INTRODUCTION

Municipalities in South Africa are increasingly making use of state-owned municipal entities and agencies to deliver public services. This follows global trends in which city and municipal public sectors, facing intense pressure to deliver economic and social development, with increasingly limited resources, yet perceived as shackled by bureaucratic constraints, decreasing income and lacking entrepreneurial nous, increasingly use alternative service delivery (ASD) methods (Stumm 1997; Jessop 2003; Wilkins 2003).

In 1994, the ANC government set about transforming the apartheid-era public service from a racially exclusive entity in terms of staff, public service delivery and ethos, to one that is developmental, efficient, democratic, and racially inclusive in both delivery and make-up (Fraser-Moleketi and Saloojee 2008; Gumede 2015). While transforming, the public service had also, at national, provincial and municipal level, to dramatically increase the quantity and quality of service delivery, as well as reduce historical public service delivery backlogs.

However, it soon became clear that at municipal level, massive capacity constraints, limited financial and human resources, and ongoing institutional weaknesses hamstrung public service delivery. ANC government policymakers started looking at alternative ways of delivering public service efficiently, cheaply and quickly, beyond the weak municipalities (Stacey 1997; SACP 1999; Khumalo, Ntlokonkulu and Rapoo 2003; Gumede 2005).

From 1996 onwards, the ANC government at municipal level increasingly used state-owned entities and agencies, run along business lines yet still owned by municipalities, either by restructuring existing ones or creating new ones, to deliver public services. The irony is that by 2016, many of these entities were so inefficient, corrupt and poorly managed that new Democratic Alliance (DA) Johannesburg mayor Herman Mashaba threatened, in the case of the Johannesburg city-owned entities, to close them down, and incorporate the staff back into the city's public service (Mashaba 2016). This chapter will look at the reasons for the broken governance of South Africa's municipal-owned entities.

THE DIVERSE LANDSCAPE OF MUNICIPAL ENTITIES AND AGENCIES

Municipal entities are essentially ring-fenced businesses (IoDSA 2010) which have a mandate to deliver a specific public service, can operate autonomously from the municipality, and ideally would have fewer bureaucratic constraints to innovate and improve performance (Peters 2012: 255). Most municipal entities concentrate on local social and economic development, tourism, social housing, and the provision of water, power and cleaning services.