Matjhabeng municipality’s appeal rejected amid financial challenges, service delivery collapse

Free State’s Matjhabeng Local Municipality in the Free State has suffered a legal setback after its appeal was dismissed.

The appeal stemmed from a case filed by the Democratic Alliance (DA) against the municipality, which was brought before the Free State High Court in Bloemfontein.

The DA argued that Matjhabeng was in a financial crisis and persistently failing to meet its obligations to provide basic municipal services and fulfil its financial commitments.

In November 2023, the party requested the intervention of the Free State government and the Minister of Cooperative Governance and Traditional Affairs (Cogta).

The Matjhabeng Local Municipality consists of the towns of Welkom, Virginia, Odendaalsrus, Hennenman, Ventersburg, and Allanridge.

Matjhabeng municipality audit findings

The case was largely informed by the Auditor-General’s findings, which highlighted a range of serious issues within the municipality.

The audit revealed that Matjhabeng lacked proper systems to accurately bill residents for water and electricity usage.

It also showed that the municipality’s water infrastructure was severely deteriorated, resulting in a loss of 56% of the water it procures due to infrastructure failure.

These losses—exceeding R239 million—were a result of metering inefficiencies, ageing pipelines, burst pipes, leakages, and unmetered connections.

The municipality was also found to owe Eskom R6.8 billion.

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Material electricity losses totalling more than R98 million were attributed to the condition of the electricity network, adverse weather, load pressures, and non-technical losses such as theft and vandalism.

Moreover, the audit disclosed that more than R339 million in fruitless and wasteful expenditure had been incurred, primarily from interest and penalties on overdue supplier payments.

The municipality was also found to have failed to meet the 30-day payment requirement stipulated by the Municipal Finance Management Act (MFMA).

In October 2024, the Free State High Court ruled in favour of the DA and issued a declaratory order.

The respondents in the case included the municipality itself, the President, the Cogta Minister, the National Treasury, the National Council of Provinces (NCOP), and the Free State Premier.

Leave to appeal application

In its appeal, heard in March 2025, the Matjhabeng Local Municipality argued that the court erred in finding it had violated the constitution by failing to provide essential services.

The municipality claimed that the current administration, which took office in November 2021, had inherited long-standing challenges.

These included decaying infrastructure, poor service delivery, limited funding, and significant debts to service providers.

According to the municipality, these problems had developed over time and were now the responsibility of the new leadership to resolve.

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However, in her ruling, Judge Ilse van Rhyn pointed out that the municipality had not challenged any of the substantive facts or legal grounds presented by the DA in its original application.

“The Matjhabeng Municipality did not dispute the DA’s case that there has been a breakdown in law and order, including rampant infrastructure theft, vandalism and illegal mining activities within the area of the Matjhabeng Municipality.

“The Matjhabeng Municipality has incurred staggering amounts of wasted and irregular expenses, including the outsourcing of its project management unit and furthermore paying for duplicated services and inflated invoices,” the judgment reads.

Court dismisses Matjhabeng Municipality’s appeal

Van Rhyn emphasised that the facts presented by the DA about Matjhabeng Local Municipality’s failure to meet constitutional obligations were not in dispute.

“While the DA contended that the only solution was to grant the substantive relief sought, by granting of a structural interdict and the imposition of intervention measures to the effect that the provincial spheres of government will intervene and impose a recovery plan, the opposing respondents, including the Matjhabeng [Local] Municipality argued that within a short period of time, much progress has indeed been made and that a further 12 months will afford them time to see the recovery steps to fruition.”

She concluded the municipality’s appeal application had no reasonable prospects of success and should be dismissed.

The Matjhabeng Local Municipality was placed under administration by the Free State government in February.

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