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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)

Chapter 3 : Municipal Revenue

Part 2 : Cash, investment and asset management

14. Disposal of capital assets


(1) A municipality may not transfer ownership as a result of a sale or other transaction or otherwise permanently dispose of a capital asset needed to provide the minimum level of basic municipal services.


(2) A municipality may transfer ownership or otherwise dispose of a capital asset other than one contemplated in subsection (1), but only after the municipal council, in a meeting open to the public—
(a) has decided on reasonable grounds that the asset is not needed to provide the minimum level of basic municipal services; and
(b) has considered the fair market value of the asset and the economic and community value to be received in exchange for the asset.


(3) A decision by a municipal council that a specific capital asset is not needed to provide the minimum level of basic municipal services, may not be reversed by the municipality after that asset has been sold, transferred or otherwise disposed of.


(4) A municipal council may delegate to the accounting officer of the municipality its power to make the determinations referred to in subsection (2)(a) and (h) in respect of movable capital assets below a value determined by the council.


(5) Any transfer of ownership of a capital asset in terms of subsection (2) or (4) must be fair, equitable, transparent, competitive and consistent with the supply chain management policy which the municipality must have and maintain in terms of section 111.


(6) This section does not apply to the transfer of a capital asset to another municipality or to a municipal entity or to a national or provincial organ of state in circumstances and in respect of categories of assets approved by the National Treasury, provided that such transfers are in accordance with a prescribed framework.