Astral disburses R3m for lost production as Standerton’s ‘horror’ continues
Lekwa Municipality has become the star of municipal chess in South Africa
- With 3,615 workers, Astral is the largest employer in Standerton, where it processes its Goldi and Festive chicken brands.
- Last week, the chicken farmer had to shell out R3 million to make up for lost production and only slaughtered 950,000 birds due to the city’s water crisis.
- Poor administration and crumbling infrastructure are at the center of the service delivery crisis in the Lekwa Municipality of Standerton.
One of South Africa’s largest chicken farmers, Astral Foods, parted with R3million in just one week as Standerton’s latest water supply disruption spanned more than a month.
With 3,615 workers, Astral is the largest employer in the city of Mpumalanga, where it processes its Goldi and Festive chicken brands. Together with the Olifantsfontein plant in Gauteng, the Standerton plant produces nearly 3.2 million chickens per week. Astral also owns a pet food business in Standerton.
But last week the chicken farmer had to fork out R3 million to pay his staff overtime to make up for lost production and only slaughtered 950,000 birds due to the water crisis in the city. Standerton has frequent power and water cuts, which have impacted Astral production. Power cuts alone have cost the company 39 million rand over the past five years.
Poor administration and crumbling infrastructure are at the center of the service delivery crisis in the Lekwa Municipality of Standerton. Fin24 has already reported about the water that gushes into the streets from burst pipes, as people walk around with water containers on their heads or wheelbarrows to collect water. For other residents, the situation is worse, as raw sewage seeps into their homes and the smell is now part of the city. It also takes special driving skills to navigate its many potholes.
To remedy the problem, Astral took its battle against Lekwa and the electricity supplier Eskom to court. And the North Gauteng High Court in Pretoria ordered the government to put Lekwa under administration. In May, Lekwa City Council was dissolved by Cabinet and its by-elections were suspended.
This month, in addition to the load shedding, Astral had to deal with a prolonged water outage.
Astral’s chief commercial officer, Frans van Heerden, said it was linked to a load-shedding, which meant the city’s water treatment plant could not operate. But the load shedding only exacerbated the facility’s longstanding problems, prompting Astral to invest R50 million in a reverse osmosis water treatment facility.
However, this installation only supplies Astral with 50% of its water, the rest coming from the municipality.
“Last week we lost 50% of our production time due to the Eskom load shedding, Lekwa load shedding and more regular infrastructure outages due to the load shedding,” said Van Heerden.
The government appointed the career city administrator, Johann Mettler, to get Lekwa out of his hole.
But Van Heerden said the situation was still serious.
“Making up for lost production costs a lot of money, because of the extra shifts that have to be done. It is also not good for our employees and all the citizens of Standerton to go home after work without power or water for long periods of time, “he said.
Mettler lives in Standerton, and potholes, poor sanitation, and power and water cuts are also part of his life. Although he oversaw the administration of Msunduzi Municipality in KwaZulu-Natal and was a former municipal manager of Nelson Mandela Bay, he was not prepared for what he found in Lekwa.
“I read all the reports… [but] nothing can really prepare you for all the horror of the situation in Lekwa, ”Mettler said.
He explained that the load shedding is only part of the problem, but the city’s infrastructure, which has not been maintained or updated, is a bigger problem.
For example, filling the water tanks in Standerton is difficult because they are filled with holes, and the municipality lost a lot of water as a result. And the majority of neighborhoods affected by the water cut will have to use tankers provided by the municipality. The government will provide the municipality with 8.5 billion rand next year for the city’s bulk water supply.
It will take years, and hundreds of millions, to get Lekwa out of the mess he finds himself in; a situation made worse by his debts. The municipality owes Eskom 1.3 billion rand and the water department 1.4 billion rand, while its debt to the South African tax authorities amounts to hundreds of millions.
As for when residents will need to stop relying on tankers, Mettler said he did not have a timeline at this time, given the extent of the deterioration of the city’s infrastructure.
But its deployment could be a bit too late for residents.
The Lekwa Community Forum and Lekwa Taxpayer Association member Sello Tsotetsi said on Tuesday that Mettler’s presence had not been helpful so far.
“It is getting worse now, we are struggling more than before. I think it would have been better if it had not come,” Tsotetsi said.
He added that Standerton was heading in the same direction as eMbalenhle, a township in the local municipality of Govan Mbeki in Mpumalanga, where residents set fire to the municipality’s offices during service delivery protests.