Makana recovery plan made order of court
Makana municipality’s financial recovery plan has been made an order of court, putting both the municipality and the Eastern Cape provincial executive to terms to improve the financial and other management of the failing municipality.
A Daily Dispatch report says the groundbreaking settlement between the provincial government and the Unemployed Peoples’ Movement (UPM) reached in the SCA this week ends a five-year-long war of attrition in the courts which has seen the UPM win almost every step of the way.
The battle seemed to culminate in January 2020 with a judgment from the Eastern Cape High Court (Makhanda) declaring that municipality had consistently contravened the Constitution by failing to sustainably provide services to the community or to structure and manage its administration, budget and planning processes.
The province was ordered to immediately dissolve the municipal council and place the municipality under full administration pending the election of a new council.
But both the municipality and the provincial government appealed against the judgment all the way to the SCA.
While the Makana municipality then withdrew from the largely academic appeal to the SCA, the provincial government persisted – as it felt the judgment had set a bad precedent.
The Daily Dispatch report says it has now settled the case with the UPM in the week that the matter was due to be argued. The province has agreed that an updated financial recovery plan would be made an order of court – requiring that it be implemented to the letter.
While the settlement is likely to benefit Makana ratepayers, who can now hold the municipality directly to account, it will put tremendous pressure on the broke municipality to improve its management while simultaneously forcing the province to assist it or face possible contempt proceedings.
The 67-page plan takes place over three phases: rescue, stabilisation and sustainability.
It will prove an onerous process for a municipality so broke that it has reneged on its agreed-to repayment plan to Eskom after almost paying off its R44m electricity debt by late last year.
A provincial intervention team will be in place to oversee the process.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
