After a talk about reintegrating municipal-owned entities like Pikitup, Johannesburg Water and City Power, the City of Johannesburg council approved a report proposing the initiation of the process at the council meeting held on 26 January.
The City will reabsorb these entities within the next 18 months, with minimal job losses, Executive Mayor Herman Mashaba explained. He said that the only people to lose their positions will be non-executive directors on boards, whose salaries totalled R18 million last year.
“It is about bringing the existing workforce and management into the City structures to improve service delivery to our residents,” he said.
Mashaba advocated for the report, saying it’s absurd that the City is the sole shareholder of these entities but they operate under the Company’s Act and are semi-autonomous of the City.
“Each of these entities has a board of directors to whom the managing directors or chief executive officers of these entities report. It is these boards that direct the activities and not the City. How can a City be responsible and accountable to its residents for fast-tracking service delivery when it does not have complete control over the entities that implement delivery?” Mashaba asked.
“I am not aware of these boards featuring on ballot papers. Boards have all the powers of directing service delivery through these entities with zero accountability to the residents.”
MMC for Finance, Dr Rabelani Dagada, told investors at a roadshow in October last year, “This was done to improve service delivery and reduce costs. A balance had to be struck to ensure that the entities’ boards did not wield too much power. At the same time as the government, the City needed to be involved in the running of these institutions.”
Agreeing with the move, sociologist Dr Liela Groenewald previously said ratepayers can hope to see an improvement in service delivery if municipalities are directly accountable for these services. “Municipal entities are often run as business entities and may operate on the principles of making a profit,” she said.
Groenewald added that when services are the work of a separate entity, voters lose some power to hold those who are responsible for service delivery, accountable.
The report shows the process to be followed, which includes the formation of task teams, both administrative and political; feasibility studies to assess the impact of integration and advise on the best model of management to ensure a seamless transition and public consultation so that the City can engage with residents. It will also involve the process of deregistering these companies.
“Each and every step will be conducted with the best interests of our residents as the key consideration,” the mayor said.
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