The uThukela District Municipality appeared before Parliament’s Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) on Tuesday, 17 March 2026, where its financial position and governance challenges came under renewed scrutiny.
The Ladysmith-based municipality was required to account for ongoing financial instability, including unpaid creditors, unfunded budgets, and a legal dispute that resulted in the freezing of its bank accounts and the attachment of more than R130 million.
The parliamentary appearance follows oversight visits conducted across KwaZulu-Natal in January and March 2026, during which concerns were raised around financial management and service delivery within several municipalities, including uThukela.
At the centre of the municipality’s current crisis is a dispute with RASP Consultants CC. Earlier this year, legal action by the service provider led to the attachment of municipal bank accounts, severely limiting the municipality’s access to funds.
Click here to read more about this here.
According to information presented to the committee, the dispute relates to a contract awarded in May 2021 for the repair and maintenance of water infrastructure.
The municipality was subsequently ordered by the Pietermaritzburg High Court to settle an amount of approximately R137 million for services rendered.
Click here to read more about this.
A repayment arrangement was reached, structured over several years. However, the municipality failed to meet the first instalment on time, which triggered further legal action by RASP.
In January 2026, a writ of execution was issued, resulting in the attachment of the municipality’s bank accounts held with major financial institutions. Funds exceeding R130 million were transferred out of these accounts.
The financial impact was immediate.
The municipality experienced cash flow constraints, which affected its ability to meet operational obligations, including salary payments to employees in February 2026.
Click here to read more about this.
In response, the municipality approached the Pietermaritzburg High Court on an urgent basis. On 9 March 2026, the court granted interim relief, ordering that the accounts be unfrozen and that funds be returned, pending further legal proceedings.
Click here to read more about this.
As of mid-March, only a portion of the attached funds—approximately R4.6 million—had reportedly been returned. The matter remains before the courts, with an application for leave to appeal lodged.
During the period of restricted access to its accounts, the municipality implemented interim measures to continue operations, including facilitating salary payments through an internal municipal entity.
Despite these interventions, the municipality’s financial position remains under pressure. Figures presented indicate that, as of 11 March 2026, the municipality held approximately R169 million in cash, while total outstanding creditors amounted to over R850 million.
Furthermore, the municipality is currently receiving support from National Treasury and Provincial CoGTA under a Section 154 intervention aimed at assisting struggling municipalities.
Measures to improve financial stability have included efforts to increase revenue collection, deductions from employees with outstanding municipal accounts, and restrictions on new appointments.
The ongoing legal dispute with RASP Consultants remains unresolved and continues to impact the municipality’s liquidity.
Parliamentary oversight processes are expected to continue as the situation develops, with the outcome of the court proceedings likely to influence the municipality’s short-term financial position and its ability to meet obligations.
What are your thoughts on this? Let us know below.
Do not forget to read:
uThukela Municipality’s bank accounts were frozen following legal action by RASP Consultants CC, which obtained a writ of execution after the municipality failed to meet agreed payment terms for services rendered.
More than R130 million was attached from the municipality’s bank accounts as part of the legal enforcement process.
The debt relates to a contract awarded in 2021 for the repair and maintenance of water infrastructure. The municipality was later ordered by the Pietermaritzburg High Court to settle approximately R137 million for services delivered.
Yes. In March 2026, the Pietermaritzburg High Court granted interim relief, ordering that the municipality’s bank accounts be unfrozen and that funds be returned, pending further legal proceedings.
No. Only a portion of the funds—reported to be around R4.6 million—had been returned as of mid-March 2026. The remainder is still subject to ongoing legal processes.
