Msunduzi Municipality defends R27m Royal AM sponsorship deal

Pietermaritzburg City Hall is the headquarters of Msunduzi Municipality.Picture; Doctor Ngcobo

Pietermaritzburg City Hall is the headquarters of Msunduzi Municipality.Picture; Doctor Ngcobo

Published Oct 12, 2023


Durban — The Msunduzi Municipality has vowed to defend its decision to give the Royal AM Football Club R27 million for using Harry Gwala Stadium.

The municipality and the club, owned by businesswoman Shauwn Mpisane, signed a deal in July, where the municipality offered R27m over three years in exchange for the club using Harry Gwala Stadium.

The DA has filed court papers in the Pietermaritzburg High Court, asking it to review and set aside the decision. The party said it could not believe that a financially struggling municipality like Msunduzi had decided to take the little resources left for services and hand it to a wealthy club.

Municipality spokesperson Ntobeko Mkhize said the city and its legal teams were studying the court papers.

The ANC in Moses Mabhida has also defended the municipality’s decision, calling the DA’s application opportunistic. The regional spokesperson, Njabulo Mtolo, said the municipality was within its rights to undertake such social investment as it was in line with its development objectives. Mtolo said the decision was beneficial to the people of Msunduzi and small businesses.

“There is value in this decision. We needed a club in the Premier Soccer League that will continue utilising our stadium. Whenever there are games here, restaurants and other establishments like hotels reap the benefits of the decision, so it was not only social investment but business development as well,” said Mtolo.

He said there was precedence to this as the city had sponsored Maritzburg United, and had to look for alternatives after the club was relegated.

DA provincial chairperson Dean Macpherson told the Daily News on Wednesday that there was no way that the party would let the ANC and the municipality deprive residents of service delivery. Macpherson said the municipality’s finances are in a bad situation.

“We cannot believe that the municipality chose to fund a billionaire club rather than paying workers pension money owed. The city cannot pay for anything, including fixing potholes. Therefore, where did this money come from? It was an irrational decision, which is why we want the cost order to be borne by all parties that will oppose our application, including the municipal manager, who must pay from his pocket,” said Macpherson.

The municipality has 15 days to file responding affidavits if it intends to oppose the application. The DA said that any money already paid to the club must be paid back with interest. The DA also argued that even if the municipality had to give such a sponsorship, it should have called for bidders not just given it to a club without following Treasury processes.

Responding to questions, Royal AM said: “We acknowledge your inquiry regarding the aforementioned documents. However, we regret to inform you that we have no knowledge of such documents and thus, we have no further comments to provide on the matter. Our primary focus is on the business of football as we prepare for our Carling Black Label Cup fixture.”

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