Radical plan to fix failing municipalities
A NEW form of municipal administration, with independent control over electricity and other service charges, may soon be on the cards for failed municipalities.
This is if business organisation Sakeliga is successful with a new litigation strategy to try to save local economies from municipal implosion.
In papers served on two municipalities in the North West, as well as the Ministry of Finance and others, Sakeliga is asking the court for far-reaching interventions that have never been applied at municipal level. They aim to turn to the North West Division of the high court on an urgent basis on July 15.
The interventions revolve around the establishment of a so-called “special master” to take control of electricity and water revenue.
This is in addition to compulsory administration, and compulsory interventions by the National Treasury’s Municipal Finance Recovery Service.
They are also asking the court to order that the special master compile evidence of corruption and related matters and report on it to the court.
Piet le Roux, chief executive of Sakeliga, said this case was new as it moved beyond temporary solutions. It seeks to prevent access by incompetent or corrupt municipal officials to water and electricity payments and to aim for a long-term solution.
To this end, Sakeliga is requesting the court to appoint a special master – such as independent auditors – to take control of water and electricity payments.
The special master may then make payments directly to Eskom and water suppliers, as well as for maintenance of electricity and water infrastructure. Only a remaining portion will be made available to the municipality and the administration team.
“The purpose of the court case is to save local economies by providing a structural solution which will require control over the flow of money.
“After years of failure at all levels of government to intervene as they should have, we are now asking the court to order that the Special Master take control of the most important financial matters – those regarding water and electricity – until such time as National Treasury’s financial recovery plan has been properly implemented,” Le Roux said.
He said the failure at local level is a result of a collapse of management and control at all levels of government up to the Cabinet.
Le Roux said if they simply continue obtaining interdicts banning service interruptions by Eskom and water boards, then Eskom and those water boards would collapse financially, taking the whole fiscus with them.
“On the other hand, if we allow electricity and water to be cut off or interrupted, then it heralds the end of that local economy,” he said.
“Property values would fall to zero and whole populations would migrate to the metros, which only shifts the pressure and destabilises the larger centres.”
Le Roux said the only solution for local economic recovery is that services must be rendered and payments for those services must reach the correct destinations.
Sedibeng Water has, meanwhile, provided an undertaking to Sakeliga that it will withdraw its instruction to employees to halt water-related services in the North West. Sakeliga will thus no longer proceed with its urgent application to interdict Sedibeng from cutting the water supplies, but rather try to find a lasting solution.
Sedibeng’s undertaking means that bulk water supply in towns such as Mahikeng, Lichtenburg and others will be continued for the time being.
Last week Sedibeng Water instructed its employees in several municipalities in the North West that supply and maintenance services should be discontinued from the start of this week due to non-payment by the local municipalities.