The Matjhabeng Local Municipality has suffered a legal setback after the Free State High Court dismissed its appeal against a case brought by the Democratic Alliance (DA), which accused the municipality of financial mismanagement and failing to deliver basic services to residents.
The court upheld the DA’s argument that Matjhabeng—which includes towns like Welkom, Virginia, and Odendaalsrus—is in dire financial distress, leading to severe service delivery failures. The ruling compels the municipality and the provincial government to draft a financial recovery plan within six months.
A Precedent for Provincial Intervention
DA Member of Parliament George Michalakis, who was interviewed following the judgment, emphasized that the case sets a crucial precedent. He explained that the court’s decision reinforces Section 139(4) and (5) of the Constitution, which mandates provincial governments to intervene in municipalities facing financial collapse—rather than treating it as a discretionary measure.
“The financial failure is so evident that none of the three government spheres could argue against it,” Michalakis said. “It’s baffling that the municipality and province chose to fight this in court instead of addressing the crisis.”
Audit Exposes Massive Losses
The DA’s case highlighted alarming financial irregularities, including R239 million in water losses and R339 million in wasteful expenditure. Michalakis attributed the prolonged crisis to political negligence, pointing out that former municipal leaders were later appointed to provincial cabinet positions without being held accountable.
“This isn’t just inherited mismanagement—it’s a cycle of the same people being recycled through positions of power,” he said.
No Signs of Improvement
Despite claims by the current administration—in office since 2021—that progress was being made, Michalakis stated that the DA saw no credible recovery efforts before pursuing legal action. The court also noted that even after appointing a new municipal manager, little had been done to improve services.
What Happens Next?
With the appeal dismissed, the Free State provincial government must now step in to enforce financial discipline in Matjhabeng. The ruling could pressure other provinces to act more decisively in struggling municipalities nationwide.
For now, residents continue to endure erratic water supply and crumbling infrastructure, hoping the court-ordered recovery plan will finally bring change.
