National Treasury has briefed the eThekwini Municipality’s executive committee on the Metro Trading Services reforms started in the 2024/25 financial year to help improve areas of service delivery including water, electricity and solid waste management.
Treasury said the purpose of the reforms was for municipalities to submit turnaround strategies for water in the current financial year and electricity and solid waste in the following financial year.
It said the reforms would also look at improving governance in municipalities and improving financial transparency.
eThekwini mayor Cyril Xaba said that they welcomed the presentation by the National Treasury.
“The turnaround strategy is crucial as it also focuses on improving customer care, investment on infrastructure, governance and long-term financial sustainability of the municipality.”
Treasury said that there was a need for the reform due to the urgent need to improve essential services and losses in water infrastructure with losses amounting to R25 billion nationally.
Despite eThekwini experiencing numerous water supply challenges, Treasury welcomed the water turnaround strategy that the City council has approved.
It said that the reforms started with water but would focus on other aspects of trading such as electricity and solid waste.
“eThekwini already has a water turnaround plan that has been approved by council and it will be submitted to the National Treasury soon – eThekwini is already ahead of other municipalities.
There is a legal obligation to submit a turnaround strategy in electricity and solid waste next year. We however advise all municipalities to be ahead and submit electricity turnaround strategies this financial year.”
Treasury said that the reforms were necessary because they are not getting full information from the municipalities.
“We have done analysis of municipalities over a long time and we find they don’t give us the full story and that is why we are finding that some municipalities have been in decline for years.
Municipalities need to acknowledge their failures, that is the only way we are going to see change.”
The Treasury said that as part of the turnaround strategy municipalities need to look at infrastructure investment in their turnaround strategy.
“We have picked up that there has been a long term under investment in municipal infrastructure and that is really why we see a decline in services ... when services decline customers are unwilling to pay for services they are not getting.”
The National Treasury said the fundamental long-term objective of a municipal trading service is to sustainably provide universal access to essential services.
“This is critical for the social and economic development of people, businesses, and institutions of the city, including city government. The reforms will therefore ultimately be applicable to all metro trading services. Qualifying trading services will have access to the performance-based incentive grant component of the USDG and associated funding. The reforms will start in water and sanitation. Only metro water and sanitation units will generate strategies, road maps and plans in the 2024/25 financial year.”
The Treasury said that eThekwini’s water turnaround strategy had seen notable progress.
“The implementation of the strategy is based on a set of key objectives that were developed by the City and supported by National Treasury’s city support programme. The strategy is beginning to yield desired outcomes. For instance, there has been a steady decline in the loss of non-revenue water, which can be attributed mainly to the increase in metre readings as well as an increase in resources for maintenance.”
The Mercury