Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.
The performance of Eastern Cape municipalities was criticised by the province's MEC for finance and treasury, Billy Nel, during his 2007-08 budget speech on Friday.
Nel said though transfer payments and subsidies to the municipalities had increased, a number of municipalities were not yet able to meet their developmental and service delivery quotas.
He attributed these failures to their inadequate economic base and to high levels of poverty and unemployment.
"Cumbersome administrative and budgeting systems, inefficient service delivery, poor management and disproportionate wage bills compound the problems," he said.
During a media briefing earlier, Nel stressed that the provincial government would not transfer money to municipalities that lacked capacity.
He said a comprehensive investigation into the financial viability and service delivery capacity would be made at selected municipalities.
Nel said he hoped the investigation, which would be done by a private company, would be able to establish unambiguously the underlying factors hampering service delivery.
At least 22 out of the 39 municipalities currently monitored by Nel's department were not financially viable and lacked the capacity to execute service delivery, said Newman Kusi, who is the head of the Finance Department.
Kusi said the investigation would help him influence politicians to give more administrative and financial support to these municipalities.
Kusi said he believed the investigation would help municipalities that were forced to raise 80 percent of their budget from the communities.
He said this should be "reversed" in some municipalities and the government should provide them with 80 percent of their budgets instead of the current 20 percent. - Thozi Manyisana