“South Africa’s Constitution provides for circumstances when municipalities are caught up in persistent breach of their obligations to provide basic services or to meet their financial commitments – often due to ongoing maladministration, corruption and poor performance – for them to be put under administration to rectify these issues,” says Julius Kleynhans, OUTA’s Portfolio Manager for Water and Environment.
Kleynhans says that such recovery plans bind a municipality in the exercise of its legislative and executive authority, but only to the extent necessary to solve the crisis in its financial affairs. “Should a municipality be unable to give effect to such recovery plan by approving the necessary legislative measures, the provincial executive must dissolve the municipal council and appoint an administrator until a new municipal council is elected,” says Kleynhans.
Recent reports have exposed that three Gauteng local municipalities together owe R1.016 billion to Rand Water for water services and Eskom for electricity.
Municipality Rand Water Eskom
Emfuleni R369 million R262 million
Merafong R52 million R140 million
Mogale R20 million R173 million
Total R441 million R575 million
We highlight that, if a municipal council is dissolved, the provincial executive must assume responsibility for the implementation of the recovery plan.
OUTA believes that the mere facilitation of repayment arrangements by Gauteng Finance MEC Barbara Creecy does not solve the financial problems as service delivery will have to be curtailed to enable these municipalities to pay their debts which were allowed for political expediency to escalate every month for at least the past five years. “Municipalities are characterised by over-populated staff establishments, lavish state-of-the municipality functions, luxurious vehicles and offices, just too many visits for unknown reasons to China, and high levels of corruption related to irregular expenditure, which substantially contribute to these irresponsible debts,” says Kleynhans.
This means that clear recovery plans are needed from the provincial leadership.
Wayne Duvenage, OUTA CEO, says that the neglect and poor leadership by the national, provincial and local executive has added to this untenable situation. “Three of the primary local municipalities of Gauteng – the engine room of the SA economy – are in serious financial trouble and we wonder why South Africa is being downgraded by credit ratings agencies.”
Duvenage says this points to a failure of political oversight, including by the Gauteng Legislature.
OUTA is a proudly South African non-profit civil action organisation, comprising of and supported by people who are passionate about holding government accountable and improving the prosperity of South Africa.