VAT liability, and improved liquidity, with the current ratio rising from 0.42 in 2022/23 to 0.88 by October.

“These gains demonstrate that the city is consolidating its financial recovery,” Moya said.

She noted that honest financial management remains essential as the metro navigates the wage ruling.

Moya said it will continue to handle the matter with responsibility and transparency and will communicate the final implementation plan ‘clearly and openly’ once discussions with labour conclude and financial modelling is complete.

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