Court case takes aim at broken municipalities in South Africa – wants independent control of rates and fees

Business group Sakeliga says it is pushing for a new form of municipal administration, with independent control over electricity and other service charges.

The group has served papers on two municipalities in the North West, as well as the minister of finance and others. Sakeliga said it is asking the court for far-reaching, novel interventions that have never been applied at the municipal level.

The interventions revolve around the establishment of a so-called ‘special master’, who takes control of electricity and water fees, in addition to compulsory administration, and compulsory interventions by the national treasury’s “Municipal Finance Recovery Service.”

The special master must also compile evidence of corruption and related matters and report to Sakeliga, the respondents, and the court.

“What is new about this case, is that it moves beyond temporary solutions. It seeks to prevent access by incompetent or corrupt municipal officials to water and electricity payments in the first place, which is what is required 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, Sakeliga said.

“The purpose of the court case is to save local economies, by providing a structural solution. Although we and other organisations are regularly successful with interdicts and other short-term interventions, lasting solutions 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.”

Case to impact entire country

Sakeliga’s Piet Le Roux said that the group is trying to defuse a situation that threatens to destabilise the whole country.

“The failure at local level is a result of a collapse of management and control at all levels of government, up to the cabinet.

“If we were to 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. ”

Le Roux said that if electricity and water is allowed to be cut off or interrupted it will bring about the end of the local economy – property values would fall to zero and whole populations would migrate to the metros, which only shifts the pressure and destabilises the larger centres.

“A third way is required: services must be rendered and payments for those services must reach the right destinations,” he said.

Le Roux added that the litigation forms part of Sakeliga’s larger strategy for local economic recovery.

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Court case takes aim at broken municipalities in South Africa – wants independent control of rates and fees