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Consolidated Municipal Infrastructure (CMIP) and Municipal

Infrastructure Grant (MIG)

DPLG PRESENTATION TO THE PORTFOLIO COMMITTEE ON LOCAL

GOVERNMENTBudget review10 March 2003

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Municipal Infrastructure Grant

(MIG)

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PROBLEM STATEMENTΩ Supply vs demand driven approach not

responsive to community needs-unsustainableΩ Centralised disbursement from different depts-

admin burdenΩ Inequitable allocations to municpalitiesΩ No clear spending accountabilityΩ Programme not supportive municipal capacity

and development

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OVERVIEW (C0NT)Infrastructure is key to social security and economic developmentDecentralization recognises municipalities as primary agency for infrastructure delivery

MIG approach seek to to enhance accountability in terms of policy outcomes and outputsNational and provincial departments provide support and capacity to municipalities

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BROAD OVERVIEWLast 7 years focused on addressing the needs of the underserved communities estimated at 15,2 million in 1994Approximately over 5 million (61%) have access to water, and an estimated 3,4 (66,1)million has access to electricityLevels of under-servicing remains high and requires an integrated strategy to addressInfrastructure delivery remains governments key priority

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PRINCIPLES

غ Equity in the allocation and use of fundsغ Decentralization of spending authorityغ Efficient use of fundsغ Promote integrated development

objectives of the three spheresغ Predictability and transparency

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OBJECTIVES Fully subsidize the capital costs of

providing basic services to the poor Distribute funding for MI in an equitable,

transparent and efficient manner Assist developmental capacity of

municipalities through multi-year planning Coordinated pursuit of national policy and

priorities. Increased job creation through higher

investment in public infrastructure

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INSTITUTIONAL ARRENGEMENTSMulti-departmental accountability fund-

DPLG take financial accountabilityPolicy making and regulatory functions

of each of the national depts. Remains intact

MIPTT- for policy decisionsTMITT-for operational coordination

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MIG BUDGET

2003/04 R 47million

2004/05 R117million

2005/06 R97million

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PROCESS Pilot phase 2003/04 financial year Infrastructure transfers will go directly to local

government in support of IDPs The Grant will be consolidate from CMIP,

LED,WSCG,CBPWP,UTG,BS&R and NEP (post restructuring)

Largely formula driven to ensure proper targeting and windows for innovations

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Pilot sitesNodal areas were identified as key

Ethekwini (U) Nelson Mandela(U) Sekhukhuni (R) Bohlabela (R) Kgalagadi (R) Alfred Nzo (R) OR Tambo ( R) Maluti-A-phofung (R) Mangaung

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CHALLENGESMIG only provides basic servicesNeed for concession for poor municipalities with no revenue baseNo guarantees for proper O&M implementation capacity ( sustainability)Lack of Technical support for mostly rural municipalities to deliver infrastructure

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Consolidated Municipal Infrastructure Grant

(CMIP)

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Progress

• Since inception approximately 2,5 million households benefited from CMIP

• 1760 projects completed value R 2345m

• Currently 936 projects under construction value R2335m

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Consolidated Municipal Infrastructure Programme

Outputs Service Delivery Indicators

The quantity and quality of infrastructure developed

315 projects were completed with a CMIP value of R480m

150 - Water 460 - Water 60 - Sanitation 280 - Sanitation 50 - Roads 450 - Roads

450 000 households per annum Number of beneficiaries 530 000 households

50% - Urban projects 51% - Urban projects50% - Rural projects 49% - Rural projects30% - Men 35% - Men30% - Women 17% - Women30% - Youth 48% - Youth

(Women youth is reported under youth component)

30% - Men 38% - Men30% - Women 18% - Women30% - Youth 44% - Youth

(Women youth is reported under youth component)

300 SMME’s per annum utilised SMME involvement 440 SMME’s utilised

Original TargetsOutputs achieved

Categories of projects funded

Location of projects

Employment opportunities

Accredited training provided

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URBAN RENEWAL PROJECTS

ALLOCATION R70 MILLION Number of projects implemented in UR nodes 56Number of projects in the construction phase 14Number of projects completed 0

INTERGRATED SUSTAINABLE RURAL DEVELOPMENT PROJECTS

ALLOCATION – R230 MILLION

Number of projects implemented in ISRDP nodes 204Number of projects in the construction phase 80Number of projects completed 19

CMIP : ACHIEVEMENTS - 2002/2003

170

300000

600000

900000

1200000

1500000

1800000

R'000

Amount Voted (R'000) Projected Expenditure (R'000) Savings (R'000)

Preliminary Expenditure Results by Sub Programme - CMIP

1,799,097 1,797,897 1,200

Amount Voted (R'000)

Projected Expenditure (R'000)

Savings (R'000)

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CMIP BUDGET

2003/04 R2246million

2004/05 R2724million

2005/06 R3016million

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CMIP : OUTPUT DELIVERABLES - 2003/2004

Funds to be spent on labour intensive projects 20% of total allocation

Number of households serviced per annum 650 000 households per annum

30% - Men

30% - Women

30% - Youth

30% - Men

30% - Women

30% - Youth

Number of SMME's utilised per annum400 SMME’s per annum to be utilised

Output deliverables

Priority given to project implementation in ISRDP and URP

Employment opportunities created

Service Delivery Indicators

20% of allocation

Accredited training provided

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2004/2005 2005/2006

Funds to be spent on labour intensive projects

20% of total allocation 20% of total allocation

Number of households serviced per annum

800 000 households per annum 900 000 households per annum

30% - Men 30% - Men

30% - Women 30% - Women

30% - Youth 30% - Youth

30% - Men 30% - Men

30% - Women 30% - Women

30% - Youth 30% - Youth

Number of SMME's utilised per annum

600 SMME’s per annum to be utilised

700 SMME’s per annum to be utilised

Accredited training provided

Employment opportunities created

20% of total allocationPriority given to project implementation in ISRDP and URP

Service Delivery Indicators

20% of total allocation

Output deliverables

CMIP : PROJECTED OUTPUT DELIVERABLES - 2004/2005 & 2005/2006

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CMIP CHALLENGES

• Lack of technical capacity at municipal sphere

• Lack of monitoring capacity by municipalities

• Too lengthy procurement procedures followed by municipalities

• Life cycle costing for O&M by municipalities

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THANK YOU