First published in the Daily Maverick 168 weekly newspaper.

The Eastern Cape government announced on Thursday morning that the Amathole District Municipality would be placed under administration – but it said it did not know on what basis Mayor Khanyile Maneli decided to withdraw a circular announcing that no salaries would be paid from February to June.

The executive committee of the Eastern Cape government said it had decided to invoke part of Section 139 of the Constitution, which allows for interventions in municipalities, to place the Amathole District Municipality under administration.

Premier Oscar Mabuyane’s spokesperson, Mvusi Sicwetsha, said details of the municipality’s financial state would be made public by Co-operative Governance MEC Xolile Nqatha.

Last week, Nqatha said he had requested a bailout from the National Treasury. Treasury, however, said it would only supply technical support to ensure the municipality became sustainable, and that it was not in a financial position to provide a multimillion-rand bailout.

The municipality needs more than R70-million a month to pay the salaries of more than 1,600 staff, councillors and traditional leaders, and R150-million for voluntary severance packages.

On Wednesday, Maneli said they were withdrawing the circular informing staff, councillors and traditional leaders that they would not receive their salaries from February to June, “following a meeting with representatives from national and provincial government”.

“The meeting resolved on the establishment of a multidisciplinary task team whose task is to strengthen and implement a sustainable financial recovery plan for the municipality. We have full confidence in the engagements of the task team that they will yield positive results, hence the withdrawal of the initial circular,” he said.

But Sicwetsha said they did not know what had prompted this.

“We took a decision to intervene on the basis of a communication by the Amathole District Municipality that they are not able to meet their financial requirements. If they have [withdrawn the circular] it would require them to provide evidence of a change in their circumstances,” he said.

Section 139(5)(a) of the Constitution states that if a municipality, as a result of a crisis in its financial affairs, is in serious or persistent material breach of its obligations to provide basic services or to meet its financial commitments, or admits that it is unable to meet its obligations or financial commitments, the relevant provincial executive must impose a recovery plan aimed at securing the municipality’s ability to meet its obligations to provide basic services or its financial commitments.

“It is not something that could be retracted or be wished away,” Sicwetsha said. “We do not know what informed the retraction of the letter.”

He said the reason for the intervention was precisely to ensure salaries were paid and services rendered.

“Access to water must be restored fully. Where there is drought the delivery of water will have to continue. Those are the responsibilities of the municipality.”

Sicwetsha explained that as part of the implementation of a financial recovery plan they had established a political workstream that includes the MECs for co-operative governance and traditional affairs and finance, and a technical team from the national and provincial governments would lend support.

“We are optimistic that the leadership will receive the support well as they requested government intervention. We want to see results.” DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores.