The Democratic Alliance has tabled a notice of motion in the Eastern Cape Provincial Legislature to dissolve the Kouga council.
DA MPL, Dacre Haddon, says this would allow for the appointment of administrators to run the municipality.
In a statement on Thursday, Haddon said Kouga was unable to service its debts and owes the Nelson Mandela Bay Metro more than R25m for water services.
He adds that the municipality had been unable to pay contributions to the pension funds of its workers and its debt to SARS and others creditors was in excess of R80m.
"The grim reality of the financial disaster in Kouga is reflected in the fact that requests for interventions has been made by both the DA and the ANC. This included a sitting of the Legislature in Humansdorp last year, meetings and letters to the MEC for Local Government, the Minister of Finance and the Auditor General," Haddon said.
He said "the NMBM has its own financial difficulties and urgently needs this outstanding payment to be made. Service delivery to the people of Kouga is at an all-time low."
Haddon said financial support was only a short term solution to the real problem which needs to be resolved in a responsible manner.
"The Kouga municipality and Council cannot manage their affairs at all. It would be wrong to call for just financial support when the evidence of financial mismanagement calls for this municipality to be run by administrators in terms of a Section 139-intervention by the Department of Local Government."
