MAKHADO (LOUIS TRICHARDT) – Confusion reigns about the controversial transfer of services from the Makhado Municipality to the Vhembe District Municipality. Serious concerns were once again raised this week about the potentially disastrous consequences if the transfer continues.

Fixed asset investments of more than R31 million, and a loss of income amounting to more than R13 million are involved, without indications of any financial compensation to the local municipality.

The municipality must now gear itself for a shortfall of more than R23 million within a month after the budget for the 2003/4 financial year was approved. Critics of the present administrative dispensation say the system of District Municipalities threatens democracy, because it removes government even further away from the people. District municipalities will be less accountable to the people, which spells disaster for the democratic process of accountability and transparency.

The DA, in a strongly-worded media release, said that this short-sighted decision will render local municipalities helpless and forever dependent on the whims and wishes of political party bosses on District, Provincial and National level. "The ANC seems totally unable to understand that more government does not mean better service delivery. Smaller government, better training and officials who are more efficient will enhance such delivery," it says.

Confusion reigned in the monthly meeting of the Makhado Municipal Council, when the recommended approval of the interim agreement for the transfer of water, sanitation and the fire fighting services to the Vhembe District Municipality was discussed.

Ms Marie Helm, Ward Councillor for Ward 1, registered her official objection against the proposed recommendation. She questioned the financial implications of the proposed transfer and drew attention to the fact that the proposed transfer will leave a major shortfall, for which no budgetary provision had been made. The municipality now faces a shortfall of R23 058 896.

According to the recommendation before Council, the Executive Committee proposed that Council approve the interim agreement and that the Municipal Manager be authorized to sign it on behalf of the Makhado Municipality. After Ms Helm's objection several other councillors also requested further clarity on the whole matter.

It was decided that a meeting should be arranged to inform councillors about the exact meaning and consequences of the proposed agreement. The wisdom of the proposed transfer and the very existence of a District Municipality in a rural area, which is totally covered by local municipalities, are being increasingly questioned by experts on administration. The DA had earlier already, in its reply to the budget speech, warned that the transfer of services from the Makhado Municipality to the Vhembe District Municipality would end in financial disaster for the local municipality. In the envisaged division of powers and functions for water and sanitation, both the water service authority and the water service provider functions are transferred from the local municipality to the Vhembe District Municipality (VDM), with effect from July 1, 2003.

Fixed asset investments of more than R31 475 361, built up over many years by local taxpayers, will be removed from their direct control and transferred to the VDM. With effect from 1 July, the equitable share is allocated to the VDM, together with all income from water and sewer service provision. The equitable share that will be transferred to the VDM for water and sewage services, will amount to R10 698 056. The total income reduction on the 2003/4 budget of the local municipality will be R13 159 281.

The DA says: "This is indeed an ideal way to make sure that local government will end up being a roads-and-cemetery Mickey Mouse authority, with no income of its own and therefore no ability or wish to improve service delivery. Local communities will not be able to hold local government accountable. Local people will once again have to pay the price for short-sighted and incompetent schemes. Local communities cannot afford the luxury of yet another inefficient and clumsy level of government. Three levels are quite enough. We can do without a fourth."