How Newcastle did it

2013-11-11 00:00

FROM a chaotic political and economic situation in 2009, Newcastle has somehow leapfrogged richer municipalities to become the best-run town in KwaZulu-Natal in just four years.

Last week, the DA’s provincial chief whip Radley Keys simply conceded the success of the ANC-run town. “We are happy to give credit where credit is due,” he said.

Mayor Afzul Rehman set out a simple recipe for municipal success: “Run your municipality like a business, invest in infrastructure, [and] work with all parties and all stakeholders for the sole purpose of improving people’s lives.”

Rehman revealed that Newcastle’s winning strategy began with consultations with the managing directors of large private companies, including Mittal Steel and Karbochem.

“We were upfront with them and said: ‘Guys, we want to be able to run our municipality exactly like you run your business, but we want to be able offer a quality service at an affordable price’,” said Rehman. “so we did what any good business would do. We cut expenses and funnelled money to infrastructure.”

Rehman says direct lessons from business included the town’s decision to keep increases in electricity tariffs down, while marginally upping rates increases to seven percent per year.

Rehman said his council inherited a “very disproportionate” budget, in which R800 million was set aside for day-to-day costs, but only R68 million was available for infrastructure.

The infrastructure budget now stands at R406 million.

“With just R68 million a year for infrastructure, we realised it would take a lifetime to change the lives of the community. Where to find the money? Well, you can either raise taxes, take out loans or save on your operation budget — and that’s what we decided to do.

“As you know, municipalities sometimes go away on strategy sessions, in which they put lots of visions down on paper and nothing happens. We decided to change it — that two-and-a-half days of the three days will be spent exclusively on budget reformation. We go through over 5 000 line items, every single cost centre and see where we can save.

“For instance, we found that every year we were spending R5 million on repairing the tractors that cut the grass — tractors that are 30 years old. We thought: ‘Why don’t we take that R5 million, and buy new tractors and save on maintenance?’.”

Next, he said Newcastle’s councillors actively worked toward co-operative relations between the four primary political parties as an investment marketing strategy.

“Businesses and investors really care about political stability. They won’t invest in your town if they think there might be no budget passed due to political fighting,” said Rehman.

“With Newcastle, everyone now knows that, between the ANC, the IFP, the NDP and the DA, we are able to take decisions for the good of the city and we are able to implement them.”

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