| (1) | The Minister may for purposes of this Chapter make regulations or issue guidelines in accordance with section 120 to provide for or regulate the following matters: |
| (a) | The preparation, adoption and implementation of a municipal tariff policy; |
| (b) | the subsidisation of tariffs for poor households through— |
| (i) | cross-subsidisation within and between services; |
| (ii) | equitable share allocations to municipalities; and |
| (iii) | national and provincial grants to municipalities; |
| (c) | limits on tariff increases; |
| (d) | [Section 86A(1)(d) repealed by section 13 of Act No. 12 of 2007] |
| (e) | incentives and penalties to encourage— |
| (i) | the economical, efficient and effective use of resources when providing services; |
| (ii) | the recycling of waste; and |
| (iii) | other environmental objectives; |
| (f) | criteria to be taken into account by municipalities when assessing options for the provision of a municipal service; |
| (g) | measures against malpractice in selecting and appointing service providers, including measures against the stripping of municipal assets; |
| (h) | mechanisms and procedures for the co-ordination and integration of sectoral requirements in terms of legislation with this Chapter, and the manner in which municipalities must comply with these; |
| (j) | the minimum content and management of service delivery agreements; |
| (k) | additional matters that must be included in a feasibility study in terms of section 78(3)(c), which may include— |
| (i) | the strategic and operational costs and benefits of an external mechanism in terms of the municipality's strategic objectives; |
| (ii) | an assessment of the municipality's capacity to effectively monitor the provision of the municipal service through an external mechanism and to enforce the service delivery agreement; |
| (l) | performance guarantees by service providers; and |
| (m) | any other matter that would facilitate— |
| (i) | the effective and efficient provision of municipal services; or |
| (ii) | the application of this Chapter. |
| (2) | The Minister may only make regulations and issue guidelines contemplated in subsection (1)(a) to (e) after consulting with the Minister of Finance and any other Cabinet member whose portfolio is affected by such regulations and guidelines. |
| (3) | When making regulations or issuing guidelines in terms of section 120 to provide for or regulate the matters mentioned in subsection (1), the Minister must— |
| (a) | take into account the capacity of municipalities to comply with such regulations and guidelines; and |
| (b) | differentiate between different kinds of municipalities according to their respective capacities. |
[Section 86A inserted by section 17 of Act No. 44 of 2003]
