- The Pretoria High Court has ordered the government to put Lekwa Municipality in Standerton under administration.
- JSE-listed Astral began its legal action against the provincial and national government in 2018 to compel it to repair Standerton’s infrastructure.
- Power cuts have cost Astral R39 million over a five-year period and the plant, which churns out almost 3.2 million chickens a week, has had to invest in a reverse osmosis water treatment facility for its water supply, which cost the company R50 million.
Deputy Finance Minister David Masondo says a groundbreaking decision by the North Gauteng High Court in Pretoria to place Standerton’s failing Lekwa Municipality under administration, comes with "valuable lessons" for government.
Masondo’s statement came in an address to the Mpumalanga municipality’s former council members, who have been relieved of their duties.
The municipality was placed under administration after the High Court’s order in April.
The court order brings the battle between Lekwa and South Africa’s biggest poultry producer, Astral Foods, to an end.
JSE-listed Astral took legal action against the provincial and national government in 2018 to compel it to repair Standerton’s infrastructure. The poultry producer is Standerton’s biggest employer and produces the Goldi Chicken brand at the local plant. It also owns the Festive, Mountain Valley and County Fair chicken brands and hatchery and feed businesses.
- READ | Standerton chicken producer gets court order to force govt to supply town with water, electricity
But service delivery issues in in Standerton, including repairs to its road riddled with potholes, waste removal and sanitation services have come to a standstill. And the biggest issue the town’s people share with Astral are regular electricity and water cuts. The power cuts have cost Astral R39 million over a five-year period and the plant, which churns out almost 3.2 million chickens a week, has had to invest in a reverse osmosis water treatment facility for its water supply, which cost the company R50 million.
In his address, Masondo said there are 39 municipalities in dire straits like Lekwa, which had failed in their constitutional and developmental mandate, 25 years into the new local government dispensation. He added that he was confident that the order, which is the first of its kind to be handed down to national government, would not be the last.
"The events in this municipality will in all likelihood blaze a trail for other communities that have had their fair share of poor service delivery and general municipal ineptness," he said.
He said there are 163 additional municipalities in financial distress, while 108 have passed unfunded budgets for the 2020/21 financial year. This means that they expect to experience cashflow issues in that year.
Poor governance will not 'be tolerated'
"To deal with the envisaged scale and depth of this problem, it is vital that national government sends a clear and unambiguous message that poor leadership undermines the proper functioning of our municipalities, be it at the political level or the administrative level, will no longer be tolerated nor condoned," Masondo said.
The deputy finance minister also said that the court’s order came with lessons for the government which include that court’s will be the point of recourse for communities and provinces that have been ignored by their municipalities. Another lesson for the government is that political and administrative leadership is key to creating efficient municipalities.
- READ | The town of Standerton and Astral Foods | An exhibition of municipal failures' crippling effect on business
"If we are serious about fixing a financial and service delivery crisis, we need to first fix the political and administrative leadership crisis," Masondo said.
Last month, Cabinet dissolved Lekwa’s municipal council and relieved the councillors of their duties, while its by-elections have been put on hold. The government has since appointed former Nelson Mandela Bay Metro city manager Johann Mettler as Lekwa’s administrator.
Astral’s commercial managing director Frans van Heerden said the poultry producer welcomed the court’s decision.
Meanwhile, Standerton's residents continue to live in tough conditions with Lekwa Community Forum and Lekwa Ratepayers’ Association member Sello Tsotetsi saying some community members have stopped taking chronic medication and families don’t have water to flush toilets or cook.
Tsotetsi added that small businesses like cafés and car washes have lost revenue, while Covid-19, typhoid and cholera continue to be a threat for the residents.
He called the for the immediate scrapping of Lekwa's power cuts and the revival of the town's economy.