Gauteng Provincial Legislature raises serious concerns over Merafong Municipality’s financial viability

The Gauteng Provincial Legislature’s Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA) yesterday met with the Department of CoGTA and Merafong City Local Municipality to assess the municipality’s financial viability and service delivery performance.

The Committee expressed deep concern over Merafong’s deteriorating financial and governance position, which has left residents exposed to prolonged service disruptions. Towns such as Welverdiend have endured electricity outages lasting more than a month due to transformer failures, while water provision has been compromised by the municipality’s R1.4 billion debt to Rand Water. Although a payment of R50 million secured partial restoration, only about 80% of water supply has resumed, and full restoration remains uncertain. Infrastructure in the Carletonville CBD continues to decline, while the municipality’s own performance assessment shows that just 34% of service delivery targets were achieved in the past financial year.

The Committee noted that these concerns align closely with findings of the National Council of Provinces (NCOP), which earlier this year considered a petition from residents of Khutsong. The NCOP’s report, adopted on 1 April 2025, raised alarm over ageing infrastructure, unreliable transformers, and poor governance in Merafong. Amongst its resolutions, the NCOP directed Gauteng CoGTA to step in under Section 154 of the Constitution to provide structured support, called for monthly progress reports from the municipality, and prioritised the resettlement of informal settlements in hazardous dolomitic zones. It also instructed that forensic investigations be undertaken into questionable procurement and payments thereof, reckless recruitment, and the appointment of dubious senior officials. The Committee is particularly concerned that these directives remain outstanding and have not yet served before the full Council. The Committee has committed to ensuring that both the Department and the Municipality account fully on their implementation.

The Committee also raised concerns regarding the appointment of a Deputy Chief Financial Officer at Merafong. While the municipality appointed the Deputy CFO in April 2024, questions remain about the compliance of such a position with the Municipal Finance Management Act (MFMA), which does not make provision for the designation of “Deputy CFO” within municipal structures. The Committee emphasised the need for urgent legal certainty on the matter to ensure that the municipality’s financial management structures are fully aligned with legislation. The Committee will write to the MEC for COGTA to receive further clarity on this matter.

Committee Chairperson, Hon. Mzi Khumalo, acknowledged that while Merafong faces immense challenges, there are signs of improvement, particularly in its financial reporting. “The municipality has started to make progress in strengthening its audit processes, and that effort should not be overlooked. These are small but important steps towards restoring stability. However, sustained progress requires firm leadership, improved revenue collection, and stronger accountability. With the right interventions and the full commitment of all spheres of government, Merafong has the potential to recover and rebuild public confidence,” he said.

The Committee reaffirmed its commitment to rigorous oversight of the 10-point turnaround strategy, including cash flow improvements, the rollout of smart metering, enhanced indigent household support, and strengthened audit outcomes. It further called on the Department and the municipality to fast-track compliance with NCOP directives and demonstrate measurable progress in addressing service delivery and governance failures.

Enquiries:
Ms Pfano Bulasigobo
Media Officer
Cell: 060 533 1982
E-mail: PBulasigobo@gpl.gov.za

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