| (a) | a municipal entity or another municipality, it may, subject to subsection (3), negotiate and enter into such an agreement with the relevant municipal entity or municipality without applying Part 3 of this Chapter; |
| (aA) | a national or provincial organ of state, it may enter into such an agreement with the relevant organ of state without applying Part 3 of this Chapter; or |
| (b) | any institution or entity, or any person, juristic or natural, not mentioned in paragraph (a) or (aA), it must apply Part 3 of this Chapter before entering into such an agreement with any such institution, entity or person. |
| (2) | Before a municipality enters into a service delivery agreement with an external service provider it must establish a programme for community consultation and information dissemination regarding the appointment of the external service provider and the contents of the service delivery agreement. The contents of a service delivery agreement must be communicated to the local community through the media. |
| (a) | Where a municipality decides to enter into a service delivery agreement with another municipality as contemplated by section 76(b)(ii), that other municipality must conduct or commission a feasibility study, which it must take into account, before the service delivery agreement is entered into. |
| (b) | The feasibility study referred to in paragraph (a), must include— |
| (i) | an assessment on the impact on the budget of that other municipality, and on its assets, liabilities and staff expenditure, for each of the financial years that it intends to serve as an external service provider; |
| (ii) | an assessment on whether it will be necessary to increase the number of staff to enable that other municipality to be an external service provider, and whether it will be necessary to transfer or second any staff from the appointing municipality to that other municipality; |
| (iii) | an assessment on the ability of that other municipality to absorb any commitments, liabilities or employees involved, if and when the appointment as external service provider ends; and |
| (iv) | any other relevant information as may be prescribed. |
[Section 80 substituted by section 12 of Act No. 44 of 2003]
