I view the suspension of the Council of the Qaukeni Municipality in a very serious light This intervention was undertaken with the object of restoring of peace and stability, as well as the continued provision of service delivery within the Municipality.

Presently there are legal challenges to the intervention, which challenges will be vigorously defended by the Department of Housing, Local Government and Traditional Affairs of the Eastern Cape Province.

The Mayor and Speaker are presently suspended. However, they have been involved in assisting the Administrator in his efforts to restore and sustain good

governance at the Municipality.

Barring attempts to damage Municipal property and an attack on the life of the Administrator, the community has been engaged in the intervention process and have indicated wide-spread support for the intervention.

The intervention has accordingly resulted in a more stable, social and political

environment.

The intervention has examined the prime document relating to service delivery, same being the Integrated Development Plan (IDP). Comprehensive consultations have been held with the community of Qaukeni in an effort to establish their needs. It is anticipated that the IDP will be finalized during June 2004

The provision of basic services and capital projects has continued within the Municipality. The intervention has resulted in the restoration of service delivery and facilitating the implementation of new and existing, capital and LED projects. For example, a housing project which had been approved in 1998, involving 503 houses, was launched by myself-6n 30 March 2004, with a targeted completion date of 30 September 2004.

On the Human Resource front some of the key initiatives undertaken include developing a new organogram and the adoption of approximately 17 Human Resources Departmental policies. A mentorship programme has been developed in order build capacity of the finance department as well as to ensure that statutory provision relating to financial management are adhered to.

In order to improve the working environment, particularly financial management a comprehensive information technology system is currently being implemented.

My report dealing with service delivery is annexed hereto as "Annexure A "

Forensic investigations are currently being conducted by the Special Investigating Unit (SIU). It <s anticipated that these investigations will be completed by the target date, same being 30 May 2004. The SIU will then submit to me a report, in which they will set out their findings.

To date, cash recoveries amounting to R800 000.00 have been effected. A further R3 million has been saved in respect of contracts which have been set aside due to improper procurement practices. • .

These recoveries will positively impact on the cashflow of the Municipality. The progress report of the SIU as at 31 March 2004 is annexed hereto as 'Annexure B.'

Whereas I had initially anticipated that a period of 5 months would be sufficient for the intervention, I am now of the opinion that the intervention time frame should be reviewed.

My proposed exit strategy is annexed hereto as "Annexure C"

Following the approval of my intervention into the affairs of the Qaukeni Local Municipality by the National Council of Provinces on 11 February 2004, I have pleasure in submitting my first report covering the period ended 31 March 2004.

The Qaukeni .Local Municipality has experienced serious problems as a consequence of instability at both political and administrative levels.

These problems had started in June 2002 when the Mayor, Speaker and certain members of the Executive Committee were removed from office after allegations of mal-administration, fraud and corruption. The Provincial Department of Housing, Local Government and Traditional Affairs conducted investigations into the substance of the allegations. The conflicting parties attempted to resolve their dispute by means of court actions, with significant cost implications for the municipality. The infighting amongst the councilors resulted in the collapse of administration, service delivery, political management and the rule of law within the municipality. The support programmes implemented by the Province in terms of section 154 of the Constitution did not bring about the desired effect.

In the meantime, I tried to prevail upon the councilors to resolve their differences and to act with restraint at all times, but the councilors willfully ignored my pleas and/or refused to engage in peace talks. The councilors, instead, embarked upon a spending spree by using municipal funds to litigate against each other.

The violent confrontations in December 2003, which resulted in two shooting incidents, propelled me to invoke;-the provisions, of section 139 of the Constitution and intervene in the affairs of the Qaukeni Local-Municipality to restore proper governance in the interests of the people of Qaukeni as well as in the interests of local government collectively in the Province. The Council of the Qaukeni Local Municipality was accordingly suspended in December 2003, and an

Administrator was appointed in the place of the Council. The Administrator is

carrying out his duties on my behalf.

The intervention is set to last for a period of five months, ending on 31 May 2004, or until such time as I have determined that the objectives of the intervention have been achieved.

Report of the MEC for Housing, Local Government and Traditional Leaders to the National Council of Provinces - Intervention into the affairs of the Qaukeni Local Municipality

My strategy, with regard to the intervention, was developed in full consultation with the leadership of SALGA, the O.R. Tambo District Municipality and the Premier of the Province. I therefore established structures having a political strategic and operational component to support the intervention.

These were spelt out, in writing, to the Administrator by myself. The terms of reference required the preparation of both short and medium term actions by the Administrator.

I hereby submit the first report on the progress achieved thus far in the intervention. The report focuses mainly on strategic areas of the intervention and is more or less aligned to the action plan of the Administrator.

The Chairperson

National Council of Provinces

P.O. Box 15

CAPE TOWN

8000

Dear Colleague

Due to the political turmoil being experienced at the Qaukeni Local Municipality (the Municipality), I intervened in the affairs of the Municipality in terms of section 139 of the Constitution of the Republic of South Africa, Act No. 108 of 1996, with the aim of restoring proper governance. The intervention included in the main the suspension of the Council for an undetermined period and was effective from 30 December 2003.

During the suspension of Council, as MEC, I assumed responsibility for the Council's executive and legislative obligations, which obligations I chose to exercise through the appointment of an Administrator, Mr Sodo. My strategy in undertaking this intervention was to address three primary areas, being political, strategic and operational, which include corresponding institutional components.

To date' the intervention has yielded the following :

1. Despite isolated incidents of violence and damage to property, the community has been engaged in the intervention process and have indicated wide-spread support for the intervention. The intervention has accordingly resulted in a more stable social and political environment.

2. The intervention team has reviewed the prime documents relating to service delivery, same being the Integrated Development Plan (IDP).Comprehensive consultations have been held with the community of Qaukeni in an effort to establish their needs. It is anticipated that the IDP will be finalized during June 2004.

3. The provision of basic services and capital projects has continued within the Municipality. The intervention has resulted in the restoration of service delivery and facilitating the implementation of new and existing, capital and Local Economic Development (LED) projects. For example, a housing project, which had been approved in 1 998, involving 503 houses, was launched by rnyself on 30 March 2004, with a targeted completion date of 30 September 2004.

4. On the Human Resource front some of the key initiatives undertaken include developing a new organogram and the adoption of approximately seventeen Human Resources Departmental policies. A mentorship programme has been developed in order to build capacity of the finance department as well as to ensure that statutory provisions relating to financial management are adhered to.

5. In order to improve the working environment, particularly financial management, a comprehensive information technology system is currently being implemented with the estimated completion date being 31 August 2004.

6. Forensic investigations are currently being conducted by the Special Investigating Unit (SIU). Phase 1 of these is planned to be completed by 31 August 2004.

7. To date, cash recoveries amounting to R800 000-00 have been effected. An amount of R3 million has been saved in respect of contracts, which have been set aside due to improper procurement practices. These recoveries have and will positively impact on the cashflow of the Municipality. A further R2 million is expected to be recovered during the months of June to August 2004, albeit not in full.

8. A number of cases have been handed over to the South African Police Services and the Joint Anti-Corruption Task Team (JACTT) for the purpose of the investigation and institution of criminal proceedings. It is submitted that a period of at least three months post May 2004 is required to bring these cases to finality.

It appears that a continuation of the intervention is required for the following reasons :

1. A number of the above-mentioned gains, as. well as other issues, which are addressed in the attached report, are still in the process of being investigated and finalized. For example, in a number of cases, civil action is in the process of or has been instituted for the recovery of monies owed to the Municipality.

2. A consultation with some stakeholders has. indicated a preference for the continuation of the intervention in order for current processes to be completed.

In view of the aforementioned, I hereby request a continuation of the intervention, as is or in an amended term, until such time as the purpose of the intervention has been accomplished.

I trust that my request will receive your favourable consideration.

Yours faithfully