REPORT ON THE MUNICIPAL INFRASTRUCTURE GRANT (MIG ... with presentations.pdfdplg should be improved....

REPORT ON THE MUNICIPAL INFRASTRUCTURE GRANT (MIG) PROGRAMME

QUARTERLY WORKSHOP

23 – 25 APRIL 2007

HELD AT HANS MERENSKY IN THE LIMPOPO PROVINCE

1. BACKGROUND

The dplg, regard the interaction with and coordination of provinces and sector departments as an integral part in, amongst other, the delivery of infrastructure services. One such a forum where issues are discussed is the quarterly workshop that was held from 23 to 25 April 2007 at Hans Merensky in the Limpopo Province. The workshop was attended by:

• Provincial Programme Management Units in all 9 provinces; • National provincial sector departments;

- Department of Public Works - Department of Water Affairs and Forestry - Department of Transport

• Project Management Units of Limpopo Municipalities.

The attendance register is attached as Annexure A. Recipients are urged to use the list to assist them to forge relationships with one another, not only in provincial contexts but also across provinces to cross pollinate one another on solution orientated approaches to service delivery. The programme for the workshop is attached as Annexure B.

From the discussions over the three days an action plan has been drafted which is enclosed as Annexure C.

ACTION LIST

Issues discussed Decisions and action By whom By when

Strategic priority areas for municipal infrastructure in 2007/08 • Overview of 2006/07; • Sustainable

infrastructure delivery and multi-dimensional support;

• Outcome from the round-table between Minister, mayors and councillors held on 23 March 2007.

Presentation/s attached as Annexure/s C1 and C2.

1. National to further communicate decisions of the round table discussions

2. Provinces to implement provincial round table actions and monitor municipal actions

3. Sector master plans and support strategies should be made available to provinces and municipalities to facilitate IDPs.

4. Strategic plan of branch and Chief Directorate to be communicated individually to provinces

5. Detailed 8 steam interventions to be distributed to provinces.

1. dplg, Dir: MIP

2. Province to monitor

3. Sector departments

4. Chief Directorate; Municipal Infrastructure

5. Chief Directorate municipal

Infrastructure

1. End of May 2007 2. Report by end of August

2007

3. Sector depts. by the end of May 2007

4. At the next quarterly meeting

5. As soon as it is approved by Cabinet

Capacity of PMUs • Ineffective and

insufficient capacity of PMUs

• Optimizing existing capacity e.g shared service could be enhanced more

• Deployment to be up-scaled

• Effective coordination between stakeholders through existing structures should be enhanced

Presentation/s attached as Annexure/s C3.

1. PMU guidelines to be discussed in sessions with municipalities and provinces

2. Provinces to receiveget latest version of PMU guidelines

3. Provinces to monitor PMUs according to guidelines, Weak performing PMUs identified and remedial actions identified

4. Rare-skills initiative of Government should be investigated on how it could be applied to the municipal PMUs.

5. The Dplg to continuously inform provinces on the progress made on the deployment. Matrix of deployment and various briefings of deployees to provinces.

1. dplg, Dir: MIG

2. dplg, Dir: MIG

3. Provinces

4. dplg, Dir: MIP

5. dplg, Dir: MIP

1. End of Aug 2007 1.

2. End of May 2007

3. Monthly monitoring and quarterly reporting to dplg

4. Coordination with JIPSA

5. Continuous

Capacity of provinces to monitor and support municipalities on infrastructure • Deployment to be

introduced in provinces and municipalities

• Provinces has challenges securing the necessary funding

Presentation/s attached as Annexure/s: C4 – Eastern Cape C5 – Free State C6 – Gauteng C7 – KwaZulu-Nartal C8 – Limpopo C9 – Mpumalanga C10 – Northern Cape

1. Provinces to indicate deployment requirements from DBSA by completing template developed by dplg.

2. The dplg to assist provinces during provincial budget hearings. Dplg to get dates from NT.

3. Provinces to submit budgetary requests to their HODs as input to provincial treasury

1. Provinces to indicate 2. dplg, Dir: IDF 3. Provinces

1. 4 May 2007 2. Dates to be determined. 3. Dates to be determined.

Provinces top report back on progress at next quarterly workshop.

Best practices by PMUs in 3 Municipalities Presentation/s attached as Annexure/s: C11 – Bela-Bela LM C12 – Greater Sekhukhune DM C13 – Thulamela LM C14 – Modimolle LM

- - -

Division of Revenue Act, 2007 Presentation/s attached as

1. Provinces to ensure that annual reports are submitted by municipalities to NT and dplg (section section 11(3) of DORA 2006)

1. Provinces

1. End of May 2007

Annexure/s C15 & C16

2. Communication between province and dplg should be improved. Copies of letters of allocations to be submitted to provinces by dplg.

2. dplg, Dirs: MIP & IDF 2. End of May 2007

Stopping of funds • R503m has been

stopped from the 2006/07 allocations.

• The decision of where funds will be reallocated vests with the Minister of Finance.

Presentation/s attached as Annexure/s C17

1. The implications of not allocating the stopped funds must be communicated to municipalities as expectancies have been created. The dplg to draft general communiqué. Note the important dates on slide 19 of Annexure 17

1. dplg 1. Mid June 2007

MIG formula Presentation/s attached as Annexure/s C18

1. The dplg to discuss formula review outcomes at the next quarterly workshop.

1. dplg 1. Next quarterly workshop

Construction industry and market factors impacting on municipal infrastructure • Impact of the

construction industry boom on the delivery of municipal infrastructure and MIG


1. More regular engagement between SAFCEC and stakeholders would be required.

1. The dplg to advice on this process.

1. Next quarterly workshop

MIG-MIS • Accelerating the

utilization of MIG-MIS through training and

1. Provincial training and system analysis at a municipal level should be done in cooperation with provinces

2. The dplg to provide names to provinces

1. dplg, Dir: IGIMS 2. dplg, Dir: IGIMS

1. End of May 2007 2. End of May 2007

assistance to municipalities and provinces.


of service providers in the provinces to do analyses and training.

Expanded Public Works programme (EPWP) Leadership of EPWP at a provincial level and the customization of guidelines in line with revised criteria and informing/ guiding municipalities. Presentation/s attached as Annexure/s: C21 – National EPWP office C22 – Eastern Cape C23 – Free State C24 – KwaZulu-Nartal C25 – Limpopo C26 – Mpumalanga C27 – Northern Cape C28 – North West

1. Existing projects to be evaluated and verified by EPWP (province) together with Provinces whether it conforms to EPWP principles or can be converted to EPWP under certain conditions. The process should be part of the KPI reporting verification processes for the quarter ending on 31 March 2007.

2. EPWP reporting by provinces at the quarterly workshop must be based on the latest confirmed data generated from the KPI reporting cycle.

3. EPWP Unit to provide reporting template for reporting at quarterly workshops

4. Provincial EPWP offices to lead process to capacitate municipalities. Coordination with provincial local government offices. EPWP to inform provinces of the capacity building time frames.

5. EPWP (together with EPWP provinces) to invite provinces to the national EPWP meetings.

6. EPWP to attend PMITT meetings. Where problems exist, provinces can contact nation EPWP office.

7. Presentation on EPWP training at the next quarterly meeting.

8. Province to receive the general EPWP progress report on municipalities.

1. EPWP (provinces) and Provinces.

2. Provinces

3. EPWP National Unit

4. EPWP (provinces) to inform provinces

5. Provinces to inform EPWP (provinces)

6. Provinces



1. (end June 2007)


3. (end June 2007)

4. End of May 2007

5. Continuous

6. Continuous

7. Next Quarterly meeting

8. End of May 2007

Service levels and unit 1. The dplg to discuss guidelines at the 1. dplg, Dir: MIG 1. Dates of sessions to be

cost Unit cost to be updated more frequently to keep tract with changing environment impacting on unit cost.

provincial sessions with municipalities and progress provided at the next quarterly workshop.

coordinated with provinces

IDPs and infrastructure

2. Results of IDP analyses to be presented at the next quarterly workshop

3. Western Cape to share “10 questions” with other Provinces to evaluating IDPs

4. Provinces to collect IDPs and evaluate it according to check lists. List to be forwarded by dplg.

5. Provinces to ensure that provincial departments do attend the IDP hearings to deal with infrastructure.

6. The dplg and provinces to ensure coordinating role in terms of those departments responsible for infrastructure in IDPs.

1. dplg

2. Western Cape Province

3. dplg, Dir:MIG

4. Provinces

5. dplg ( Dir:MIG) and provinces


2. End of May 2007

3. Mid June 2007

4. According to dates of hearings

5. According to dates of hearings

Asset management and comprehensive infrastructure plans Presentation/s attached as Annexure/s C29

1. The dplg to discuss guidelines at the provincial sessions with municipalities.

1. dplg, Dir: MIG 1. Dates of sessions to be coordinated with provinces

Non-Financial Monitoring processes • Role of provinces, sector

departments and dplg • Registration of projects • KPI reporting Presentation/s attached as Annexure/s C30

1. July 2007 (1st quarter) report to be based only on information as on the MIG-MIS.

2. Commitments on 07/08 finalised by April 2007.

3. Commitments on 08/09 finalised by August 2007.

1. Provinces and municipalities

2. Municipalities assisted by provinces

3. Municipalities assisted by provinces

1. As per reporting process

2. End of April 2007

3. End of August 2007

Municipal services - turn around projects and cost recovery Presentation/s attached as Annexure/s C31

- - -

Bulk Water Services infrastructure programme managed by DWAF • Specific purpose capital

grant to supplement the financing of the social component of regional bulk water & sanitation infrastructure

• Only for Regional Bulk water services infrastructure and for the social component.

• Allocation: • 07/08 … R300

million • 08/09 … R450

million • 09/10 … R650

million Presentation/s attached as Annexure/s C32

1. Policy document available 2. Project Checklist developed 3. Nomination process for 2008 99%

complete (need some confirmation, validation & budget reconciliation)

4. Project profiles being captured 5. Project list 2009 being finalized 6. DWAF to confirm Task Teams

established to support institutional as well as water resources components

7. Feasibility guide: 80% complete 8. Funding allocation to Regions by mid to

end May

1. DWAF 2. DWAF 3. DWAF

4. DWAF 5. DWAF 6. DWAF

7. DWAF 8. DWAF

1. Completed 2. Completed 3. 99% completed at April

2007

4. Continuous 5. Continuous 6. Next Quarterly

7. 80% complete 8. Mid May 2007

Water Supply & Sanitation: Making it happen Stakeholders in the water

sector have to indicate how they will succeed in meeting the targets

1. Reality action plan with the assistance with provinces and municipalities Clarity on goals to be delivered Funding reconciliation on backlogs Resource reconciliation Existing actions and projects alignment

1. DWAF assisted by provinces 1. Mid May 2007 and results communicated at next quarterly workshop

Presentation/s attached as Annexure/s C33 Eradication of bucket sanitation

•

- - -

Report by sector departments on the development of the sector support strategies Presentation/s attached as Annexure/s C34

1. The department together with roads agencies to assist municipalities with the classification of roads

1. Department of Transport to coordinate

1. Report at the next quarterly meeting on the coordination and interaction with municipalities on the process.

ANNEXURE A

ANNEXURE B

DEPARTMENT OF PROVINCIAL AND LOCAL GOVERNMENT MUNICIPAL INFRASTRUCTURE GRANT Tel: (012) 334 4994 Private Bag X804 Fax: (012) 334 4862 PRETORIA 0001

MUNICIPAL INFRASTRUCTURE GRANT (MIG) PROGRAMME QUARTERLY WORKSHOP

1

DATE : 23 – 25 April 2007

VENUE : Hans Merensky, Phalaborwa (Limpopo Province)

STAKEHOLDERS : (dplg, Provincial Departments of Local Government - Sector National, Provincial and Regional Departments, Limpopo PMUs)

PROGRAMME DAY 1: 23 April 2007 08:30 – 09:00 Tea and registration

09:00 – 09:10 Welcome and opening

Limpopo Province

09:10 – 09:30 Strategic priority areas for municipal infrastructure in 2007/08

• Overview of 2006/07 • Sustainable infrastructure delivery and multi-

dimensional support • Outcome from the round-table between

Minister, mayors and councillors held on 23 March 2007

DDG: FBS&I in dplg

09:30 – 09:50 Capacity of municipalities to implement municipal infrastructure

Revised Project Management Unit Guidelines Coordination and deployment of experts Preliminary results of the analysis on the

deployment of senior engineers through SAICE

dplg (Dirs: MIG & MIP)

09:50 – 10:10 Questions and discussion

10:10 – 13:10 Reports by provinces on current capacity to monitor and support municipalities on infrastructure

Current structure and functions of the Provinces on Municipal Infrastructure

Current capacity and budget Proposed structure of the Province, functions

and budget (15 minutes per presentation and 5 minutes per provinces for discussion)

Provinces

13:10 – 14:00 Lunch



2

14:00 – 15:00 Best practices by PMUs in 3 Municipalities (15 minutes per presentation and 5 minutes per PMU for discussion)

Limpopo PMUs

15:00 – 15:30 Division of Revenue Act, 2007 Overview of the Act Key areas of concern impacting on MIG

business processes and procedures MIG Financial monitoring framework and the

role of provinces, sector departments and dplg

dplg (Dir: IDF) & National Treasury

15:30 – 15:50 Tea and coffee


16:10 – 16:30 MIG formula review Results and further work to be done

dplg (Dir: IDF)


16:50 – 17:00 Summary and closure for day 1

DAY 2: 24 April 2007 07:30 – 08:00 Tea and registration

8:00 – 08:30 Construction industry and market factors impacting on municipal infrastructure

Impact of the construction industry boom on the delivery of municipal infrastructure and MIG

Henk Langehoven: SAFSEC


09:00 – 09:20 Institutionalisation of the MIG-MIS projects

dplg (Dir: IGIMS)


10:00 – 10:15 Tea and Coffee

10:15 – 10:25 Expanded Public Works Programme Technical support to municipalities

DPW – EPWP Unit




3

10:40 – 12:10 Provincial reports on the progress on EPWP implementation

• Projects • Coordination • Support to municipalities

(10 minutes per presentation)

Provinces

12:10 -12:30 Questions and discussion

12:30– 13:30 Lunch

13:30 – 13:50 Infrastructure planning in IDPs Preliminary results of the IDP analysis on

infrastructure Sector targets and master planning

dplg: (Dirs: MIG & Planning Implementation)


14:10- 14:30 Asset management and comprehensive infrastructure plans

dplg: (Dir: MIG)


15:00 – 15:15 Tea and coffee

15:15 – 15:45 Revised service levels and unit cost

dplg: (Dir: MIG)


16:10 – 16:30 Non-Financial Monitoring processes Role of provinces, sector departments and dplg Registration of projects

dplg (Dir: MIG)


16:50 – 17:00 Summary and closure of day 2 DAY 3: 25 April 2007 07:30 – 08:00 Tea and registration

08:00 – 08:30 Bulk Water Services infrastructure programme managed by DWAF

Funding criteria Conditions

Processes and procedures

DWAF



4


08:50 – 09:20 Eradication of bucket sanitation Progress and challenges Identification of gaps and interventions

DWAF


09:40 – 10:00 Solid Waste requirements

DEAT


10:20 – 10:40 Tea and Coffee

10:40 – 11:20 Report by sector departments on the development of the sector support strategies

11:20 – 11:30 Summary and closure of day 3

dplg

12:00 – 13:00 Lunch

ANNEXURE C

ANNEXURE C1

1

1

MIG QUARTERLY WORKSHOP: Strategic Priority Areas For

Municipal Infrastructure Delivery 2007/08

23 April 2007

2

Outline

• Strategic Context– Vision 2014– State of Nation Address 2007– Reading of the External Environment

• Likely Situation in 2009

• Factors that will promote Acceleration and achievement of 2014 vision

• Key Discussion Points

3

Strategic Context

4

OUTCOMES & TARGETSSustainable Human Settlements, Local Economies & Livelihoods

• Eradication of sanitation buckets - 2007• Access to potable water - 2008• Access to sanitation - 2010• Infrastructure for FIFA World Cup - 2010• Universal access to electricity - 2012• Halve poverty and unemployment - 2014• Upgrade all informal settlements - 2014• Accelerated housing delivery - 2014

South Africa Vision 2014

5

State of Nation Address 2007

• Harmonize planning across the three spheres of government

• Improve statistical database – community survey 2007

• Millennium Development Targets, and eradication of buckets in established settlements by end 2007

• Increase pace of housing delivery

• Intensify community outreach activities including izimbizo and extend coverage of multi-purpose community centres

6

State of Nation Address 2007

• Urgently fill vacancies in municipalities

• Improve effectiveness of anti-corruption strategy across all three spheres of government

• Roll-out Batho Pele campaign at local government level

• Maximise benefits of growing economy by intensifying second economy programs including:

– micro-finance, cooperatives– national youth service, – expanded public works, communal land rights – effective involvement of the institution of traditional leadership in

governance and development processes.

2

7

State of Nation Address 2007(South African Women in Dialogue,

drawing on experience form Tunisia and Chile)

• Define clearly the poverty matrix of our country;

• Develop a proper database of households living in poverty;

• Identify and implement specific interventions relevant to these households;

• Monitor progress in these households as the programmes take effect in graduating them out of poverty;

• In this context, address all indigence, especially the high numbers of women so affected;

• Co-ordinate and align all anti-poverty programmes to maximise impact and avoid wastage and duplication; and

• Accelerate the training of Family Social Workers at professional and auxiliary levels to ensure that identified households are properly supported and monitored. 8

Reading of External Environment• Economic growth without sufficient impact on poverty

eradication:– Risk that levels of indigence rise to unsustainable levels

• Economic growth not sufficiently underpinned by productive sector:– The current account deficit is increasing– Imports (consumables) are exceeding exports which is impacting

negatively on domestic employment creation

• Insufficient coverage of economic development outside traditional growth centres. Urban areas are not contributing enough to achieve and sustain 6% plus economic growth target.– Synergy between urban and rural and development needed as part

of single economy– Agriculture sector decline (bio-fuels potential), land reform slow– Growth of/in new towns taking place– Growth in number of households in urban areas

9

Reading of External Environment• The inadequate and inappropriate skills profile of South Africans is

impacting negatively on infrastructure and service provision and on ability of “Developmental State” to constitute requisite capacity as active economic development agent.

• Despite major progress with service delivery, community dissatisfaction stems from poor government communication, inadequate complaint management systems and lack of confidence in delivery structures

– Basic services are not extended rapidly enough in a sustainable and integrated manner.

– Perceptions of mismanagement and corruption surrounding government procurement processes

• Government revenue increasing, fiscal allocations increasing yet R70 billion municipal infrastructure funding gap and R120 billion for housing.

• Insufficient emphasis on community empowerment and building their self reliance in approach to “Developmental State”.

– Challenge is to move beyond delivery projects to systems of support and organisation of communities/households to undertake sustainable livelihoods

10

Likely Situation in 2009

11

Likely Situation in 2009(based on current funding provisions)

• Service Delivery– Bucket eradication target for established communities can be met by end

2007 if minimum service standard is applied. Bucket eradication in informal settlements by 2009 will depend on progress with housing delivery programme.

– Access to potable water by 2008 is under risk with current funding provisions. Likely to be met only in 2013/14 financial year.

– Access to sanitation by 2010 is under risk with current funding provisions. Likely to be met only in 2016 (dry sanitation) and 2030 (wet sanitation)

– Universal access to electricity by 2012 can be met if funding is increased from R1.39 billion to R3 billion annually.

– Need to deliver some 500 000 units per annum to reach 2014 housing target. Significant additional funding required for housing – A total of R124,7 Billion (at current prices) to reach housing target

12

Likely Situation in 2009Water: Since 1994 a total of 16,0 million people have been provided with a safe supply of water at different levels of service. The current backlog for basic water supply is 2 million households (8, 2 million people). The rate of delivery during 2005/06 was 1.1 million people or 250 000 households.

To achieve the 2008 sector target, a delivery of 2.7 million people per year or 675 000 households is required

To eradicate the backlogs will require R12 Billion way below the current DORA allocation of R3.5 billion.

2009 RATE OF DELIVERY WILL STILL BE BELOW REQUIRED RATE OF 675 000 Households per annum.

3

13 14

Likely Situation in 2009SANITATION:The current sanitation backlog is 3, 75 million households or 15.3 million people. The rate of delivery in 2005 was 200 000 households and the current estimate 100 000- 120 000 based on money spent is way below the required rate of delivery (800 000 to I million households per annum).

To achieve the 2010 sector target, a delivery of 1 million households at a cost of R3 billion per annum over the next four years totalling R12 billion is required.

The current DORA is R1.4 billion which can deliver 350 000 households.

2009 RATE OF DELIVERY BELOW REQUIRED RATE OF 900 000 Households per annum.

15 16

17


ERADICATION OF THE BUCKET:

TOTAL BUCKETS IN INFORMAL AREAS TO BE ERADICATED BY DECEMBER 2007 IS 117 060 AS AT FEBRUARY 2007CURRENT RATE OF DELIVERY IS 5000 PER MONTHREQUIRED RATE IS AROUND 13 000.00 PER MONTH TO REACH THE TARGET

18

4

19

Likely Situation in 2009ELECTRICITY :The current electricity backlog is estimated at 3, 41 million households. The current National Electrification Funding (NEF) is approximately R1, 39 billion annually and is able to fund approximately 230 000 connections per year. In order to achieve universal access, an estimated total number of about 500 000 connections per annum is required at an estimated cost of R3, 6 billion. This does not include funding for bulk infrastructure.

2009 RATE OF DELIVERY (587 995) WILL STILL BE FAR BEHIND THE REQUIRED RATE OF DELIVERY 500 000.

20


Free Basic Services

– At least 90% of households provided with Free Basic Water (FBW)

– At least 85% of households provided with Free Basic Electricity (FBE)

21

Factors that will Promote Acceleration

22


• Infrastructure and Service Provision– Close funding gaps– Technical and management capacity– Water resources– Bulk infrastructure especially in rural areas– Institutional arrangements (IGR, Powers and Functions)– Policy issues– Agreement on data, statistics, service levels and standards– Differentiated support approach– Technology innovations– Refurbishment and rehabilitation– Forward planning and project and contract management

23


• Differentiated Support Approach:

– Stream 1: General Support to Municipalities– Stream 2: Finalization of Programme to eradicate the

Bucket System– Stream 3: Pilot Project in 9 Target municipalities– Stream 4: Focused interventions in large low capacity

Municipalities– Stream 5: Support to small low capacity municipalities– Stream 6: Municipalities with low expenditure– Stream 7: Large well performing municipalities– Stream 8: Small well performing municipalities.

24


• National Project and Contract Management Facility

– Convert national targets into projects with clear activities anddeliverables per municipality and per sector

– Manage delivery directly in areas where there is no capacity

– Simultaneously build infrastructure planning and management capability in provinces and municipalities

– Undertake and build capacity for Comprehensive Infrastructure Plans

5

25


• Partnerships with private and or public specific service sector stakeholders (Energy, Water, Transport and Waste Environment sectors)

• Inter-sphere infrastructure planning and collaboration to create predictability and alignment of projects identified among spheres and across boundaries

26

FBSI Branch Role

27

Key Discussion Points

1. Funding Gap– Including revenue generation capability of municipalities,

REDs, etc– Borrowing framework– Targeting Indigents and funding FBS– Delivery in remote rural areas

2. Differentiated Support Approach3. Infrastructure regulatory role of dplg

– Service standards and new technologies4. Sustainable Human Settlements project with Dept of

Housing5. National Project Management Facility

28

Thank you

29

Millennium Development GoalsAnna Tibaijuka speech at World Urban Forum 2006, Under-Secretary General,

United Nations

• “Currently, more than one billion people are living in slums. This figure could easily reach 2 billion by 2030. The vast majority of these people live on less than one dollar a day. They lack safe water, a major contributing factor to malnutrition, disease and loss of productivity. In many communities, young girls spend hours every day fetching water and thus forgo their education. Most slum dwellers have no access to sanitation. In some of the slums my agency works in, there is no refuse collection and up to 300 people share a single toilet. HIV/AIDS, malaria and other diseases are rife and life threatening. Entire families, especially single mothers and their children, eke an existence from informal trading and services at the margins of human dignity. Crime, drugs and violence are daily realities.”

• “Worse still, when natural disasters strike, as we sadly witnessed with the Asian Tsunami, Hurricane Katrina and recent earthquakes in Pakistan and Indonesia, the poor are disproportionately and adversely affected.”

• “Unfortunately for these one billion slum dwellers, issues such as global warming and biodiversity are distant notions, far removed from their daily struggles and priorities. Their plight mirrors the huge chasm between rich and poor, between those who benefit from globalisation and those who are marginalised by it. ”

ANNEXURE C2

1

OUTCOMES OF THE ROUND-TABLE DISCUSSION ON THE

ACCELERATION OF INFRASTRUCTURE SERVICES

DELIVERY

MIG quarterly workshop – 23 April 2007

OBJECTIVES OF THE ROUNDTABLE DISCUSSION

• Develop a joint commitment to the five-year Local Government Strategic Agenda and interventions to enhance infrastructure services delivery in order to reach the service delivery targets

• Deepen the participation of sector departments to ensure sector support strategies that are aligned to lessons learnt from Project Consolidate and adequately address municipal challenges

• Better position the municipal infrastructure grant as one of Government’s tools to accelerate infrastructure service delivery

SUMMATION OF AREAS DISCUSSED

Backlog Targets:

• The backlog eradication targets will have to be met throughout the country and no municipality is exempted from meeting these targets.

Integrated Development Planning & IGR:

• Integrated development planning should be strengthened across all three spheres of government

• Intergovernmental relations machinery should continue to improve to better refine and improve the quality of and participation of stakeholders in the IDPs.

SUMMATIONA OF AREAS DISCUSSED

Municipal Infrastructure Grant:

• Most of the municipalities are not doing justice to the multi-year capital planning process

• A need to introduce processes that will allow them to start to plan for the next three years.

OUTCOMES & ACTIONSNationally:• Effective participation of sector departments in IDP processes to be

intensified i.e. IDP analysis week scheduled from 14-18 April

• Followed by provincial wide specific process for nat. & Prov depts to interact directly with municipalities on their IDPs

• Sector depts finalise their Master Sector Plans and Sector Support Strategies by May 2007 to support process above.

• Dedicated support by dplg and sector depts to Mun. which have not yet committed their total MIG 2007/08 allocations.

• Deployment should be up-scaled and skills be transferred to provinces and municipalities

• The dplg undertook to lead discussions on the budgetary implications as a result of meeting the service delivery targets.

OUTCOMES & ACTIONS

Provincial:

•MECs to undertake a process of verifying the backlog figures of munper sector, especially 2007 and 2008 targets.

•MECs provide a clear programme of intervention and action per municipality by the end of May 2007

- Plans the be adopted by Prov Cabinets- Should coincide with deploying the relevant expertise to provinces

and municipalities.

2

OUTCOMES & ACTIONS

Municipal:• Each municipality should develop CIPs with sets a clear programme of

delivery towards targets and that these plans informs credible IDPs.

• Final IDPs including budgets should be adopted by end June 2007.

• Vacancies of key managerial and technical areas should be filled by June 2007 and steps should be implemented for a more conducive environment and institutional stability in order to retain skills.

• The dplg will engage with NT with the view in putting municipalities in a position to recruit and retain the necessary skills.

• Projects must be identified to commit the total 2007/08 MIG allocations by the end April 2007.

CONCLUSION

• Set of guideline documents on sustainable infrastructure delivery are available that were implemented by 1 April 2007.

ANNEXURE C3

1

IMPACT ASSESSMENT: DEPLOYMENT OF

ENGINEERING SKILLS TO MUNICIPALITIES

BACKGROUND

Municipalities are responsible for providing the communities within their local jurisdiction with basic services. Infrastructure delivery is currently very low, and one of the key challenges is lack of engineering capacity to roll out infrastructure services.

To address the capacity challenge, the dplg through Project Consolidate has deployed technical experts to municipalities.

OBJECTIVES OF THE DEPLOYMENT

Provide hands-on support in order to fast track infrastructure service deliveryTo create sustainable engineering skills at municipal level, through:

• providing on the job training for graduates, and

• Experiential training for students to enable them to graduate

PROGRESS TO DATE

To date the dplg has deployed:51 senior engineers45 graduates 99 students180+ in house municipal staff being trained75 municipalities receiving hands on support

PROGRESS TO DATE CONT…

The intervention has also given support to R2 billion worth of projects which include:MIG projectsCapital projectsO&M ProjectsRehab projectsSavings by containing lossesIncreased income (revenue enhanced)

THE INTERVENTION RATIONALE

The criteria used for the selection of municipalities to benefit in the programmewere done in the following manner:A cross boundary municipalityA low capacity municipalityA project consolidate municipalityA nodal municipalityDistricts who are water services authorities and providers for the whole district.

2

THE IMPACT ASSESSMENTS

The dplg conducted the impact assessments with the purpose of measuring success with regards to the Deployment programme

The assessments were aimed at evaluating the effectiveness of the programme i.e.

Ability to deliver MIG projectsDevelopment of skillsStrategic planningAddressing O&M and other issues

IMPACT ASSESSMENT OBJECTIVES CONT/D

Showcasing of best practices Identify challenges Get feedback from beneficiary municipalities

SAMPLING

Eight municipalities were selected Mogale City - GautengEmfuleni - GautengZululand - KwaZuluNatalUgu - KZNPixley Ka Seme – Northern CapeMnquma – Eastern CapeFetakgomo – LimpopoBushbuckridge - Mpumalanga

METHODOLOGY

The following methods were used for the collection of data:Interviews with deployed engineersInterviews with graduates and studentsInterviews with municipal staffSite Visits

FINDINGS

The engineers managed to unblock some challenges experienced by municipalities:Fast tracking of MIG registrationEstablishment of PMUsEstablishment of technical departmentsAddressing O&M issuesAssist in the day to day running of the municipalityEnhancement of shared servicesSkills development – municipal staffSkills development - Students/ graduates

FINDINGS CONT/D

Fruitless expenditure tackledRevenue enhancementAddressing community needs and revenue enhancement

3

CHALLENGES IDENTIFIED

Engineers and students in some municipalities not being used effectivelySome municipalities do not have projects to implement – students unable to get any experienceIn some instances engineers proposals not taken into considerationIssues of powers and functions within municipalities

CHALLENGES CONT/D

In some municipalities there are staff members for the deployees to be able to transfer skillsNeed for up scaling of deployment In some instances lack of understanding-objectives of the deployment

LESSORNS LEARNT

Ownership of the programme by beneficiary municipalities is key- including by- in from municipal senior officialsMore cooperation –huge impactThe need for engineering support is very highNeed for effective coordination of the deplyment

LESSORNS LEARNT CONT/D

Need for regular assessments in order:- to identify bottlenecks and deal with them on

time- to get all stakeholders involved- to provide support to the stakeholders- Need to get provinces in charge of the

monitoring and supporting processes through the deployment

CONCLUSION

The deployment of engineering programme has made some significant progress and impact on the fast tracking of infrastructure delivery.

However, there is a need for all the three spheres to work jointly towards the effective utilisatisation and coordination of the deployed resources aimed at supporting municipalities.

THANK YOU

ANNEXURE C4

1

EASTERN CAPE

MUNICIPAL INFRASTRUCTURE SERVICES

MIG QUARTERLY WORKSHOP23 APRIL 2007

Presented By: Tshitsho Majavu

SENIOR MANAGERPURPOSE: TO IMPLEMENT POLICY, COORDINATE, FACILITATE, SUPPORT AND MANAGE THE PROVISION, UPGRADING, OPERATION AND MAINTENANCE OF INFRASTRUCTURE IN MUNICIPALITIESFUNCTIONS:1. TO DEVELOP AND IMPLEMENT INFRASTRUCTURE RELATED POLICIES AND MEASURE THE IMPACT

ON THE GROUND1. TO COORDINATE, FACILITATE, MONITOR AND EVALUATE THE PROVISIONING OF CAPITAL

PROJECTS IN MUNICIPALITIES 2. TO COORDINATE, FACILITATE AND SUPPORT THE OPERATIONS AND MAINTENANCE OF MUNICIPAL

INFRASTRUCTURE ASSETS

MUNICIPAL OPERATIONS & MAINTENANCE

PURPOSE: TO COORDINATE, FACILITATE AND SUPPORT THE OPERATIONS AND MAINTENANCE OF MUNICIPAL INFRASTRUCTURE ASSETSFUNCTIONS:1. Coordinate and facilitate the

the operations and maintenance of infrastructure assets by municipalities

2. Support, measure impact, and advise municipalities on best practices on sustainable operations and maintenanceof municipal infrastructure assets

______________________________________1 Project Manager (PL 12)1 Impact Assessor (PL 11)2 Deputy Chief Engineers (PL11)4 Principal Engineers (PL 10)

MUNICIPAL CAPITAL PROJECTS

PURPOSE: TO COORDINATE, FACILITATE,MONITOR AND EVALUATE THE PROVISIONING OF CAPITAL PROJECTS IN MUNICIPALITIES

FUNCTIONS:1. Coordinate and facilitate the provisioning of

capital projects in municipalities2. Monitor and evaluate the provisioning of

infrastructure projects in municipalities3. Measure the impact of infrastructure

provision and advise on policy development _______________________________________1 Chief Engineer (PL 12)1 Impact Assessor (PL 11)2 Deputy Chief Engineers (PL11)4 Principal Engineers (PL 10)4 Control Industrial Technicians (PL9)4 Senior Industrial Technicians (PL8)

1 Secretary (PL 6)

Purpose & Key Functions

PURPOSE:To develop and implement policy, coordinate, facilitate, support and manage the provision, upgrading, operation and maintenance of infrastructure in municipalities

Key functions:• To develop and implement infrastructure related

policies and measure the impact on the ground• To coordinate, facilitate, monitor and evaluate the

provision of infrastructure projects in municipalities • To coordinate, facilitate and support the operation and

maintenance of municipal infrastructure assets

Current Organogram Staffing

DEPARTMENTAL

CURRENT STAFF1 Project Manager (Acting SM)1 SecretaryDistrict (Cluster) Support1 Principal Engineers1 Impact Assessor

VACANCIES1 Senior Manager1 Project ManagerDistrict (Cluster) Support4 Deputy Chief Engineers7 Principal Engineers7 Control Industrial. Tech.1 Impact Assessors

-Complement-Capacitate

-Support

CURRENT SUPPORT(Ending in April 2007)

1 Project Manager1 Finance Manager

1 ITC Specialist2 Data Capturers

16%

84%

Delineation Process- June 2007Developmental Local

Government &

Traditional Affairs

Municipal Governance

Municipal SpatialPlanning & Land

DevelopmentAdministration

Municipal Integrated

DevelopmentStrategy

Municipal Infrastructure &

ServicesTraditional Affairs

Municipal Finance

Management

Spatial Planning

Municipal IDP / PMSSupport

Municipal Infrastructure

Support

IntergovernmentalRelations

Municipal Administration

Municipal Land Survey & Cadastral

Management

MunicipalSustainable

DevelopmentSupport

MunicipalDisaster

ManagementSupport

Municipal Public Participation

Municipal Valuations

MunicipalSpecialProjects

(MSP/PC etc)

Municipal FSB Support

Municipal Land Use Management& Administration

Municipal IGR

Special Projects

SENIOR MANAGERPURPOSE: TO DEVELOP AND IMPLEMENT POLICY, COORDINATE, FACILITATE, SUPPORT AND MANAGE THE

PROVISION, UPGRADING, MAINTENANCE, AND OPERATION OF INFRASTRUCTURE IN MUNICIPALITIESFUNCTIONS:

1. TO COORDINATE, FACILITATE AND SUPPORT THE DEVELOPMENT OFMUNICIPAL INFRASTRUCTURE POLICY AND MONITOR AND EVALUATE IMPLEMENTATIONOF INFRASTRUCTURE

2. TO DEVELOP SUPPORT OF CAPITAL PROGRAMME, CAPACITY MANAGEMENT AND MANAGE INFRASTRUCTURE PROJECTS IN MUNICIPALITIES3. TO COORDINATE AND FACILITATE SPATIAL INFORMATION AND PROMOTE INTEGRATION OF MACRO PLANS THAT WILL GUIDE STARTEGIC DIRECTION

IN INFRASTRUCTURE DELIVERY4. TO COORDINATE AND FACILITATE IMPLEMENTATION OF A POLICY FRAMEWORK OF THE MUNICIPAL INFRASTRUCTURE DEVELOPMENT FINANCE

MUNICIPAL INFRASTRUCTURE POLICY DEVELOPMENT AND IMPACT ASSESSEMNT

PURPOSE: TO COORDINATE, FACILITATE AND SUPPORT THE DEVELOPMENT OF MUNICIPAL INFRASTRUCTURE POLICY AND MONITOR AND EVALUATE IMPACTOF INFRASTRUCTURE

FUNCTIONS:1. Coordinate and facilitate the

development of municipal infrastructure policy

2. Monitor the implementation and impact of municipal infrastructuredelivery

3. Establish a monitoring and evaluationsystem for the implementation of infrastructure

4. Translate spatial planning, subsidisation and funding into strategic direction

1 Manager (PL 12)__________________________________(ORTDM/ ANDM) ( CHDM/ UKDM)(ADM/BCM) (CACADU/NMBM)2 Impact Assessors (PL 11)

MUNICIPAL INFRASTRUCTURE GRANTS

PURPOSE: TO DEVELOP SUPPORTOF CAPITAL PROGRAMME, CAPACITYMANAGEMENT AND MANAGE INFRASTRUCTURE PROJECTS IN MUNICIPALITIES

FUNCTIONS:1. Support the management of

infrastructure projects withinmunicipalities

2. Audit capacity to deliver infrastructureand develop the necessarymechanisms to build the capacity formunicipalities to manage their assetsin a sustainable manner

3. Develop a support mechanism for municipalities for on-going operationand maintenance of infrastructure

1 Chief Engineer (PL 12)___________________________________(ORTDM/ ANDM) ( CHDM/ UKDM)(ADM/BCM) (CACADU/NMBM)4 Deputy Chief Engineers (PL11)4 Principal Engineers (PL 10)

INTEGRATED GEOGRAPHICAL INFORMATION MANAGEMENT SYSTEM

PURPOSE: TO COORDINATE AND FACILITATE SPATIAL INFORMATION AND PROMOTE INTEGRATION OF MACRO PLANS THAT WILL GUIDE STRATEGIC DIRECTION IN INFRASTRUCTURE DELIVERY

FUNCTIONS:1. Develop and manage the provincial

integrated infrastructure data base2. Coordinate backlog studies by sector

departments and municipalities3. Manage and maintain GIS, MIG-MIS,

Website and EDMS for the directorate4. Coordinate spatial planning and

infrastructure macro plans based on IDPs in collaboration with sector dept.

5. Support municipalities with development of their own MIS for infrastructure development

1 Manager (PL 12)2 Data Capturers (PL 6)___________________________________(ORTDM/ ANDM) ( CHDM/ UKDM)(ADM/BCM) (CACADU/NMBM)4 MIS &GIS Managers (PL 11)

INFRASTRUCTURE DEVELOPMENT FINANCE

PURPOSE: TO COORDINATE AND FACILITATE IMPLEMENTATION OF A POLICY FRAMEWORK OF THE MUNICIPAL INFRASTRUCTURE DEVELOPMENT FINANCE

FUNCTIONS:1. Set up provincial fund administration

system 2. Compile monthly, quarterly and annual

financial reports3. Prepare DORA reports4. Reconciliation of disbursements against

expenditure5. Analyse financial implications of the

infrastructure delivery in municipalities6. Monitor and evaluate subsidisation and

funding mechanisms for grants, based on planning

1 Financial Manager (PL 12)2 Financial Data Capturers (PL6)____________________________________(ORTDM/ ANDM) ( CHDM/ UKDM)(ADM/BCM) (CACADU/NMBM)2 Financial Officers (PL 11)

1 Senior Admin Officer (PL 8)1 Secretary (PL 6)

2

Proposed Organogram: Purpose & Key FunctionsPURPOSE:

To develop implement policy, coordinate, facilitate, support andmanage the provision, upgrading, operation and maintenance of infrastructure in municipalities

Key Functions:• To coordinate, facilitate and support the development of municipal

infrastructure policy and monitor and evaluate implementation ofinfrastructure project

• To develop support of capital programme, capacity management and manage infrastructure projects in municipalities

• To coordinate and facilitate spatial information and promote integration of macro & micro plans that will guide strategic direction in infrastructure delivery

• To coordinate and facilitate implementation of a policy framework of the municipal infrastructure development finance

Proposed Organogram Staffing

CURRENT STAFF1 Project Manager1 SecretaryDistrict (Cluster) Support1 Principal Engineers1 Impact Assessor

VACANCIES1 Senior Manager3 Managers1 SAO4 Data CapturersDistrict (Cluster) Support4 Deputy Chief Engineers3 Principal Engineers2 Impact Assessors2 Financial Officers2 GIS & MIS Officers

-Complement-Capacitate

-Support

CURRENT SUPPORT(Started in April 2007)1 Programme Manager (DBSA)1 Finance Manager (DBSA) 2 Tech. Managers (PC)

ADDITIONAL SUPPORT REQUIRED1 ITC Manager2 Data Capturers

15%

85%

Avail. R7.2m Req. R5.9 m

Total Budget R13.1m

PPMU Key Challenges & Recommendations

The 2004 phased-out capacity grant to PMMUs should re-consideredN. Treasury with dplg should intervene and engage DHLGTA and P. Treasury

Budget constraints to provide continuous and sustainable support to municipalities (Funded / Unfunded mandate)

dplg’s “revised PMU guidelines” should also incorporate PMMU expected support role to municipalities Explore support initiatives (DBSA-SM)

PMMU capacity constraints to support the municipalities

The department’s “Scarce skills Attracting & Retention Policy” should be finalised (DPSA & dplg intervention)

The inability by Dept. to attract and retain experienced staff.

Chief Director and MIG-PPM should engage the SG, DDG-Local Govt and HRM-Manager (dplg intervention)

Lack of urgency by the Dept (HRM) in filling of posts

RECOMMENDATIONSCHALLENGES

ANNEXURE C5

1

FREE STATE PROVINCE

PROVINCIAL MIG MANAGEMENT UNIT (PMMU)

MIG National Quarterly Workshop23-25 April 2007

Phalaborwa, Limpopo Province

Background

R564m – 2006/07 MIG Allocation – 80% expenditureR1,050b – 2007/08 MIG AllocationR600m – 2007/08 Bucket AllocationBucket Eradication Backlog = ±83,00021 Receiving Municipalities13 Established PMUs

Functions

Coordination - PMMU, Sector Departments, DBSA, SAICE and BEC – PMITTMonitor, support and strengthen Municipalities –PMUsMonitor and update Backlogs – Sector DepartmentsMonthly reporting – Financial and non-financialEnsure IDP alignment and ensure that IDPs give priority to basic servicesTechnical support

Current Staff

Chief Director – Municipal InfrastructureProvincial MIG ManagerFinancial Manager3x MIG Coordinators

Existing Structure of PMMUDDG Local Government

Chief Director MunicipalInfrastructure

Director MIG

Financial Manager

MIG Co-odinator MIG Co-odinator MIG Co-odinator

Project/Technical Manager (V)

4 x Engineers(V)

Budget

There is no specific budget set aside for the PMMU The directorate is part of a Chief Directorate of Municipal Services and therefore its functions are budgeted for within the department’s budget

2

Challenges

Capacity within Municipalities – technical, administrative and financial

12 Municipalities needs assistance• 2x SAICE• 4x DBSA (technical)• 2x DBSA (financial)• 5x Bucket Eradication

PMU CapacityDelay in procurement – MunicipalitiesCapacity of Consultants and Contractors

Challenges

Communication: DPLG to ProvinceAllocation lettersRegistration lettersPMU approval lettersWithholding of fundsRe-allocation of funds

MISApproval of technical reports from DWAFTechnical monitoring

Comments / Recommendations

That a ring fenced budget be provided from national Treasury to undertake the duties of the PMMUMore work needs to done on communication between all stakeholders

THANK YOU

ANNEXURE C6

MIG Workshop Limpopo

23-25 April 2007

Gauteng Department of Local Government

2Kemmy Ojageer

Geographic Area

B O J A N A L A

S O U T H E R N

W A T E R B E R G

F R E E S T A T E

S E D I B E N G

E K U R H U L E N I

J O H A N N E S B U R GW E S T R A N D

N K A N G A L A

M E T S W E D I N G

G O V A N M B E K I

T S H W A N E

G A U T E N G

3Kemmy Ojageer

Municipal Infrastructure Support

4Kemmy Ojageer

Municipal Infrastructure SupportProgramme 4

Local Govt. Support

Municipal Infrastructure Support

Director: level 13Filled

EngineeringChief Engineer:

level 12Filled

Engineer: MIG and Capital projects

Level 10Filled

Project LeadersLevel 9

New PostCity of JHB

Final Reporting Co-ordinator

Level 12

Project leaders:Level 9

New postMetsweding

Project leaders: Level 9

New PostEhurhuleni


New postTshwane


New postMidvaal & Lesedi


New postMogale City

Appendix BNew Organogram

2007/2008

Admin Assistant Level 07

Filled


New postEmfuleni


New postRandfontein


New postRoving


New postWestonaria

Admin AssistantLevel 6

New postAdmin Assistant

Level 6

Permanent staff

Current insourced to be replaced with permanenet

staff

Additional new staff required over and above permanent and current in sourced staff

5Kemmy Ojageer

Current Work Load• IDP involvement and monitoring• Bucket Eradication Programme• MIG and Capital Projects• Water and Sanitation Backlog Strategy and

Guidelines/Policy- Full water borne• Water and Sanitation for Schools and Clinics • Electricity Backlog Strategy/Policy for the

Province• Free Basic Services policy for the • REDS Implementation

6Kemmy Ojageer

Current Work Load• Project Consolidate (24 Engineers, 11 Graduates + 14 Students)• Master planning guidance• EPWP• 20 Priority Townships • Water Demand management for the province• Decentarlisation of Waste Water Treatment

Works for Gauteng• R500 Million Waste Water Treatment Works

in Emfuleni• CDW – Quick Scan of all wards

7Kemmy Ojageer

Best Practices by Unit• One project leader per municipality – minimum 2

days a week• More hands on identification of alignment of

projects• Better Statistical Information• Provincial Support is within 24 hours • Filling the gaps at municipal level• CDW information -422 on the ground + contact

details• Identifying possible EPWP projects• Hands on training of new staff• Consolidated meetings where possible

8Kemmy Ojageer

Impact on the province

• Current cost of consultants –R300 000 per month.

• Telephone cost R10 000/month• Km’s -10 000km/month• Staff out of office – difficult to control• Municipalities see support as a permanent

post deployment and relax employment• Resignation rates at municipalities are to high

and therefore require continuous support.

9Kemmy Ojageer

PMU Capacity of Municipalities

• Gauteng: 3 Metro, 3 districts and 8 local Municipalities

• 6 PMUs established with MIG funds (Emfuleni, Ekurhuleni, Randfontein, Westonaria, City of Johannesburg and Kungwini)

• 5 PMU’s Internal Capacity(Tshwane, Lesedi, Midvaal and Mogale City, Nokeng Tsa Taemane)

10Kemmy Ojageer

Sector Department Integration

• DPLG - Good• DWAF Gauteng – excellent relationship• DPTRW on EPWP is non existent.• DME – weak• Housing – weak• Education – weak• SRAC- suitable• Treasury - weak

11Kemmy Ojageer

Funding + Engineers

• Province requires financial support for staffing

• Engineers are required for high level reporting, interventions and planning.

12Kemmy Ojageer

I Thank You

Ke a leboga

Baie Dankie

ANNEXURE C7

1

Mr Andre Evetts Provincial Programme ManagerMunicipal Infrastructure Grant Programme (MIG)KwaZulu-Natal

MUNICIPAL INFRASTRUCTURE GRANT PROGRAMME

(MIG) KWAZULU-NATAL

Presented by:Presented by:

Heartland of SA

Critical care High care

Moderate care

Capacity

Municipality

Local government – the game plan

Metro

Immediate target capacity level

X

X

THE CONSTITUTION

CHAPTER 3: CO-OPERATIVE GOVERNANCE

SECTION 40 (1) STATES THAT GOVERNMENT IS CONSTITUTED AS NATIONAL, PROVINCIAL AND LOCAL SPHERES OF GOVERNMENT WHICH ARE DISTINCTIVE, INTERDEPENDENT AND INTERRELATED

THE CONSTITUTION

SECTION 154 (1)

“The national government and provincialgovernments, by legislative and other

measures, must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to

perform their functions”

THE CONSTITUTIONSECTION 155 (6)

“Each provincial government must establish municipalities in a manner consistent with the legislation enacted in terms of subsections (2) and (3) and, by legislative and other measures, must –(a) provide for the monitoring and support of local

government in the province; and

(b) promote the development of local government capacityto enable municipalities to perform their functions and manage their own affairs”

2

THE CONSTITUTIONSECTION 155 (7)

“The national government, subject to s 44, and the provincial governments have the legislative and executive authority to see to the effective

performance by municipalities of their functions in respect of the matters listed in

Schedules 4 and 5, by regulating the exercise by municipalities of their executive authority

referred to in section 156(1)”

THE CONSTITUTION

SECTION 139

When a municipality cannot or does not fulfil an executive obligation in terms of

legislation, the relevant provincial executive may intervene by taking any

appropriate steps to ensure fulfillment of that obligation,

THE MUNICIPAL SYSTEMS ACT

SECTION 105 (1)(a)

(1) The MEC for local government in aprovince must establish mechanisms,processes and procedures in terms ofs 155 (6) of the Constitution to-

(a) monitor municipalities in the provincein managing their own affairs,exercising their their powers andperforming their functions

THE MUNICIPAL SYSTEMS ACT

SECTION 105 (1) (b) & (c)

(b) monitor the development of local government capacity in the province; and

(c) assess the support needed bymunicipalities to strengthen theircapacity to manage their own affairs,exercise their powers and performtheir functions

SUMMARY OF CONSTITUTIONAL MANDATES

Establish

Support

Monitor

Build capacity

Supervise

Regulate

Function Mandate

s 155 (6)s 154 (1) ; s 155 (6)

s 155 (6) ; s 105s 154 (1) ; s 155 (6)

s 139

s 155 (7)

Documented roles of Province

Constitutional Mandates s154(1), s155(6), s139,s155(7) as well as the Municpal Systems Act s105(1) and s105(1)(b) and (c) entails monitoring, support and building of capacity of municipalities.

MIG Guideline document includes the responsibility matrix which details provincial functions

Management Business Plan, how to manage the MIG programme

Intervention process into the municipal affairs -Constitution

3

Ensure that IDP’s combine to form a viable development framework in line with PGDSEnsure that IDP’s give priority to the basic needs of communitiesCo-ordination of infrastructure developmentFinancial management of infrastructure development programmesProgramme managementBacklog analysis and PlanningTechnical supportMonitoring and supervisionCapacity building & establishment of appropriate management structuresAdjudication of project applicationsProject management and reportingSupport establishment of partnerships

From s 154 & s155

ROLE OF PROVINCE – OVERVIEW

(SPECIFIC TO INFRASTRUCTURE DEVELOPMENT)

Key emphasis

Making MIG happen in the Province

Providing support i.r.o. all implementation processesProviding technical advice on the MIG programmeRapid improvement in delivery linked to the developmental programmes of local governmentSynchronized infrastructure development with sector role-players such as housing deliverySupport and facilitate the Municipal PMUs / managementProvision of the GIS systemsExtended function for monitoring and training on EPWP at municipal levelResponsible for the MIG awareness campaigns through orientation and technical workshops, media awareness articles and events to celebrate MIG

SUPPORT

MIG implementation :FinanceAdministrationProgramme and Project ManagementIT & MIS

Capital Development PlanningHR specification and recruitmentEstablishment and sustaining of PMU’sProcurement and tender evaluationBacklogs / MIIP’s / CDP’sGIS

WHAT IS MONITORED ?

Project implementation “on the ground”

MIG KPI’s

Expenditure vs projection

Legal compliancing (MOA / NOA)

Technical compliance with business plan

Co-ordination with housing programme and IDP

Service provider vs allocation of powers/functions

Extent that backlogs are being addressed

Monthly MIS (??) warehouse reportsMonthly Executive ReportsMonthly Site Visit & Photographs reportsMonthly Municipal Managers Meeting ReportsMonthly Expenditure reportsMonthly Key Performance Indicator reportsMonthly Division Of Revenue Act reportsQuarterly MIS (??) KPI reportsQuarterly Cabinet Executive ReportsQuarterly reports to the Water and Sanitation CommitteeBi-annual Capacity Building ReportAnnual Strategic Policy ReportsAnnual Capacity Building ReportsProject Consolidate reports

REPORTING Responsibilities of Provincial MIG Management –Project level

Claim verification & draw downsCash flow managementEnsure all NOA contractual conditions are complied withCheck the design report & tender docsRatify the adjudication report & approval processEnsure the project programme & financials are in accordance with the business planMonitor the projectManage Key Performance Indicators (KPI’s)Approve variation orders and use of contingenciesFinal project inspectionImpact assessmentClose financial votesCertify conditions of NOA and Transfer Funding AgreementEnsure Division of Revenue Act compliance

4

Municipalities encouraged and supported to target to 110% expenditure by 31 March.The 10% surplus acts as a contingency in the event of the unknown, rain, festive season, calendar holidays etc.Additional regular meetings with Municipalities who produced unacceptable month end variances.Strong teamwork, support and monitoring by all Municipal Infrastructure Staff with all municipalities.

ENSURING 100% ALLOCATION EXPENDED BY 31 MARCH Current capacity

Provincial - six !Director & PA – not dedicated to MIGDeputy ManagerFinance Manager (on secondment)Project ManagerAdministration clerk (on secondment)4 x interns

Departmental restructuring – 26 months

Munics : 55 receiving

Draft new structure

37 posts

4 filled

10.8% occupancy

Issues

KZN Infrastructure funding historically and currently highest allocation nationally.

The municipal categorization of capacity, as seen by province, is Moderate Care, High Care, Critical Care =necessitates various levels of support at cost

The PMU funding as top slice to municipalities has not been adequate enough to cater for dedicated PMUs and some cases previous commitments on projects meant that the PMU funding had to be used to honour these.

Reliance on the Provincial support. Ability of Provincial support unit (PPMU) limited by Provincial capacity constraints

National MIG unit’s responsibility to build Provincial capacity

Universal top-slice created expectation that all munics must establish a PMU. Fundamentally flawed. Should be abandoned immediately in favour of shared services

The declaration of more new allocations to individual municipalities who previously did not have an allocation means more capacity building and training will be required on all aspects of the MIG in those municipalities

Continuous management structure to support and guide municipalities is a necessity

Local Government funding at provincial level (Prof.and Spec) is limited to sustaining ongoing support at least until PMU’s become self sufficient

No management fee since 05/06, in contravention of the Division of Revenue Act at the time

Issues Siyenza Manje deployment

Note : Other service providers were supporting Jozini & Hlabisa

5

Provincial MIG Manager

Thank you for your attentionAny questions ?

ANNEXURE C8

1

MIG: 2006/07MIG: 2006/0744thth QUARTER: NATIONAL WORKSHOPQUARTER: NATIONAL WORKSHOP

CAPACITY TO MONITOR AND SUPPORT CAPACITY TO MONITOR AND SUPPORT MUNICIPALITIES ON INFRASTRUCTUREMUNICIPALITIES ON INFRASTRUCTURE

23 23 –– 25 April 200725 April 2007

Presented by: D. T. SEROKAPresented by: D. T. SEROKA

MUNICIPAL INFRASTRUCTURE DEVELOPMENT (MID): CURRENT

STRUCTUREBRANCH: GM

MIDFilled

SBU: SM:CEMIDelActing

SBU: SMMIAM & FBS

Acting

DIVISION: MANAGER:MIAS

Acting

SPM (5 No.)4 Filled (-1)

SPM (5 No.)1 Filled

D/ MANAGERS(3NO.)

None Filled

PM (30 No.)4 Filled

PM (30 No.)3 Filled

A.O. & D. Cap(12 No.)

3 AO filled

Strategic Goal: To coordinate, capacitate and providehands on support to Local Government (Municipalities)in order to improve municipal infrastructure service delivery

Programmes: The branch is responsible for the following:

• Municipal Infrastructure Grant (MIG)• Municipal Provincial Infrastructure Grant (MPIG)• Integrated National Electrification Programme (INEP)• Municipal Infrastructure Assets Management• Free Basic Services

FUNCTIONS OF THE MUNICIPAL INFRASTRUCTURE DEV. BRANCH

FUNCTIONS OF THE MUNICIPAL INFRASTRUCTURE DEVELOPMENT BRANCH

(continued)Strategic Business Units (SBU):

The Municipal Infrastructure Delivery SBU is responsible for monitoring and supporting implementation of MIG, MPIG and INEP

The Municipal Infrastructure Asset Management & FBS SBU is responsible for monitoring and supporting operation, maintenanceand asset management of the infrastructure

The Municipal Infrastructure Administration Support division provides administrative support (logistics, records, secretariat, etc) to the whole branch.

Functions of Municipal Infrastructure Delivery SBU

• Manage project feasibility and registration to ensure that the

projects are feasible, comply with programme requirements and

facilitate MTEF budget commitment.

• Facilitate, guide and support municipalities on construction

financial requirements of the infrastructure delivery programmes.

• Facilitate, guide and support construction programme

management to provide impact of implemented projects, viz. key

performance indicators on technical and socio-economic aspects.

Functions of Municipal Infrastructure Delivery SBU (continued)

• Construction monitoring and evaluation to ensure compliance with built environment legislation, norms and standards.

• Facilitate and monitor the implementation of the labour intensive construction and EPWP in municipal infrastructure programmes in order to maximise life skills development and work opportunities

2

Functions of Municipal Infrastructure Asset Management & FBS SBU

• Manage the development and monitoring implementation of asset management plans

• Monitor and support infrastructure asset transfer• Build assets management capacity in Municipalities• Provide support to Municipalities in relation to asset management

and FBS• Manage the development and monitoring implementation of

indigent policies

Functions of Municipal Infrastructure Administration Support

• Collate and record keep reports on infrastructure programmes• Provide logistics and administrative support to the branch• Provide secretariat support to infrastructure and related co-ordination structures and infrastructuretask teams

• Update and maintain data information • Manage communication awareness programmes

EVALUATION OF CAPACITYProvincial level:• The current MID structure has 89 positions and 19 positions are

filled. This represents 21.3% capacity and thus 78.7% under capacity.

• This severe under capacity puts a lot of overload on the existing staff to monitor and support the even more under-capacitedMunicipalities.

• The budget required to run the complete structure above is at present value R16.3 million annually. There is a funding gap to cater for such a budget. The funding gap is R10 million annually.

• As such the above structure is being filled at a deliberate phased pace. Outsourced capacity was engaged to assist as an interim measure.

EVALUATION OF CAPACITY

Sector Departments (Including DPLG):

• In line with the MIG policy sector departments are to support municipalities in line with the sector department functions.

• In a more similar manner as above, there is an urgent need to quantify the capacity of the Sector Departments in view of supporting Municipalities.

• Visual observation of the support, points that there is also under-capacity at these sector departments.


Municipalities:• It is most important that there must be full capacity at the

Municipal level because service delivery directly takes placethere

• The capacity referred to here is not only for the Technical/Infrastructure Services directorate but for the whole Municipal Institution. This is obviously so because the strategic and operational plans of Technical/Infrastructure Services directorate are dependent on strategic and operational plans of the Municipal Institution - INTEGRATION

• Furthermore, there has to be sharing of common informationbetween the Technical/Infrastructure Services directorate and other directorates within the Municipality.


Municipalities (Continued):

• Therefore, at strategic level, the Municipal Manager has to provide the platform to encourage such sharing of information –ENABLEMENT ENVIRONMENT.

- This can take place inherently in structured strategic management meetings.

3

All Organisations:

• In any organization, the delivery of Municipal Infrastructure isdependent not only on the units directly responsible for the actual implementation and asset management (O & M) but also on other units indirectly (or quasi-directly) responsible.

- For example the units dealing with development planning and IDPs.

- Therefore there has to be some sharing of common information between such units and those directly dealing with implementation and asset management

EVALUATION OF CAPACITY"With our little more effort and commitment, an additional infrastructure can be developed to afford another South African an access to basic services“ PLEASE ENJOY YOUR STAY IN THE PLEASE ENJOY YOUR STAY IN THE

PROVINCEPROVINCE

THE HEARTLAND OF SOUTHERN AFRICATHE HEARTLAND OF SOUTHERN AFRICA–– DEVELOPMENT IS ABOUT PEOPLEDEVELOPMENT IS ABOUT PEOPLE

THANK YOU!!THANK YOU!!

ANNEXURE C9

1

4th MIG QUARTERLY WORKSHOP

HANS MERENSKY, LIMPOPO PROVINCE23- 25 APRIL 2007

MPUMALANGA PROVINCE

PPMU CURRENT STRUCTURECHIEF DIRECTOR : LOCAL GOVERNMENT

DEPUTY DIRECTOR (SPECIAL PROJECTS) – MPCC’s

DEPUTY DIRECTOR( MIG)

ASSISTANT DIRECTOR: (MPCC)ASSISTANT DIRECTOR: FINANCE

2X TECHNICIAN

2X ADMIN OFFICER

DIRECTOR: LOCAL GOVERNANCE (PPM)

INDUSTRIAL CONTROL TECHNICIAN

(OTHER)

STRUCTURE

• The current structure forms part of the Local Governance Chief Directorate.

• It is placed in a sub- directorate called Municipal Infrastructure

• The MIG personnel perform the following functions:

CURRENT CAPACITY AND FUNCTIONS• Promoting the development of local government

capacity to enable municipalities to perform their MIG function.

• Facilitate the building of institutional capacity in terms of :- Project management- Infrastructure investment planning- Financial management of capital budgets- Procurement procedures (Compliance with -CIDB

registration conditions)- Asset management- MIS data base (operation and management)- MIG administration and reporting system- Impact assessment

• Premier Special Infrastructure projects (e.g. Bucket Eradication, MPCC, Water Flagship projects)

PROPOSED STRUCTURECHIEF DIRECTOR (LOCAL GOVERNANCE)

DIRECTOR (MUNICIPAL INFRASTRUCTURE)

DEPUTY DIRECTOR DEPUTY DIRECTORDEPUTY DIRECTOR

ASSISTANT DIRECTOR ASSISTANT DIRECTORASSISTANT DIRECTOR

2X ADMIN OFFICER 2x ADMIN OFFICER2x ADMIN OFFICER

FUNCTIONS OF THE PROPOSED STRUCTURE

Infrastructure Investment Planning:

• Ensure that municipal IDPs combine to form a viable development framework across the province, and are vertically integrated with the Provincial Growth and Development Strategy.

• Support the determination of municipal backlogs and the provision GIS systems to support the planning process

• Ensure that IDPs give priority to the basic needs of communities and promote the social and economic development of communities.

2

FUNCTIONS CONT….• Support and monitor municipalities to prepare and

implement Water Services Development Plans (WSDP’s) –in cooperation with DWAF

• Ensure proper co-ordination between all municipal infrastructure programmes within the respective province

• Build capacity of municipalities to ensure the development of a three-year capital plan linked to its IDP and budgetAsset Management

• Build capacity of municipalities to ensure the development of a sustainable operational and maintenance programme

• GIS systems support for the development of an efficient and sustainable asset management programme.

FUNCTIONS CONT…..Monitoring and Evaluation

• Monitoring the financial status of municipalities through Project Viability

• Monitor compliance with DORA framework

• Monitor expenditure and advise when required

• Monitor progress on the removal of backlogs

• Monitor KPI’s during implementation

• Extract project registration forms from MIS and evaluate in terms of MIG criteria and recommend (sign off) for funding to National when in compliance

FUNCTIONS CONT….

Local Economic Development / Capacity Building

• Support the establishment of municipal service partnerships through the MIG programme

• Facilitate the implementation of labour-intensive methods in accordance with the EPWP Guidelines for labour intensive construction

• Approval of municipal capacity building business plans, which must include community based partnerships etc.

• Facilitation with other Provincial Sector Departments

And please visit Mpumalanga as well !!!! We do not only have animals and hotels but a

casino as well and all our Land Rovers have come home !!

ANNEXURE C10

1

MEC 1

DDG

Level 15

Director:

Office of the MEC

Level 13

MEC Support staff

X 7 posts (filled)

Sub-Dir: MISS

Dir: Communications

Level 13

Dir: Auxilliary Services

Level 13

Dir: HRM

Level 13

DDG Support Staff

CD: Dev. L/ Gov

Level 14

CD: Housing

Level 14

CD: Development and Planning

Level 14

CD: CFO

Level 14

Dir: IDP

Level 13

Dir: Disaster Mngt.

Dir: Housing Asset Management

Level 13

Dir: Housing Performance

Level 13

Dir: Urban Renewal and Human Settlement Redevelopment

Level 13

Dir:Integrated Municipal Infrastructure

Level 13

Dir: Municipal Finance

Level 13

Dir: Municipal Administration

Level 13

Dir: Development Administration

Level 13

Dir: Finance

Level 13

Dir: Supply Chain Mngt.

Level 13

Dir: Housing Planning & Research

NORTH WEST PROVINCIAL GOVERNMENT

APPROVED FUNCTIONAL AND ORGANISATIONAL STRUCTURE FOR THE DEPARTMENT OF DEVELOPMENTAL LOCAL GOVERNMENT AND HOUSING

TOP STRUCTURE

DEPARTMENT OF DEVELOPMENTAL LOCAL GOVERNMENT AND HOUSING

MEMBER OF THE EXECUTIVE COUNCIL

Purpose: To provide political and strategic leadership in the Department of Developmental Local Government and Housing through the implementation of the National and Provincial mandates

DEPUTY DIRECTOR GENERAL

Purpose: To provide strategic and administrative leadership in the department

Functions: 1. To promote and support properly consolidated and stable municipalities

2. To ensure the development of a habitable human settlement through the implementation of the National Housing Programmes and Housing Policy in the province

3. To ensure the consolidation of transparent and efficient Local Government Systems and creation of habitable human settlement

4. To ensure management, control and monitoring of departmental finances and human capital

Posts: 1 x Deputy Director General (Level 15)

CHIEF DIRECTORATE: DEVELOPMENTAL LOCAL GOVERNMENT

Purpose: To promote and support properly consolidated and stable municipalities

Functions: 1. To enhance effective integrated development process

2. To support municipal infrastructure and development

3. To co-ordinate disaster management and fire services

Posts: 1 x Chief Director (L. 14)

1 x Professional Assistant (L. 9)

CHIEF DIRECTORATE: HOUSING DELIVERY

Purpose: To ensure the development of habitable human settlement through the implementation of National and Provincial Housing Programmes and Policy in the province

Functions: 1. To ensure effective subsidy administration and management of claims

2. To ensure integrated and sustainable human settlement development and effective housing implementation



CHIEF DIRECTORATE: DEVELOPMENT AND PLANNING

Purpose: To ensure the consolidation of transparent and effective local

government system and creation of habitable human settlement

Functions: 1. To monitor and support the performance of municipalities

2. To develop support framework for provincial MIG and Municipal Services support

3. To provide remedial actions for a sustained municipal performance



CHIEF DIRECTORATE: CHIEF FINANCIAL OFFICER

Purpose: To ensure management, control and monitoring of departmental finances

Functions: 1. To manage the financial accounting and planning process

2. To provide strategic leadership in the implementation of the supply chain management



2




DIRECTORATE: INTEGRATED MUNICIPAL INFRASTRUCTURE

Purpose: To support municipal infrastructure and development

Functions: 1. To support municipalities in the implementation of FBS

2. To ensure integration of service delivery with other sector departments

3. To develop support framework for municipal MIG and municipal services support

Posts: 1 x Director (L. 13)


1 x Cleaner (L. 2)

DIRECTORATE: DISASTER MANAGEMENT

Purpose: To co-ordinate disaster management and fire services

Functions: 1. To prepare and develop disaster response plan for the province

2. To co-ordinate the establishment of fire and disaster management centers



1 x Deputy Director (L.11)

2 x Assistant Director (L. 9)

1 x Senior Admin Officer (L. 8)

1 x Secretary (L.

2 x General Worker (L. 4)

1 x Cleaner (L.2)


Purpose: To promote and support properly consolidated and stable municipalities

Functions: 1. To enhance effective integrated development process

2. To support municipal infrastructure and development

3. To co-ordinate disaster management and fire services




1 x Cleaner (L. 2)

9

DIRECTORATE: MUNICIPAL FINANCE

Purpose: To monitor and support the performance of municipalities

Functions: 1. To monitor the financial performance of municipalities

2. To monitor the implementation of Municipal Performance Management System

3. To monitor the contribution of housing and implementation of the BEE Act as it relates to housing and infrastructure

4. To provide a data warehouse and reporting tool to support and enhance the monitoring of municipalities at provincial level



1 x Admin Clerk (L. 2)

1 x Cleaner (L.2)

DIRECTORATE: MUNICIPAL ADMIN.

Purpose: To develop support framework for provincial MIG and capacity building support

Functions: 1. To co-ordinate municipal capacity building programmescommensurate with assignment of functions

2. To develop and implement capacity building strategies to prepare municipalities for accreditation

3. To promote community participation in governance

4. To co-ordinate the Community Development Workers programme in the Province



1 x Cleaner (L. 2)




Sub-Directorate: Municipal Service Partnerships (MSP)

Purpose: To ensure integration of service delivery with other sector departments

Functions: 1. Liaise with PPP on municipal investment

2. Monitor and evaluate the impact of partnerships on service delivery

Posts: 1 x Deputy Director (L. 11)



Sub-Directorate: Municipal Infrastructure Grant (MIG)

Purpose: To develop support framework for municipal MIG and municipal services support

Functions: 1. Ensure proper co-ordination between all municipal infrastructure programmes in the province

2. Assist in the compilation of district and provincial MIG business plans

3. Spearhead the MIG capacity building and training programmes

4. Develop control mechanisms to monitor compliance with procurement


2 x Project Manager (L. 10)


3 x Technician (L. 9)


2 x Senior Admin Clerk (L. 5)


Purpose: To support municipal infrastructure and development

Functions: 1. To support municipalities in the implementation of FBS

2. To ensure integration of service delivery with other sector departments

3. To develop support framework for municipal MIG and municipal services support



1 x Cleaner (L. 2)

Sub-Directorate: Free Basic Services (FBS)

Purpose: To support municipalities in the implementation of FBS

Functions: 1. Support municipalities in the implementation and provision of FBS

2. Facilitate and support municipalities to establish and maintain indigent registers

3. Support municipalities in sustaining provision of FBS

4. Monitor and evaluate the provision of FBS by municipalities




11

Capacity: Infrastructure Directorate

• The Directorate is made up of 3 Sub-Directorates : FBS, MSP & MIG which are closely linked in terms of basic service delivery.

• FBS & MSP Sub-Directorates are newly established and still vacant: due process of appointment has commenced and to be finalized by June 2007.

• Currently the MIG Sub-Directorate is operating with the Director, Deputy Director, 2 Project Managers, Senior Admin Officer and Senior Admin Clerk.

• The above mentioned staff component of 6 people utilizes a budget of R1,8m a which is 30% of the required budget to staff the entire Directorate.

• The Directorate has 20 posts, with 6 occupied,14 vacant off which 5 are in the process of being filled across the entire Directorate.

• The entire Directorate require a budget of R4.4m to be fully staffed.

Challenges & Assistance Required

• Poor linkage working relation between the Housing and Infrastructure Directorates.

• Limited IT resources ( Laptops, Internet Access, Digital Camera, Printers, Scanners, Binding Machines)

• Inadequate Office Space for staff to operate effectively and efficiently.

• Field staff members not being able to do site visits due to limited traveling allowance .

• Short term deployment of 4 senior engineers at the province to assist and capacitate provincial staff.

• Funding to staff vacant posts.

2

Functions of the Directorate

• Coordination of Electrification Programme• Coordination of Water & Sanitation Programme• Implementation and monitoring of Bucket

Eradication Programme.• Coordination of Provincial MIG Quarterly

meetings with all municipalities, DWAF, DPW, DACE & Eskom

• Capturing of MIG registration forms on the MIS on behalf of all municipalities.

• Verification and signing off of MIG registration forms to DPLG

Functions of the Directorate

• Coordination of monthly district MIG working sessions.

• Hands-on support to municipalities, whereby MIS training and its usage is done at municipal level.

• Technical support and advice to municipalities in terms of tender specification and documentation.

THANK YOU

NW Integrated Municipal Infrastructure

(MIG)

ANNEXURE C11

1

BELABELA--BELABELA

PMU REPORT ON MIG PROJECTSPMU REPORT ON MIG PROJECTS

BELABELA--BELABELA•• POPULATION POPULATION 6200062000•• BACKLOGSBACKLOGS

•• WATERWATER 4800 4800 h/hh/h•• SANITATIONSANITATION 5200 5200 h/hh/h•• HOUSINGHOUSING 4000 houses4000 houses

BELABELA--BELABELA

R 0.00-R 1.99-R 1.94R 0.00DIFFERENCE

R 5.66R 4.58R 4.08REVISED ALLOCATION

R 6.57R 6.02R 3.99ORIGINAL ALLOCATION

2008/092007/082006/072005/06YEAR

BELABELA--BELABELA

•• PROJECTSPROJECTS–– 05/0605/06

•• Road pavingRoad paving•• Borehole system (planning)Borehole system (planning)•• Radium sewer plant (planning)Radium sewer plant (planning)

–– 06/0706/07•• Borehole system (construction)Borehole system (construction)•• Radium sewer plant (constructionRadium sewer plant (construction•• ExtentionExtention water purification (planning)water purification (planning)

BELABELA--BELABELA

–– 07/0807/08•• Extension of water purification (construction)Extension of water purification (construction)•• EctensionEctension of sewer purification (planning)of sewer purification (planning)

ANNEXURE C12

1

Greater Sekhukhune Greater Sekhukhune District MunicipalityDistrict Municipality

PMU PMU forfor

National Quarterly National Quarterly migmig WorkshopWorkshopin Limpopoin Limpopo

Introduction• The Greater Sekhukhune District

Municipality is located in Limpopo Province.

• This district was created in December 2000 as a category C municipality cross-border with Mpumalanga, with jurisdiction over five category B municipalities

• It represents 1.2million population with about 220 000 households.

Waterberg

Capricorn

Vhembe

Mopani

Bohlabela

Sekhukhune

Map 1

SCALE:

7 0 7 14 21 Kilometers

N

CLIENT:

COMPILED BY:

BASE DATA BY:

Limpopo ProvinceDepartment of Water Affairs & ForestryPlanning & Information

SCALE 1 : 700 000

SEKHUKHUNE INTEGRATED SPATIAL DEVELOPMENT FRAMEWORK

GIS Project SolutionsPolokwaneTel.: 015 - 296 4854Ref: 0010/projects/sekhukhune a3isdf maps.apr

Hannes Lerm & AssociatesPolokwaneTel.: 015 - 296 0851

LOCALITY PLAN

Base Map Legend:

Dams

RiversMain Roads District Municipal Boundaries

Local Municipalities

Communities

LEGEND:Local Municipalities

FetakgomoGroblersdalMakhudutamagaMarble HallTubatse

SekhukhuneTubatse

Fetakgomo

Makhudutamaga

Marble Hall

GroblersdalMPUMALANGA

LIMPOPO

Motse

Steelpoortrivier

Lepellane

Mosesrivier

Nku m

pi

Ngw

aritsi

Puleng

Elandsr ivier

Mohlaletsi

Molomahlapi

Motseleopa

Moopetsi

Gemsbokspruit Sp ekb oomri vi er

Khathazweni

Monametsi

Moh

lap i

tse

Motsephiri

Selonsrivier

Rooikraaldam

Olifant sriv ier

Steelpoortrivier

Ol ifantsrivier

Olifa

ntsr

ivier

Ngwari tsi

O lifants

rivier

Olifant srivier

Olifantsr ivier

Flag Boshielo Dam

Der Bochem Dam

LepellanedamPiet Gouwsdam

Rooikraal Dam

Lehlagare MatlalaLola Mantes Dam

Mahlangu Dam

Dr. Eiselen Dam

Mapoch's Dam

Locality Map: South Africa

NORTHERN CAPE

WESTERN CAPE

EASTERN CAPE

FREE STATE

NORTH WEST

KWAZULUNATAL

GAUTENGMPUMALANGA

LIMPOPO

Waterberg

Capricorn

Vhembe

Mopani

Bohlabela

Sekhukhune

Locality Map: Limpopo Province

SEKHUKHUNEDISTRICTMUNICIPALITY

Socio-economic challenges

• Our District represents fragmented medium density settlements (about 500 households each) effecting in costlyservice provision.

• There are mostly households with the minimum living level.


• The poverty and unemployment is a common characteristic of this Unimproved (natural) Grassland with a homogenous, largely traditional, predominantly rural (95%) Sepedi (83.4%)residents.

• The low level of education is another indicator of the “vicious downward cycle of poverty”.


2

80% 69%

EnvironmentEnvironment

• The granite tableau is holding high the GSDM area.

• There are 11 potential bulk water sources, which are dispersed over 1 324 437ha in extent.

• District is located OUTSIDE major towns –Pretoria is about 200km to the south and Polokwane 200km to the North. Nelspruit is about 150km on the East.

Socio-economic opportunities• Significance of mining (world biggest platinum group)

0 10 20 30 40 50 60 70 80 90 100

Percentage of World Total

Titanium Minerals - 2

Alumino-Silicates - 1

PGMs - 1

Vanadium - 1

Chrome ore - 1

Ferrochromium - 1

• Relatively low HIV/ AIDS infection rate

Mining• The Fetakgomo and Tubatse municipality

areas, partially also Marble Hall and Groblersdal are of mining interest.

• The Bushveld Complex is the world largest reserve of platinum group metals.

• The Transvaal Supergroup provides for mining of limestone, dolomite, manganese, Lead and Zinc.

12

Spatial Dimension of Mining

Source: Council for Geoscience; Greater Sekhukhune District Municipality 2025 Development Strategy (2005/2006); GeoTimes Dec 2003

Bushveld ComplexBushveld ComplexBushveld Complex

Mining Resources in Sekhukhune1

World’s largest reserve of platinum group metals (PGMs)VanadiumTitanium CopperChrome Nickel

World’s largest reserve of platinum group metals (PGMs)VanadiumTitanium CopperChrome Nickel

Makhuduthamaga

Tubatse

Fetakgomo

Steelpoort

Burgersfort

OhrigstadGreater Marble

Hall

Greater Groblersdal

Groblersdal

Marble Hall

N11

2

2

1

Transvaal SupergroupTransvaal SupergroupTransvaal Supergroup2

LimestoneDolomiteManganeseLeadZinc

LimestoneDolomiteManganeseLeadZinc

3

Agriculture ( but only30%land under commercial farming)

• There are 974 commercial and subsistence farms in Tubatse, 264 subsistence farms in Makhudutamaga, 225 farms in Groblerdal,148 in Marble Hall and 55 in Fetakgomo areas.

• Marble Hall and Groblersdal are having predominantly commercial farming.

• The maize, wheat, cotton, tobacco, grapes, citrus, vegetables, soy beans & peas, sunflower, also game, sheep, goats and some cattle are produced.

Agriculture Production

Makhuduthamaga

Tubatse

Fetakgomo

Steelpoort

Burgersfort

Marble Hall LM

Groblersdal LM

Groblersdal

Marble Hall

Marble HallMarble HallMarble Hall

FetakgomoFetakgomoFetakgomo

55 farmsMaize, wheat, vegetables, cattle and goat

55 farmsMaize, wheat, vegetables, cattle and goat

MakhuduthamagaMakhuduthamagaMakhuduthamaga

TubatseTubatseTubatse976 farms Commercial farming of maize, wheat, cotton, tobacco, grapes, citrus, vegetables, game, sheep and goatsSubsistence farming of maize and wheat

976 farms Commercial farming of maize, wheat, cotton, tobacco, grapes, citrus, vegetables, game, sheep and goatsSubsistence farming of maize and wheat

GroblersdalGroblersdalGroblersdal

Predominantly Commercial Farming Areas Predominantly Subsistence Farming Areas

146 farmsMaize, tobacco, cotton, sunflower, citrus fruits, grapes, vegetables, soy beans and peas

146 farmsMaize, tobacco, cotton, sunflower, citrus fruits, grapes, vegetables, soy beans and peas

264 farmsMaize, wheat and vegetables264 farmsMaize, wheat and vegetables

225 farmsMaize, tobacco, cotton, sunflower, citrus fruits, vegetables, grapes, soy beans and peas

225 farmsMaize, tobacco, cotton, sunflower, citrus fruits, vegetables, grapes, soy beans and peas

Source: Greater Sekhukhune LED (Urban-Econ 2003); www.agis.agric.za

Loskop Valley

N11

SiloAbattoir

Ohrigstad

Cotton Processing Plant

Tourism(potential but not fully exploited)

• Makhuduthamaga contains series of ecological assets like Leolo Mountains, Olifants and Lepelle Rivers, Maphanama Caves, Bapediculture and historical sites, and it is targeted as a location of District Administration Capital.

• Tubatse as a large and growing mining sector has created solid demand for accommodation and restaurant facilities for business travellers. There are also Echo Caves- a popular natural attraction located along a tourist road to Kruger Park. There is Tsate – the seat of the former Sekhukhune empire and the Premier Heritage Site. The Klein Drakensberg Escarpment and several rivers add to richness of Tubatse.

• Marble Hall as close to Johannesburg is a supplier for an agri – business. The Schuinsdraai Nature Reserve and Flag Boshielo Dam as natural resources with Ndebele culture, and small airfield are able to attract interest.

• Groblersdal with close proximity to Johannesburg and Pretoria, with agri –business, Loskop Valley and Loskop Dam, Mapoch caves, Ndebele culture and planned construction of de Hoop Dam could provide tourism opportunities.

Tourism

Pretoria, Johannesburg

Polokwane

Makhuduthamaga LM

Tubatse LM

Fetakgomo LM

Steelpoort

Burgersfort

Ohrigstad

Greater Marble Hall

LM

Greater Groblersdal

LMGroblersdal

N11

R555

R37

Tourism Inputs by Local Municipality

Source: Glen Styn; “Greater Sekhukhune District Tourism Development Strategy Status Quo Report”, October 2005; Interviews, Sekhukhune DM Website

TubatseTubatseTubatse

Large and growing mining sector has created solid demand for accommodation and restaurant facilities for business travelersThe Echo Caves: a popular natural attraction located along a tourist road to Kruger ParkTsate: the seat of the former Sekhukhune Empire and premier heritage siteKlein Drakensberg Escarpment and several rivers

Large and growing mining sector has created solid demand for accommodation and restaurant facilities for business travelersThe Echo Caves: a popular natural attraction located along a tourist road to Kruger ParkTsate: the seat of the former Sekhukhune Empire and premier heritage siteKlein Drakensberg Escarpment and several rivers

Marble HallMarble HallMarble Hall

Proximity to Johannesburg and PretoriaAgri-businessSchuinsdraai Nature Reserve and Flag Boshielo DamNdebele cultureSmall airfield

Proximity to Johannesburg and PretoriaAgri-businessSchuinsdraai Nature Reserve and Flag Boshielo DamNdebele cultureSmall airfield

Marble Hall

GroblersdalGroblersdalGroblersdal

Proximity to Johannesburg and PretoriaAgri-businessLoskop Valley and Loskop DamMapoch CavesPlanned construction of De Hoop DamNdebele culture

Proximity to Johannesburg and PretoriaAgri-businessLoskop Valley and Loskop DamMapoch CavesPlanned construction of De Hoop DamNdebele culture

Makhuduthamaga and Fetakgomo

Makhuduthamaga and Makhuduthamaga and FetakgomoFetakgomo

Contain a series of ecological assets, including:– Leolo Mountains– Olifants and Lepelle

Rivers– Maphanama Caves

Bapedi culture and historical sites

Contain a series of ecological assets, including:– Leolo Mountains– Olifants and Lepelle

Rivers– Maphanama Caves

Bapedi culture and historical sites

Greater Sekhukhune District MunicipalityGreater Sekhukhune District MunicipalityGSDM started as a cross GSDM started as a cross border new district to lead border new district to lead in in transformationtransformation Marble Marble Hall, Groblersdal and Hall, Groblersdal and Tubatse well established Tubatse well established municipalities and to municipalities and to provide support to also provide support to also newly created Fetakgomo newly created Fetakgomo and and MakhuduthamagaMakhuduthamagamunicipalities.municipalities.

4

Greater Sekhukhune District Municipality

• The Government grants provided for our growth, establishment and development.

• We are strongly supported as a nodal and IRSDP area.

• The opportunities given fed our ambition to stand up to all challenges.


• GSDM covers 13 266km2

• There are 546 villages and 5 towns as per IDP recognition with population of 1.2million

• The area is governed by 5 municipalities: Tubatse is biggest with highest population of 283 083 people

Makhuduthamaga represents 275 038 peopleGroblersdal – 231 484, Marble Hall -126 976 and Fetakgomo – 96 501 people.

Greater Sekhukhune District Municipality• The following are provincial and district

growth points : • Makhuduthamaga: Jane Furse and

Phokwane• Fetakgomo: Apel• Marble Hall: Van der Merweskraal &

Elandskraal;• Groblersdal: Motetema & Monsterlus• Tubatse: Burgersfort, Steelpoort,

Mecklenburg, Orighstad& Driekop


• GSDM is a water authority for all areas as from July 2003, is responsible for all district roads and Fetakgomo Municipality internal roads. Also storm water management in Tubatse municipality. In addition it must provide management of waste disposal .

Technical Services and PMUTechnical Services and PMU

•• The Technical Services Division is still under The Technical Services Division is still under establishment to fulfil expected role as for Water establishment to fulfil expected role as for Water Authority , district roads and other allocated Authority , district roads and other allocated functions.functions.

•• The opportunity given byThe opportunity given by MMIG to createIG to create thethePMU is of effective assistPMU is of effective assistanceance inin ththe process.e process.

PMU structurePMU ManagerMuriel Teisho

Koos de JonghAssistant ManagerAlso water & sanitation

Ester RadingwanaAssistant ManagerAlso roads &EPWP

PMR. Mahlankwane

(Groblerdal)

PMEllias Mamphane

also Electricity

PMMolomo Malesela

also road

PMvacant(Tubatse)

PMR. Mariri

(Makhudutamaga)

Ass. PMK. Phaahla

(Marble Hall)

Dimakatso MogaleQuantity Surveyor

Ass. PMM. Marishane

Ass.PMC. Mashabela

PMK. Ramantswana

Julia Keurdeladministration

8 On contracts

Mathung MatlalaAccountant

Ass. PMAnna Sehlapelo

(Fetakgomo)

Jackson Jackson RaksantshoRaksantshoData capturerData capturer

9 District Official

5

Technical Services and PMUTechnical Services and PMU

•• The PMU team consisting of 16 members has 8 The PMU team consisting of 16 members has 8 people on contract and 9 are permanently people on contract and 9 are permanently appointed by the GSDM.appointed by the GSDM.

•• There is no adequate administration support. There is no adequate administration support. •• A proposal has been submitted in the new PMU A proposal has been submitted in the new PMU

Business Business Plan toPlan to appoint on contract additional appoint on contract additional 4 4 members.members.

GSDM budget

• The MIG allocation until now is the biggest portion of GSDM budget.

MunicipalInfrastructureGrant




Sekhukhune MIG allocations

143.8153.3

168.6

186

020406080

100120140160180200

R m

illio

n

2004/05 alloc 2005/06 alloc 2006/07 alloc 2007/08

In summary:

R651.7m allocation versus R1 474m as registered projects MIG value

Sekhukhune MIG PMU performance

50%

100%

38%

90%

100%89%

100%

0%10%20%30%40%50%60%70%80%90%

100%R m

illio

n

2004/5 utilisation end of March 2004/5 utilisation June2005/6 utilisation March 2005/06 utilisation June2005/06 Utilisation Sept 2006/7 utilisation March2006/07 utilisation April

March 05

March 06

June 05

June 06 Sept 06 March 07 April 07

Greater Sekhukhune District Municipality• The Councilors' were our planners. The

community interventions were responded to and pushed through the political interventions.

• Our financial Officers were dictating values of our projects, regardless of infrastructure need or functionality.

• We learned during implementation. We responded to emergencies, to outcries of communities previously disadvantaged.

• We did feasibility studies to find out why we are constantly behind our target.

• We learned about GSDM specifics of geology and topography.

• The challenges for budget utilisation are related to the state of organisational establishment and the political interventions, especially as the cross border district.

• From October 2006 GSDM started to register projects to address the backlog, not allocated budget.

• The infrastructure planning and capital asset management is still not fully established, but there is progress and promising recognition of the matter.

6

Status of projects

• Our MIG Project List reflects 172 projects as registered.

• 116 projects are reported as completed but service is not fully delivered everywhere.

• 51 registered projects, including 9 schemes provide for our multiyear commitment.

Schemes

43.366Lebalello BWS8

95.9106.3Olifantspoort BWS3

251268Mooihoek - 38

Tubatse

9

44.4547Grob/Luckau-137

106.8113.7Legolaneng -9Elias Motsoaledi

6

234.09234.09Fetakg roads -175

12.213.4Mohlalet/Mal- 6Fetakgomo4

15.4435.46Rietfon/Spi - 82

48.7654.6Nkadimeng-20Makhuduthamaga

1

BalanceRmillion

MIG value Rmillion

Name & no of villages served

Municipality

Schemes

54.6

48.8

35.5

14.4

106.3

95.9

13.4

12.2

234

233.8113.7

106.8

47

44.5

66

43.3

268251

0

50

100

150

200

250

300

Nkadimeng Rietfontein Olifantspoort Mohlaletsi Fetakgomoroads

Legolaneng Grobl/Luckau Lebalello Mooihoek

total cost balance

MIG projects• Those 172 projects consist 163 projects

for basic residential services and 9 projects for public services

• There are 9 urban and 163 rural projects• There are 10 rehabilitation and 162 new• There are 140 water projects, 15

sanitation, 9 roads, 6 taxi ranks, 1 solid waste, 1 Municipal offices

Projects’ status

• 172 registered• 116 completed• 48 under construction• 1 design& tender• 7 pre-implementation

116

48

17

completed constructiondesign pre-implement

Summary : 172MIG projects, 51 presently for implementation

209.32

73.45

408.05

353.62

68.6833.34

326.55

198.34

449.07

323.13

0

50

100

150

200

250

300

350

400

450

Makhuduthamaga Fetakgomo Marble Hall Elias Motsoaledi Tubatse

Allocation Balance

39p

8p

29p

9p

36p14p

40p

10p

28p

11p

7

GSDM Summary : 51 presently for implementation

836494

692119

238474234022

37596

288599072

55159000

720112000

10320

0100000200000300000400000500000600000700000800000900000

37 water 4 roads 5sanitation

5 taxi rank 1 firestat 1 offices

value balance

12095.5

138

263.6263.6

208.5

149.595

138113

95

246

79.1 95.50

50100150200250300

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Accumulative scheduledAccumulative transfersActual accumulative expendituresIntervention

Performance in 2006/07, including rollover

Completed project• We reported on 4th quarter KPI that 116 projects

certified as completed utilised R316.4M and made impact on 664 114 statistical households

• On those projects were constructed the following: for water: 62new & 2 rehabilitated boreholes, 60

new &2 rehabilitated reservoirs, 7new &2 rehab water treatment plants, 13 pump stations,138km of new and 8km rehabilitated supply lines, 349km of new and 60km rehabilitated reticulation pipelines, 11 245 new stand pipes & 4 085 metered yard connections. We provided 4 023 water meters on existing infrastructure to address the cost recovery.

Completed project

• For sanitation one pump station was rehabilitated

• We completed one site for waste disposal • Job opportunities were created for 6 956

persons with 497 039 man-days and 727 labourers received training as reported.

EPWP

Presently the GSDM PMU is providing only Learnership ProgrammeHR training division to be involved for several tasks:

a) Training analysisb) Monitoring compliance for skill transfer

and non- accredited trainingc) Permanent employmentd) Community Partnership contracts

Areas requiring improvement

Effective evaluation of performance of consultants( we keep consultants who are aggressively abusing GSDM by charging high fees, over designing infrastructure or are incompetent) Effective evaluation of performance of contractors (we are appointing contractors who failed previous projects; who are over committed or who do not comply with requirements)Improvement of management in Technical DivisionImprovement of SYSTEMATIC performance

8

Areas requiring improvement

Office space :- the project management carries important

recordPMU administration capacity to be increased:

- the project and programme management requires efficient administration, including databases maintenance

Challenges for DistrictChallenges for DistrictExpectation and backlogExpectation and backlogPoverty and unemploymentPoverty and unemploymentLow human development indexLow human development indexSocial and physical disintegration of communitiesSocial and physical disintegration of communitiesThreatened environmentThreatened environmentDrought, shortage of water, very high water costDrought, shortage of water, very high water costPoor tourism infrastructurePoor tourism infrastructureLimited investment from public and private Limited investment from public and private sector, also disinvestment due to rural naturesector, also disinvestment due to rural natureCommunal nature of landownershipCommunal nature of landownershipLow revenue base for district municipalityLow revenue base for district municipalityLack of ability to attract relevant skillsLack of ability to attract relevant skills

Challenges for PMUChallenges for PMU•• Lack of established and effective planning Lack of established and effective planning

municipality divisionmunicipality division•• Lack of recognition of PMU line functionLack of recognition of PMU line function•• Lack of effective assistance byLack of effective assistance by support divisions support divisions

of municipalityof municipality•• Lack of adequate performanceLack of adequate performance of support of support

divisionsdivisions•• Inadequate or not availabInadequate or not availablele facilities: office facilities: office

space, internet,space, internet, phophone line, cameras, cars etcne line, cameras, cars etc

Challenges for PMUChallenges for PMU•• MIS MIS –– due to GSDM poor facilities to operatedue to GSDM poor facilities to operate•• MIS backlogMIS backlog•• Lack of record on completed projectsLack of record on completed projects•• Inefficient project registration processInefficient project registration process

a) everybody overloadeda) everybody overloaded, t, therherefore delays in efore delays in attending to MISattending to MISb) MIS errorsb) MIS errorsc) incorrect settings c) incorrect settings delaying actions or ability to delaying actions or ability to correctcorrect

Challenges for PMUChallenges for PMU•• Different interpretations of priorities and Different interpretations of priorities and

requirementsrequirements•• Lack of improvement of performance and lack Lack of improvement of performance and lack

of interest to improve capacity or gain of interest to improve capacity or gain experienceexperience

•• Lack of leadership andLack of leadership and dynadynamism in mism in managementmanagement inin Technical DivisionTechnical Division

Achievements• GSDM attended to issues of

organisational establishment (human resources and policies)

• District crafted an approach for local economic development

9

Way ForwardRevision of organisational structure and effective appointmentsRevision of internal processes:

a) Planning and prioritiesb) Procurementc) Flow of submissionsd) Project hand over

Involvement of HR for EPWP implementationReconciliation of asset against MIG Project List

Acknowledgement

• PMU TEAM effort• Support received 1) Internally 2) From Province3) From DPLG4) From DWAF

Thank you for your attention and the opportunity to talk about

Sekhukhune•• GSDMGSDM

ANNEXURE C13

23-May-07

PRESENTATION BY THULAMELA MUNICIPALITY:

BEST PRACTICE ON MIG PROGRAMME IMPLEMENTATION

MIG WORKSHOPApril 2007

PRESENTATION BY PRESENTATION BY THULAMELA MUNICIPALITY:THULAMELA MUNICIPALITY:

BEST PRACTICE ON MIG PROGRAMME BEST PRACTICE ON MIG PROGRAMME IMPLEMENTATIONIMPLEMENTATION

MIG WORKSHOPMIG WORKSHOPAprilApril 20072007

Presenter: Mr A. C. Mphagi (PMU Manager)Presenter: Mr A. C. Mphagi (PMU Manager)23-May-07 2

BACKGROUND

• Thulamela is one of the four local municipalities of the Vhembe District and a medium capacity.

• Population = 584 563• 20% Urban and 80% Rural• Gets its direct mig funding from

2005/6 financial year.

23-May-07 3

INFRASTRUCTURE BACKLOGS

• Roads & Stormwater:→ Urban Streets (About 150 km; only 49,4 km tarred)→ Rural areas: upgrade the access collectors to uplift

the living standards • Sports Facilities:

→ Have 9 centres: to develop various sporting codes.→ Scope: Grassed soccer field, roofed pavilion with

change rooms and ablutions, swimming pool, one volley + basket ball court, one netball + tennis court, borehole with storage and irrigation, fencing and parking.

• Other public infrastructure: Solid waste disposal and transfer stations, taxi and bus ranks, and cemeteries.

23-May-07 4

INSTITUTIONAL SET-UP

• A committee based PMU was established in 2005/6, with specialization in consideration

• Additional personnel for special municipal focuses were included, e.g. EIA and IDP

• In-house PMU manager is almost full time with no additional remuneration. Other members support on part time basis.

• On progress to have full-time PMU, through the review of Organogram.

23-May-07 5

TRAINING CAPABILITIES

Management of projects

UNISAAdvanced Certificate in Project Management

1

Environmental management

North West University

Environmental Law for Environmental Managers

1

Management of projects

Continue Education at University of Pretoria

Advanced Programme in Project Management

1

Assist in the Mana-gement of projects

CE at UP Project Management Principles and Practices

4

Evaluate contractsCE at UPContract Management15

Update maps Intergraph Systems SA

GIS5

Co-ordinate EIA and get ROD

North West University

Environmental Impact Assessment

1

OHS auditingAdvantage ACTIntegrated SHEQ Internal Auditors

2

OutcomeInstitution Type of training No. of personnel

23-May-07 6

CHALLENGES

• Poor performance by emerging service providers.Mix experienced with emerging.

• dplg financial year vs Municipal financial year. Budget adjustment.

• Under estimation.Appoint project consultants to do detailed cost estimates.

• Low unit cost of roads and stormwater.dplg to revise the unit cost

• Project identification and community involvement.Co-ordinate all stakeholders, like civics and traditional leaders, through Ward Councillors.

• Lots of hiccups in the initial year, because of no planningPlan ahead

23-May-07

23-May-07 7

OUR STRENGTH

• Conduct EIA a year before – have a budget. • Feasibility study and Designs approval prior

implementation financial year – plan to have a budget.

• Monthly meetings of the PMU as preparation for monthly meetings with consultants.

• Use of different consultants.• Planned appointments of students for in-service

training and of the people with disability, in the projects.

• Full support by management.

23-May-07 8

IMPACT MADE BY MIG

• 18.7 km of tarred streets, one solid waste disposal site, and one sport facility were constructed in 2005/6.

• 6.5 km of tarred streets, 11.8 km gravel roads, two sports facilities, and 5.5 km concrete strip road are under construction for 2006/7.

• Budget: mig = R44 674 251-47 and municipal counter = R19 000 000-00, for both 2005/6 and 2006/7. 16 projects were implemented.

• 78 083 households benefited and 365 people got employment.

23-May-07 9

OVERALL MUNICIPAL PROGRESS AS ON 28 FEBRUARY 2007

• Spent R21 700 315.75 from the allocation of R23 705 202.49; i.e. 91.5%

• Time elapsed in the financial year is 91.7%.

• THANK YOU

23-May-07 10

TSHIKOMBANI BASIC SPORTS FIELD

Pavilion under construction

23-May-07 11


Swimming pool under construction

23-May-07 12


Pavilion

23-May-07

23-May-07 13


Netball & Tennis Court

23-May-07 14


Swimming pool

23-May-07 15

MAKWARELA TO HOLLYWOOD ROAD

23-May-07 16

THOHOYANDOU UNIT J MAIN STREET

23-May-07 17

TSHIAVHA ACCESS ROAD

ANNEXURE C14

1

MODIMOLLE LOCAL MODIMOLLE LOCAL MUNICIPALITYMUNICIPALITY

MIG QUARTERLY WORKSHOPMIG QUARTERLY WORKSHOP2323--25 APRIL 200725 APRIL 2007PHALABORWAPHALABORWA

Modimolle means “a place of spirits’’named after a majestic mountain visible

from the N1.The Municipality is situated South-East of

the Waterberg District Municipality.It shares borders with Bela-Bela to the

south, Mookgopong to the North, and Thabazimbi to south-West, Lephalale to

the West and Mogalakwena to the North-west.

1. INTRODUCTION

The Municipality is at the centre of the District Municipality and hence the

administrative capital of the Waterberg District Municipality.

Municipal Demarcation Board Municipal Demarcation Board number: NP 365. number: NP 365. Municipal area: 5543.5 KmMunicipal area: 5543.5 Km²²..Modimolle is the administrative Modimolle is the administrative capital of the Waterberg region and capital of the Waterberg region and consist of three settlements viz, consist of three settlements viz, Modimolle/Phagameng, Mabatlane Modimolle/Phagameng, Mabatlane and Mabaleng the remainder of the and Mabaleng the remainder of the area is predominantly farming areas area is predominantly farming areas and portion of the Waterberg and portion of the Waterberg Biosphere Reserve.Biosphere Reserve.

Modimolle Municipality is 155 Km Modimolle Municipality is 155 Km southsouth--west of Polokwane the west of Polokwane the Provincial capital and the Gateway Provincial capital and the Gateway international airport, 30Km from the international airport, 30Km from the world acclaimed Nylsvlei with world acclaimed Nylsvlei with Ramsar status and 149 Km from Ramsar status and 149 Km from Lephalale near Botswana.Lephalale near Botswana.Modimolle has hot summers and mild Modimolle has hot summers and mild winters which makes it an all year winters which makes it an all year tourist destination.tourist destination.

Modimolle town is growing as a Modimolle town is growing as a commercial centre and is renowned commercial centre and is renowned for its export quality grapes and other for its export quality grapes and other fruits such as melons and peaches.fruits such as melons and peaches.

2

LIMPOPO PROVINCELIMPOPO PROVINCE2. INFRASTRUCTURE 2. INFRASTRUCTURE

DEVELOPMENT AND BASIC DEVELOPMENT AND BASIC SERVICE DELIVERYSERVICE DELIVERY

MabatlaneMabatlane X 4

(200 – Middle-High300 – RDP)Mabaleng

Mabatlane X 3Modimolle X 24Mabatlane X 3Modimolle X 11Phagameng X 8Phagameng X 10

StandardRDPRDPRDP

StandardRDP

StandardStandard

RDP

BULK SUPPLYHousehold

Connections50023770Water Reticulation15070303001 100

WATER

LOCATIONSERVICE LEVEL REQUIREMENT

BACKLOGINTERVENTION

INTERVENTION BACKLOG SERVICE LEVELREQUIREMENT

LOCATION

SANITATION Bulk StorageUpgrading of sewerplants and ponds

Sewer Reticulation500

1 00323715070

30300

1 100

Standard

RDP/Standard

RDPRDP

StandardRDP

StandardStandard

RDP

ModimolleMabatlaneMabaleng

Mabatlane(200 – Middle-High

300 – RDP)Phagameng X 9

MabalengMabatlane X 24Mabatlane X 3

(Old Stadium area nextto Community Hall)

Modimolle x 11Modimolle X 8

Phagameng x 10


LOCATION

ELECTRICITY Bulk supply150300237

Reticulation500

1 0032371507030300

1 100

Standard

RDP/Standard

RDPRDP

StandardRDP

StandardStandard

RDP

Modimolle X 24Phagameng X 8

Mabaleng

Mabatlane X 4(200 – Middle-High


MabalengModimolle X 24Mabatlane X 3Modimolle X 11Phagameng X 8Phagameng x 10


LOCATION

ELECTRICITYStreetlights

500

1 0032371507030300

1 100

HouseholdConnections

500

1 0032371507030300

1 100

RDPRDP

StandardRDP

StandardStandard

RDP

RDP

RDPRDP

StandardRDP

StandardStandard

RDP



MabalengModimolle X 24Mabatlane X 3

Modimolle X 11Phagameng X 8Phagameng x 10



MabalengModimolle X 24Mabatlane X 3

Modimolle X 11Phagameng X 8Phagameng x 10


LOCATION

LAND AND HOUSING LandLandfill sites

Future expansionAgri-village

Housing – low cost70300

1 003110

Housing – Middle/High20030200300

StandardRDP/Middle/High

Standard

RDPRDPRDPRDP

Middle/HighMiddle/HighMiddle/HighMiddle/High

Mabatlane & MabalengMabatlane

Ward 3

MabatlaneMabatlane X 4

Phagameng X 9Phagameng X 10

MabatlaneModimolle X 11

BosveldsigPhagameng x 8

3


LOCATION

ROADS ANDSTORMWATER

Roads: Construction10km upgrade

5 km10 km5 km5 km5 km

15 km

Roads resealing2 km

20 km20 km

Storm Water10 km5 km

10 km10 km1 km2 km

20 km

StandardStandard

RDPRDP

StandardStandardStandard

StandardStandardStandard

StandardStandardStandardStandardStandardStandardStandard

LesedingMabatlane X 4

MabatlaneMabalengMabalengModimolle

Phagameng

MabatlaneModimolle

Phagameng

LesedingMabatlane

Mabatlane X 4Mabaleng

Modimolle X 11Modimolle x 15

Phagameng


LOCATION

SOLID WASTE &ENVIRONMENT

Solid Waste &Environment

1 ha per nodal pointfor expansion of

cemeteries

1 ha Municipal area

TRANSPORT Sheltered TaxiRanks

As per taxi regulations Mabatlane,Mabaleng,

Modimolle &Phagameng

SPORT, ARTS,CULTURE ANDRECREATION

Lack of recreationalfacilities

Lack of adequateLibrary facilities

Standard

Standard

Municipal area

Municipal area

3. BEST PACTICES BY 3. BEST PACTICES BY MUNICIPALITIESMUNICIPALITIES

• 3.1 ROLE OF PMU• Understanding the structure, system and

culture of a Municipality.• Selling the PMU idea • PMU’s attitude: Aggressively pushing for

implementation

3.2 PROJECT LIFE CYCLE (FOUR 3.2 PROJECT LIFE CYCLE (FOUR PHASE)PHASE)

1.1. Conceptual PhaseConceptual Phase2.2. Planning PhasePlanning Phase3.3. Implementation Phase Implementation Phase 4.4. CloseClose--out Phaseout Phase

1.1. CONCEPTUALCONCEPTUAL

-- Master Plans inform the IDP processMaster Plans inform the IDP process-- Stakeholder involvement (NGOStakeholder involvement (NGO’’s s

Community, Councilors, WSDP and Community, Councilors, WSDP and other plans)other plans)

- Identification of Projects

2.2. PLANNINGPLANNING

–– Registering identified Projects from Registering identified Projects from IDP,IDP,

-- MIG Guidelines forming the basis of MIG Guidelines forming the basis of planning,planning,

-- Identifying risks, Constraints and Identifying risks, Constraints and other problems,other problems,

-- Municipal BudgetMunicipal Budget

4

-- Identifying crucial Stakeholders and Identifying crucial Stakeholders and involving them in the planning and involving them in the planning and development of projects development of projects requirements,requirements,

-- Planning for procurement Planning for procurement -- Developing the O&M PlanDeveloping the O&M Plan

3.3. IMPLEMENTATIONIMPLEMENTATION

-- Supply Chain Management Supply Chain Management -- The PMU to influence the process The PMU to influence the process

3.1. PROCUREMENT PROCESS

3.1. APPOINTMENT OF CONSULTANTS3.1. APPOINTMENT OF CONSULTANTS

–– Clear Scope of Work (Clear Scope of Work (ToRToR))-- Feasibility studies, technical Feasibility studies, technical

repots,EIA, preliminary , final design repots,EIA, preliminary , final design and Contract documentation and Contract documentation

–– Monitoring ConsultantMonitoring Consultant’’s performances performance

3.2. APPOINTMENT OF CONTRACTOR3.2. APPOINTMENT OF CONTRACTOR

-- Monitoring the Quality of WorkmanshipMonitoring the Quality of Workmanship-- Monitoring the Targeted outputsMonitoring the Targeted outputs-- Maximize Local Employment Maximize Local Employment

incorporating EPWP guidelinesincorporating EPWP guidelines

3.3. MANAGING THE CASHFLOW3.3. MANAGING THE CASHFLOW

-- Role of the Consultant Role of the Consultant

-- Role of Client Role of Client

-- InterventionIntervention

3.4.3.4. CLOSE CLOSE –– OUT OUT

-- Close Close ––Out Report (MIG 9)Out Report (MIG 9)-- O&M ImplementationO&M Implementation-- Retention (MIG10)Retention (MIG10)

5

4. CHALLENGES & 4. CHALLENGES & INTERVENTIONSINTERVENTIONS

- Scarcity of Local Competent Contractors –Seek assistance from Public works to provide learnerships

- Interference – Establishing Communication Guidelines between PMU and other Stakeholders

- Budget Constraints - ??? MODIMOLLE 1ML WATER TOWER

RESEALING OF ROAD-MODIMOLLE MODIMOLLE TAXI RANK

FENCING AROUND PHAGAMENG CEMETRY ROAD PAVING AT PHAGAMENG

6

THANK YOUTHANK YOU

ANNEXURE C15

1

MIG QUARTERLY WORKSHOP

23 – 25 APRIL 2007

PERFORMANCE OF THE MUNICIPAL INFRASTRUCTURE GRANT (MIG) – 2005/06 AND 2006/07 FINANCIAL YEARS

PART A: 2005/06 FINANCIAL REPORT

2005/06 FINANCIAL REPORT• Municipalities spent R5, 417 billion out of the total allocation of

R5, 436 billion as at the end of March 2006

• Expenditure represents 99,6 percent of the total transferred and the allocation

• Free State (99,4 %), KZN (99,0 %), KZN (99,0 %), Mpumalanga(98,9 %) and Northern Cape (97,7 %), are the provinces that are struggling to spend 2005/06 allocation.

• In Free State and Mpumalanga no expenditure was reported for the past three months

• KZN and Northern Cape report expenditure of less than a million a month

Consolidated report 2005/06

18 26799.665 417 896100.005 436 1615 436 161Total

0100.00297 027100.00297 027297 027Western Cape

0100.00422 254100.00422 254422 254North West

3 86997.75168 316100.00172 184172 184Northern Cape

3 81598.94356 689100.00360 506360 506Mpumalanga

6 73599.07721 033100.00727 769727 769Limpopo

1 34499.881 114 934100.001 116 2781 116 278KwaZulu Natal

0100.00841 414100.00841 414841 414Gauteng

2 50499.42432 408100.00434 913434 913Free State

0100.001 063 817100.001 063 8171 063 817Eastern Cape

Amount not yet

spent (R'00

0)

% Exp from total alloc

Actual Exp to date (R'000)

% Transffrom total alloc

Transf to date

(R'000)Allocation

(R'000)

Province

List of Municipalities still spending 2005/06 funds per province

2

LIMPOPO

6 73599.07721 033766.7194 922727 769Total

11099.7951 792100.0051 90251 902Waterberg DM

6 62593.0288 296100.0094 92294 922Bohlabela DM

Amount not yet spent

(R'000)




Transf to date

(R'000)Allocation

(R'000)

Municipality

KWAZULU NATAL

1,34499.881 114 934100.001116 2781116 278Total

6898.624 841100.004 9094 909Nkandla

75582.343 520100.004 2744 274Maphumulo

52175.661 620100.002 1412 141Mkhambathini

Amount not yet

spent (R'000)




Transf to date

(R'000)Allocation

(R'000)

Municipality

MPUMALANGA

3 81598.94356,689100.00360 506360 506Total

3 81592.4046,393100.0050 20850 208Gert Sibande DM


(R'000)


Actual Exp to date

(R'000)

% Transffrom total

alloc

Transf to date

(R'000)Allocation

(R'000)

Municipality

NORTHERN CAPE

3 86997.75168 316100.00172 184172 184Total

65391.266 820100.007 4737 473Tsantsabane

2 47178.889 230100.0011 70011 700Frances Baard DM

74588.605 788100.006 5326 532Siyancuma


(R'000)




Transf to date

(R'000)Allocation

(R'000)

Municipality

FREE STATE

2 50499.42432 408100434,913434,913Total

25798.1913 90610014 16214 162Lejweleputswa DM

2 24783.1711 10010013 34713 347Xhariep DM

Amount not yet

spent (R'000

)




Transf to date

(R'000)Allocation

(R'000)

Municipality

PART B: 2006/07 FINANCIAL REPORT

3

2006/07 FINANCIAL REPORT• The total MIG allocation for the 2006/07 financial

year is R6, 265 billion

• R5,767 billion transferred to municipalities

• Municipalities have spent R5,162 billion as at end March 2007

• Expenditure represents 82 % of the total allocation and 90% of transferred amount

2006/07 FINANCIAL REPORT

604,98390%82%5,162,39392%5,767,3756,265,300TOTAL

3,21999%99%300,918100%304,137304,137Western

Cape

43,14891%84%443,58693%486,733525,574North West

24,65580%75%98,06994%122,725130,922Northern

Cape

159,53062%54%254,87888%414,408470,284Mpumalanga

58,22192%86%704,50393%762,723821,264Limpopo

86,75393%92%1,157,22499%1,243,9771,262,412KZN

54,88993%87%784,36793%839,257898,554Gauteng

54,81489%80%452,81990%507,633563,896Free State

119,75389%75%966,02884%1,085,7821,288,257Eastern

Cape

Amount not yet

spent (R'000)

% Expenditure

from the amount transferred

% Expenditure from total allocation

Actual Expenditure to date (R"000)

% Transferred from total allocation

Transferred to date (R '000)

Allocation (R'000)PROVINCE

Monthly comparative analysis of Actual Transfers against Actual expenditure

MONTHAMOUNT

TRANSFERRED EXPENDITURE VariancesAPRIL 182,971 76,888 106,083MAY 271,537 129,449 142,088JUNE 420,119 264,499 155,620JULY 620,486 263,459 357,026AUGUST 288,187 334,277 -46,089SEPTEMBER 432,785 408,078 24,707OCTOBER 384,725 367,682 17,043NOVEMBER 499,741 466,423 33,319DECEMBER 399,479 602,481 -203,003JANUARY 532,995 443,905 89,090FEBRUARY 814,165 659,320 154,844MARCH 918,187 1,120,415 -202,228TOTAL 5,765,375 5,136,876 628,499

Monthly Expenditure trends per province

P r o v i n c e O c t - 0 6 N o v - 0 6 D e c - 0 6 J a n - 0 7 F e b - 0 7 M a r - 0 7E x p t o d a t e

E a s t e r n C a p e 7 7 7 3 1 8 1 1 9 2 1 0 2 3 4 0 8 9 3 9 0 9 7 8 8 5 1 5 5 5 6 5 9 5 4 2 6 1F r e e S t a t e 3 2 2 4 6 4 3 8 6 0 2 9 4 0 8 5 5 1 0 2 5 7 3 6 9 1 1 4 5 2 8 4 5 2 8 1 9G a u t e n g 5 8 7 6 7 5 9 5 3 9 1 7 9 4 9 8 7 1 7 0 1 3 3 7 2 3 2 4 5 3 2 5 7 8 2 3 2 1K w a Z u lu N a t a 6 1 1 3 8 9 1 1 3 1 2 1 5 5 2 8 6 1 6 5 8 1 5 3 2 0 2 2 6 0 7 1 1 1 1 5 3 8 8 6L im p o p o 4 1 8 4 5 7 2 1 4 3 9 8 1 0 3 6 7 8 9 5 8 6 2 4 4 1 8 2 1 1 2 6 9 9 3 9 2M p u m a la n g a 2 1 6 5 4 1 8 8 7 1 5 2 8 2 1 1 9 9 1 5 4 8 3 2 1 4 6 4 3 8 2 5 4 6 4 4N o r t h e r n C a p e 5 1 0 6 1 2 4 6 3 1 1 9 8 8 8 2 0 7 2 0 0 8 5 1 4 8 4 8 9 8 0 6 9N o r t h W e s t 4 9 8 4 6 5 8 3 0 0 4 7 4 3 5 3 9 9 4 6 3 7 0 1 2 5 5 6 4 2 4 4 0 5 6 6W e s te r n C a p e 1 9 3 4 9 2 8 9 2 3 2 6 9 0 9 1 4 6 2 2 2 5 4 7 8 4 5 2 4 5 3 0 0 9 1 8T o t a l 3 6 7 6 8 2 4 6 6 4 2 3 6 0 2 4 8 1 4 4 3 9 0 5 6 5 9 3 2 0 1 1 2 0 4 1 5 5 1 3 6 8 7 6

THANK YOU

ANNEXURE C16

1

Presentation to MIG Quarterly WorkshopDivision of Revenue Act, 2007

23 April 200723 April 2007PhalaborwaPhalaborwa

Overview of the Act• Section 9 (1) – duties of transferring officer in relation to

schedule 4 allocation– Ensure transfers made according to payment schedule– Monitoring expenditure and non-financial information

• Monitoring system approved by NT• System doesn’t impose undue burden to munics• System compatible and integrated with other systems• System is consistent with sections 11(2) and 23

– Evaluating the performance of programmes and submit to treasury within six months after the end of financial year

• Section 9 (2) - Coordinate role players– Should avoid duplication– Avoid undue pressure

Overview of the Act• Section 11 (1) – duties of receiving officer in relation to

schedule 4 allocation– Complying with the framework of schedule 4– The manner in which it spends and allocate schedule 4

• Section 11(2) –– follows the budget process– Report expenditure to NT and transferring officer

• Section 11(3) –– annual report to reflect on performance of programme as the

framework– Submit a quarterly performance report to transferring officer 30

days after the end of each quarter

Overview of the Act• Section 13 – duties in relation to financial statements and

annual reports– Financial statements to reflect all funds transferred to

municipalities – Indicated transfers that were withheld in each municipality– Indicate any re-allocations by NT– Certify to NT that transfers were deposited into primary bank

accounts of municipalities– Annual reports to:

• Should indicate reasons for withholding of transfers• Indicate to what extent municipalities were monitored for compliance• Indicate to what extent the allocation achieved objectives and outputs• Indicate any non-compliance with this Act and indicate any steps

taken to address non-compliance

Overview of the Act

• Section 15(1) – reflects purpose and objectives of the programme

• Section 15(2) – reflects on the transferring mechanism of the grant

• Section 15(3) – Allocation of less than R2 million to be listed as allocation to category B as per section 22(1)(a)

• Section 15(4) – municipalities receiving MIG should table 3-year Capital budget in accordance with MFMA

Overview of the Act• Section 22(1) – NT must within 14 days after DORA,

publish in a gazette-– Allocations per municipality of each schedule 4 to local

government– The framework for schedule 4

• (2) - NT must publish in the gazette any amendments or revision to allocations or frameworks according that is authorized by any adjusted budget

• (3) – NT may at any time revise or amend framework in consultation with transferring national officer to correct any error or omission– An amendment or correction takes effect on publication thereof in

a gazette

2

Overview of the Act• Section 23 (1) – MIG framework should be designed to promote

comprehensive reporting on output for a programme or function funded or partly funded by an allocation

• (2) MIG framework may– Include a condition requiring the registration of projects with a national department

or any other organ of state prior to financial year or municipal financial year in which the project will be implemented or such later date as may be agreed between the transferring officer and receiving officer, provided that such later date may not delay or impede the commencement of that project in the relevant financial year

– Not include a condition for a national department or any other organ of state other than the relevant municipality or NT in respect PPP, to approve specific projects or budgets

– Requiring a report on spending other than the reports required in terms of section 11 or approved by NT

• Section 24 (1) – an allocation referred to in schedule 4 may only be utilized for the purpose stipulated in the schedule concerned and in accordance with the framework published in terms of section 22

Matters Raised by the dplg with the Committee on 7 March 2007 (sec 23)

• MIG grant framework is the summary of the policy and emphasises the conditions and targeted outputs for that grant that need to be complied with

• Project registration is crucial in capturing baseline information for monitoring and reporting purposes

• The dplg, has in terms of project registration, assisted municipalities to commit 97%, 70%, and 48% of projects for the 2007/08, 2008/09 and 2009/10 financial years respectively

• Sec 40 should not only cover Infrastructure Grants to Provinces but include the Infrastructure Grants to municipalities as well

dplg 20 March 2007 8

Matters Raised on Sec 23 cont..

It is proposed that Section 23(2) (a) be amended as follows:

“(2) The framework referred to in subsection (1) should –(a) Include a condition requiring the registration of a project with a national

department or any other organ of state only if the registration of such projects complies with section 40(2).”

It is proposed that a new Section 40(2) be inserted to read as follows:

“(2)(a) The receiving officer of a Municipal Infrastructure Grant must by 30 June 2007, submit all the project registrations forms (business plans) for the projects to be implemented in 2008/09 financial year to the National Transferring Officer.

(b) The submission in this regard must indicate the projected start and completion dates for such projects.


Matters Raised on Sec 23

(c) The national transferring officer must evaluate and review the project registration forms (business plans) and certify to National Treasury by submitting the commitments for 2008/09 per municipality by 31 August 2007.

(d) The national transferring officer in consultation with the receiving officer must ensure that the supply chain management processes for projects to be implemented during the 2008/09 financial year must be finalised by 31 March 2008.

(e) The receiving officer of a Municipal Infrastructure Grant in a category C municipality, must, by 1 October 2007, certify to the National Treasury that its capital budget is co-ordinated with all category B municipalities located within that category C municipality.”


Outcomes of Discussions between dplg and National Treasury re Sec 23

• It was agreed that and understood that it should be ensured thatthe conditions of the MIG are adhered to by municipalities that are recipients of the grant

• It was also understood and confirmed by the National Treasury that both the actual Bill/Act and the accompanying grant frameworks have equal standing from a compliance and legal point of view, and that municipalities must comply with both

• It was therefore agreed that the clause as proposed in the Division of Revenue Bill 2006 be retained as is; that the dplg’s suggested insertions for section 40 which were meant to strengthen the dplg’s proposals regarding section 23, be included in the framework for the MIG as these are compliance matters


Overview of the Act• Section 24 (1) – TNO may withhold MIG transfers for a period

not exceeding 30 days if-– Non-compliance with the conditions of the allocation– Roll-overs not spent– Significant under spending from previous transfers

• (3) TNO must, 7 working days or such shorter notice as may be approved by NT- Gives the relevant receiving officer-– Written notice of the intention to withhold the allocation– An opportunity to write written representations– Inform the relevant PT and NT of its intention to withhold– Notice should include the reasons for withholding

• (5) withholding for more than 30 days but less than 120 days– Facilitate compliance– Minimize under spending risk– TNO to submit of proofs of 3 when requesting withholding for more than

120 days– Gives notice for final withholding

3

Overview of the Act • Section 26 – NT may stop allocation in its discretion or on request of TNO

– Persistent or material non-compliance– Anticipation of significant under spending

• NT must when stopping the allocation– Comply with section 38 of MFMA– Inform relevant PT– Publish funds stopped in a gazette

• The Minister may by notice in a gazette, may approve that an allocation or portion of such allocation stopped be used to meet that municipality’s outstanding statutory and financial commitments

• Section 27(1) – NT may when it stops the allocation after consultation with TNO, determine that a portion or a full allocation that will not be spent be re-allocated to one or more municipalities

• The re-allocation to be spent in the next financial year should be deemed as the roll-overs

Overview of the Act• Section 30 – duties relating to category C municipalities

– No letter than 13 April 2007 submit to NT and all the Bs the budget as tabled in accordance with section 16 of MFMA

– Budget should indicate all the funds to be transferred or spent on behalf of Bs and disclose allocation criteria

– Must strive not to duplicate functions performed by Bs and transfer funds for infrastructure development including funds replacing RSC levies

– May spend directly if they:• They retain functions in terms of MSA• If B has, in the opinion C weak capacity and dplg and NT concur with the opinion• If MIG allocation for B is transferred via the District in terms of section 36

– C municipality must before implementing any capital project consult the B before implementation and agree on which municipality is responsible for O&M

• 33 (3) (b) – the TNO of schedule 4 must submit a payment schedule to NT for approval by 13 April 2007.

• (4) TNO should provide the receiving officer with the copy of payment schedule before transferring

• 34 – Amend of payment schedule• Transfer to low capacity municipality – TNO and NT

MIG FRAMEWORK

Conditions

• Prioritise residential infrastructure for water, sanitation, refuse removal, streets lighting, solid waste, connector and bulk infrastructure, and other municipal infrastructure like roads, in line with the MIG policy framework and/or other government sector policies established before the start of the municipal financial year.

• Compliance with Chapter 5 of the Municipal Systems Act (2000). Infrastructure investment and delivery must be based on an Integrated Development Plan that provides a medium to long-term framework for sustainable human settlements and is in accordance with the principles of the National Spatial Development Perspective

• Municipalities must adhere to the labour-intensive construction methods in terms of the Expanded Public Works Programme (EPWP) guidelines

• Compliance with the Division of Revenue Act, including additional reporting requirements on spending and projects as approved by National Treasury

MIG FRAMEWORK

Process for approval of 2008 MTEF allocations

• The receiving officer of a Municipal Infrastructure Grant must by 01 August 2007, submit all the project registrations forms for the projects to be implemented in 2008/09 financial year to the National Transferring Officer.

• The receiving officer must submit to the transferring officer by31 October 2007 the detail project implementation plan of all the projects to be implemented in the 2008/09 financial year. Such details should include timelines regarding project designs, initiation of procurement, and EIA approvals.

• Final allocations to be submitted to the National Treasury by 31 October 2008

Important dates to note

Province and dplg31-July-0731-July-07

Due date was August 2006, please submit

before 30 April 2007

Project registration forms

Province and dplg15-Mar-0915-Mar-0815-Mar-07

PMU business plan/revised budget

Province and dplg15-Mar-0915-Mar-08

15-Mar-07 –Outstanding ones must please be

send to dplg and province ASAP

A letter of acceptance of conditions

National Treasury1-Apr-091-Apr-081-Apr-07

Submission of Capital Plan

Province and dplg15-Mar-0915-Mar-08

15-Mar-07 –Some EC and GT

municipalities did not submit on time

Submission of payment schedule

Receiving office

2009/10 Financial Year

2008/09 Financial Year

2007/08 Financial YearActivity

ANNEXURE C17

1

1

MIG

QU

AR

TE

RLY

WO

RK

SH

OP

23

-25

AP

RIL

20

07

DEP

AR

TM

EN

T O

F P

RO

VIN

CIA

L

AN

D L

OC

AL G

OV

ER

NM

EN

T (

dp

lg)

2

thedplg the dplg the dplg the dplg the dplg the dplg

Sco

pe o

f P

rese

nta

tio

n

Sec

tion 1

1 –

duties

of

rece

ivin

g o

ffic

er in r

espec

t of

schedule

4

allo

cation

Sec

tion 1

5 –

Munic

ipal

Infr

astr

uct

ure

Gra

nt

Sec

tion 2

3 –

Fram

ework

for

sched

ule

4 a

lloca

tion

Sec

tion 2

5 –

Withhold

ing o

f an

allo

cation

Sec

tion 2

6 –

Sto

ppin

g o

f an

allo

cation

Sec

tion 2

7 –

Re-

allo

cations

aft

er s

toppin

g o

f al

loca

tion

Sec

tion 2

8 –

Unsp

ent

conditio

nal

allo

cations

Sec

tion 3

3 –

Pay

men

t sc

hed

ule

Sec

tion 3

4 -

Am

endm

ent

of

the

pay

men

t sc

hedule

MIG

fra

mew

ork

–co

nditio

ns

and p

roce

ss for

appro

val

of 2008

MTEF

allo

cations

Import

ant

date

s to

rem

em

ber

3


Sec

tion

11

–du

ties

of

rece

ivin

g of

fice

r in

res

pec

t of

Sch

edu

le 4

allo

cati

on

11

. (1

) A r

ecei

ving o

ffic

er is

resp

onsi

ble

for—

(a)

com

ply

ing w

ith t

he

fram

ework

for

a Sch

edule

4 a

lloca

tion a

s publis

hed

in t

erm

s of

sect

ion 2

2;

and

(b)

the

man

ner

in w

hic

h it

allo

cate

s an

d s

pen

ds

a Sch

edule

4 a

lloca

tion.

(2)

The

rece

ivin

g o

ffic

er o

f a

munic

ipal

ity

must

—

(a)

ensu

re a

nd c

ertify

to

the

Nat

ional

Tre

asury

that

the

munic

ipalit

y—(i

) in

dic

ate

s, o

r if r

equired

, ex

clusi

vely

appro

priat

es e

ach p

rogra

mm

efu

nded

or

par

tial

ly f

unded b

y th

is a

lloca

tion in its

annual

budget

; an

d(i

i) m

akes

public

, in

acc

ord

ance

with t

he

requirem

ents

of

sect

ion 2

1A o

f th

e M

unic

ipal Sys

tem

s Act

, th

e co

nditio

ns

and o

ther

info

rmat

ion in

resp

ect

of

the

allo

cation t

o f

acili

tate

per

form

ance

mea

sure

men

t an

d t

he

use

of

required

inputs

and o

utp

uts

; an

d

(b)

as p

art

of

the

report

req

uired

in t

erm

s of

sect

ion 7

1 o

f th

e M

unic

ipal

Finan

ce

Man

agem

ent

Act

, re

port

to t

he

Nat

ional

Tre

asury

and t

he

tran

sfer

ring n

atio

nal

off

icer

on s

pen

din

g a

nd p

erfo

rman

ce a

gai

nst

pro

gra

mm

es.

4


Sec

tion

11

–du

ties

of

rece

ivin

g of

fice

r in

res

pec

t of

Sch

edu

le 4

allo

cati

on

(4)

The

rece

ivin

g o

ffic

er m

ust

rep

ort

agai

nst

pro

gra

mm

esfu

nded

or

par

tially

funded

by

a Sch

edule

4 a

lloca

tion a

gai

nst

the

rele

vant

fram

ework

in its

annual

fin

anci

al s

tate

men

ts a

nd a

nnual

rep

ort

.

(5)

The

rece

ivin

g o

ffic

er m

ust

, w

ithin

tw

o m

onth

s af

ter

the

end o

f th

e finan

cial ye

ar a

nd w

her

e re

leva

nt

the

munic

ipal finan

cial ye

ar,

eval

uat

e its

per

form

ance

in r

espec

t of

pro

gra

mm

esfu

nded

or

par

tially

funded

by

an a

lloca

tion a

nd s

ubm

it s

uch

eva

luat

ion t

o t

he

tran

sfer

ring n

atio

nal

off

icer

.

5


Sec

tion

15

-M

IG

15

. (1

) The

Munic

ipal

Infr

astr

uct

ure

Gra

nt

set

out

in S

ched

ule

4

supple

men

ts t

hef

undin

gof

infr

astr

uct

ure

pro

gra

mm

esfu

nded

fro

m

munic

ipal budgets

to e

nab

le m

unic

ipalit

ies

to a

ddre

ss b

ackl

ogs

in

munic

ipal in

fras

truct

ure

req

uired

for

the

pro

visi

on o

f bas

ic s

ervi

ces.

(2)

The

Munic

ipal In

fras

truct

ure

Gra

nt—

(a)m

ust

be

tran

sfer

red,

direc

tly

to a

cat

egory

A,

B o

r C m

unic

ipalit

y th

at

has

the

pow

ers

and f

unct

ions

refe

rred

to in s

ection 8

4 o

f th

e M

unic

ipal

Str

uct

ure

s Act

to p

rovi

de

munic

ipal in

fras

truct

ure

in r

espec

t of

those

pow

ers

and f

unct

ions;

and

(b)

may

be

tran

sfer

red v

ia t

he

rele

vant

cate

gory

C m

unic

ipalit

y to

aca

tegory

B m

unic

ipal

ity

if—

6


Sec

tion

15

-M

IG

(i)

the

allo

cation t

o t

he

cate

gory

B m

unic

ipal

ity

is les

s th

an R

2 m

illio

n;

or

(ii)

the

tran

sfer

ring n

atio

nal

off

icer

, in

consu

ltat

ion w

ith t

he

National

Tre

asury

, id

entifies

the

cate

gory

B m

unic

ipal

ity

as n

ot

bei

ng a

ble

to

man

age

or

adm

inis

ter

the

allo

cation.

(3)

Allo

cations

refe

rred

to in s

ubse

ctio

n (

2)(

b)

must

be

liste

d a

s an

al

loca

tion t

o t

hec

ateg

ory

B m

unic

ipalit

y in

the

public

atio

ns

refe

rred

to in

sect

ion 2

2(1

)(a)

.

(4)

A m

unic

ipalit

y re

ceiv

ing t

he

Munic

ipal In

fras

truct

ure

Gra

nt

must

tab

le

a th

ree-

year

cap

ital

budget

as

par

t of

its

budget

for

the

2007/0

8

finan

cial ye

ar in a

ccord

ance

with t

he

Munic

ipal Fi

nan

ce M

anag

emen

t Act

, unle

ss e

xem

pte

d in t

erm

s of

that

Act

.

2

7


Sect

ion

23

–Fr

amew

orks

for

Sch

edu

le

4 a

lloca

tion

(1)T

he

fram

ewor

k fo

r a

Sch

edule

4 a

lloca

tion m

ust

be

des

igned

to

pro

mote

com

pre

hen

sive

rep

ort

ing o

n o

utp

uts

for

a pro

gra

mm

eor

fu

nct

ion f

unded

or

par

tial

ly f

unded

by

the

allo

cation.

(2)

The

fram

ework

ref

erre

d t

o in s

ubse

ctio

n (

1)

may

—(a

)incl

ude

a co

nditio

n r

equirin

g t

he

regis

trat

ion o

f a

pro

ject

with

a nat

ional

depar

tmen

t or

any

oth

er o

rgan

of

stat

e prior

to t

he

finan

cial

year

or

munic

ipal

fin

anci

al y

ear

in w

hic

h t

he

pro

ject

will

be

imple

men

ted o

r su

ch lat

er d

ate

as m

ay b

e ag

reed

bet

wee

n t

he

tran

sfer

ring n

atio

nal

off

icer

and t

he

rece

ivin

g o

ffic

er,

pro

vided

that

su

ch lat

er d

ate

may

not

del

ay o

r im

ped

e th

e co

mm

ence

men

t of

that

pro

ject

in t

he

rele

vant

finan

cial

yea

r; a

nd

(b)

not

incl

ude

any

conditio

n—

(i)

for

a nat

ional

dep

artm

ent

or

any

oth

er o

rgan

of

stat

e, o

ther

than

the

rele

vant

pro

vince

or

munic

ipalit

y or

the

Nat

ional

Tre

asury

in r

espec

t of

a public

priva

te p

artn

ersh

ip,

to a

ppro

ve s

pec

ific

pro

ject

s or

budget

s; o

r(i

i) r

equir

ing a

rep

ort

on s

pen

din

g o

ther

than

the

report

s re

quired

in

term

s of

sect

ion 1

1 o

r as

appro

ved b

y th

e N

atio

nal

Tre

asury

.8


Sec

tion

25

–W

ith

hol

din

g of

allo

cati

on

(1)

Subje

ct t

o s

ubse

ctio

ns

(2)

and (

3),

a t

ransf

erring n

atio

nal off

icer

may

w

ithhold

the

tran

sfer

of

a Sch

edule

4,

5,

6 o

r 7 a

lloca

tion o

r an

y port

ion o

f su

ch a

lloca

tion f

or

a per

iod n

ot

exce

ed

ing

30

days,

if—

(a)t

he

pro

vince

or

munic

ipal

ity

does

not

com

ply

with t

he

pro

visi

ons

of

this

Act

or

conditio

ns

to w

hic

h t

he

allo

cation,

as p

rovi

ded

for

in t

he

rele

vant

fram

ework

, is

subje

ct;

(b)

roll-

ove

rs o

f co

nditio

nal

allo

cations

appro

ved b

y th

e N

atio

nal

Tre

asury

in a

ccor

dan

ce w

ith s

ection 2

8 h

ave

not

bee

n s

pen

t; o

r

(c)

expen

diture

on p

revi

ous

tran

sfer

s during t

he

finan

cial ye

ar r

efle

cts

signific

ant

under

-spen

din

g,

for

whic

h n

o s

atis

fact

ory

exp

lanat

ion is

giv

en.

9


Sec

tion

25

–W

ith

hol

din

g of

allo

cati

on

(5)

(a)

The

Nat

ional

Tre

asury

may

when

a t

ransf

erring n

atio

nal off

icer

is

withhold

ing a

n a

lloca

tion in t

erm

s of

subse

ctio

n (

1)

inst

ruct

or

appro

ve a

req

ues

t fr

om

that

tra

nsf

erring n

atio

nal

off

icer

to w

ithhold

an

allo

cation f

or

a per

iod longer

than

30 d

ays,

but

not

exce

edin

g 1

20

day

s, if

the

withhold

ing w

ill—

(i)

faci

litat

e co

mplia

nce

with t

his

Act

or

the

conditio

ns

to w

hic

h t

he

allo

cation is

subje

ct;

or

(ii)

(ii)

min

imis

eth

e ri

sk o

f under

spen

din

g.

(b)

A t

ransf

erring n

atio

nal

off

icer

must

, w

hen

req

ues

ting t

he

withhold

ing

of

an a

lloca

tion in t

erm

s of

this

subse

ctio

n,

subm

it p

roof

of

its

com

plia

nce

with s

ubse

ctio

n (

3)a

nd a

ny

repre

senta

tions

rece

ived

fro

m

the

rece

ivin

g o

ffic

er,

to t

he

Nat

ional

Tre

asury

.

10


Sec

tion

26

–St

oppi

ng

of a

lloca

tion

(1)

Des

pite

sect

ion 2

5,

the

Nat

ional

Tre

asury

may

in its

dis

cret

ion o

r at

th

e re

ques

t of

a tr

ansf

erring n

atio

nal

off

icer

sto

p t

he

tran

sfer

of—

(a)a

Sch

edule

4,

5 o

r 6 a

lloca

tion r

efer

red t

o in s

ection 2

5(1

) to

a

pro

vince

or

munic

ipal

ity

on t

he

gro

unds

of

per

sist

ent

and m

ater

ial

non-c

om

plia

nce

with t

he p

rovi

sions

of

this

Act

, or

a c

onditio

n t

o w

hic

h

the

allo

cation,

as p

rovi

ded

for

in t

he

rele

vant

fram

ework

, is

subje

ct;

or

(b)

a Sch

edule

4,

5,

6 o

r 7 a

lloca

tion r

efer

red t

o in s

ection 2

5(1

) if t

he

Nat

ional

Tre

asury

antici

pat

es t

hat

a p

rovi

nce

or

munic

ipalit

y w

ill

subst

antially

under

spen

d o

n t

hat

pro

gra

mm

eor

allo

cation in t

he

finan

cial ye

ar.

11


Sec

tion

27

–R

e-al

loca

tion

aft

er

stop

pin

g o

f al

loca

tion

(1)T

he

Nat

ional

Tre

asury

may

, w

her

e it s

tops

an a

lloca

tion in t

erm

sof

sect

ion 2

6,

afte

r co

nsu

ltat

ion w

ith t

he

tran

sfer

ring n

atio

nal

off

icer

, det

erm

ine

that

a p

ort

ion o

r th

e al

loca

tion t

hat

will

not

be

spen

t be

real

loca

ted t

o o

ne

or

mor

e pro

vince

s or

munic

ipalit

ies

on c

onditio

n

that

the

allo

cation w

ill b

e sp

ent

in t

he

finan

cial ye

ar o

r th

e nex

t finan

cial ye

ar.

(2)

The

real

loca

tion o

f a

port

ion o

r th

e fu

ll allo

cation o

n c

onditio

n t

hat

th

e al

loca

tion w

ill b

e sp

ent

in t

he

nex

t finan

cial ye

ar r

efer

red

to in

subse

ctio

n (

1),

must

be

dee

med

to

be

a ro

ll-ove

r ap

pro

ved b

y th

e N

atio

nal

Tre

asury

in t

erm

s of

sect

ion 3

1(2

)(a)

.

12


Sec

tion

28

–U

nsp

ent

con

dit

ion

al

allo

cati

ons

(1)

Des

pite

the

pro

visi

ons

of

the

Public

Fin

ance

Man

agem

ent

Act

or

the

Munic

ipal Fi

nan

ce M

anag

emen

t Act

rel

atin

g t

o r

oll-

ove

rs,

any

conditio

nal

allo

cation,

exc

ludin

g t

he

Gau

train

Rap

id L

ink

allo

cation,

that

is

not

spen

t at

the

end o

f a

finan

cial

ye

ar r

ever

ts t

o t

he

Nat

ional

Rev

enue

Fund,

unle

ss t

he

rele

vant

rece

ivin

g o

ffic

er c

an p

rove

to

the

satisf

action o

f th

e N

atio

nal

Tre

asury

that

the

unsp

ent

allo

cation is

com

mitte

d t

o iden

tifiab

le p

roje

cts.

(2)

Des

pite

subse

ctio

n (

1),

the

Nat

ional

Tre

asury

may

at

the

reques

t of a

tran

sfer

ring n

atio

nal

off

icer

, pro

vinci

al t

reas

ury

or

munic

ipal

ity

appro

ve—

(a)

roll-

ove

rs f

rom

a c

onditio

nal

allo

cation t

o t

he n

ext

finan

cial

yea

r; a

nd

(b)

spen

din

g o

f a

port

ion o

f a

conditio

nal

allo

cation o

n a

ctiv

itie

s re

late

d

to t

he

purp

ose

of

that

allo

cation w

her

e th

e pro

vince

or

munic

ipal

ity

pro

ject

s si

gnific

ant

unfo

rsee

able

and u

nav

oid

able

ove

r sp

endin

g o

n its

budget

.

3

13


Sec

tion

33

–P

aym

ent

Sch

edu

le

(3)

(a)

The

Nat

ional

Tre

asury

must

appro

ve t

he

pay

men

t sc

hed

ule

s fo

r Sch

edule

s 4,

5 a

nd 6

allo

cations.

(b)

The

tran

sfer

ring n

atio

nal

off

icer

of

a Sch

edule

4,

5 o

r 6 a

lloca

tion

must

subm

it a

pay

men

t sc

hed

ule

to t

he

Nat

ional

Tre

asury

for

ap

pro

val bef

ore

13

Ap

ril 2

00

7.

(c)

Prio

r to

the

subm

issi

on o

f a

pay

men

t sc

hed

ule

in t

erm

s of

par

agra

ph

(b)

thet

ransf

erring

nat

ional

off

icer

must

—

(i)

in r

elat

ion t

o a

Sch

edule

4 a

lloca

tion,

con

su

lt t

he r

ele

van

t re

ceiv

ing

off

icer;

14


Sec

tion

33

–P

aym

ent

Sch

edu

le

(4)

Th

e t

ran

sferr

ing

nati

on

al off

icer

of

a S

ched

ule

4,

5 o

r 8

allo

cati

on

mu

st p

rovid

e t

he r

ece

ivin

g o

ffic

er

wit

h a

co

py o

f th

eap

pro

ved

paym

en

t sc

hed

ule

pri

or

to m

akin

g t

he f

irst

tra

nsf

er

in a

ccord

an

ce t

here

wit

h.

15


Sec

tion

34

–A

men

dm

ent

of p

aym

ent

sch

edu

le

(1)

Su

bje

ct t

o s

ub

sect

ion

(2

), a

tra

nsf

err

ing

nati

on

al off

icer

of

a

Sch

ed

ule

4,

5 o

r 6

allo

cati

on

mu

st w

ith

in t

hre

e d

ays

of

the

wit

hh

old

ing

or

sto

pp

ing

of

an

allo

cati

on

in

term

s o

f se

ctio

n 2

5

or

26

, am

en

d a

paym

en

t sc

hed

ule

as

a r

esu

lt o

f th

e

wit

hh

old

ing

or

sto

pp

ing

of

an

allo

cati

on

in

term

s o

f th

is A

ct.

(2)

Th

e N

ati

on

al Tre

asu

ry m

ay,

in t

he i

nte

rest

of

bett

er

deb

t an

d

cash

-flo

w m

an

ag

em

en

t or

to d

eal w

ith

fin

an

cial

mis

man

ag

em

en

t or

slow

sp

en

din

g a

men

d a

ny p

aym

en

t sc

hed

ule

fo

r an

allo

cati

on

lis

ted

in

Sch

ed

ule

2,

3,

4,

5 o

r 6

on

no

tifi

cati

on

to—

(a)

the h

ead

of

a p

rovin

cial tr

easu

ry,

in t

he c

ase

of

a p

rovin

cial

allo

cati

on

; an

d (

b)

the a

cco

un

tin

g o

ffic

er

of

the n

ati

on

al

dep

art

men

t re

spo

nsi

ble

for

loca

l g

overn

men

t, i

n t

he c

ase

of

a

loca

l g

overn

men

t allo

cati

on

.

16


Sec

tion

34

–A

men

dm

ent

of p

aym

ent

sch

edu

le

(3)

A p

aym

en

t sc

hed

ule

am

en

ded

in

term

s of

sub

sect

ion

(1

) or

(2)

mu

st t

ake a

ccou

nt

of

the m

on

thly

sp

en

din

g c

om

mit

men

ts

of

pro

vin

ces

or

mu

nic

ipaliti

es,

th

e r

even

ue a

t th

e d

isp

osa

l o

f p

rovin

ces

or

mu

nic

ipaliti

es

an

d t

he m

inim

isati

on

of

risk

an

d

deb

t se

rvic

ing

cost

s fo

r all

th

ree s

ph

ere

s of

govern

men

t.

(4)

An

am

en

dm

en

t of

a p

aym

en

t sc

hed

ule

in

term

s o

f su

bse

ctio

n

(2)

pre

vail

s over

an

y a

men

dm

en

t m

ad

e i

n t

erm

s of

sub

sect

ion

(1

).

(5)

Th

e t

ran

sferr

ing

nati

on

al

off

icer

mu

st i

mm

ed

iate

ly i

nfo

rm t

he

rece

ivin

g o

ffic

er

of

an

y a

men

dm

en

t to

a p

aym

en

t sc

hed

ule

in

acc

ord

an

ce w

ith

su

bse

ctio

ns

(1)

or

(2).

17


MIG

FR

AM

EWO

RK

Co

nd

itio

ns

•P

rio

riti

se r

esi

den

tial in

frast

ruct

ure

for

wate

r, s

an

itati

on

, re

fuse

re

mo

val,

str

eets

lig

hti

ng

, so

lid

wast

e,

con

nect

or

an

d

bu

lk i

nfr

ast

ruct

ure

, an

d o

ther

mu

nic

ipal in

frast

ruct

ure

lik

e

road

s, in

lin

e w

ith

th

e M

IG p

oli

cy f

ram

ew

ork

an

d/

or

oth

er

go

vern

men

t se

cto

r p

olici

es

est

ab

lish

ed

befo

re t

he s

tart

of

the

mu

nic

ipal fi

nan

cial year.

•C

om

plian

ce w

ith

Ch

ap

ter

5 o

f th

e M

un

icip

al

Syst

em

s A

ct

(20

00

). I

nfr

ast

ruct

ure

in

vest

men

t an

d d

elivery

mu

st b

e b

ase

d

on

an

In

teg

rate

d D

evelo

pm

en

t P

lan

th

at

pro

vid

es

a m

ed

ium

to

lon

g-t

erm

fra

mew

ork

for

sust

ain

ab

le h

um

an

sett

lem

en

ts a

nd

is

in

acc

ord

an

ce w

ith

th

e p

rin

cip

les

of

the N

ati

on

al S

pati

al

Develo

pm

en

t P

ers

pect

ive

•M

un

icip

ali

ties

mu

st a

dh

ere

to

th

e lab

ou

r-in

ten

sive

con

stru

ctio

n m

eth

od

s in

term

s o

f th

e E

xp

an

ded

Pu

blic

Work

s P

rog

ram

me (

EP

WP

) g

uid

elin

es

•C

om

plian

ce w

ith

th

e D

ivis

ion

of

Reven

ue A

ct,

incl

ud

ing

ad

dit

ion

al re

port

ing

req

uir

em

en

ts o

n s

pen

din

g a

nd

pro

ject

s as

ap

pro

ved

by N

ati

on

al

Tre

asu

ry18


MIG

FR

AM

EWO

RK

Pro

cess

for

ap

pro

val o

f 2

00

8 M

TEF a

llo

cati

on

s

•T

he r

ece

ivin

g o

ffic

er

of

a M

un

icip

al

Infr

ast

ruct

ure

Gra

nt

mu

st

by 0

1 A

ug

ust

20

07

, su

bm

it a

ll t

he p

roje

ct r

eg

istr

ati

on

s fo

rms

for

the p

roje

cts

to b

e i

mp

lem

en

ted

in

20

08

/0

9 f

inan

cial year

to t

he N

ati

on

al

Tra

nsf

err

ing

Off

icer.

•T

he r

ece

ivin

g o

ffic

er

mu

st s

ub

mit

to t

he t

ran

sferr

ing

off

icer

by

31

Oct

ob

er

20

07

th

e d

eta

il p

roje

ct im

ple

men

tati

on

pla

n o

f all

the p

roje

cts

to b

e im

ple

men

ted

in

th

e 2

00

8/

09

fin

an

cial year.

S

uch

deta

ils

sho

uld

in

clu

de t

imelin

es

reg

ard

ing

pro

ject

d

esi

gn

s, in

itia

tio

n o

f p

rocu

rem

en

t, a

nd

EIA

ap

pro

vals

.

•Fin

al allo

cati

on

s to

be s

ub

mit

ted

to t

he N

ati

on

al Tre

asu

ry b

y

31

Oct

ob

er

20

08

4

19


IMP

OR

TAN

T D

ATE

S TO

REM

EMB

ER

Pro

vinc

e an

d dp

lg31

-Dec

-07

31-J

uly-

07

Due

dat

e w

as

Aug

ust 2

006,

pl

ease

sub

mit

befo

re 3

0 A

pril

20

07P

roje

ct re

gist

ratio

n fo

rms

Pro

vinc

e an

d dp

lg15

-Mar

-09

15-M

ar-0

815

-Mar

-07

PM

U b

usin

ess

plan

/revi

sed

budg

et

Pro

vinc

e an

d dp

lg15

-Mar

-09

15-M

ar-0

8

15-M

ar-0

7 –

Out

stan

ding

one

s m

ust p

leas

e be

se

nd to

dpl

gan

d pr

ovin

ce A

SA

PA

lette

r of a

ccep

tanc

e of

con

ditio

ns

Nat

iona

l Tr

easu

ry1-

Apr-0

91-

Apr-0

81-

Apr-0

7S

ubm

issi

on o

f Cap

ital

Pla

n

Pro

vinc

e an

d dp

lg15

-Mar

-09

15-M

ar-0

8

15-M

ar-0

7 –S

ome

E

C a

nd G

T m

unic

ipal

ities

did

no

t sub

mit

on ti

me

Sub

mis

sion

of

paym

ent s

ched

ule

Rec

eivi

ng

offic

e

2009

/10

Fina

ncia

l Yea

r20

08/0

9 Fi

nanc

ial Y

ear

2007

/08

Fina

ncia

l Yea

rA

ctiv

ity

20


IMP

OR

TAN

T D

ATE

S TO

REM

EMB

ER 15th

12th

10th

6th

3rd

D

raw

dow

ns

20th

18th

16th

10th

6th

3rd

DO

RA

repo

rt an

d re

vise

d pa

ymen

t sc

hedu

le

25th

20th

10th

6th

3rd

KP

I rep

orts

(S

ectio

n 25

re

ports

)

20th

10th

6th

3rd

Mon

thly

pr

ogre

ss re

ports

(b

ucke

ts, b

ulk

infra

stru

ctur

e,

SM

IF)

dplg

to S

ect

Dep

t

dplg

:C

FO to

N

T

EM

M to

dp

lg:C

FO/F

in

Dep

tN

MM

U

to E

MM

PM

MU

to

NM

MU

PM

U to

P

MM

UM

unic

ipal

itie

s to

PM

U

Mile

ston

es d

ates

per

mon

th

21

Th

an

k y

ou

ANNEXURE C18

1

1

Revision of the MIG Allocation Formula

Presentation to MIG Quarterly Workshop -Understanding the Problem

24 April 2007

2

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg TERMS OF REFERENCES

The issue of revenue raising capacityThe issue of DevelopmentPoverty levelsBulk infrastructure and issues regarding unit costsPerformance vs non-performanceInformation that feeds the formulaAlignment with the housing subsidy grantAlignment with other grantsReducing the E-componentRing-fencing funds for other sectors in the P-component

3

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg The MIG Allocation Formula

Step 1: Dividing MIG Allocation into componentsMIG(F) = B + P + E + N + M

WhereB is for basic residential infrastructure(75% of the total MIG allocation). This component is further divided into water and sanitation (72%), roads and stormwater (23%), and “other” (namely refuse removal and street lighting) (5%).P is for public municipal facilities, and comprises 15% of the total MIG allocation. E is an amount allocated for other institutions and micro-enterprises, and comprises 5% of the total MIG allocation.N is for nodal municipalities and comprises 5% M is an allocation intended to allow for performance related adjustments

4

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Step 2: Dividing between Metros and Locals

5%

Number of households living in areas identified as nodes and earning less than R1,100 per month according to Census 2001

N

5%Number of households earning less than R1,100 per month according to Census 2001

E

15%Number of households earning less than R1,100 per month according to Census 2001

P

3.75%Number of households with less than adequate refuse removal service according to Census 2001

“Other”

17.25%Number of households living in informal dwellings according to Census 2001

Roads

54%

Number of households with less than adequate water supply according to Census 2001Number of households with less than adequate sanitation service according to Census 2001

Water and sanitation

B

Percentage of total MIG fund divided between municipalities using

this parameter

ParameterSub-componentComponent

5

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

MIG Funds Split – 2007/08 – 2009/10

9,130,2308,003,0906,478,564

0%0%0%M-Component

456,512400,155323,9285%5%5%N-Component

456,512400,155323,9285%5%5%E-Component

1,369,5351,200,464971,78515%15%15%P-Component

342,384300,116242,9465%5%5%Other

1,574,9651,380,5331,117,55223%23%23%Roads

0000%0%0%Electricity

4,930,3244,321,6693,498,42572%72%72%Water & sanitation

6,847,6736,002,3184,858,92375%75%75%B-Component

6

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Step 3: “Rolling up” to Districts

Where a district is authorized for that function the allocation made to the local municipality for that function is rolled up to the district municipalityFor analysis purposes it has been more appropriate to analyse trends in MIG allocations prior to it being rolled upIt must also be noted that 2006/07 was the first FY for MIG to be allocated directly to each municipality. Prior to this lower capacity municipalities had their allocation made to their district municipality, who was to administer it on their behalf.

2

7

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lgMIG allocation to each of the three Municipal categories in 2005/6 FY

-

500

1,000

1,500

2,000

2,500

3,000

All As All Bs All CsMunicipal category

MIG

allo

catio

n (R

mill

ion)

8

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

MIG allocation to each of the three municipal categories in 2006/7 FY

-

500

1,000

1,500

2,000

2,500

3,000

All As All Bs All CsMunicipal category

MIG

allo

catio

n (R

mill

ion)

9

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg MIG allocation for each of the seven municipal sub-categories in 2005/6 and 2006/7 FYs

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4 C1 C2

Municipal sub-category

MIG

allo

catio

n (R

mill

ion)

2005/6 2006/7

C1s have a reduced allocation, as MIG is now allocated directly,C1s have a reduced allocation, as MIG is now allocated directly,based on powers and functions.based on powers and functions.

10

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg MIG allocation for metropolitan and local municipalities in 2006/7 FY

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4


MIG

allo

catio

n (R

mill

ion)

••This is before rolling up to districts and presents a geographicThis is before rolling up to districts and presents a geographical split.al split.••B4 municipalities receive largest MIG allocation, followed by MeB4 municipalities receive largest MIG allocation, followed by Metros & B1stros & B1s

11

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4


MIG

allo

catio

n (R

mill

ion)

Water & Sanitation Roads Other P E N

Disaggregation of MIG allocations for metropolitan and local municipalities in 2006/7 FY

••High MIG allocation to B4 municipalities is driven by water and High MIG allocation to B4 municipalities is driven by water and sanitation, and large sanitation, and large P component.P component.••Allocation to metropolitan municipalities is driven by a large rAllocation to metropolitan municipalities is driven by a large roads component, as oads component, as well as fairly large water and sanitation and P components.well as fairly large water and sanitation and P components.••The allocation for B1 municipalities is driven mainly by a fairlThe allocation for B1 municipalities is driven mainly by a fairly large roads y large roads

componentcomponent.. 12

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

relation to parameters used in the allocation formula

49%34%50%6%50%39%B4

9%15%15%12%13%13%B3

29%9%9%8%8%9%B2

2%16%16%25%13%15%B1

10%26%10%49%16%23%A

NP and EOther BRoadsWater and sanitation

Affected component

Share of poor households

living in identified nodes

in 2001

Share of poor households in

2001

Share of households with

inadequate refuse service in

2001

Share of households

living in informal

dwellings in 2001

Share of households with

inadequate water and

sanitation in 2001

Share of MIG allocation in 2006/7 FY

3

13

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Requirements vs Allocations in 2006/7 FY

-

1,000

2,000

3,000

4,000

5,000

6,000

A B1 B2 B3 B4


Rm

illio

n

Required capital expenditure from MSFM Actual MIG allocation

14

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lgTheoretical capital funding gap in each of the metropolitan and local municipal sub-categories in 2006/7

10,9755,75716,732Total

57%2,9522,2565,208B4

71%1,8297522,580B3

58%7475361,282B2

65%1,6748822,556B1

74%3,7741,3325,106A

(R million)(R million)(R million)

Capital funding gap as % of capital expenditure requirement

Capital funding gapActual MIG allocation in 2006/7

Capital expenditure requirement from MSFM for 2006/7

••Metros and B1s are likely to fill gap with own source revenue orMetros and B1s are likely to fill gap with own source revenue or borrowingborrowing••Large funding gap for B3 and B4 is of concern. Unlikely to accesLarge funding gap for B3 and B4 is of concern. Unlikely to access s borrowed fundsborrowed funds 15

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

MIG allocation per household in 2006/7

-

100

200

300

400

500

600

700

800

900

A B1 B2 B3 B4Municipal sub-category

MIG

allo

catio

n pe

r hou

seho

ld (R

)

••This is before rollingThis is before rolling--up funds to districtsup funds to districts••B4s receive a large MIG allocation and are sparsely populated, rB4s receive a large MIG allocation and are sparsely populated, resulting in esulting in a high allocation per householda high allocation per household

16

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

MIG allocation per poor household in 2006/7 FY

-

200

400

600

800

1,000

1,200

1,400


MIG

allo

catio

n pe

r poo

r hou

seho

ld

(R)

••Allocations to B2 and B4 are slightly higherAllocations to B2 and B4 are slightly higher••The P and E subThe P and E sub--components make up a slightly smaller proportion of the components make up a slightly smaller proportion of the total MIG allocations for B2 and B4 municipalities. This means ttotal MIG allocations for B2 and B4 municipalities. This means that there hat there are comparatively fewer poor households are comparatively fewer poor households ““sharingsharing”” the full MIG allocation.the full MIG allocation.••B2 and B4 represent largest proportion of poor households livingB2 and B4 represent largest proportion of poor households living in nodes in nodes -- effectively receive an additional MIG allocation under Neffectively receive an additional MIG allocation under N--componentcomponent

17

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg MIG allocation per un-served household in 2006/7 FY

-

500

1,000

1,500

2,000

2,500

3,000


MIG

allo

catio

n pe

r hou

shol

d w

ith

inad

equa

te w

ater

(R)

••High in As, but low in B4s. High in As, but low in B4s. In B4, more than half of MIG allocation is made up of the W&S coIn B4, more than half of MIG allocation is made up of the W&S component. mponent. However, in As, the W&S component makes up only 37% of the totalHowever, in As, the W&S component makes up only 37% of the total MIG MIG allocation. This means that comparatively fewer unallocation. This means that comparatively fewer un--served households served households ““shareshare”” the full MIG allocation.the full MIG allocation.

18

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

MIG allocation to each of the formula components in 2006/7 FY

-500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

B P E N M

MIG

allo

catio

n (R

mill

ion)

W & S Roads Other

4

19

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lgComposition of MIG allocations compared to composition of required capital expenditure in 2006/7 FY

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Formula Required (MSFM)

Com

posi

tion

of M

IG e

xpen

ditu

re

Water and sanitation Roads Other B P

20

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Expenditure on MIG for each of the seven municipal sub-categories in 2005/6 FY

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

A B1 B2 B3 B4 C1 C2Municipal sub-category

Expe

nditu

re o

n M

IG (R

mill

ion)

21

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Expenditure on MIG compared to allocation for each of the seven municipal sub-categories in 2005/6 FY

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4 C1 C2


Expe

nditu

re o

n M

IG (R

mill

ion)

Allocation Actual expenditure••Significant overSignificant over--spend by B4s and spend by B4s and underspendunderspend by Districts in 2005/6.by Districts in 2005/6.••It is likely that MIG funds were effectively allocated to the B4It is likely that MIG funds were effectively allocated to the B4 local local municipalities by their districts.municipalities by their districts.••Note however that the substantial underNote however that the substantial under--spend by C2 district spend by C2 district municipalities may indicate some capacity problems.municipalities may indicate some capacity problems.

22

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Expenditure on each of the MIG components for each of the seven municipal sub-categories in 2005/6 FY

-

200

400

600

800

1,000

1,200

1,400

1,600

A B1 B2 B3 B4 C1 C2


Expe

nditu

re o

n M

IG c

ompo

nent

s (R

mill

ion)

B P E

••Dominance of BDominance of B--component is component is noteablenoteable..

23

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Composition of expenditure on MIG in 2005/6 FY

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Formula Actual

Com

posi

tion

of M

IG e

xpen

ditu

re

Water and sanitation Roads Other B P E

24

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

2005/6 FY compared to formula allocation

0%5%E

6%16%P

94%79%B

6%4%“Other” B

25%18%Roads

63%57%Water and sanitation

ActualFormula

••Over 60% of MIG is spent on W&SOver 60% of MIG is spent on W&S••25% spent on roads. This is more than allocated by formula, whic25% spent on roads. This is more than allocated by formula, which may h may indicate an underindicate an under--allocation to roadsallocation to roads••B makes up 94% of expenditure (79% in formula), indicating a lacB makes up 94% of expenditure (79% in formula), indicating a lack of k of priority given to P & E components by municipalitiespriority given to P & E components by municipalities

5

25

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Expenditure on the elements of the B component in 2005/6 FY

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Water andsanitation

Roads andstormw ater

Solid w aste Street lighting


Expe

nditu

re o

n el

emen

ts o

f B

com

pone

nt (R

mill

ion)

26

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Expenditure on the elements of the P component in 2005/6 FY

-

50

100

150

200

250

Communityfacilities

Social services Emergencyservices

Parks and openspaces

Public transport


Expe

nditu

re o

n el

emen

ts o

f P

com

pone

nt (R

mill

ion)

27

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lgComposition of expenditure on water and sanitation infrastructure for each of the seven municipal sub-categories in the Western Cape and Eastern Cape provinces in 2005/6 FY

0%

20%

40%

60%

80%

100%

A B1 B2 B3 B4 C1 C2 Total


Com

posi

tion

of e

xpen

ditu

re o

n w

ater

and

san

itatio

n in

fras

truc

ture

type

s

Internal reticulation Connector Bulk

••Small proportion of total W&S expenditure is spent on internal rSmall proportion of total W&S expenditure is spent on internal reticulation eticulation in As and B1s. in As and B1s. ••These are largely urban. As a result, internal reticulation is lThese are largely urban. As a result, internal reticulation is likely to be ikely to be funded through the housing subsidy in these municipalities, not funded through the housing subsidy in these municipalities, not MIG.MIG.

28

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Expenditure on MIG projects for new infrastructure and rehabilitation in 2005/6 FY

0%

10%

20%30%

40%

50%

60%

70%80%

90%

100%

A B1 B2 B3 B4 C1 C2


Com

posi

tion

of e

xpen

ditu

re o

n M

IG p

roje

cts

New Rehabilitation

29

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Summary of Key Issues

30

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Information on Backlogs

Outdated Census Information from 2001Current Arrangements for measuring backlogs have shortcomings

They build forward from the 2001 census, with additions made based on a wide range of sources which probably have variable accuracy. This means that progressive inaccuracies can potentially occur. The water services and electricity monitoring systems do not have a common information base in terms of the unit of measurement (households, dwellings or consumer units). The information collection systems are not based universally on municipal systems and municipalities, in turn, are not consistent in the information they use for planning purposes. There is no system for monitoring access to roads and no sound roads classification system.

6

31

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Population Dynamics

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4

Tota

l MIG

allo

catio

n (R

mill

ion)

Census 2001 Dynamic

••Population Growth, currently, is not adequately dealt with by MIPopulation Growth, currently, is not adequately dealt with by MIGG••The above figure shows the projected MIG allocation if migrationThe above figure shows the projected MIG allocation if migration since since 2001 is taken into account2001 is taken into account

32

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Alignment with Housing Subsidies

Need for alignmentFragmentation of Housing ResponsibilityImplementation Arrangements need housing to take the leadMisalignment of Targets

Strategic ResponseNational Programme AlignmentInstitutional ReformTargetsEligibility ThreshholdsCapital Grant AlignmentPlanningImplementationM&E

33

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Alignment with other grant streams

Increasing number of capital grants available to municipalities for infrastructure and housingIn contrast to concept of MIG – single capital grant funding stream with greater autonomy to municipalities with respect to capital programmesCausing difficulty for municipalities especially Metros

34

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Nationalfiscus

DPLG DoH

Prov Deptsof Housing

NT

Municipalities DevelopersEskom

DoTDME

NDPG IHAHSDPTIFINEP

Formulabased

Applicationbased

Applicationbased

Applicationbased

Applicationbased

Municipalinfrastructure

Public transportinfrastructure

‘Economic’ &social

infrastructure

Electricityinfrastructure

Housing & related

infrastructure

SARCC

Financial Framework

MIG

DLA

Land grant

Applicationbased

Residentialland

35

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Funding Gap in Economically Weak Municipalities

MIG is intended to be used only for the funding of basic infrastructure to the poor. Yet economically weaker municipalities (C2 and B4s particularly)cannot raise capital for infrastructure themselves to cover the infrastructure they must provide to non-residential consumer units and higher income residential consumer units. Therefore they use MIG funds for this purpose, in contrast to the intention of the grant. This issue needs to be addressed either through a change in the MIG rules or through new arrangements to make loan finance available to these municipalities, something which will be very difficult.

36

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Unit Costs Adjustment

Key concern is over the higher costs of bulk services in rural areas, in comparison with urban conditions (currently not adequately addressed in the report). However, it is notable that distribution infrastructure is generally much less expensive in rural areas (water connections communal, no need for road access to each dwelling, etc).Further, the level of service required in urban areas is higher (for example it is not possible to use on site sanitation in ‘urban core’ areas).All of these factors need to be taken into consideration and will receive specific attention in the following reports.

7

37

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg “Lumpiness” of Investment

This is a problem for smaller municipalities where there may be only a few projects a year. These projects may run over two years. This creates a particular set of problems for small municipalities in establishing a steady stream of funding and spending this funding consistently every year. The problem was recognised when the original MIG policy was developed and the following options were considered:

Allow small municipalities to accumulate funds for a given period either in their own accounts or in accounts kept for them by dplg.Accept that there will be variability and provide for this in the monitoring arrangements (This does imply some acceptance of roll-over of funds from year to year).

There may be other solutions to this problem which need to be investigated

38

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Borrowing / Revenue Raising Capacity

There has been an argument that those municipalities which can raise capital themselves through access to their own reserves orborrowing, sufficient to fund basic infrastructure to the poor, should do so and should not get MIG allocations or get reduced MIG allocations. At this stage there is uncertainty about the merits of a borrowing capacity adjustment, but the arguments will be explored as part of this project.

39

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Splitting of Roads Allocation

The responsibility for the district roads function, as defined in the Municipal Structures Act has been assigned, with many local municipalities, in fact, having been given the function.However, where the function is retained by the district there is no certainty as to which roads the district is responsible for as a road classification system has not been implemented in most provinces. Often the problem is broader than this as there is also uncertainty relating to the interface between provincial and municipal roads.Finally, in the case of municipal roads, there is no certainty of the length of roads that they are responsible for outside settlementboundaries – this makes funding allocations very difficult

40

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Nodal status

A concern has been raised that that the N-component does not differentiate, between urban and rural nodes.88% of the MIG N-component is allocated to municipalities that are ISRDP nodes. Only 12% goes to municipalities that are URP nodes, This is in line with their share of the nodal poor.The merits of further disaggregating the formula to deal separately with the urban and rural poor are not clear.

41

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Levels of Poverty

Currently in the MIG allocation model, a poor household is defined as a household with an income of R1 100 per month or less. There are a number of poverty lines used in allocating funds in South Africa:

R800 per month: used for calculating the Basic Services component of the Equitable ShareR1 686 per month: used to determine eligibility for a state pensionR3 600 per month: used to determine eligibility for housing subsidies

It has thus been suggested that the poverty line used in calculating MIG allocations should be aligned with these other poverty lines, particularly, that used for housing subsidies.

42

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

Impact of different poverty lines on MIG

-

500

1,000

1,500

2,000

2,500

A B1 B2 B3 B4

Tota

l MIG

allo

catio

n (R

mill

ion)

R 800 R 1,600 R 3,200

••Raising the poverty line results in the reRaising the poverty line results in the re--allocation of MIG funding away allocation of MIG funding away from more rural municipalities (B3 and B4) towards more urban from more rural municipalities (B3 and B4) towards more urban municipalities (A and B1). municipalities (A and B1). ••This is because of the way that income is distributed in South AThis is because of the way that income is distributed in South Africafrica

8

43

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Performance of Municipalities

The MIG Allocation Formula currently has the M-component which is intended to be used for a performance related adjustment that may either be positive or negative. This component has yet to be used. Concern has been expressed that the formula keeps allocating funds to municipalities that have performed poorly with regard to MIG spending. There are a number of arguments as to why it may be premature to be using the M-component of the formula:

It is likely that MIG funds were effectively allocated to the B4 local municipalities by their district partners.The lumpiness of investment in smaller municipalities that was dealt with earlier. The nature of the project cycle, often dictates that funds may need to be rolled over to another year. Therefore annual expenditure is too short a timeframe to measure.

44

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Performance (continued)

It is arguable that the M-component can be most appropriately used on a medium-term timeframe of evaluating performance (over 2-3 years). However, its focus could be more than just expenditure on MIG and should additionally include measuring the impact that MIG is having on backlog targets and on good financial management and governance.This component of the formula should be explored for its potential to incentivise certain requirements e.g. low volume roads using labour-based methods.

45

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg Ring-fencing per sector

There is a view that MIG should hold municipalities, to the respective sectoral splits used in the formula, in their MIG expenditure at local level. The analysis done earlier indicates that municipalities only spent 6% on infrastructure related to the P-component of the formula, while the formula allocates 16%. This indicates that municipalities are not prioritising infrastructure related to the P-component, in line with the formula used to calculate their MIG allocation.However, ring-fencing is in contradiction to intention of MIG – a consolidation of capital grants to municipalities for infrastructure while giving them the autonomy to prioritise infrastructure programmesNot only can ring-fencing be unnecessarily constraining on municipalities, it is also unclear how this could be regulated effectively.

46

the

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg t

he

dp

lg

47

Thank you

ANNEXURE C19

1

MIG PRESENTATION• INTRODUCTION• ECONOMIC GROWTH OUTSTRIPPED

INFRASTRUCTURE EXPANSION• WHAT IS ON THE CARDS?• IMPACT OF GROWTH

– PEOPLE– EQUITY– PROFITS, ESCALATION, PRODUCTIVITY– MATERIALS

SNAPSHOT OF THE ECONOMIC SITUATION (1)TOTAL DEMAND/PRODUCTION/INCOME =

• CONSUMPTION SPENDING (FAST GROWTH)• INVESTMENT (MODERATE GROWTH)• GOVERNMENT SPENDING (PRUDENT GROWTH)

• EXPORTS (CONSTRAINED GROWTH)• IMPORTS (FAST GROWTH)

= BALANCE OF PAYMENTS DEFICIT= A LITTLE INFLATION= ECONOMIC GROWTH OUTSTRIPPED

INFRASTRUCTURE GROWTH

SNAPSHOT OF THE ECONOMIC SITUATION (2)

ECONOMIC GROWTH OUTSTRIPPED INFRASTRUCTURE GROWTH

INVESTMENT LAGGED DRAMATICALLY• MACRO/BULK INFRASTRUCTURE

– ROADS/ BRIDGES & BORDER POSTS– WATER/SEWERAGE SCHEMES– RAIL AND HARBOUR INFRASTRUCTURE– AIRPORTS– ELECTRICITY

• MICRO/RETICULATION INFRASTRUCTURE: MIG

GDP and Construction Growth

-15

-10

-5

0

5

10

15

20

60 65 70 75 80 85 90 95 20

Perc

enta

ge (%

)GDP grow th Construction Grow th

EX SARB

Economic infrastructure lagging economic growth

EX SARB

% Points difference GDP/Capital Stock growth

-3

-2

-1

0

1

2

3

4

60 65 70 75 80 85 90 95 20

Perc

enta

ge (%

)

5 year moving average

Paved national and provincial roads, passenger vehicles,and commercial vehicles for transport of goods

0

100

200

300

400

500

1940 1950 1960 1970 1980 1990 2000

Inde

x (1

970

= 10

0)

Paved roads Passenger vehicles Goods vehicles

2

30 000

35 000

40 000

45 000

50 000

55 000

60 000

65 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Years

Cap

acity

(MW

)

Total Existing System (Including Decommissioning) Total Imports (MW)Cahora Bassa Hydro firmRTS Simunye Plants Build Pumped Storage Plants (Peaking)Build Open Cycle Gas Turbine plants (Peaking) Build Base Load PlantsForecast peak Demand before DSM Peak Demand after DSMRequired Capacity (Approximately 12% RM) Required Capacity at 15% RM

Greenfield PF (Fast Track) - Earliest 2013

Greenfield PS (Fast Track) - Earliest 2013

Pumped Storage Braamhoek - Earliest 2011

Greenfield FBC Fast Track - Earliest 2011

Greenfield CCGT Generic - Earliest 2010

CCGT 1 - Earliest 2009

Brownfield PF- Earliest 2009

Komati - Earliest 2010

Grootvlei Earliest 2007

Camden

Open Cycle GT - Earliest 2008

EX Eskom

Electricity generation installed capacity and utilisation

Utilization of Social InfrastructureIntegrationTransportTradeSustainable jobsProductivityEconomic productionTaxes to afford social infrastructure

Roads & BridgesRailwaysHarboursAirportsAgricultureManufacturingMining

Economicinfrastructure

HealthWelfareEconomic production

Water and SanitationTelecommunicationsElectricity

Social &Economic infrastructure

HealthEducationWelfareProductivity

HousingSchoolsHospitalsService Centers

SocialInfrastructure

Impact on Society/Economy

Type of Infrastructure Investment

Category

Growth in population vs Stock of Social infrastructure (06 = estimates)

-4

-3

-2

-1

0

1

2

85 90 95 0 5

Perc

enta

ge P

oint

EX SARB and ASSA

OUTCOMES & TARGETSSustainable Human Settlements, Local Economies & Livelihoods

• Eradication of sanitation buckets - 2007• Access to potable water - 2008• Access to sanitation - 2010• Infrastructure for FIFA World Cup - 2010• Universal access to electricity - 2012• Halve poverty and unemployment - 2014• Upgrade all informal settlements - 2014• Accelerated housing delivery - 2014

South Africa Vision 2014

3

Likely Situation in 2009: Service Delivery– Bucket eradication target for established communities can be met by

end 2007 if minimum service standard is applied. Bucket eradication in informal settlements by 2009 will depend on progress with housing delivery programme. Access to sanitation by 2010 is under risk with current funding provisions. Likely to be met only in 2016 (dry sanitation) and 2030 (wet sanitation)

– Access to potable water by 2008 is under risk with current funding provisions. Likely to be met only in 2013/14 financial year.

– Universal access to electricity by 2012 can be met if funding is increased from R1.39 billion to R3 billion annually.

– Need to deliver some 500 000 units per annum to reach 2014 housingtarget. Significant additional funding required for housing – A total of R124,7 Billion (at current prices) to reach housing target

Factors that will Promote Acceleration: Infrastructure and Service Provision

• FUNDS– Close funding gaps

• PEOPLE– Technical and management capacity– Forward planning and project and contract management

• BULK SUPPLY– Water resources– Bulk infrastructure especially in rural areas

• “HEAD OFFICE” STUFF– Institutional arrangements (IGR, Powers and Functions)– Policy issues– Agreement on data/statistics/service levels/standards

• PROGRAMS/INTERVENTIONS– Differentiated support approach– Technology innovations– Refurbishment and rehabilitation

WHAT IS TO BE DONE?

• GROWTH BASED ON STABILITY & EXCELLENT NATIONAL TREASURY & SARB

• GROWTH CAUSED INCREASED DEMAND FOR ECONOMIC INFRASTRUCTURE (ROADS,WATER, ELECTRICITY, RAIL CONNECTIONS, PORTS)

• SOSIAL INFRASTRUCTURE PROVISION NEEDS TO ACCELERATE

THEREFORE:• NEXT PHASE OF GROWTH DEPENDS ON

INCREASED CAPACITY OF ECONOMIC INFRASTRUCTURE

• ACCELERATION OF SOCIAL INFRASTRUCTURE AS WELL.

ASGI-SA• 3 Broad Initiatives:

– Development of the Olifants River System– The Development of the Durban Gauteng

Corridor;– Roll-out of broad band capacity

• Specific Plans– 120 Billion by Eskom over next 5 years;– R53 billion by Transnet of which R40 billion will

be for ports, railway and petroleum pipeline;– R 5.2 billion for Airports– R19.7 billion for water infrastructure– R7.5 billion - 2010

Which Authorities?

R Million 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09National Departments 5952 6022 7262 7835 8884 10578 12381Provincial Departments 15491 19642 21586 24412 31989 36201 40669Municipalities 13100 16687 17053 24759 26046 27296 28524PPP 849 1552 1106 1594 3776 4776 3672Extra-budgetary public entities 2854 3053 3470 3650 4116 4521 4927Non-financial public entities 26803 21375 22145 27566 37694 42092 43662Total 65049 68331 72622 89816 112505 125464 133835

2006 MTEF Capital Expenditure and Infrastructure Maintenance

•The total allocation from 2003/04 to 2005/06 was R230.7 billion and the total over the MTEF is R371.8 billion. An increase of 61%.

•Non-financial public entities will be responsible for 33% or a R123 billion over the MTEF.

4

What Infrastructure?

0

10000

20000

30000

40000

50000

60000

70000

Previous MTEF Current MTEF

Mill

ion

Water Sanitation Electricity Housing Education Health Roads Rail Ports Courts Police Infrastructure Prisons

96%

120%

76%

Transnet Priority Projects (Estimates)

R3-6 bnEnd 2007Petronet PipelineR2.394 bnEnd 2007Orex LineR1.075 bnIn ProgressOrex Line

R4.454Oct 2007Port of Ngqura berth 3 & 4

R4.917 bnDec 2006Port of Ngqura berth 1 & 2

R5.5 bnAug 2007CPT Container Terminal

R1.43 bnJune 2008Durban Pier 1

R1.6-1.8 bnLate 2007Durban Harbour Entrance Channel

ValueStartProject Name

ESKOM• R120 bill – Generation

– RTS – R10 bn– Coal – R90 bn (ALPHA)– OCGT– Pump Storage (HOTEL)

• R15 bill – Transmission– Erecting lines and building substations

• R20 bill - Distribution

2010 WORLD CUP

December 2008Jan/Feb 2007Nov/Dec 2007Till Oct/Nov 2006PETER MOKABA

December 2008November 2006Sept/Oct 2006Till Aug/ Sept 2006FNB

December 2008January 2007Nov/Dec 2006Till Oct 2006GREEN POINT

December 2008October 2006Aug/Sept 2006CompleteNELSON MANDELA

December 2008January 2007Oct/Nov 2006Till Aug/SeptMBOMBELA

Nov/Dec 2008November 2006Sept/Oct 2006Till July/Aug 2006ETHEKWINI

CONSTRUCTIONCOMPLETION

CONSTRUCTIONCOMMENCEMENT

TENDERING & AWARD

DESIGNPHASE

STADIUM

Private Sector

– 87 Projects announced worth R134.9 bill

– Manufacturing R68.2 bill

– Mining R32 bill for next 5 years

– Real Estate Developments R30 bill

Nedbank Project Listing

CONCLUSIONS & IMPLICATIONS• UNPRECEDENTED AMOUNTS WILL BE SPENT• MAIN FOCUS AREAS: ECONOMIC

– ELECTRICITY– ROADS– PORTS

• MAIN FOCUS AREAS: SOCIAL– WATER– SEWERAGE

• CONSTRUCTION PROBABLY ON NEXT LONG TERM GROWTH PATH– IF IT CAN BE DELIVERED

5

Construction Works

0%

5%

10%

15%

20%

25%

30%

35%

195519561957195819591960196119621963196419651966196719681969197019711972197319741975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

GOV PRIVATE BUS CONSTRUCTION WORKS

4% Real – GDP

GFCF – 25%

CW – 20%-25%

60 65 70 75 80 85 90 95 00 5 10 15 2010

20

30

40

RA

ND

BIL

LIO

N

Optimistic

Pessimistic

Reality

2000 = 100

CONSTRUCTION WORKS SCENARIOS

CONSTRUCTION WORKS FORECAST

10

20

30

40

50

60

70

60 65 70 75 80 85 90 95 0 5 10 15

Ran

d B

illio

n (2

005

= 10

0)

2006.q4 2005.q4 2006:q4 2005:q4C O N FID EN C E** 9.25% (197) 36.29% (180) 15.37% (384) 49.8% (332)TEN DER S -19.16% 7.03% -13.86% 5.67%C O N TR AC T AW ARD S* 38.00% 20.73% 28.00% 16.26%EM PLO YM EN T 7.12% 20.74% 13.40% 12.00%TU R NO VER 19.48% 16.72% 14.40% 14.30%

IN D IC ATO R6 M O N THS TO 12 M O N TH S TO

Value of Awards and Number of Tenders

0

1

2

3

4

5

6

7

8

95 96 97 98 99 2000

2001

2002

2003

2004

2005

2006

Bill

ions

0

200

400

600

800

1000

1200

1400

Contract Awards Number of Tenders

Percentage contribution to total value of awards per annum

00.1

0.20.30.40.5

0.60.7

0<X<3000

3000<X<5000

5000<X<7000

7000<X<10000

10000<X<15000

15000<X<20000

X>20000

%

2004 2005 2006

Work Load Distribution

0

5

10

15

20

25

30

35

40

45

Public Private Public Private Public Private

Earthworks Concrete Structures Specialist Work

% D

istr

ibut

ion

6

Expected Company Growth vs Expected Market Growth (PUBLIC SECTOR)

0

10

20

30

40

50

60

70

80

Potential Company Potential Market Potential Company Potential Market Potential Company Potential Market

Earthworks Concrete Structure Specialist Work

% D

istr

ibut

ion

Expected Company Growth vs Expected Market Growth (PRIVATE SECTOR)

0

2

4

6

8

10

12

14

16

18

Potential Company Potential Market Potential Company Potential Market Potential Company Potential Market

Earthworks Concrete Structure Specialist Work

% D

istr

ibut

ion

IMPLICATIONS OF VIGOROUS GROWTH

PEOPLE: THE KEY; HAVE STRATEGIES TO– KEEP WHAT YOU HAVE; THEY ARE GOLD– DEVELOP ALL POTENTIAL– CHANGE/FIND THE STARS AND INVEST IN THEM

• EQUITY/TRANSFORMATION CHARTER• MATERIALS• PROFITS! • ESCALATION• PRODUCTIVITY

LABOUR & MATERIALS SHORTAGES

0

10

20

30

40

50

60

70

80

90

100

| 72 | 77 | 82 | 87 | 92 | 97 | 02 | 07

Source: BER; MFA DATABASE

LESS

SEV

ERE

BO

TTLE

NEC

KS

/ SEV

ERE

BO

TTLE

NEC

Materials Labour

SHADED AREAS REPRESENT THE UPSWING PHASESIN THE ECONOMY

Key Risk Issues in effective infrastructure project structuring

Low Risk High Risk

Payment

Design Development

Schedule

Status of Partner

Low Bidding

Client Management

Portfolio Risk

Project Development

Growth & Expansion

Risk vs. Reward

Contract Models

Qualified Resources - skills

Risk Management Process

Change Management

Source: ECRI

Extra Engineers & Employees needed to cater for anticipated growth

010000200003000040000500006000070000

200520062007200820092010201120122013201420152016

Empl

oyee

s

0

1000

2000

3000

4000

5000

6000

Civ

il En

gine

ers

EX SAFCEC

7

Site Management

0

10

20

30

40

50

60

70

80

90

Serious More than usual Very Few None

% D

istr

ibut

ion

Site Supervisors

0

10

20

30

40

50

60


% D

istr

ibut

ion

Skilled Workers (All Artisans and Tradesmen)

0

10

20

30

40

50

60

70

80


% D

istr

ibut

ion

Civil Engineering – Engineers & Technologists

0 50 100 150 200 250 30024

29

34

39

44

49

54

59

64

69

Age

Number per age group

BlackWhite

EX Allyson Lawless, June 2004

Construction Management Graduations

0

25

50

75

1986

1988

1990

1992

1994

1996

1998

2000

2002

Male Female

0

100

200

300

1986

1988

1990

1992

1994

1996

1998

2000

2002

Male Female

0

25

50

75

1986

1988

1990

1992

1994

1996

1998

2000

2002

White Black

UniversitiesUniversities TechnikonsTechnikons

0

100

200

300

1986

1988

1990

1992

1994

1996

1998

2000

2002

White Black

EX Allyson Lawless

Training and EducationCurrent trends and requirements for technical

skills to cater for growth

-12500

-10000

-7500

-5000

-2500

0

2500

5000

7500

10000

12500

15000

17500

20000

22500

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Retirement

Early retirement

Emigration

Loss due to premature death

Leaving the industry

Immigrants

National Diploma graduate

BSc/BEng graduate

In industry from 2004

EX Allyson Lawless

8

70 73 76 79 82 85 88 91 94 97 0-20

-10

0

10

20

CH

AN

GE

(%)

OUTPUTLAB INPUTLAB PROD

CHANGES: OUTPUT, LABOUR INPUT, PRODUCTIV EQUITY

• Despite various policies that have been introduced since 1994 there has been limited progress in the transformation of the sector.

• Transformation of the Construction Sector will be driven by the Construction Transformation Charter & Scorecard

Transformation driven by the Construction Charter

Targets for Change

14

26

6

6

15

56

1

1

10

12

0.005

30

40

40

40

40

65

1.5

2.5

25

70

0.25

0 10 20 30 40 50 60 70 80

Ownership

Control: Board

Control: Exec Man

Sen Management

Mid Management

Jun M

Training Costs

Learnerships

Bursaries

Procurement

CSI

Percentages (%)

Status Quo Targets

Black contracting participation

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

1990

1990

1991

1992

1993

1993

1994

1995

1996

1996

1997

1998

1999

1999

2000

2001

2002

emerging (%of Value) emerging (% of Number) 5 qrt ma (%value)

Perc

enta

ge o

f Tot

al o

n D

atab

ase

EX SAFCEC

Business/Enterprise Development

0

30000

60000

90000

1-5 6-10 11-20 21-30 31-50 51-75 76-100

101-250

251-500

501-1000

1000+

Size category

Num

ber o

f sta

ff

Staff in Total of 11441 Black CompaniesStaff in Total of 8412 White Companies

Demographic distribution and size of companies in the construction sector

Ex Allyson Lawless

Global E&C Industry Profit Margins

Source: 1) Factset. Includes the 38 publicly traded companies in North America, Europe and AsiaNotes: 2) Profit margin is found by company’s operating margin/net sales

3) Global trend is found from a composite of all companies weighted by market share4) Prepared in cooperation with AT Kearney and the World Economic Forum

• 60% EBITDA decline in 12 years

• Structural issue, not explained by “business cycles”

• Europe has improved (in the past five years), but came from negative territory

• Regions appear to be converging, reflecting globalization

Key Observati

ons

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

EB

ITD

A M

arg

in

Asia

GlobalNorth

America

Europe

Global Trend

?

“Global”1991

Recession

“Global”2001

Recession

5-Year GlobalTrend

9

Profitability & Turnover correlation: RSA

0

1

2

3

4

5

6

7

8

70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000200120022003200420052006

%

8.5

10.5

12.5

14.5

16.5

18.5

20.5

22.5

24.5

Bill

ions

Net Profit/Turnover Civil Turnover (2000=100) Poly. (Civil Turnover (2000=100))

Competition for Tenders (greater than 10)

05

10152025303540

2002

2002

2003

2003

2004

2004

2005

2005

2006

2006

Civil Engineering Turnover (200=100), Inflation (%), Profitability (%)

5

7

9

11

13

15

17

19

21

23

25

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000

2001

2002

2003

2004

2005

2006

Bill

ions

0

2

4

6

8

10

12

14

16

18

20

22

%

Civil Engineering Turnover Profitability Inflation

7.06%6.5%

5.21%

20%

17%

Challenges – Material

• Material– Cement currently 13 million tons– 2010 Demand – 16.7 million tons– Expansion underway – 15.6 million tons by

2008• Glass and brick manufacturers

announced expansions• Steel – no supply problem?

Purchases in Civils

0%

5%10%

15%20%

25%30%

35%

Sand, stone and building lime

Cem

ent

Ready M

ix

Bricks etc

Textiles

Plastics

Sheets, pipes, tubs etc

Reinforcing Steel

Structural Steel

Doors, W

indows etc

Insulated Cables

Lighting & Switches

Other Electrical

Wood

Glass

Paint

Fuel

Gypsum

Consum

ables

10

Projected Demand vs Industry Capacity

101112131415

1617181920

2004 2005 2006 2007 2008 2009 2010 2011

Mt

Projected Demand Industry Capacity

PPC = 1.2Mt PPC = 1.2Mt

Holcim = 0.45MtNPC = 0.6Mt Lafarge = 1.0Mt

Feasibility Stage

Note: 1. PPC’s expansions cater for old kiln retirements totalling more than 1.0M t 2. Holcim considering 1.2M t cement line for commissioning around 2010

SARMA: READYMIX

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

2004 2005 2006

m3

24% Growth

22% Growth

CONCLUSIONS• GROWTH FOR THE FIRST TIME IN 25

YEARS! FOR 10 YEARS AT LEAST …

• PEOPLE WILL BE THE KEY

• GROWTH HAS MORE AND EXCEEDINGLY MORE DIFFICULT DEMANDS THAN CONTRACTIONS

BEST OF LUCK!

ANNEXURE C20

1

Institutionalization of the MIS

Thursday, 24 April 2007

Presented by: Manus Bolton

MANAGEMENT INFORMATION SYSTEM

Problem Statement

Lack of consistent reporting on MIG Projects between/to different stakeholders across government

? ?

RESULT:Incorrect (duplicate) / inconsistent

reporting

National Provincial/ Municipal Sector Departments

Target Date:KPI Report end July 2007

Project Scope / Deliverables

• Identify and address Information Technology (IT) issues – IT

• Identify and address the Capacity related issues - People

• Identify and address the Data capture process and data quality issues in the PMMU, PMU and municipalities - Data

• Identify and address Business processes followed - Processes

• Train and capacitate the users - Training

Support TEAM

MIS Institutionalise

Marelize Nel Corlia Snyman Vuyani Matoti

Mike Gohl Hanyani Maswangani

MpumalangaNorthern Cape Western Cape

Gauteng

Kwazulu NatalFree StateGauteng

Eastern CapeNorth WestGauteng

Limpopo

Project ManagerKgashane Pilusa

Technical SupportManus Bolton

Call Centre:- [email protected] 012 334 4860

Process

• Data• MIG-MIS System• Processes• Personnel• IT Environment

What do we need to do?Who can and should do it?How to implement this?

Target Date: End July 2007

2

Challenges identified

• Incorrect and Missing Information (Some cases No information on MIG1 of Service Provider Consultant Contractor)

• Processes no followed• Different reporting templates (NOT on the MIG

6 and 8)• Slow Internet / No Internet Connections

Feedback for training - “Great system - very user friendly”

Hosting of the MIS - Challenges

• Compete with other internet traffic (In and Out Bound)

• DPLG (mail, users, internet, etc.)• NO SLA’s in place between DPLG IT and

SITA

Resolve in March 2007

Hosting of the MIS - Bandwidth

Before (562 Kb/s) – internet response slow, bandwidth utlized constantly above 80%

After (1536Kb/s) – internet response faster, bandwitdhutilization below 50%

Training (Sept 2006 – Apr 2007)

Mpumalanga19%

North West0%

Northern Cape12%

Western Cape11%

Eastern Cape9% Free State

9%

Gauteng15%

Kwazulu Natal0%

Limpopo25%

195Total

22Western Cape

24Northern Cape

0North West

37Mpumalanga

48Limpopo

0Kwazulu Natal

29Gauteng

18Free State

17Eastern Cape

No of people trained

Province

Capacity to maintain/ operate the MIG-MIS.

HighMedium

Low

Municipal Level

Municipal logins since the inception July 2005.

205, 28%

33, 5%

27, 4%

151, 21%

118, 16%

68, 9%

32, 4%30, 4%

69, 9%

EASTERN CAPE

FREE STATE

GAUTENG

KWAZULU-NATAL

LIMPOPO

MPUMALANGA

NORTH WEST

NORTHERN CAPE

WESTERN CAPE

3

Percentage of use per Province by Municipality

733Grand Total

9.469WESTERN CAPE

4.130NORTHERN CAPE

4.432NORTH WEST

9.368MPUMALANGA

16.1118LIMPOPO

20.6151KWAZULU-NATAL

3.727GAUTENG

4.533FREE STATE

28.0205EASTERN CAPE

% No. of LoginsProvince

Projects in the MIS

1417Kwazulu-Natal Total

1044Pre-Implementation

316Implementation

56Design/Tender

1CompletedKwazulu-Natal

531Gauteng Total


203Implementation

76Design/Tender

14CompletedGauteng

338Free State Total


65Implementation

59CompletedFree State

1725Eastern Cape Total


1093Implementation

135Design/TenderEastern Cape

No. of ProjectProject StatusesProvince

Overall increase in Project Registration as from November 2006.

Projects in the MIS (cont.)

518North West Total


231Implementation

80Design/Tender

1CompletedNorth West

551Mpumalanga Total


282Implementation

62Design/Tender

1CompletedMpumalanga

622Limpopo Total


158Implementation

32Design/Tender

9CompletedLimpopo


Projects in the MIS (cont.)

6477Grand Total

614Western Cape Total


368Implementation

19Design/TenderWestern Cape

161Northern Cape Total


38Implementation

2Design/Tender

43CompletedNorthern Cape


Thank you

ANNEXURE C21

1

EPWP InfrastructureEPWP Infrastructure

Functions, roles and process stepsTechnical Support Strategy

Joint EngagementJoint Engagement

Background, Scope and Objectives

Background

Joint initiative between EPWP Unit and EPWSPComprehensive approach but with clearly distinguished roles for:

Infrastructure Unit: National Technical Support TeamEPWP Stakeholder managers / EPWP Provincial CoordinatorsEPWSP

Scope involves both Municipalities and Provinces. (Start with Municipalities)Includes 5 Direct Engagement and 40 Joint Engagement

Key issue: Report and manage EPWP performance from one data set that is accessible to all role players at any point in time

Management Information

System

Initial and Ongoing Municipal and Project Data

Get project status and deploy technical

assistance

Technical Feed back project progress and removal of blockages

Quarterly progress reports to

M&E

Analysis of data to improve support:•Blockages•Projects•Impact•Effectiveness of Technical Support•Benchmarking

Strategic Management:•Get complete overview•Make decisions on deployment of resources•Make decisions to prioritise areas and or types of projects

Statistics on 45 Municipalities

19 District Municipalities containing 99 local municipalities (2 Direct)6 Metros (3 Direct)20 Local MunicipalitiesTotal 06-07 MIG Allocation: R4.056 billionTotal 07-08 MIG Allocation: R4.974 billion

2

Statistics on 45 Municipalities

41.6% of 532,717 that still needs to be secured by infrastr.

221,708205,79315,915Targeted work opportunities

2006/7: 2007/8:2008/9:

2006/7: R 4.4bn2007/8: R 5.1 bn2008/9: R 4.3 bn

2006/7: R 3.1 bn2007/8: R 3.6 bn2008/9: R 3.0 bn

2006/7: R1.26 bn2007/8: R1.46 bn2008/9: R 1.26 bn

MIG Budgets

53.4% of 234 municipalities countrywide

4519 DMs (99 LMs)6 Metros20 LMs

4017 DMs3 Metros20 LMs

52 DMs3 Metros

Number of Municipalities

% of overall

Total Engagement

Joint Engagement

Direct Engagement

Statistics on the 45 Municipalities

457

104374172

TOTAL

20196TOTAL340LP271KZN103GP300FS151EC400MP100NC430NW101WC

LMDMMetroProvince

National Technical Support Manager

Data Analyst

Administration Support

WC Technical Advisor

GP

Technical Advisor

GP Ass. Technical Advisor

KZN Technical Advisor

KZN Ass.

Technical Advisor

EC Technical Advisor

EC Ass. Technical Advisor

FS Technical Advisor

NC

Technical Advisor

N W Technical Advisor

MPU Technical Advisor

A team of 15 Technical Advisors has been appointed

Technical Support Consultant Organogram

LIM

Technical Advisor

A team of 11 Training Facilitation support officers being appointed

Structure and Resources

CD: LISMaikel

D: Technical SupportI. Ariyo

DDG:B. Gxilishe

National Technical Support Manager

Data AnalystAdministrator

9 Technical Advisors3 Assistant Technical Advisors, 11 Training Facilitation Support officers

ILO Technical Support

Project leader M. Nell

Project ManagerA. Campbell

Joint Engagement Team:P. Foley, Marius Marks

MIS Support Team:D.Seymore, S. Dhlamini

EPWP Support ProgrammeEPWP Unit

Technical Support Consultants and MIS Data Managers

Joint Monthly Management

Meeting

Progress Reports

Instructions for Technical Support

What types of support?

Technical Support will do the following:Identify suitable projectsSet targets for projectsAssist with designs and contract documentationExtract project training needsAssist with procurement processCreate enabling conditions: wage rates, contractors trained etcContract managementReportingProject evaluationEPWP Mainstreaming: Municipal policies and proceduresAdvise on alternative models: large projects/ contractors

What it is not

The technical support team will not:Solve political problems within the municipalityProject manage implementation of projects for the municipalityAct as an EPWP Police forceSupport to municipal officials to do their other non EPWP related work

3

Key challenges to the approach

Identifying high potential projectsKeeping track of progress on individual projectsDeploying support efficiently and effectively, as and when requiredReporting EPWP status and outputs at any time

Critical that MIS is rigorously kept up to date and that data is regularly analysed

Where we are now

Implementing Joint EngagementSurveyed 26 out of the additional 40 municipalitiesDirectly engaged with 16 of the 26

Joint Engagament - Progress to Date

0 10 20 30 40 50

Total

Surveyed

Engaged

Number of Municipalities

Engaged as per strategy

Total No. Engaged

Total No. Targeted

EPWSP

Scope of Joint Engagement

The Joint Engagement strategy aims to:Supporting dedicated technical interventions to increase the allocation of projects and expedite problems in prioritised municipalities.DPW Target: 750,000 work opportunities from the Infrastructure Sector

Initial Overall Municipal Infrastructure Targets:Municipal Target: 450,000 work opportunitiesEPWSP Target: 195,000 work opportunities

Potential to support creation of 270,000 work opportunities over the next 3 years.

Joint EngagementJoint Engagement

Functions and Activities

Functions

8 functions have been identified as necessary components of the Joint Engagement strategy.The following slides identify the roles both Shisaka appointed by the Business Trust and the EPWP Unit will play in each function

Function 1: Municipal Prioritization EPWP Unit

Desktop AnalysisAssess the prioritized top 40 municipalities (prioritized on the basis of MIG and Vuk’uphile)Roles

EPWP Infrastructure Technical AdvisorsInstitutional Analysis

Assess the organizational capacity and commitment to the EPWPRoles

EPWP Stakeholder Managers / EPWP Provincial CoordinatorsOpportunity Identification

Identify potential EPWP project clustersRoles

EPWP Stakeholder Managers / EPWP Provincial CoordinatorsOutcome

Selected municipalities for technical engagementEPWSP Support

Assist in developing tools for assessmentProvide data analysis support

4

Function 2: Structuring the EngagementEPWP Unit

Technical assessment of project listsConfirming the status and suitability of projects and number of potential work opportunitiesRoles: EPWP Technical Advisors (consultants)

Technical interaction to assess operational readiness (policies,processes and structures)

Confirming the organizational readiness and needs of municipalityRoles: EPWP Technical Advisors (consultants)

Agree EPWP support objectives with municipal leadershipEstablish the basis of support, objectives and reporting and reviewRoles: EPWP Infrastructure sector and EPWP Stakeholder managers / Provincial Coordinators

OutcomeLetter of intent setting out nature of support, objectives and reporting and review structures

EPWSP SupportAssist in developing tools for detailed assessment and engagementSupport to develop and implement training for programme managers and technical consultantsProvide MIS support to load municipal profile

Function 3: Project LoadingEPWP Unit & EPWSP

Project RegistrationIdentified projects are loaded on MIS (ongoing process)Roles

EPWP Technical Advisors document project informationEPWP Technical Advisors /EPWSP load project dataEPWSP quality controls data

Project training needs assessmentTraining requirements per project are identified and quantifiedRoles

EPWP Technical Advisors estimates jobs earmarked per project and identify training requirements as per DoL course catalogueEPWP Technical Advisors agree jobs and training needs with municipality

Preliminary project diagnosisIdentify preliminary key challenges and blockages per projectRoles

EPWP Technical Advisors identify and document initial blockagesOutcome

Identified projects, training requirements and initial challenges are loaded on the MISEPWSP Support

Quality control and loading of data on MISProduce status reports on projects, project blockages and training requirements

Function 4: General Tech Support InterventionsEPWP Unit (Technical Advisors)

Establish Wage RatesAssist municipalities to set and proclaim EPWP wage rates

Align Contract DocumentationReview and align municipal contracting documents to EPWP guidelinesRoles:

EPWP Technical Consultants assist in document revisionEPWSP assists EPWP in training EPWP Technical Advisors

Facilitate Contractor ComplianceAssess compliance and facilitate training and registration on CIDB

Facilitate Consultant ComplianceAssess compliance and facilitate training and registration with ECSA

Align Supply Chain ManagementIncorporate EPWP requirements and align with legal framework

Facilitate Training Coordination CapacityAssist in establishing EPWP municipal training coordination capacity

Outcome: Municipal institutional blockages to EPWP implementation removedEPWP Enabling Environment created

EPWSP develops approaches via STA Fund.EPWP Unit implements revised approaches provincially (where necessary) and in

municipalities

Function 5: Project Monitoring & AnalysisEPWP Unit and EPWSP

Maintain and update project dataReceive monthly updates on project status and outputsFollow up and secure missing dataQuality control monthly updatesMaintain project historic and current status

EPWSP manage and maintain MIS EPWP Technical Advisors chase data

Prepare project status and output reportsAccess required reportsQuality control reportsCirculate to joint engagement team

EPWSP produce and quality control reportsAnalyse reports and identify required interventions

Analyse reports deviations and trendsIdentify project specific and generic interventions per municipality

Monthly Joint Management MeetingSchedule required interventions

Allocate and programme resources to interventionsInstruct technical advisors to implement interventions

National Technical support ManagerOutcome: Accurate and current data is available and analysed; Appropriate interventions are identified and scheduled

Function 6: Implement projects interventionsEPWP Unit (Technical Advisors)

Brief municipality on blockages and required interventionsBlockage report and suggested interventions submitted to municipality (through monthly report) for information

Technical AdvisorsImplement planned interventions

Technical advisors implement interventions together with municipal officials, project consultants and contractors

Technical AdvisorsMonitor technical interventions

Progress on interventions submittedInterventions report reviewed and accepted as data

National Technical Support ManagerTechnical Advisors performance monitored

Progress reports per technical advisor provided to technical support teamTechnical support team reviews reports and takes action

National Technical Support Manager/EPWP Technical TeamDevelop solutions to generic blockages

Identify generic blockagesDevelop tools to resolve generic blockagesDisseminate tools

Joint Technical TeamOutcome: Blockages are resolved through appropriate interventionsEPWSP: Manage and maintain the MIS

Develop generic tools

Function 7: Worker TrainingEPWP Unit

Prepare and submit the municipal training plan to DoL in DoL formatTraining facilitation support officer supported by EPWP Training manager

Follow up with DoL on training readiness (funding, service providers, logistics) EPWP Training manager supported by Training facilitation support officer

Ensure that responsible project person has been provided with the project training plan

Training facilitation support officer supported by Training facilitation support officerMonitor training implementation

Receive monthly training reportsQuality control and load training dataPrepare monthly project and overall training reportsProvide reports to municipal training coordinator (forward copy to contractor where relevant)

EPWSP MIS CoordinatorEPWP Technical Advisor to chase missing data

Provide training compliance reports to the National Technical Support TeamCompliance reports evaluated and acted on

EPWSP MIS Outcome: Performance on compliance with worker training requirements

evaluated and acted on

5

Function 8: ReportingEPWP Unit & EPWSP

Report to municipalitiesProduce monthly reportsPresent monthly reports to municipal officialsPresent quarterly reports to municipal leadership

EPWSP MIS Team generate reportsTechnical Advisors report to municipal officials monthlyEPWP Stakeholder managers/ Provincial Coordinators report to municipal leadership quarterly

Report monthly to the joint infrastructure management teamProduce monthly reports

EPWSP MIS Team generates reportsJoint Management Team

Produce quarterly EPWP reportProduce quarterly reportEnsure municipality has signed off the reportReport submitted through required structures to EPWP National M&E Unit

EPWSP MIS Team generate reportsTechnical Advisors ensure sign off by municipalityOutcome: Municipal leadership are aware of their performance and progress on EPWP

Municipal data is submitted to the national EPWP Unit

Primary Reporting Formats

The following reports will be generated through the MIS and willinclude:Monthly municipal reports

Person days of workNo. of people employedTraining days provided Training coursesNo. of people who received trainingProject status and milestone reports

Monthly technical support management reportsPer technical advisor; per municipality; per project category; per project

Quarterly EPWP reportImport relevant data into EPWP templateMunicipality signs reportReport submitted to M&E Unit

Quarterly Strategic Management ReportOverall outputsOverall complianceTrend analysis Key strategic issues

Function flow diagram

F1: Municipal Prioritisation

F2: Structuring the Engagement

F3: Project Loading F4: General Tech Support Interventions

F5: Project Monitoring & Analysis

F6: Implement projects interventionsF7: Worker Training

F8: Reporting

Tools and Process

MISEPWP Stakeholder manager project list and training spreadsheetsWhat the technical support forms look likeWhat the reports look likeWhat the municipal target and strategy form look like

Other tools Diagnostic; Assessment pipeline; contracting documentation; status and who: training framework; training needs assessment template; contractor reporting template; EPWP policy template; …

ANNEXURE C22

1

1

PROVINCE OF THE EASTERN CAPE

24 April 2007

2

1. Summary of EPWP Results

R 527 millionTotal value of EPWP Projects

1,430Number of MIG: Labour Intensive projects

ECProvince:

15,885Person-days of work created

R1,344,621Total wages paid to workers

1,766R 7,937 billion

Number of MIG projects being implemented or completed

R40 – R70 / dayAverage daily Wage

4 / 9 / 0Percentages Women/ Youth/ Disabled

?Number of work opportunities created

66Number of MIG-EPWP projects

Progress*Indicator

3

EPWP ProgressWhich municipalities are performing well on EPWP?

NMMMWhich municipalities are not performing well?

New receiving municipalitiesWhat are the key challenges being faced by municipalities in implementing the EPWP?

Understanding GuidelinesLack of ownership of the programmeService Provider accreditation Provincial Support and involvementReporting – complete lack

What kind of support would help in improving the performance of the municipalities on the EPWP?

Road show to new councilsRe-emphasize programme and how to “start”Encourage timeous registration of projects to create enough timefor labour intensive construction

ANNEXURE C23

1

1

MIG Quarterly Workshop

Free State Province

Hans Merensky, Phalaborwa, Limpopo Province23-25 April 2007

Reporting format for EPWP Session

2

EPWP Progress

R72,178,304Total value of EPWP Projects registered

59Number of MIG: Labour Intensive projects registered

Free StateProvince:

6,087Person-days of work planned

315Number of MIG projects being registered

296Number of work opportunities planned

3Number of MIG-EPWP projects registered

Progress*Indicator

Please prepare a complete list of the projects so that DPW’scan engage with the respective municipalities on these projects

3

Co-ordination

EPWP invited to all PMU meetings – MonthlyEPWP a member of the PMITT – QuarterlyOne to one meetings with the EPWP section

4

Support to Municipalities

EPWP District Managers supporting Municipalities?PMMU providing training to Municipalities in terms of reporting

5

Challenges

Understanding the guidelinesReporting from MunicipalitiesInvolvement of EPWP in MunicipalitiesNational targets to achieve

ANNEXURE C24

1

1

MIG Quarterly WorkshopAPRIL 2007


2

1. Summary of EPWP MIG TO DATE End 06/07

C&C: R 1,995,486,765All: R2,848,513,716

Total value of EPWP Projects

Comp & Constr: 565 (52.9%)All : 728 (68.2%)

Number of MIG: Labour Intensive projects

KZNProvince:

C&C: 1,968,267All: 3,273,799

Person-days of work created

C&C: R2,300,430All: R4,383,720

Total wages paid to workers

1068Number of MIG projects being implemented and completed

C&C: R66All: R66

Average daily Wage

C&C: 26% 43% 1%All: 23% 45% 0.6%

Percentages Women/ Youth/ Disabled

C&C: 34,855All: 66 420

Number of work opportunities created

Comp & Constr: 116 (20.5%)All : 166 (15.5%)

Number of MIG-EPWP projects

Progress*Indicator

3

EPWP Progress for 06-07

R 2 343,043,484Total value of EPWP Projects registered


KZNProvince:

2,831,623Person-days of work planned


58 159Number of work opportunities planned


Progress*Indicator

Please prepare a complete list of the projects so that DPW’scan engage with the respective municipalities on these projects

ANNEXURE C25

1

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ANNEXURE C26

1

1

LIMPOPO PROVINCE

MIG Quarterly Workshop

23- 25 APRIL 2007


2

1. Summary of EPWP Results

R512.742mTotal value of EPWP Projects

193Number of MIG: Labour Intensive projects

MpumalangaProvince:

56 900Person-days of work created

R2 845mTotal wages paid to workers

609Number of MIG projects being implemented or completed

R50Average daily Wage

Women- 41%Youth- 57%Disabled- 2%

Percentages Women/ Youth/ Disabled

2 584Number of work opportunities created

132Number of MIG-EPWP projects

Progress*Indicator

3

EPWP Progress for 2007- 08

R 59.072mTotal value of EPWP Projects registered


Province:

18200Person-days of work planned



Progress*Indicator

4

EPWP ProgressWhich municipalities are performing well on EPWP?Which municipalities are not performing well?What are the key challenges being faced by municipalities in implementing the EPWP?What kind of support from National/ Province would help in improving the performance of the municipalities on the EPWP?

5

EPWP Progress

The Following municipalities are performing well:Most of the municipalities in Nkangala and Ehlanzeni District are performing well

Non Performing Municipalities A challenge remains with municipalities in GertSibande District

6

KEY CHALLENGES

Ranges from understanding the policiesAvailability of suitable service providersCIDB requirementsPlanning of the projects

Registration processes

2

7

KEY INTERVENTIONS

DPW to coordinate information sessions with municipalitiesGuidelines and hands-on support be provided to the PMU’sSet clear targets Provide technical intervention through Engineers Enhance capacity for project registration

8

THANK YOU

ANNEXURE C27

ANNEXURE C28

1

MIG Quarterly Workshop (NW EPWP Report)23-25 April 2006

1. Summary of EPWP Results (061. Summary of EPWP Results (06--07)07)

R138 076 848R138 076 848Total value of EPWP ProjectsTotal value of EPWP Projects

358358Number of MIG: Labour Intensive projectsNumber of MIG: Labour Intensive projects

North WestNorth WestProvince:Province:

141 154141 154PersonPerson--days of work createddays of work created

R8 186 932R8 186 932Total wages paid to workersTotal wages paid to workers

116116Number of MIG projects being implemented and Number of MIG projects being implemented and completedcompleted

R58R58Average daily WageAverage daily Wage

41%/55%/0.3441%/55%/0.34%%

Percentages Women/ Youth/ DisabledPercentages Women/ Youth/ Disabled

20892089Number of work opportunities createdNumber of work opportunities created

4141Number of MIGNumber of MIG--EPWP projectsEPWP projects

Progress*Progress*IndicatorIndicator

EPWP Progress for 07EPWP Progress for 07--0808

R68 830 131R68 830 131Total value of EPWP Projects registeredTotal value of EPWP Projects registered

110110Number of MIG: Labour Intensive projects Number of MIG: Labour Intensive projects registeredregistered

North WestNorth WestProvince:Province:

3 6303 630PersonPerson--days of work planneddays of work planned

195195Number of MIG projects being registeredNumber of MIG projects being registered

246246Number of work opportunities plannedNumber of work opportunities planned

1313Number of MIGNumber of MIG--EPWP projects registeredEPWP projects registered

Progress*Progress*IndicatorIndicator

EPWP ProgressEPWP Progress

-- Rustenburg ,Rustenburg ,MatlosanaMatlosana ,,MerafongMerafong & Central & Central District Municipality are implementing EPWP District Municipality are implementing EPWP projects projects

-- The Province anticipate/expect better The Province anticipate/expect better implementation in 07/08 because all above implementation in 07/08 because all above mentioned municipalities has established EPWP mentioned municipalities has established EPWP units to deal with EPWP projectsunits to deal with EPWP projects

-- Provincial EPWP officials should be involved in Provincial EPWP officials should be involved in planning, design and monitoring of these planning, design and monitoring of these projects projects

ChallengesChallenges

Number of EPWP projects have declinedNumber of EPWP projects have declinedMost municipalities are not keen to implement EPWP Most municipalities are not keen to implement EPWP projects due to projects due to labour labour issues and time involvedissues and time involvedMinimum wages allowed on the Minimum wages allowed on the programmeprogramme, which , which communities and municipalities do not accept.communities and municipalities do not accept.DPW is not providing sufficient support or taking the DPW is not providing sufficient support or taking the lead in assisting municipalities in understanding and lead in assisting municipalities in understanding and implementing EPWP projects.implementing EPWP projects.Poor coordination between DPW, Poor coordination between DPW, DoLDoL and municipalities and municipalities to ensure that the necessary training is done.to ensure that the necessary training is done.

THANK YOU THANK YOU

ANNEXURE C29

1

Asset Management and Comprehensive Infrastructure Plans

Quarterly Workshop Limpopo24April 2007

What is Asset Management?The process of decision-making, planning and control over the acquisition, use, safeguarding and disposal of assets to maximize their service delivery potential and benefits, and to minimize their related risks and costs over their entire life.

LEGISLATIVE FRAMEWORK FOR ASSEST MANAGEMENT

In terms of Section 63 of the MFMA: (1) The accounting officer of a municipality is responsible for the

management of—(a) the assets of the municipality, including the safeguarding and

the maintenance of those assets; and(b) the liabilities of the municipality.

(2) The accounting officer must for the purposes of subsection (1) take all reasonable steps to ensure—(a) that the municipality has and maintains a management,

accounting and information system that accounts for the assets and liabilities of the municipality;

(b) that the municipality’s assets and liabilities are valued in accordance with standards of generally recognised accounting practice; and

(c) that the municipality has and maintains a system of internal control of assets and liabilities, including an asset and liabilities register, as may be prescribed.

Supported by Section 55 of the MSA.

• In terms of section 73(2)(c) of the MSA the services provided by the municipality must be, amongst other requirements, be financiallysustainable.

• Chapter 1 of the MSA defines financial sustainability in relation to the provision of a municipal services in a manner aimed at ensuring that the financing of that service from internal and external sources, including budgeted income, grants and subsidies for the service, is sufficient to cover the costs of:

(i) the initial capital expenditure required for the service;(ii) operating the service; and(iii) maintaining, repairing and replacing the physical assets used in

the provision.

LEGISLATIVE FRAMEWORK FOR ASSEST MANAGEMENT

PURPOSE OF GUIDELINES

The “Guidelines for IAM in Local Government”:

• meets legislative requirements• supports improvement in the strategic management of municipal infrastructure

assets towards sustainable improvements in service delivery;• describes a framework to facilitate the preparation of sector-specific IAMP’s

and the aggregation of these into CMIP’s;• provides guidelines on the core principles, methodology and basic techniques

for AM;• draws on international best practice, and interpret these for local conditions;

and• considers the management of the following municipal services:

Community facilities and administration buildingsElectricity

Solid waste servicesSanitation

Roads, street lighting and stormwater drainageWater

What is a Infrastructure Asset Management Plan?

• A plan developed for the management of Infrastructure Assets with the aim of providing specified levels of service in a cost-effective manner, now and in the future.

• Multi-disciplinary management techniques (including technical and financial) are combined to determine the aggregated asset life-cycle needs.

• A significant component of the plan is a long-term cashflow.

2

What is Comprehensive Municipal Infrastructure Plans?

A plan that provides a holistic overview of existing service performance, a vision of future performance scenarios, the risks, priorities, funding and tariff implications, as a strategic input to the IDP process.

STRATEGIC FRAMEWORK FOR IAM (Cont’d)

The CMIP:• Contains summarised inputs from the IAMPs, and represents the integrated

infrastructure component of the IDP.

• This arrangement allows for:– optimised decision-making, – considered organisational level investments in infrastructure and cross-

subsidy arrangements; and– Effective replicable improvements in infrastructure management practices

across sectors.

Comprehensive Municipal Infrastructure Plans (CMIPs):

The preparation of these plans will, amongst other, enable municipalities to:

• rank projects and develop budgets based on an holistic view of local needs & priorities;

• assess optimum funding arrangements; and

• demonstrate their ability to effectively manage and maintain infrastructure investments.

WHY?

• During analysis of information from sector departments it was revealed that there is a weighted average of about 3.2 million households (out of an average of 12.8 million, i.e. 26%) without services (water, sanitation, electricity and solid waste). This backlog requires an estimated budget of R63 billion. Additional amounts would be required for roads, public infrastructure and refurbishment.

• The backlog reflects that there is asymmetry in infrastructure services delivery because approximately 26% of households are still without infrastructure in one or several services. This could only be resolved through decentralised comprehensive infrastructure planning.


• Infrastructure and Service Provision– Close funding gaps– Technical and management capacity– Water resources– Bulk infrastructure especially in rural areas– Institutional arrangements (IGR, Powers and Functions)– Policy issues– Agreement on data, statistics, service levels and standards– Differentiated support approach– Technology innovations– Refurbishment and rehabilitation– Forward planning and project and contract

management

3


• National Project and Contract Management Facility

– Convert national targets into projects with clear activities anddeliverables per municipality and per sector

– Manage delivery directly in areas where there is no capacity

– Simultaneously build infrastructure planning and management capability in provinces and municipalities

– Undertake and build capacity for Comprehensive Infrastructure Plans

• It is recommended that Cabinet notes progress on the report on municipal infrastructure backlogs and the provision of sustainable infrastructure services and support: (i) the different streams derived from the analysis and proposed interventions based on the perceived challenges per stream; (ii) development of comprehensive infrastructure plans per municipality to address the full life cycle of infrastructure with concomitant budgets; and (iii) the sector departments to develop sector support strategies and to enhance the existing sector master plans so as to inform the Comprehensive Infrastructure Plans (CIPs) of municipalities by the end of May 2007.

• It is also recommended that Cabinet approves the allocation of 1% of the 2007/8 MTEF Municipal Infrastructure Grant (MIG) allocation towards the development of CIPs.

Proposal by DPLG

Way Forward

• Implementation plan

• Support from dplg to provinces– Guidelines– Toolkit

• Roll out by provinces

• Possible funding to support municipalities

ANNEXURE C30

1

Presentation MIG Progress

DEC 2007

Progress as end December 2006

Water supply is the most important basic service funded through MIG to poor communities in South Africa. Water services projects registered make up 45% of the total MIG value of registered residential projects at dplg.

The next two biggest funding categories on MIG were sanitation (26%) and roads (23%) .

WaterSanitationRoadsStormwaterStreet / Community LightingSolid Waste Removal26%

23%

2% 1%3%

45%

Progress as end December 2006

Since the start of MIG, R28 911.88 million (The total value of all the MIG projects, including the multi-year projects, registered on the dplg database) has been allocated to the B, P and E funding.

The bulk of the funding for registered projects in the programme is funded from MIG and is 89.09% of the total source of funding to date.

The contribution from the public (e.g. municipality’s own funds) and private sectors are 10.61% and 0.30% respectively since the inception of MIG.

Million % B (basic residential infrastructure) R25 757.58 89.09 P (public municipal service infrastructures) R3 066.67 10.61 E (social institutions and micro-enterprises infrastructures) R87.63

0,30

Total R28 911.88 100,00

Progress as end December 2006Up to the end of December 2006, 21 657 432 person days employment opportunities have been created through MIG projects. The employment opportunities for women (including female youth and disabled persons) in person days expressed, as a percentage was 34% of the total employment opportunities. The employment of youth was 37% of the total employment opportunities.

Employment on MIG Projects

20.48%

41.46%

13.17%

24.01%0.55%0.32%

Women Men Youth (Female) Youth (Male) Disabled (Female) Disabled (Male)

Progress as end September 2006

At the end of December 2006 the total number of Small Medium and Macro Enterprises is 1 605 and 976 Black Economic Empowerment companies was involved on implemented MIG projects by the municipalities.

Project Status of all (B-,P-& E Components) projects Up to September 06 Up to December 06Pre-Implementation 778 786 Design / Tender 745 880 Construction 2,504 2,664 Completed 2,168 2,276 Total 6,195 6,606

Progress as end September 2006As at December 2006, 3,636,438 households have been serviced on completed MIG projects since the inception of MIG in April 2004.

Households serviced on Completed Projects Up to September

2006October-

December

Up to December

2006Water 769,107 206,317 975,424Sanitation 300,794 90,362 391,156Roads 512,009 35,891 547,900Multi purposes community halls 164,445 11,734 176,179Multi purposes sport centre / fields 198,144 20,754 218,898Parks and open spaces 439 0 439

2

Municipal Infrastructure Municipal Infrastructure Grant: CommitmentsGrant: Commitments

Commitments as at March 2007

Municipal Infrastructure Grant National Financial Year

Eastern Cape 99% 88% 72%Free State 95% 55% 36%Gauteng 100% 47% 7%KwaZulu Natal 97% 92% 61%Limpopo 100% 90% 25%Mpumalanga 92% 68% 36%Northern Cape 97% 63% 66%North West 100% 79% 62%Western Cape 100% 90% 48%National 98% 76% 46%

Province 2006/07 (R'000)

2007/08 (R'000)

2008/09 (R'000)

INTERVENTIONS AND CHALLENGES

GENERAL CHALLENGES FACING MUNICIPALITIES

• Planning in the context of Integrated Development Planning.

• Intergovernmental cooperation (municipalities, provinces, and sector departments involvement in MIG implementation)

• Overlapping of financial years (national and municipal)• Lack of capacity to manage MIG projects (Project

Management Units)• Supply chain management• Technical reports and Environmental Impact Assessment

THANK YOU

ANNEXURE C31

11

PRESENTATION PRESENTATION MUNICIPAL SERVICES

TURN AROUND PROJECTS

AND

COST RECOVERY

KHUVUTLU: WATER, CONSULTING, ROADS & SERVICES cc

Kkkw KHUVUTLU: WATER, CONSULTING, ROADS &

SERVICES cc

22

PRESENTATION OVERVIEWPRESENTATION OVERVIEW

1. PURPOSE OF PRESENTATION

2. INTRODUCTION OF KWCRS cc

3. TURN AROUND & COST RECOVERY PROJECTS

3.1 GREATER GIYANI TURN AROUND PROJECT

3.2 BA-PHALABORWA MUNCIPALITY TURN AROUND STRATEGY

3.3 BUSHBUCKRIDGE DEBT MANAGEMENT / COST RECOVERY

3.4 ELANDSKRAAL COST RECOVERY

6. FUNDING OF PROJECTS

7. CONCLUSION


Kkkw

33

1. PURPOSE 1. PURPOSE

TO SHARE BEST PRACTICES ON COST RECOVERY MANAGEMENT IN TO SHARE BEST PRACTICES ON COST RECOVERY MANAGEMENT IN PERIPERI--URBAN AREAS.URBAN AREAS.

TO PROVIDE FIRST HAND EXPIERENCE ON STRATEGIC COMMUNITY TO PROVIDE FIRST HAND EXPIERENCE ON STRATEGIC COMMUNITY MANAGEMENT FOR PAYMENT OF MUNICIPAL SERVICES. MANAGEMENT FOR PAYMENT OF MUNICIPAL SERVICES.

TO PRESENT SERVICES OFFERED BY KWCRS TO DEPARTMENT OF TO PRESENT SERVICES OFFERED BY KWCRS TO DEPARTMENT OF LOCAL GOVERNMENT & HOUSING.LOCAL GOVERNMENT & HOUSING.

TO SHARE EXPERIENCES ON COST RECOVERY PROJECTS GAINED AT TO SHARE EXPERIENCES ON COST RECOVERY PROJECTS GAINED AT MUNICIPALITIES.MUNICIPALITIES.

SHARE IDEAS ON POTENTIAL COST RECOVERY STRATEGIES FOR THE SHARE IDEAS ON POTENTIAL COST RECOVERY STRATEGIES FOR THE PERI PERI ––URBAN AREAS.URBAN AREAS.

TO SHARE NEW APPROACH TO ELIMINATION OF SERICES BACKLOG TO SHARE NEW APPROACH TO ELIMINATION OF SERICES BACKLOG ON EXISTING INFRASTRUCTURE.ON EXISTING INFRASTRUCTURE.


Kkkw

44

COMPANY BACKGROUND COMPANY BACKGROUND

(KWCRS)THE “KEEN WATER CARE AND RELATED SERVICES” PROVIDER


55

OUR COMPANYOUR COMPANYCOMPANY OWNERSHIP

- 100% owned by historically disadvantaged black professionals

- 25% are youth i.e. 35 years and younger- 25% ownership belongs to women

STAFF PROFILE

- 100% management in the hands of black South African professionals.

- 33% of management are black women- 44% of management are youth- 75% of shareholders are working fulltime in the company- The company has 44 permanent employees with full benefits

i.e. pension, funeral cover, life cover, registered with UIF, OHSACT, Professional Indemnity Insurance


66

OUR SERVICESOUR SERVICES

Water & Waste Water Management

Operations & maintenance of water systems

Customer Management

Capacity Building

Electrical & Mechanical maintenance

Institutional Design & Organizational Development

Feasibility Assessment

Training & Development

Programme / Project Management & Coordination

Rural Development & Municipal Infrastructure

Consultancy services

Roads & Stormwater Design & Supervision

Road rehabilitation work & Maintenance

Geometric & Pavement Design


77

OUR COMPANYOUR COMPANYOFFICE LOCATIONS:

POLOKWANE:38A Bodenstein Street/37 Compensatie Street

THOHOYANDOU:182A Sibasa, Thohoyandou

GIYANI:518 E Giyani

PHALABORWA:13 Appelblaar Street

MIDRAND:1332 Ground Floor Montrose Place waterfall Office Park


Kkkw

88

BACKGROUNDBACKGROUNDMunicipalities in Limpopo like many others Municipalities in Limpopo like many others are faced with the following challenges:are faced with the following challenges:

Many Municipalities being newly established Many Municipalities being newly established

Changes in demarcationChanges in demarcation

Changes in powers & functions e.g.: new water Changes in powers & functions e.g.: new water services authorities. services authorities. Increase in none payment of municipal servicesIncrease in none payment of municipal services

Kkkw

99

PROJECT LOCATIONPROJECT LOCATION

1010


1111


1212

TURN AROUND PROJECT

BABA--PHALABORWA MUNICIPALITY OPERATED SCHEMES SUPPLYING PHALABORWA MUNICIPALITY OPERATED SCHEMES SUPPLYING THE TOWN ONLY.THE TOWN ONLY.

THE BATHE BA--PHALABORWA MUNICIPALITY RECEIVED SCHEMES FROM PHALABORWA MUNICIPALITY RECEIVED SCHEMES FROM DWAF, SERVICING 293 TOWNS AND SURROUNDING VILLAGES. DWAF, SERVICING 293 TOWNS AND SURROUNDING VILLAGES.

TRANSFER ARRANGEMNT WAS ACCOMPANIED BY 3 YEAR PHASED TRANSFER ARRANGEMNT WAS ACCOMPANIED BY 3 YEAR PHASED OUT SUBSIDY FROM DWAF OUT SUBSIDY FROM DWAF

POOR PAYMENT CULTURE FOR SERVICES IN THE AREA SUPPLIED BY POOR PAYMENT CULTURE FOR SERVICES IN THE AREA SUPPLIED BY DWAF SCHEMESDWAF SCHEMES

HIGH CONSUMPTIONS AVERAGE 94 KL/MONTH / HOUSEHOLD HIGH CONSUMPTIONS AVERAGE 94 KL/MONTH / HOUSEHOLD OCTOBER 2004OCTOBER 2004

LOCAL MUNICIPALITY WAS UNABLE TO SERVICE BULK WATER LOCAL MUNICIPALITY WAS UNABLE TO SERVICE BULK WATER ACCOUNT.ACCOUNT.

LIMITED BILLING COVERAGE LIMITED BILLING COVERAGE

ILEGAL CONNECTIONSILEGAL CONNECTIONS

BABA--PHALABORWA LOCAL MUNICIPALITYPHALABORWA LOCAL MUNICIPALITY

Kkkw

1313

ACHIEVEMENTSACHIEVEMENTS

TURN AROUND PROJECT

UPWARD TRENDUPWARD TREND15%15%% RECOVERY BILLED TO % RECOVERY BILLED TO PRODUCEDPRODUCED

UPWARD TRENDUPWARD TREND25%25%% RECOVERY PAID TO BILLED% RECOVERY PAID TO BILLED

IST AND LAST THREE MONTHSIST AND LAST THREE MONTHS144%144%AVERAGE PAYMENT LEVEL BY AVERAGE PAYMENT LEVEL BY NUMBERNUMBER

1ST AND LAST THREE MONTHS1ST AND LAST THREE MONTHS56%56%AVERAGE PAYMENT LEVEL BY AVERAGE PAYMENT LEVEL BY VALUEVALUE

UPWARD TRENDUPWARD TREND60%60%PAYMENT LEVEL BY VALUEPAYMENT LEVEL BY VALUE

METERS REPLACED, REPAIRED & METERS REPLACED, REPAIRED & INSTALLEDINSTALLED

55%55%CUSTOMER DATABASECUSTOMER DATABASE

REMARKSREMARKSINCREASEINCREASE

29 MONTHS


BABA--PHALABORWA LOCAL MUNICIPALITYPHALABORWA LOCAL MUNICIPALITY

1414


1515


1616


1717

GIYANI MUNICIPALITY AREA EXPRIENCING WATER CRISIS.GIYANI MUNICIPALITY AREA EXPRIENCING WATER CRISIS.

MOPANI DISTRICT MUNICIPALITY WANTED TO EXPAND WATER MOPANI DISTRICT MUNICIPALITY WANTED TO EXPAND WATER SYSTEM AT MIDDLE LETABA TO ADDRESS THE PROBLEM.SYSTEM AT MIDDLE LETABA TO ADDRESS THE PROBLEM.

DWAF NATIONAL INSISTED ON WATER DEMAND MANAGEMENT TO BE DWAF NATIONAL INSISTED ON WATER DEMAND MANAGEMENT TO BE IMPLEMENTED AND DISAPROVED EXPANSIONS. IMPLEMENTED AND DISAPROVED EXPANSIONS.

POOR PAYMENT FOR SERVICES WAS RIPE IN THE AREA.POOR PAYMENT FOR SERVICES WAS RIPE IN THE AREA.

IRREGULAR BILLING. IRREGULAR BILLING.

CUSTOMER LOST CONFIDENCE ON BILLING PROCESS.CUSTOMER LOST CONFIDENCE ON BILLING PROCESS.

HUGE DEBT FOR CUSTOMERS, SOME NEVER HAVING PAID FOR IN THE HUGE DEBT FOR CUSTOMERS, SOME NEVER HAVING PAID FOR IN THE PAST 4 YEARS AND AVERAGE DEBT WAS R7 000.00 PER CUSTOMER.PAST 4 YEARS AND AVERAGE DEBT WAS R7 000.00 PER CUSTOMER.

GIYANI LOCAL MUNICIPALITY GIYANI LOCAL MUNICIPALITY

TURN AROUND PROJECT

KHUVUTLU: WATER, CONSULTING, ROADS & SERVICES cc 1818

TURN AROUND PROJECT

32,12%32,12%% RECOVERY PAID TO PRODUCED% RECOVERY PAID TO PRODUCED

53,1%53,1%% RECOVERY PAID TO BILLED% RECOVERY PAID TO BILLED

IST AND LAST THREE MONTHSIST AND LAST THREE MONTHS2790%2790%AVERAGE PAYMENT LEVEL BY AVERAGE PAYMENT LEVEL BY NUMBERNUMBER

2791%2791%PAYMENT LEVEL BY NUMBERPAYMENT LEVEL BY NUMBER

1ST AND LAST THREE MONTHS1ST AND LAST THREE MONTHS583%583%AVERAGE PAYMENT LEVEL BY AVERAGE PAYMENT LEVEL BY VALUEVALUE

632%632%PAYMENT LEVEL BY VALUEPAYMENT LEVEL BY VALUE

RECEIVING SERVICES BUT NOT RECEIVING SERVICES BUT NOT BEING BILLEDBEING BILLED

25%25%CUSTOMER DATABASECUSTOMER DATABASE

REMARKSREMARKSINCREASEINCREASE

41 MONTHS


ACHIEVEMENTSACHIEVEMENTSGIYANI LOCAL MUNICIPALITY GIYANI LOCAL MUNICIPALITY

1919


2020


2121


2222

BACKGROUNDBACKGROUND

PAYMENT LEVEL FOR SERVICES ACCOUNTS VERY LOW PAYMENT LEVEL FOR SERVICES ACCOUNTS VERY LOW ASSESSMENT RATES INTRODUCED & WORSENED THE PAYMENT RATE. ASSESSMENT RATES INTRODUCED & WORSENED THE PAYMENT RATE. INACCURATE BILLING FOR VARIOUS SERVICES AMOUNTS INACCURATE BILLING FOR VARIOUS SERVICES AMOUNTS

ACHIEVEMENTSACHIEVEMENTS

DATA CLEANSING & ACCURATE BILLING & PROPER ACCOUNTS MANAGEMENTDATA CLEANSING & ACCURATE BILLING & PROPER ACCOUNTS MANAGEMENTADVISE MUNICIPALITY ON DEBT COLLECTION STRATEGY & IMPLEMENTATIONADVISE MUNICIPALITY ON DEBT COLLECTION STRATEGY & IMPLEMENTATIONTHEREOFTHEREOFMUNICIPALITY OFFICIALS, COUNCILLORS & COMMUNITY AWARENESS CAMPAIMUNICIPALITY OFFICIALS, COUNCILLORS & COMMUNITY AWARENESS CAMPAINS ON NS ON ALL COST RECOVERY ASPECTSALL COST RECOVERY ASPECTSTRAINING OF MUNICIPALITY OFFICIALS. TRAINING OF MUNICIPALITY OFFICIALS. PAYMENT RATE INCREASED FROM 35% TO 64%PAYMENT RATE INCREASED FROM 35% TO 64%

BUSHBUCKRIDGE LOCAL MUNICIPALITY BUSHBUCKRIDGE LOCAL MUNICIPALITY

DEBT COLLECTION & REVENUE MANAGEMENT


Kkkw

2323


2424


2525


2626

BACKGROUND

A NEED TO IMPLEMENT WATER DEMAND MANAGEMENT A NEED TO IMPLEMENT WATER DEMAND MANAGEMENT & COST RECOVERY WAS IDENTIFIED AT THE 4 & COST RECOVERY WAS IDENTIFIED AT THE 4 VILLAGES. VILLAGES.

METERS WERE INSTALLED IN ALL +4 500 UNITS METERS WERE INSTALLED IN ALL +4 500 UNITS

A SERIOUS WATER SUPPLY PROBLEM A SERIOUS WATER SUPPLY PROBLEM


Kkkw

COST RECOVERYFLAG BOSHIELO WEST WATER SUPPLY

(ELANDSKRAAL, REGAE, MBUZINI & MORARELA)

2727

ACHIEVEMENTS

PROJECT COORDINATION COMMITTEE ESTABLISHED.PROJECT COORDINATION COMMITTEE ESTABLISHED.

MAINTENANCE TEAM AND MAINTENANCE PROGRAMME WAS PUT IN PLACEMAINTENANCE TEAM AND MAINTENANCE PROGRAMME WAS PUT IN PLACE

CONSUMER EDUCATION (WORKSHOP & MASS MEETINGS) ON THE PROPER CONSUMER EDUCATION (WORKSHOP & MASS MEETINGS) ON THE PROPER USAGE OF WATER, FBW POLICY IMPLEMENTATION, CREDIT CONTROL USAGE OF WATER, FBW POLICY IMPLEMENTATION, CREDIT CONTROL POLICY ETC.) POLICY ETC.)

NEIGHBORING VILLAGES (DICHOENG & KLIPHUIWEL) NOT RECEIVING NEIGHBORING VILLAGES (DICHOENG & KLIPHUIWEL) NOT RECEIVING WATER AT ALL. WATER AT ALL. WATER SUPPLY CURRENTLY 24 HOURSWATER SUPPLY CURRENTLY 24 HOURSPAYMENT LEVEL CURRENTLY AT 10% PAYMENT LEVEL CURRENTLY AT 10% CREDIT CONTROL IMPLEMENTATION STARTED CREDIT CONTROL IMPLEMENTATION STARTED ENVISAGED PAYMENT LEVEL FOR OCTOBER IS AT 60%ENVISAGED PAYMENT LEVEL FOR OCTOBER IS AT 60%


Kkkw

COST RECOVERYFLAG BOSHIELO WEST WATER SUPPLY

(ELANDSKRAAL, REGAE, MBUZINI & MORARELA)

2828

FUNDING OF THE PROJECTFUNDING OF THE PROJECTVARIOUS FUNDING SOURCES BASED ON COMPONENTS:

1. INFRASTRUCTURE RELATED: DOMESTIC WATER METER – CHINESE GRANT MATERIALSEXTENSION OF RETICULATION – MIG

2. FREE BASIC WATER IMPLEMENTATION MANAGEMENT: MASIBAMBANE FUNDS EQUITABLE SHARE FBS COMPONENT

3. COST RECOVERY RELATED ACTIVITIES PERCENTAGE BASED ON COLLECTED AMOUNT

4. MUNICIPAL IMPROVEMENT GRANT (DLGH/DPLG) Kkkw


2929

CONCLUSIONCONCLUSIONMIG to consider funding such projects MIG to consider funding such projects

Existing infrastructure can be brought to functionality Existing infrastructure can be brought to functionality through the Turn around / Cost Recovery project.through the Turn around / Cost Recovery project.

The water demand can be greatly reduced.The water demand can be greatly reduced.

Viability of the Water Services greatly improved. Viability of the Water Services greatly improved.

Kkkw

3030

THANK YOUTHANK YOUKkkw

ANNEXURE C32

1

Regional Bulk Water Services Regional Bulk Water Services InfrastructureInfrastructure

25 April 200725 April 2007Fred van Fred van ZylZyl

PurposePurpose

•• This is a specific purpose capital grant to supplement the This is a specific purpose capital grant to supplement the financing of the social component of regional bulk water financing of the social component of regional bulk water & sanitation infrastructure& sanitation infrastructure

•• Only for Regional Bulk water services infrastructureOnly for Regional Bulk water services infrastructure•• Focus on Focus on …… RegionalRegional•• Only social componentOnly social component•• It is NOT for internal bulkIt is NOT for internal bulk•• Motivation Motivation

–– Different characterDifferent character–– Scope & extent Scope & extent –– TopTop--up funding requirement.up funding requirement.

Definition Definition

•• Regional bulk is defined as infrastructure Regional bulk is defined as infrastructure required to connect a water resource on a required to connect a water resource on a regional scale over vast distances with regional scale over vast distances with internal bulk and reticulation systems. It is internal bulk and reticulation systems. It is also defined as large bulk infrastructure also defined as large bulk infrastructure serving numerous communities over a large serving numerous communities over a large area.area.

Regional Bulk: Rules of the GameRegional Bulk: Rules of the Game•• Only for regional bulk infrastructureOnly for regional bulk infrastructure•• Only for social componentOnly for social component•• No duplication (only coNo duplication (only co--funding)funding)•• Proven implementation readinessProven implementation readiness•• Confirmed need & solution (Acceptability)Confirmed need & solution (Acceptability)

–– TechnicalTechnical–– Water resourcesWater resources–– Environmental & legislativeEnvironmental & legislative–– Governance e.g. IDPGovernance e.g. IDP

•• Institutional arrangement in placeInstitutional arrangement in place–– ImplementationImplementation–– O&M (Sustained management)O&M (Sustained management)–– OwnershipOwnership

•• Financing confirmed: Social & Economic component.Financing confirmed: Social & Economic component.

Special conditions as per Special conditions as per DoRADoRA

•• DWAF must ensure appropriate involvementDWAF must ensure appropriate involvement•• Role players must understand implicationsRole players must understand implications•• Agreement to be reached on:Agreement to be reached on:

–– OwnershipOwnership–– ImplementationImplementation–– Operation & MaintenanceOperation & Maintenance–– Social & Economic component fundingSocial & Economic component fundingPrior to implementationPrior to implementation

•• The above mentioned implies total business The above mentioned implies total business planning.planning.

Features & CharacteristicsFeatures & Characteristics

•• Scope & extentScope & extent•• Water resource development Water resource development •• Social AND Economic developmentSocial AND Economic development•• Total needs services & supportTotal needs services & support•• ComplexityComplexity•• Institutional arrangementsInstitutional arrangements•• Financial planning & financing Financial planning & financing •• SustainabilitySustainability•• Enabling infrastructureEnabling infrastructure•• Longer term developmentLonger term development•• Environmental implicationsEnvironmental implications•• Master infrastructure reference system.Master infrastructure reference system.

2

ImplicationsImplications

•• Requires macro planningRequires macro planning•• Requires technical planningRequires technical planning•• As well as As well as ……

–– Sustainability planning & arrangementsSustainability planning & arrangements–– Institutional planning & arrangementsInstitutional planning & arrangements–– Financial planning & arrangementsFinancial planning & arrangements

Funding Funding

•• Allocation:Allocation:–– 07/08 07/08 …… R300 millionR300 million–– 08/09 08/09 …… R450 millionR450 million–– 09/10 09/10 …… R650 millionR650 million

•• NB: Fund small compared to MIG:NB: Fund small compared to MIG:–– 8.6% of annual MIG8.6% of annual MIG……relative small impactrelative small impact

•• Fund transferred to DWAF as schedule 7 grant: Grant in Fund transferred to DWAF as schedule 7 grant: Grant in kindkind

•• Grant split:Grant split:–– R7m/a for regional managementR7m/a for regional management–– R40R40--50m/a for planning: to ensure implementation readiness50m/a for planning: to ensure implementation readiness–– Remainder for implementation.Remainder for implementation.

Project NominationProject Nomination3 Categories3 Categories

1. SA Overview1. SA Overview 2. Feasibility2. Feasibility3. Annual 3. Annual

Implementation Implementation readyready

Nomination Process (Implementation ready)Nomination Process (Implementation ready)

•• Nomination profile & checklist sheets developedNomination profile & checklist sheets developed•• Allocation not formula driven Allocation not formula driven •• Allocation based on caseAllocation based on case--byby--case and meritcase and merit•• Nomination received through DWAF Regions Nomination received through DWAF Regions (not all (not all

nominations valid) (MIG alignment to be implemented)nominations valid) (MIG alignment to be implemented)•• Self validationSelf validation•• Regional validation & assessmentRegional validation & assessment•• Macro assessment & adjudication panelMacro assessment & adjudication panel•• Cash flow based on logical functional components to be Cash flow based on logical functional components to be

delivered (Multi year)delivered (Multi year)•• DWAF management signDWAF management sign--off.off.

Specific issuesSpecific issues

•• Ownership Ownership •• Implementation (Model, capacity)Implementation (Model, capacity)•• Operation & maintenanceOperation & maintenance•• Funding (especially coFunding (especially co--funding)funding)•• MIG alignmentMIG alignment•• Planning.Planning.

Issues & ExpectationsIssues & Expectations•• Bulk fund not a magic wandBulk fund not a magic wand

–– Fund only 8.6% of MIGFund only 8.6% of MIG–– MIG: 07/08 = R3.5m and 08/09 = R4.3mMIG: 07/08 = R3.5m and 08/09 = R4.3m–– So ?So ?

•• Projects nominated: Projects nominated: –– Many not regional bulkMany not regional bulk–– Many not implementation readyMany not implementation ready

•• Extent of bulk projects:Extent of bulk projects:–– Requires extensive integrated planning, institutional arrangemenRequires extensive integrated planning, institutional arrangements & ts &

financingfinancing–– Project consist of social & economic components Project consist of social & economic components –– requires total planningrequires total planning

•• Cost of projects:Cost of projects:–– Many projects costs is in the order of R400m to R1.2bMany projects costs is in the order of R400m to R1.2b–– Fund allocation very small compared to requirementsFund allocation very small compared to requirements–– Many schemes to be split into smaller functional delivery unitsMany schemes to be split into smaller functional delivery units–– Total demand exceed available funds by far e.g. de Hoop water seTotal demand exceed available funds by far e.g. de Hoop water services rvices

infrastructure = R3b excluding reticulation. Zululand bulk requiinfrastructure = R3b excluding reticulation. Zululand bulk requires R1.2b.res R1.2b.

3

Actions Actions •• Policy document availablePolicy document available•• Project Checklist developed Project Checklist developed •• Nomination process for 2008 99% complete (need some Nomination process for 2008 99% complete (need some

confirmation, validation & budget reconciliation)confirmation, validation & budget reconciliation)•• Project profiles being capturedProject profiles being captured•• Project list 2009 being finalizedProject list 2009 being finalized•• Task Teams established to support institutional as well as waterTask Teams established to support institutional as well as water

resources componentsresources components•• Feasibility guide: 80% complete Feasibility guide: 80% complete •• Feasibility & implementation readiness task teamsFeasibility & implementation readiness task teams•• Funding allocation to Regions by mid to end MayFunding allocation to Regions by mid to end May•• Expert teams: Institutional, Financing & Implementation supportExpert teams: Institutional, Financing & Implementation support•• National infrastructure overview in progress.National infrastructure overview in progress.

2008 Project List 2008 Project List

ProvinceProvince 2008 2008 ImplementationImplementation FeasibilitiesFeasibilities CommentsComments

ECEC R19.5m*R19.5m* R8.00mR8.00m Projects to be confirmed & Projects to be confirmed & allocation finalizedallocation finalized

FSFS R38.1mR38.1m R2.15mR2.15m Focus on bucketsFocus on buckets

KZNKZN R70mR70m R4mR4mLPLP R72.5mR72.5m R8.55mR8.55mMPMP R30mR30m R2.57mR2.57mNCNC R5mR5m R2.3mR2.3mNWNW R20mR20m R1mR1mGPGP R0R0 R1.5mR1.5mWCWC R0R0 R4mR4m

TotalTotal R258.9mR258.9m R34.1mR34.1m R7m ManagementR7m Management

••Allocation already committed R1.2bAllocation already committed R1.2b••Actual requests exceeding R13bActual requests exceeding R13b

Critical requirements Critical requirements

•• SA overview:SA overview:–– Regional perspective & requirementRegional perspective & requirement–– Financial requirementsFinancial requirements

•• Internal bulkInternal bulk–– SA requirementSA requirement–– Asset managementAsset management–– New, replacement, extensions, refurbishment, growth New, replacement, extensions, refurbishment, growth

& development& development–– FundingFunding

•• MIG alignment MIG alignment –– Infrastructure master plans.Infrastructure master plans.

EndEnd

ANNEXURE C33

1

Water Supply & Sanitation: Making it Water Supply & Sanitation: Making it happen !happen !

The ENDThe END

In sight!In sight!

Buckets 2007Buckets 2007Clinics 2007Clinics 2007

Water supply 2008Water supply 2008Sanitation 2010Sanitation 2010Schools 2008/10Schools 2008/10Program 2010Program 2010

The JourneyThe Journey

Buckets 9 monthsBuckets 9 monthsClinics 9 monthsClinics 9 months

Water supply 21 monthsWater supply 21 monthsSanitation 45 monthsSanitation 45 months

Schools 21/45 months?Schools 21/45 months?Program 2010: 33 monthsProgram 2010: 33 months

SO ?SO ?

PresidentPresident’’s Office Requirements Office Requirement

•• We have to indicate how we will succeed We have to indicate how we will succeed and submit convergence graphs.and submit convergence graphs.

Reality Check Reality Check -- Water SupplyWater Supply

8.2 million 8.2 million peoplepeople

16.2+ 16.2+ MillionMillion

20062006 2006/72006/7 20072007

••Access to basic infrastructure Access to basic infrastructure –– 8.8m8.8m••Infrastructure but not functional Infrastructure but not functional –– 5m5m••Higher service levels Higher service levels -- ??••Housing solutions Housing solutions –– 1.2+1.2+

2

Western Cape Perspective Example Western Cape Perspective Example (Sanitation HH backlog 2006)(Sanitation HH backlog 2006)

Formal Formal HHHH

Informal Informal HousingHousing

Shared Shared servicesservices

Backyard Backyard dwellers dwellers with SSwith SS

TotalTotal GrowthGrowth

9,9009,900 14,60014,600 141,000141,000 254,000254,000 419,000419,000 177,000177,000

Housing Solution: R10.4 billion for WSHousing Solution: R10.4 billion for WS

InterventionIntervention



16.2+ Million16.2+ Million

20062006

--

2006/72006/7

1.2 million 1.2 million deliverydelivery

7 million 7 million people over 2 people over 2

yearsyears

20072007


3.5 million 3.5 million people +people +

200720072006/72006/7

1.2 million 1.2 million deliverydelivery

3.5 million 3.5 million people ++people ++

20082008

2 million 2 million peoplepeople


??Reality Check Reality Check -- SanitationSanitation

3.8 million 3.8 million HHHH

4.7 m4.7 m HHHH

20062006

--

2006/72006/7

0.1 million 0.1 million HH deliveryHH delivery

3.7 million 3.7 million HH over 4 HH over 4

yearsyears

20072007

0.9 m 0.9 m HH +HH +

20072007

0.9 m 0.9 m HH +HH +

20082008

0.9 m 0.9 m HH HH ++++

20092009

0.9 m 0.9 m HH HH ++++

20102010

Reality Check Reality Check -- SanitationSanitation2006/72006/7

0.1 m HH 0.1 m HH deliverydelivery

0.3 m 0.3 m HHHH

1.2 m 1.2 m HHHH

0.6 m 0.6 m HHHH

1.6 m 1.6 m HHHH

??ActionAction

•• Leadership and drive: handsLeadership and drive: hands--on controlon control•• Dedicated management/ Dedicated management/ programmeprogramme•• Challenge definitionChallenge definition•• Reality action plan: March 2007Reality action plan: March 2007

–– Clarity on goals to be deliveredClarity on goals to be delivered–– deliverablesdeliverables–– Funding reconciliationFunding reconciliation–– Effort reconciliationEffort reconciliation–– Existing actions and projects alignmentExisting actions and projects alignment

•• Implementation models and delivery mechanismsImplementation models and delivery mechanisms•• Intervention and delivery actionsIntervention and delivery actions•• Resource Resource mobilisationmobilisation e.g. Funding.e.g. Funding.

3

Choices: Areas of InterventionChoices: Areas of Intervention

Goals & Goals & ExpectatiExpectati

onsons

11

ResourceResourcess

22 Process & Process & ImplementatImplementation Modelion Model

33

Leakage & Leakage & Quality Quality controlcontrol

44

Reconciliation, Reconciliation, Integration & Integration &

Strategic/Tactical Strategic/Tactical managementmanagement

55

Situation/NeedsSituation/Needs Successful outcomeSuccessful outcome

Choices: Areas of InterventionChoices: Areas of Intervention

Goals & Goals & ExpectationsExpectations

11

ResourcesResources

22 Process & Process & Implementation Implementation

ModelModel

33

Discipline & Discipline & Quality controlQuality control44

Reconciliation, Integration & Reconciliation, Integration & Strategic/Tactical managementStrategic/Tactical management

55

Program of Action Program of Action -- 11

•• Political & municipal ownership and commitmentPolitical & municipal ownership and commitment•• Dedicated programDedicated program•• Backlog perspective: agreed and signed offBacklog perspective: agreed and signed off•• Application/Solution/Delivery Plan per WSA Application/Solution/Delivery Plan per WSA

(by April 07)(by April 07)–– Clarity on goalsClarity on goals–– RingRing--fenced user categoriesfenced user categories–– Solutions classificationSolutions classification–– GIS basedGIS based–– Resource and goal reconciliationResource and goal reconciliation–– Logical development framework.Logical development framework.

Program of Action Program of Action -- 22

•• Program activities : confirmation and realignment Program activities : confirmation and realignment / reprioritization/ reprioritization

•• Address implementation models and processesAddress implementation models and processes•• Communication systemCommunication system•• Shared knowledge baseShared knowledge base•• Resource mobilization (Funding & Capacity)Resource mobilization (Funding & Capacity)•• Monitoring and trackingMonitoring and tracking•• Dedicated integrated program managementDedicated integrated program management

–– PartnershipsPartnerships–– Monthly management.Monthly management.

Addressing the Goal: (Approach)Addressing the Goal: (Approach)

Direct water Direct water services solutionservices solution Housing solutionHousing solution

20082008Interim Interim solutionsolution20082008

Permanent Permanent solutionsolution20142014

Bulk Infra & services supportBulk Infra & services support

ChallengeChallenge

Addressing the Goal: (Approach)Addressing the Goal: (Approach)

•• In principle adopted by most MetroIn principle adopted by most Metro’’ss•• Already applied by Already applied by TshwaneTshwane•• Logical Logical •• Potentially achievable.Potentially achievable.

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Solutions action plan Solutions action plan –– RingRing--FencingFencing

Housing Housing

ServedServed

RDP RDP

InterimInterim= Target= Target

NB NB NBNB NBNB

•• Distinguish between infrastructure and Distinguish between infrastructure and management backlogsmanagement backlogs

•• Sustainability a priority issueSustainability a priority issue

The BusinessThe Business

•• Core Programs:Core Programs:Water Services programWater Services programHousing programHousing programSustainable managementSustainable managementService quality.Service quality.

Implications Implications

•• Extended backlog classification to include Extended backlog classification to include informal settlement perspectiveinformal settlement perspective

•• RingRing--fence and clustering per solution typefence and clustering per solution type•• Implementation action planImplementation action plan

–– Prioritization towards achievement of targetsPrioritization towards achievement of targets–– Reconciling of budgets & targetsReconciling of budgets & targets–– Implementation modelsImplementation models

•• Existing programs & models realignment.Existing programs & models realignment.

Schools & ClinicsSchools & Clinics

•• PositioningPositioning•• Task teamsTask teams•• Backlog definitionBacklog definition

–– InfoInfo–– CriteriaCriteria

•• Solutions classificationSolutions classification•• Existing actions alignmentExisting actions alignment•• Action planAction plan•• Action, action, actionAction, action, action•• MonitoringMonitoring•• Support Support

Action !!!Action !!!

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EndEnd

ANNEXURE C34

1

DEPARTMENT OF TRANSPORT

MIG QUARTERLY WORKSHOP, PHALABORWA

23–25 APRIL 2007

BRIEFING ON THE SCALING-UP THE EXPANDED PUBLIC WORKS PROGRAMME

• Brief Background• Status quo of SA road network• Strategic perspective for roads development• Current labour intensive roads programmes• Programme challenges and opportunities• Allocations for roads: EPWP• Delivery management

BACKGROUND

• DoT and DPW, in collaboration with other roads authorities and NT developed a proposal for scaling-up the EPWP through the implementation of road construction and maintenance programmes.

• Additional allocation of R3 billion was approved over the MTEF 2007-08.

STATUS QUO OF SA ROAD NETWORK

• Total road network system of approximately 753 000 km

• 15 000 km of national roads• 350 000 km of provincial roads• 168 000 km of municipal roads, • Estimated 221 000 km of unclassified roads.

Comprises of access roads and local streets in rural communities and settlements (formal and informal) in urban areas.

STRATEGIC PERSPECTIVE FOR ROADS DEVELOPMENT

RISFSA calls for:• The development of an integrated road network

system that provides access and mobility for social and economic activities;

• A road network system that responds to the needs of communities and key growth sectors of the economy;

• A road network system that is a catalyst, enabler and stimulant of growth, development and transformation

Integrated Road Network System (RISFSA Classification

Integrated Road Network System (RISFSA Classification)

National Provincial Municipal

National Roads

Safety Infrastructure

Provincial Roads Municipal Roads

Access Roads

Non-Motorised Access Ways

• Urban and Rural• Surfaced and Gravel

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Current Labour Intensive Roads Programmes

Roads Authority Programme

Capex Maintenance

Eastern Cape Labmax Vukuzakhe

Free State Vuk’uphile -

Gauteng Labmax, Siyakha Labour intensive programme

KwaZulu-Natal Vukuzakhe Zibambele

Limpopo Gundo Lashu -

Mpumalanga Vuk’uphile Siyatentela

North West Labmax, Vuk’uphile -

Northern Cape Vuk’uphile -

Western Cape Labmax, Vuk’uphile Zenzele

SANRAL Labmax Labmax

Programme Challenges & Opportunities

Challenges Opportunities

Provincial readiness i.r.o MTEF plans Increase involvement of SANRAL in NMT, safety infrastructure and access roads development

Quantity of access roads administered by provinces

Incorporation of approach into MIG framework – core of access roads and other municipal roads

Planning of NMT and safety infrastructure Integrate roads with other infrastructure initiatives within the EPWP, MIG and PIG frameworks

Existence of (or willingness to launch) provincial road maintenance programmes (like Zibambele)

Proven willingness of municipalities and provinces to buy into labour-intensive programmes if guidance and support is provided

Existence of (or willingness to launch) provinciallabour intensive capex programmes (otherGundo Lashu’s)

Targeting of (or willingness to focus) labour maximisation in conventional capex projects, particularly large scale

EPWP Allocations for Roads: EPWP

Table 8: Revised allocations to Roads: EPWP based on 70 per cent of additions to baseline

2007/08 2008/09 2009/10

Eastern Cape 96,880 135,909 282,816 Free State 50,088 68,259 134,976 Gauteng 82,678 103,117 171,277 KwaZulu-Natal 124,822 170,414 339,835 Limpopo 61,243 92,024 212,266 Mpumalanga 76,766 96,935 164,799 Northern Cape 50,454 64,051 109,976 North West 6,437 21,330 87,432 Western Cape 38,631 52,961 106,622

Total 588,000 805,000 1,610,000

Roads: Additions to Baseline

Delivery Management

• Institutional arrangements for programme coordination and management

• Monitoring and evaluation systems• Technical support

Delivery Management

• Institutional arrangements for programme coordination and management

• Monitoring and evaluation systems• Technical support

Conclusion

• Government has made interventions in the macro economy that have stabilised the South African economy and placed it in a growth trajectory.

• There are strong government intentions to achieve a 4.5% economic growth rate in the short term, and 6% in the medium to long term.

• Increased investments in roads will contribute to achieving the desired increased growth rates, while also contributing to a more equitable spread of the benefits of increased growth.

• The economy is still not achieving the desired levels of job creation.• The EPWP has been rolled out for one year and Cabinet found that the scale of the

programme is not large enough to yield the desired levels of employment.• Although there is a general under-expenditure problem in Government, and at provincial

level in particular, the roads sector has been performing better in comparison to other sectors and has the ability to absorb additional funds.

• The roads sector has implemented progressive programmes that have been found to possess potential in terms of scaling-up the EPWP and generating the requisite job creation and skills development levels, while providing social and economic infrastructure.

• In addition to these programmes the EPWP can also be scaled-up by implementing large labour-intensive road construction projects, using the approach outlined above.

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