Two councils: success vs failure

Emfuleni includes the towns of Vereeniging and Vanderbijlpark, while Midvaal extends from Alberton in the south of Johannesburg to the Vaal Dam and includes the town of Meyerton.

Emfuleni recently entered the legal record books after being slapped with a R492 million default judgment for breaches of contract for installation of smart meters.

This is par for the course for this municipality, where residents say sewage sloshes through potholed streets and rubbish is uncollected for months.

Contrast this with neighbouring Midvaal, a smaller and more prosperous municipality and one of the best run in the country, according to Ratings Afrika’s Municipal Financial Sustainability Index (MFSI) survey.

Midvaal’s mayor is Bongani Baloyi, who took on the role in 2013 aged 26.

He is now 33 and something of a legend in mayoral circles, having signed off on six consecutive clean audits and built up reserves of more than R2 billion.

Midvaal is a Democratic Alliance stronghold and Baloyi has a reputation of zero tolerance for corruption.

Emfuleni is ANC-run and is often in the news, but usually for the wrong reasons – not least of all for failing to turn up at court to defend the R492 million claim over a contract gone sour.

Baloyi plans to turn his corner of Gauteng into the Dubai of southern Africa, attracting businesses to the area with a tantalising offer: cheap and abundant water and electricity.

“Businesses are attracted to municipalities that are well run,” said Ratings Afrika analyst Leon Claassen.

“Those that are able to sweeten that by showing a measure of energy independence from Eskom, and lower electricity tariffs, can do even better. Quality of water and consistency of supply also concerns businesses.”

“We had to ensure we had some independence from Eskom and Rand Water,” said Baloyi.

One of the key measures of municipal efficiency is the debtors’ collection rate: 92% at Midvaal, and about 75% at Emfuleni. The huge difference suggests Midvaal’s residents are much more inclined to pay, based on quality of services delivered.

The Ratings Afrika MFSI survey looks at financial sustainability measured around six components: operating performance, liquidity management, debt governance, budget practices, affordability, and infrastructure
development.

Municipalities are given a score out of 100. Midvaal’s results are exemplary. Emfuleni’s are miserable. The infrastructure development
figures are very revealing, with Midvaal earning a Ratings Afrika score of 77 and Emfuleni 21.

Midvaal is not just maintaining its infrastructure, but adding to it. In Emfuleni, just 1.6% of revenue goes into maintenance and repair, against 3.75% in Midvaal.

Midvaal’s residents are all too aware of the wreckage across the fence in Emfuleni, where the ANC has ruled for decades.

What accounts for this startling difference between two neighbouring municipalities?

“All I have done is my job, and I’ve avoided making political appointments,” said Baloyi. “The law is very clear… you cannot use local government as a vehicle for political appointees.

“We employ the best professionals for the job, and I understand my role as gatekeeper against those who want to line their own pockets unlawfully.”

This article first appeared on Moneyweb and was republished with permission.

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