Midvaal has won a string of awards for good governance. Alongside it is Emfuleni, one of the country’s worst-run municipalities. What’s the difference? From Moneyweb.
The latest Auditor-General (AG) report on local government audit outcomes details the dire state of SA’s 257 municipalities, with just 34 receiving clean audits.
One of those was Midvaal, about an hour south of Johannesburg. It’s a small municipality with a population of about 125 000 and 38 000 registered households.
Across the fence is the neighbouring municipality of Emfuleni, with a population of close to one million. It is, by most measures, one of the worst-run in the country, with litter tossed onto any available piece of land and sewage seeping onto the streets. It’s frequently in the news, usually for all the wrong reasons, not least because it owes Eskom close to R6 billion; Midvaal owes Eskom nothing.
Earlier this year, Ratings Afrika declared Midvaal and Mossel Bay the country’s best-run municipalities, based on a scoring system that rewards operating performance, debt and liquidity management, affordability of living, budget practices and infrastructure development.
Read:
SA’s top-run municipalities are Midvaal and Saldanha Bay [May 2023]
Local government’s slide into ruin continues [Apr 2024]
Midvaal was the only municipality in Gauteng to win a clean audit from the AG.
“We commend Midvaal Local Municipality for sustaining its clean audit for 10 consecutive years,” says the AG’s latest report on local government audit outcomes.
Emfuleni, on the other hand, “is in a concerning financial position” for four consecutive years.
It begs the question: what does Midvaal do that Emfuleni doesn’t?
Read: Emfuleni and Midvaal enter the record books, but for very different reasons [Oct 2020]
It turns out just about everything. Midvaal is run by the Democratic Alliance (as are all the top 10 municipalities in SA), while Emfuleni is ANC-run.
The difference
The first thing that strikes you is the cleanliness of the Midvaal municipal offices and the surrounding streets.
“Where are you going to put that paper when you are finished [with] your chips?” asks Mayor Peter Texeira of a young boy. “In the bin,” comes the reply.
There’s little to no tolerance for either litter or land invasions. Nor for illegal electrical or water connections.
And about 90% of debts owed to the municipality are collected, well above the national average. Smart water meters mean the municipality can supply the 6 000 litres of free water to indigent households each month, after which they must pre-pay. Illegal electrical connections are quickly uprooted.
“It came as quite a surprise to us when we explained [to] the community that if they used more than the prescribed 6 000 litres of free water a month, they would have to pay. Initially, we got some pushback, but now the system is working brilliantly,” says Texeira.
“Water leaks are quickly reported by residents, and water usage per household has reduced.”
Land invasions – and there have been a few failed attempts – are dealt with swiftly. Midvaal outsources the policing of this to the Red Ants, who constantly patrol the area looking for signs of illegal settlements. Criminal syndicates that sell plots of land that don’t belong to them have learned the hard way that Midvaal is a no-go area. The municipality has a 100% success rate in defeating land invasions, and Texeira is determined to keep it that way.
Midvaal has an annual budget of about R2 billion, and Emfuleni just more than double this.
Midvaal spends 12% of its budget on maintenance and repairs, which is in excess of National Treasury’s recommended 8%. Municipal Money, a website run by National Treasury on the financial and operational performance of municipalities around the country, shows Emfuleni spent nothing on maintenance in recent years.
Emfuleni has embarked on a debt collection blitz to recoup R8.1 billion it reckons it is owed for electricity, switching off homes and businesses in a municipality where 70% of households and 30% of businesses (including government departments) are not paying for services.
Contrast that with Midvaal, whose municipal offices are festooned with awards, the latest being from the SA Local Government Association (Salga) for its maintenance and repair performance.
Residents see the benefits of this in terms of potholes repaired, electrical faults promptly fixed and abundant clean water. The municipality has approved R3.5 billion in building plans since 2022, covering roughly 3 000 plans, 40-50 townhouse complexes, expansions to the Eye of Africa residential and golf estate, and the under-construction Riverstone Mall, due to open in 2025.
The population of Midvaal has grown more than 30% since 2011.
It is starting to attract serious business investment, with companies such as SA Steel Mills and Heineken establishing plants in recent years.
Texeira’s vision is to emulate Midrand’s explosive growth, and that means planning 10 or more years ahead to ensure sufficient electricity, water, and other services to meet the expected demand.
Merit only …
Texeira spent much of his life as an activist in local government affairs. Like his Zulu-speaking mayoral counterpart Chris Pappas in uMngeni in KwaZulu-Natal, Texeira is something of a local celebrity who speaks multiple languages – English, Afrikaans, Zulu, Sotho and Tsonga. Born to a Portuguese father and Tsonga mother, he marinated in the diverse languages and cultures of the Midvaal area where he grew up.
One experience that forever changed his worldview was playing high school and then provincial rugby for the Valke Union. “We were playing with mostly white, Afrikaans kids, and one of them told me the only reason I had been selected was because of affirmative action. That troubled me.
“I spoke to my coach and asked whether this was true. The coach’s response was to show them that I could make the Craven Week playoffs, which is decided purely on merit – which is what I did. It taught me to try harder and not rely on the perceived advantages or disadvantages of race.”
Now 42 years old, Texeira is married to a Sotho-speaking wife with whom he has three children.
“There is no system of patronage here at Midvaal. Merit is the only way to get ahead. The downside is that some of our staff get poached by other, larger municipalities. Once they see that you have worked at Midvaal, which is known for its excellence, you are immediately on the short-list for hiring, which is a compliment of sorts.”
Construction mafia
Midvaal has managed to fend off the construction mafias that have hijacked projects up and down the country. “There are construction mafias that scrutinise our budgets to see what projects we have coming up. The first thing we do is ensure there is no fraud or irregularities in issuing tenders.
“We have five bid committees and this alone prevent[s] the same people from dominating the process. The same people are not allowed to sit in more than one committee.
“The bid adjudication committee is entirely separate from the rest and the department whose bid is being considered is excluded from this process to prevent any bias or potential for bid rigging.”
The internal audit team draws a sample of tenders every quarter to assess whether the committees made the best decisions and whether the municipality received value for money.
Then there are the fraud and risk management committees and a fraud hotline to keep staff on their toes.
Criminal infiltration into contract work is further prevented by engaging with the local community at an annual SMME summit, where local businesses are invited to attend and are coached through the legal steps in bidding for municipal work. This gives them a familiarity with the need to register for tax and with the Companies and Intellectual Property Commission (CIPC), as well as the regulations around the Municipal Finance Management Act.
Read:
Shakedowns and construction mafia: Five years, more than 700 arrests
Macpherson aims to turn SA into a construction site and declares war on ‘construction mafia’
Where general workers are required, these are often done on a ‘raffle’ basis in a crowded hall, with IDs tossed into a box and the lucky winners walking away with jobs.
The lesson here is to stay engaged with the communities and give them meaningful participation in the roughly R200 million annual capital budget expended each year.
Infrastructure
Like most municipalities, Midvaal has a plenty outdated infrastructure, most notably 1 500km of asbestos water and sanitation pipes, of which just 20km is replaced each year. It has three landfill sites, two of which have been closed, while approval for the launch of a replacement site is awaited. This will cost R78 million and take three years to install.
Read: South Africa infrastructure spend plans soar as energy woes ease
It plans to spend more than R40 million in the next two years on a new electricity control room, which Eskom requires as part of a load curtailment agreement. A further R40 million is spent each year on roads, including potholes, new roads, patching, gravelling, and grading.
Ending Eskom’s monopoly
Last week, Midvaal advertised a 20-year public-private partnership (PPP) contract for electricity, which gives it the right to purchase at least 50% of the electricity generated. “We believe this will provide the necessary grid stability and reduce our dependence on Eskom,” says Texeira.
“This 20-year deal means Eskom will not have a monopoly and will not bring our municipality to a standstill when load shedding returns.”
Part of the reason for the PPP is Eskom’s demand for a 44% tariff increase next year. While Eskom is debating whether to write off massive bad debts for dysfunctional municipalities like Emfuleni, Midvaal receives no benefit for being a diligent client. The incentive, should this write-off proceed, is to reward delinquent municipalities and penalise those who pay their bills.
Read: Municipal ‘Get out of debt free’ cards left standing …
“As a municipality, we have no outstanding debt to Eskom yet we are not protected with preferential tariffs, so we have embarked on this project to ensure we can offer affordable energy to all our consumers,” says Texeira.
Midvaal sets a high bar, and Texeira is only too willing to share his experiences with municipalities around the country. “We do some things really well and we want to see other municipalities do well, no matter which political party is in control. Those that are poorly managed face all sorts of trouble from their residents. We have to start fixing local government.”
