State Capture at a Local Level

The document details how a network of officials and politicians captured the Nelson Mandela Bay Metropolitan Municipality, specifically within the Human Settlements and Integrated Public Transport System (IPTS) departments. It describes the use of 'deviations' in procurement to funnel funds to a small pool of contractors and the role of political factions within the ANC in enabling this corruption. The author analyzes these events through frameworks of neo-patrimonialism and the 'political marketplace,' noting that such capture led to administrative decay, financial crises, and a loss of public trust, eventually resulting in a decline in ANC electoral support in the 2016 elections. The paper concludes by evaluating a 2015 intervention led by Mayor Danny Jordaan and the National Department of Cooperative Governance and Traditional Affairs (COGTA) to restore accountability and clean up the administration.

• A sophisticated syndicate captured the Human Settlements Department, utilizing a modus operandi of restricting tenders to a limited pool of handpicked contractors who used sub-standard materials and claimed payments for non-existent houses.
• The Missionvale housing development served as a primary example of fraud, where houses were built without essential internal reticulation (water, sewerage, electricity) and a quarter of the paid-for units could not be located during an audit.
• The Integrated Public Transport System (IPTS) was defrauded through the systematic use of 'deviations' from supply chain management procedures to appoint companies at inflated prices, including a R174-million contract involving Faried Fakir.
• Corruption in the municipality was facilitated by the politicization of the administration, where the ANC's regional and provincial executives decided on the appointment of Directors and Executive Directors to ensure political allegiance.
• The 'political marketplace' in Nelson Mandela Bay involved the use of money and violence to maintain patronage networks, where political entrepreneurs used unimpeded cash to pay enforcers and rent seekers.
• Institutional malaise and corruption led to a severe cash flow crisis by 2011, characterized by depleted cash reserves, an inability to borrow from capital markets, and a critical lack of technical capacity, such as the absence of registered professional engineers in water services.
• The 2015 intervention led by Mayor Danny Jordaan and COGTA focused on re-establishing hierarchical accountability, resulting in the removal of at least 10 senior managers and the recovery of financial losses through civil actions.
• The systemic corruption and failure of service delivery contributed to a significant decline in ANC electoral support in the 2016 municipal elections, with the party's vote share dropping from 51.9% in 2011 to 40.9% in 2016.

APA

Olver, C. (2016). State Capture at a Local Level. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2017/05/Crispian-Olver_State-Capture-at-a-Local-Level-Case-of-NMB_Working-Paper_Nov-16.pdf

Chicago

Olver, Crispian. State Capture at a Local Level. Public Affairs Research Institute, 2016. https://pari.org.za/wp-content/uploads/2017/05/Crispian-Olver_State-Capture-at-a-Local-Level-Case-of-NMB_Working-Paper_Nov-16.pdf.

Wikipedia

{{cite report |last1=Olver |first1=Crispian |title=State Capture at a Local Level |publisher=Public Affairs Research Institute |date=November 2016 |url=https://pari.org.za/wp-content/uploads/2017/05/Crispian-Olver_State-Capture-at-a-Local-Level-Case-of-NMB_Working-Paper_Nov-16.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{olver2016state, author = {Olver, Crispian}, title = {{State Capture at a Local Level}}, institution = {Public Affairs Research Institute}, year = {2016}, month = nov, url = {https://pari.org.za/wp-content/uploads/2017/05/Crispian-Olver_State-Capture-at-a-Local-Level-Case-of-NMB_Working-Paper_Nov-16.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }