Joburg metro set to take control of municipal entities

Johannesburg mayor Herman Mashaba is moving to bring the city’s agencies under the metro’s authority, in an apparent about-turn from promise in the run up to the 2016 local government elections.

In a statement issued by his office on Sunday, Mashaba took aim at the boards of entities belonging to the city, pledging to make savings of at least R18m from the salaries of non-executive board members alone. However, the proposed changes were aimed at fostering accountability.

Mashaba assured that no jobs would be lost in the proposed restructuring. "We will be extremely sensitive to the issue of employment. There must not be job losses in this process," he said. "It is about bringing the existing workforce and management into the city structures to improve service delivery to our residents."

The City of Johannesburg owns 12 entities, including City Power, the Johannesburg Development Agency, the Johannesburg Social Housing Company, Metrobus, the Johannesburg Roads Agency, Johannesburg Water, and the Johannesburg Property Company.

"Each of these municipal-owned entities has a board of directors to whom the MDs or CEOs of these entities report. It is these boards that direct the activities of MDs or CEOs, and not the City of Johannesburg," said the statement.

The move towards centralisation is a far cry from what Mashaba, a free market advocate and former chairman of the Free Market Foundation, initially said he would do if elected mayor.

Mashaba had promised to dismantle waste management company Pikitup into seven segments and consider privatisation. However, it would appear that political pressure won over his wishes as he has since backtracked, following fierce opposition from unions — and perhaps from coalition partners such as the Economic Freedom Fighters.

Mashaba said the Johannesburg city council had, on Thursday, approved a report that proposed the "reintegration" of municipal entities, including Pikitup, City Power and Joburg Water.

"With the service delivery challenges we have inherited in our city, the governance structure of entities is cumbersome and inefficient. In order to turnaround our high levels of unemployment, we need a government that acts swiftly in delivering its services and is willing to make bold decisions required to achieve this," he said.

He said it was "absurd" that the agencies had been established under the Companies Act, which gave their boards a considerable measure of autonomy from the metro’s authority but still saddled the city with the responsibility of accounting for their performance.

"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," Mashaba said.

The process of reintegrating the municipalities was expected to take 18 months to finalise. Mashaba said the city would not be hasty in implementing this recommendation and that a task team would be established to look at the feasibility of the reintegration.

"It is about bringing the existing workforce and management into the city structures to improve service delivery to our residents," Mashaba said. "This saving of public money each year will be redirected to improving service delivery and infrastructure."

South African Municipal Workers Union’s Gauteng provincial secretary, Caleb Mokoena, said the union had not been officially told of the pending move but saw it as "simple politics" to "undo what was done by the previous administration".

"There is a concern because when Mashaba was campaigning he campaigned around privatising Pikitup. Once you do that there are implications for job security. We need proper consultation and engagement on these matters. We need to ensure no jobs are lost," said Mokoena.

Municipal IQ analyst Kevin Allan said the city had to be sure of what it was doing as reintegrating the entities could take up to two years. The decision was neither right nor wrong, but had to be taken seriously, he said.