Second Eastern Cape municipality in firing line as premier's peace attempt fails in Komani

“The people who got us into this mess are not going to be able to get us out of the mess for obvious reasons.” This is how Ken Clark, the chairperson of Let's Talk Komani, an umbrella body for civil society organisations around Komani, formerly known as Queenstown, described their decision to go ahead with legal action in the Makhanda High Court to have the Enoch Mgijima local municipal council dissolved.

“We remain committed to working with all parties which have the genuine interest of all the citizens of the municipality at heart and are prepared to take the difficult decisions required to restore this municipality to something residents from all four of its corners can be proud of,” he said.

The municipal area includes Komani, Hofmeyr, Whittlesea, Steynsburg and Molteno.

Let's Talk Komani includes the local business chamber, the Black Management Forum, the Komani Residents' Association, the Queenstown Civic Ratepayers Association, a group of farmers, the Queenstown Education Foundation and the Phakamisa Business Forum. It also has representatives from the Komani Church Leaders' Forum, the Muslim community leadership and the Community Policing Forum. 

“There is a high likelihood that municipal salaries and Eskom accounts may not be paid this month due to the municipality’s inability to bill for services and collect outstanding revenue. The crisis of the municipality has been clearly outlined in its latest 2018/2019 audited annual financial statements which reveal unauthorised, irregular and wasteful expenditure of a staggering R894-million,” Clark said. 

The meeting was chaired by the Eastern Cape MEC for Cooperative Governance and Traditional Affairs, Xolile Nqatha and was attended by the Enoch Mgijima Municipality, Treasury and the South African Local Government Association. 

Last week, Mabuyane's office issued a press release saying that there was a memorandum of understanding about actions to be taken to save the municipality, but Nqatha agreed to have this withdrawn. 

The meeting followed a morning of service delivery protests on the Whittlesea road entrance into Komani. 

Clark argued that the Enoch Mgijima Council has failed to fulfil its constitutional mandate, and has been complicit in corruption and is totally derelict in delivering on its duty to serve the community of Komani. 

A statement issued by Let's Talk Komani (LTK) also adds that Nqatha and Mabuyane failed to hold the council accountable for the decimation of the municipality and all its structures. 

“The resulting lack of business confidence is halting job creation and youth unemployment is at an all-time high,” the statement continues. 

According to minutes of the meeting held with Let's Talk Komani, the Eastern Cape cabinet is pushing for the appointment of an administrator and a turnaround team. 

“LTK reminded the delegation that the municipality is already under administration according to SALGA’s national office and that a court precedent already existed for a less serious application.

“LTK reiterated its belief that there was a leadership crisis, a management crisis, and a credibility crisis at the municipality and that civil society had lost faith in the municipality’s ability to collect revenue. The premier would need to take decisive steps to charge corrupt officials and re-skill the municipality before it has any chance of restoring its legitimacy,” Clark said. 

It took LTK two years to get a meeting with senior politicians in the province. During this time, two administrators were appointed for the municipality, but none of them could manage to implement a financial recovery plan. 

According to figures collected by LTK, the municipality's billing has declined from 79% to 50% and its cost of labour has increased to levels in excess of revenue collected (excluding revenue received from government grants). The municipal outstanding debtors' book currently totals R824-million and Eskom is owed about R350-million. 

“MEC Nqatha admitted there was a common cause for the legal action. The fundamental difference in the approaches of the parties was the EC government believes that it can fix the problems in a ‘business as usual’ approach with some assistance, whereas LTK believes that this has already been tried and failed, and that the council needs to be disbanded as it has failed in its duty to uphold the Constitution and its councillors are, in the word of Judge Stretch, ‘constitutional delinquents’ and cannot be entrusted with turning the municipality around,” Clark said. 

He was referring to Judge Igna Stretch's judgment ruling that the Makana Local Municipality should be dissolved for its unconstitutional failure to provide basic services to its residents. 

Clark explained in his founding affidavit motivating for the municipality to be dissolved “that the municipality is in a financial crisis and is unable to deliver basic services to the residents of the municipality, ranging from water, clean air, electricity, waste removal, roads infrastructure, roaming animals and fire fighting … Every aspect of running a municipality is wanting (in the Komani municipality), and the municipality has now reached a state of disaster. 

“The council has failed to govern and manage the municipality effectively. The inability of the municipality to provide basic services and to meet its financial obligations has been manifest for a number of years, and the municipality has been in persistent material breach of its obligations to provide basic services at Komani. The municipality has been guilty of gross service delivery failures and has been unable to provide basic essential services to residents for a number of years now.” 

National Treasury has been approached for bail-out funding for 14 municipalities in the Eastern Cape. 

In a response to a question from the DA's Vicky Knoetze, Nqatha further stated that the collective Eskom debt in the province in December 2019 exceeded R1-billion. Enoch Mgijima Local Municipality had the highest amount of debt with R309-million, according to the MEC, with the Walter Sisulu Local Municipality at R222-million, the King Sabata Dalinyebo Municipality at R165-million, the Raymond Mhlaba Local Municipality at R148-million and the Inxuba Yethemba Local Municipality at R121-million.

The MEC for Finance, Mlungisi Mvoko, said in his budget speech recently that very few municipalities in the province were financially sustainable. “Institutional instability, political instability, deteriorating levels of service delivery, non-functional governance structures and financial uncertainties contribute to the negative audit outcomes and performance shown by municipalities. Provincial treasury is, however, continuing to support municipalities to improve financial management, as informed by the Financial Management Capability Maturity Model.”

He said irregular, fruitless and wasteful expenditure were a “challenge” in the province. 

“Using audit outcomes as an indicator, for example, we have observed that achieving targets in these areas remain elusive, especially for audits under the Municipal Finance Management Act. To deal with these challenges, we have established an intervention team with major focus on clearing up irregular expenditure and providing mitigation measures on all these deficiencies. We are further enhancing our supply chain management reforms by entrenching procurement plans that will ensure that proper planning and execution of projects are done in time to avoid late procurement,” he added. MC