| (1) | A municipality may establish a private company or acquire an interest in such a company only— |
| (a) | for the purpose of utilising the company as a mechanism to assist it in the performance of any of its functions or powers referred to in section 8; |
| (b) | if the municipality can demonstrate that— |
| (i) | there is a need to perform that function or power in accordance with business practices in order to achieve the strategic objectives of the municipality more effectively; and |
| (ii) | the company would benefit the local community; and |
| (c) | if any other conditions that may be prescribed have been complied with. |
| (2) | If a municipality establishes a private company or acquires an interest in such a company for the purpose of using that company as a mechanism to provide a municipal service, Chapter 8 applies. |
[Section 86E inserted by section 18 of Act No. 44 of 2003]
