Suliman Rajah writes:

The Potchefstroom Herald’s report on the JB Marks Municipality’s approval of a proposed 25-year solar power purchase agreement raises questions that go far beyond the concerns expressed by opposition councillors about transparency, costs and the timing of the special Council meeting.
Several months ago, when the municipality invited public comment on the proposed agreement, I submitted a detailed written response identifying what I considered serious legal and procedural irregularities in the process. The consultation process itself was deeply flawed. My submission set out the legal concerns that needed to be addressed before the municipality could lawfully proceed. A copy of that letter was also sent to the South African Human Rights Commission (SAHRC).

These concerns did not arise after the Council vote. They were raised when the public was invited to comment, and they deserve a substantive response.

Section 33 of the Municipal Finance Management Act (MFMA) establishes requirements for municipal contracts that impose financial obligations beyond three years. These include public disclosure, consultation, consideration of the municipality’s future financial obligations and the adoption of a resolution approving the contract in its entirety. The constitutional requirement that public procurement be fair, equitable, transparent, competitive and cost-effective also remains applicable.

The municipality must demonstrate compliance with the law. A majority vote cannot, by itself, cure a defective process.
There is, however, a further and fundamental legal question that the latest report does not adequately address: what is the true legal nature of this agreement, and has the municipality complied with the statutory framework governing municipal public-private partnerships (PPPs)?
In my earlier submission, I specifically raised concerns about whether this proposed 25-year agreement should be treated as a PPP rather than merely an ordinary electricity purchase agreement. The reported project involves a substantial private-sector solar generation facility and a long-term commitment to purchase electricity. Its legal classification cannot be determined simply by the label attached to the contract. The actual substance and structure of the arrangement, the respective obligations of the parties, the allocation of risks and the role of the private party must be examined.

Section 120 of the MFMA and the applicable Municipal Public-Private Partnership Regulations establish a specific framework for municipal PPPs. This framework addresses feasibility, affordability, value for money, risk allocation and prescribed approval and procurement processes.

If the agreement falls within the statutory definition of a PPP, the municipality cannot avoid the applicable legal requirements simply by describing it as a power purchase agreement. Conversely, whether the PPP framework applies must be established through the actual contractual arrangements and the governing law, not assumption.
The municipality must therefore disclose whether it formally assessed the proposed agreement against the PPP framework, whether it obtained a legal determination of the agreement’s classification, and whether all applicable National Treasury and provincial Treasury requirements, consultations and approvals were satisfied.

If the agreement constitutes a PPP and the prescribed processes or approvals were not obtained, this could have serious consequences for its legality. If the municipality maintains that the PPP framework does not apply, it must explain the legal basis for that position.
I call on the municipality to publish the relevant legal opinions or determinations, feasibility assessments, procurement records, financial analyses and evidence of all applicable Treasury consultations and approvals. These are not administrative technicalities. They are safeguards intended to protect the public against unaffordable commitments, inadequate risk assessment and procurement processes that fail to serve the public interest.

The timing of the Council resolution raises a separate but equally serious concern.
The Council approved this proposed agreement at a special meeting on 15 October, shortly before the municipal elections and during the final period of the outgoing Council’s term. The incoming Council will have a different composition and will inherit the financial and contractual consequences of decisions made by its predecessor.

The fact that the outgoing Council approved the agreement does not mean that it must automatically proceed to signature or implementation before the incoming Council takes office. Nor does the resolution, on its own, establish that every legal requirement has been fulfilled.

The immediate question is whether the agreement has already been signed, whether any binding contractual obligations have arisen, and whether any steps towards implementation have been taken. The municipality must disclose the facts.
If the agreement has not been signed, the incoming Council should urgently obtain the complete record and independent legal advice before any further steps are taken. If it has already been signed, that does not place the procurement process, the Council resolution or the agreement beyond legal scrutiny.

The incoming Council must not assume that it can cancel an agreement without legal consequences. Equally, it must not accept that a decision taken by the outgoing Council is beyond challenge merely because it was approved by a majority.
There are established legal mechanisms for investigating alleged financial misconduct, reviewing unlawful administrative decisions and challenging procurement processes that may have contravened the law.

The incoming Council has the authority, subject to the applicable law and its statutory powers, to initiate an investigation into the entire process, from its inception and procurement through public consultation and Council approval to any subsequent signing or implementation.

The investigation must establish not only what happened, but also who was responsible for each decision and whether the law was followed.
The MFMA provides important mechanisms for accountability. Section 32 addresses liability and the recovery of specified forms of unauthorised, irregular, or fruitless and wasteful expenditure. Sections 171 and 173 address financial misconduct by municipal officials and specified criminal offences, respectively. Section 217 of the Constitution establishes the fundamental requirements for public procurement.

Where the evidence warrants it, disciplinary proceedings, civil recovery, judicial review or referral to the appropriate law-enforcement authorities may be necessary. Criminal charges can be pursued where the statutory requirements for an offence are met.
Former councillors and municipal officials do not acquire immunity from investigation or prosecution simply because they have left office. Leaving public office does not erase potential accountability for conduct committed while in office. Whether any particular individual is liable, and under which provision of the law, must be determined through the proper investigative and legal processes.

The question is not merely whether the outgoing Council acted wisely or whether opposition councillors had sufficient time to scrutinise the report. It is whether every stage of this process complied with the law, whether the correct statutory framework was applied, and what legal remedies must follow if it did not.

The municipality reportedly has approximately R1.84 billion in consumer debt and owes Eskom R945 million. Against this background, a 25-year financial commitment demands the highest standards of scrutiny. Residents must be able to establish the full cost of the agreement, the escalation provisions, the minimum purchase obligations, the allocation of risks, the termination liabilities and the implications for the municipality’s future financial position.
Our communities cannot afford to have their future tied to an agreement whose legality and full financial implications remain in dispute. Nor should they be deprived of the opportunity to hold those responsible accountable because political parties are positioning themselves ahead of an election.

The consultation process was the opportunity for the municipality to consider and address the legal concerns raised by the public. The fact that the Council has now voted does not make those concerns disappear. The fact that the outgoing councillors and officials may soon leave office does not make an investigation unnecessary.
The incoming Council must obtain the full record, investigate the process independently, establish whether the applicable legal requirements were met and pursue every appropriate remedy where violations are established. If the evidence points to misconduct or criminal offences, those responsible must be referred to the competent authorities, regardless of whether they still occupy public office.

We must not short-change our communities for political expedience.
The residents of JB Marks deserve more than assurances that a majority has voted in favour of a long-term agreement. They deserve transparency, proof of legal compliance, protection of public resources and accountability for any unlawful conduct.
A Council resolution cannot place a contract above the law. And an election cannot bring accountability to an end.