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Finance minister sets out terms of reference for Cabinet intervention in troubled councils

Finance Minister Enoch Godongwana was expected to announce the leaders of intervention teams in the troubled Mangaung and Enoch Mgijima municipalities this week. Picture: Phando Jikelo/African News Agency (ANA)

Finance Minister Enoch Godongwana was expected to announce the leaders of intervention teams in the troubled Mangaung and Enoch Mgijima municipalities this week. Picture: Phando Jikelo/African News Agency (ANA)

Published May 6, 2022

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Johannesburg - Finance Minister Enoch Godongwana has set out the terms of reference for the intervention into two troubled municipalities placed under administration by President Cyril Ramaphosa’s Cabinet.

National government placed the Mangaung metro in the Free State and the Enoch Mgijima local municipality in the Eastern Cape under administration last month.

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Godongwana has set the terms of reference for the teams to be deployed to the two municipalities.

”… With the powers vested in me as per Cabinet resolution, a national Cabinet representative and a multidisciplinary team of experts in governance, financial management, service delivery and institutional pillars of municipal sustainability will be appointed on or before May 5 or soon thereafter …,” Godongwana announced in the Government Gazette.

He said the team will assume the responsibility to implement the financial recovery plan on behalf of the national Cabinet with effect from the effective date of the national intervention.

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The National Treasury did not respond to questions on who would lead the national interventions in the Mangaung Metropolitan and Enoch Mgijima local municipalities.

The Cabinet representatives and support teams will report to Godongwana and his Co-operative Governance and Traditional Affairs counterpart Dr Nkosazana Dlamini Zuma.

According to the terms of reference, the teams must confirm and certify in periodic reports to Godongwana on progress with the national interventions and the implementation of the financial recovery plans that all decisions of the councils and mayors are consistent with the approved financial recovery plan.

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They must also ensure and oversee the execution by the respective municipal managers of the functions referred to in the Municipal Systems Act read with any other relevant legislative provisions dealing with disciplinary matters including criminal, disciplinary and civil action.

Last month, the Cabinet placed the two municipalities under administration due to them experiencing significant financial and service delivery failures for a prolonged period.

The Free State provincial government first intervened in Mangaung in December 2019 and a mandatory financial recovery plan was subsequently imposed on the municipality the following year.

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But the municipality failed to implement the financial recovery plan during the provincial intervention, forcing the national government to place it under its watch in terms of the Constitution.

The Enoch Mgijima local municipality, which is based in Komani (previously Queenstown), was also placed under mandatory intervention by the Eastern Cape provincial government in 2018.

However, after the municipality failed to make progress in improving its financial and service delivery performance the Cabinet decided to place it under a national intervention.

The Hawks are investigating the construction of the Lesseyton sports facility in the Enoch Mgijima local municipality after a contract worth R22 million was awarded to build the facility and have undertaken that the matter will be referred to the National Prosecuting Authority for a decision on whether or not to prosecute those involved after obtaining and perusing all statements and necessary documents.

The stadium made headlines after the municipality announced that it cost R15m to build but photographs it shared showed that it may have been built for a much lesser amount.

Power utility Eskom is owed R710m by the Enoch Mgijima local municipality, with monthly interest between R100m and R200m.

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