FINANCE DIRECTORATE
SHAREHOLDING MANAGEMENT DEPARTMENT
MUNICIPAL ENTITY
QUARTERLY NEWSLETTER
Analyst
2010/2011 Quarter 1: 1 July 2010 – 30 September 2010, ISSUE NO. 14
As parent municipality to the municipal entities we aim to keep our municipal entity boards of directors
and staff abreast of all current news, legislation and policies directly affecting the municipal entities.
This will enable directors to be continuously informed as well as ensuring that we meet the legislative
requirement as parent municipality to ensure that both the municipality and the municipal entity
comply with the Municipal Systems Act, the Local Government: Municipal Finance Management Act and
any other applicable legislation.
Contents
The newsletter’s intend to convey information relating to the Local Government: Municipal Finance
Management Act, Local Government: Systems Act, Companies Act, Corporate Governance and any
information relevant to municipal entities.
THE LOCAL GOVERNMENT LEGISLATION:
THE MUNICIPAL FINANCE MANAGEMENT ACT:
Supply Chain Management: Functionality in terms of the Preferential
Procurement Policy Framework Act
In a recent court case handed down in Kwa Zulu Natal, an unsuccessful tenderer successfully
challenged the validity of the Regulation 8 of the Regulations issued in terms of the PPPF Act.
Regulation 8 allowed for the calculation of functionality points as part of the price allocation in the
90/10 or 80/20 ratio. The court held that this was in conflict with the enabling Act. National treasury
has issued a MFMA circular recommended how functionality should now be utilised. It is proposed that
that functionality be used as pre-qualifying criteria (gate keeping provision).
A copy of the Circular is available at:
http://www.treasury.gov.za/legislation/mfma/circulars/MFMA%20Circular%20No%2053%20%20SCM%20%20Amended%20Guidelines%20on%20Functionality%20for%20Evaluation%20of%20Bids.pdf
1
Supply Chain Management: Prohibition of Restrictive Practices
National Treasury has issued MFMA Circular No 52 that deals with any form of bid rigging. Tenderers
are now required to sign a Certificate of Independent Bid Determination.
The Circular may be accessed at:
http://www.treasury.gov.za/legislation/mfma/circulars/MFMA%20Circular%20No%2052%20%20Supply%20Chain%20Management%20-%20Prohibition%20of%20Restrictive%20Practices.pdf
NEW LEGISLATION:
CONSUMER PROTECTION ACT, 68 of 2008
The bulk of the Consumer Protection Act (the CPA) was intended to commence on the 24 October
2010, 18 months after it was signed into law by the President. However the Minister of Trade and
Industry has deferred the general effective date to 31 March 2011. The reason for the deferment is to
allow “additional time for adequate preparation of the administrative systems necessary to ensure the
efficient and effective implementation” of the Act.
COMPANIES ACT, 71 of 2008
The Minister of Trade and Industry has announced that the new Companies Act implementation has
been postponed until 1 April 2011.
Please contact Louise Muller (021 4003940) or Richard Wootton (021 4002701) if you have any queries
in respect of this newsletter.
Although every effort is made to check the accuracy and quality of the information supplied, The City
cannot be held responsible for any errors that may arise.
Copyright(c) City of Cape Town 2007. All rights reserved. No part of this newsletter may be reproduced or transmitted in any form
without written permission from the City of Cape Town, Finance Directorate, Shareholding Management Department.
2