City cannot afford to insource staff members

eThekwini Municipality

eThekwini Municipality

Published Mar 13, 2024


The proposal to insource staff members employed by contractors into the eThekwini Municipality workforce would cost the municipality close to R4 billion if it was to be fully implemented.

The feasibility study looking into the affordability to insource these workers has found that this exercise would be unaffordable.

Last year ActionSA councillor Zwakele Mncwango put forward a motion for the City to insource staff, including security personnel and cleaners. This prompted the city management to conduct a feasibility study.

The report tabled during a council meeting on Tuesday found that the current model where the City outsources to complement its limited staff was the best model in light of the cost.

The report said a comprehensive investigation was undertaken, focusing on critical elements impacting the scope of operations under the services concerned and other labour-related and legislative matters to be complied with.

It said from the financial perspective, the study relating to the insourcing of security services looked at three options, namely, the current versus proposed approach, provision of hybrid security services; and options available if 100% insourcing is implemented.

It was reported that currently the municipality is spending an estimated R1.3 billion for 1 300 sites, with 547 guards engaged.

“For the hybrid solution, the estimated costs to fund this was R2.6bn and the hire of 7 565 guards for national key points and landfill sites. The insourcing was estimated to cost more than R4bn and the costs to include operating and capital budget related thereto,” it said.

It said the scope of security services includes in-house security capacity, land invasion protection; VIP services; national key points and landfill sites protection.

“The overall outcome thereon was that the insourcing model comes at an exorbitant cost, and therefore not affordable within the current municipal budget. It is recommended therefore that the status quo should remain in terms of combining insourcing and outsourcing models to achieve adequate provision of the services required,” said the report.

It was resolved that the City conducts a further investigation to consider introducing the Social Solidarity Economy.

EFF councillor Themba Mvubu said the party rejects the report.

“There was no investigation here, this was a predetermined outcome,” said Mvubu, adding that the City was losing hundred of millions of rand through fruitless and wasteful expenditure that it writes off, so it cannot claim to have no money.

IFP councillor Mzwethu Gwala said it was nonsensical that the City is claiming that the initiative will be unaffordable. “They are already getting paid for this service, so which money is not available, this looks like the City is protecting those awarded tenders for these services.”

Mncwango of ActionSA said some companies have been providing services for the past 20 years. “Where is the fair bidding process if you have companies who have been there for years?

“The cost analysis that is the basis of this report is bogus, you can’t complain about R4 billion when the council writes off billions, this report is meant to ensure that workers continue to be exploited and those who have been benefiting continue to benefit.”

ANC councillor Nkosenhle Madlala said the proposal was not rejected but was currently unaffordable.

“We want to reject the notion that these companies belong to comrades,” said Madlala, adding that the City had engaged in competitive bidding.

The Mercury