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29/01/2016: Council approves reintegration of Municipal Owned Entities
29 January 2017
On Thursday, Johannesburg City Council approved a report proposing the initiation of a process to reintegrate Municipal Owned Entities such as City Power, Joburg Water and Pikitup back into the City.

This report represents an important component of the new administration’s approach to over-hauling service delivery in Joburg in an effort to improve performance.

Mayor Mashaba presented the report to Council and heavily advocated for its approval, “There is no question that service delivery has been too slow in our City, and residents made this clear when they voted for change on the 3rd of August 2016.”

“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,” added Mayor Mashaba.

The City of Joburg has a complicated structure of Municipal Owned Entities with an even more complicated relationship with the core of the City.

Decrying the status quo, Mayor Mashaba said, “The absurdity of this situation is 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 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.

“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?” asked Mashaba

“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.”

This decision to reintegrate Entities is proven best practice. Other cities such as Cape Town and eThekwini do not have Board structures and this approach tended to fast-track service delivery. The trend country-wide amongst metro municipalities has been to bring these entities within the City structures.

The process of reintegrating entities will take up to 18 months, “We cannot afford to shock the system by being hasty, rash or ill-considered, because the residents of our City will suffer,” noted Mashaba.

The report spells out in detail 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 seamless transition; and public consultation so that the City can engage with our residents. It will also involve the process of de-registering these companies.

“Each and every step will be conducted with the best interests of our residents as the key consideration,” stated Mashaba.

On the topic of employment within these entities, Mayor Mashaba stated that, “We will be extremely sensitive to the issue of employment. There must not be job losses in this process.”

“It is about bringing the existing workforce and management into the City structures to improve service delivery to our residents,” said Mayor Mashaba.

The non-executive directors on Boards will be the only individuals to lose their positions during this process. This will also save the City millions of Rand annually, with the salaries of non-executive board members totaling R18 million in the current financial year.

“This saving of public money each year will be redirected to improving service delivery and infrastructure,” added Mashaba

Mayor Mashaba concluded by stating, “I have no doubt in my mind that this is what we need to do to correct the sluggish and non-responsive nature of our service delivery in our City.”

For further information, please contact:

Tony Taverna-Turisan
Director of Communications
Office of the Executive Mayor
City of Johannesburg
Tel: 011 407 7375
Cellular: 082 920 9708
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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Last Updated on 31 January 2017