Godongwana wants reforms in metro management

FINANCE Minister Enoch Godongwana has called for urgent reforms in the way South Africa's metros manage their core trading services, warning that years of underinvestment in water, sanitation and electricity have left cities struggling to support growth and attract investment.

- SIPHELELE DLUDLA

Speaking at a Metro Trading Services Reform engagement session with executive mayors yesterday, Godongwana said the country's stagnant economy and rising unemployment had put severe pressure on public finances.

The National Treasury implemented these reforms to restore and sustain trading services such as electricity, water, sanitation, and waste services in metros through institutional and financial reforms.

Godongwana noted that municipalities are unable to expand bulk infrastructure in fast-growing areas such as Lanseria in Johannesburg, Mooikloof in Tshwane, and Cape Town's West Coast, limiting property development and revenue generation.

"This means that metros cannot collect additional revenue in the form of property rates, nor can they add paying customers to water and electricity businesses," he said.

"Considering the declining water and electricity margins, which we are fully aware of due to double-digit bulk purchases, municipalities are in a difficult position. This is a trend that we cannot continue to be spectators to. We need to arrest this in the interest of our country."

The minister announced the Metro Trading Services Reform, which includes

restructuring the grant system to introduce performance-based incentives.