1. PRESENTATION TO THE BUDGET SELECT COMMITTEE BRANCH : FREE BASIC SERVICES AND INFRASTRUCTURE By: Patrick Flusk

2. Overview : Branch Activities Chief Directorate Objectives
CONTENTS
Key Focus Areas
Budget Allocations
Main purpose
Overview : Branch Activities
Chief Directorate
Objectives
Milestone 2003/04
Challenges
Overview : 2004/05 Business Plan
Conclusions 2

3. DDG : Mr. Patrick Flusk 4 Chief Directorates CHIEF DIRECTOR
Ms Gabi Gumbi-Masilela
FBS
Ms Molatelo Montwedi
MIG
Ms Xoliswa Sibeko
Public Participation And Empowerment
Mr Muthotho Sigidi
MSPs 6

4. FBS: Key Focus Areas
Addressing backlogs through infrastructure provision
Enhanced service delivery through integration and coordination
Enhanced access to basic services
Full rollout of free basic services
Enhanced public participation
Strengthening the role of PPPs

5. Budget Allocations: Administration
Subprogramme
Expenditure Outcome
Adjusted
appropriation
Medium-term expenditure estimate
Audited
Preliminary
Outcome
R Thousand
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
Management -
3 000
3 443
3 497
4 028
Municipal Infrastructure
7 015
6174
8 509
11 662
16 622
20 114
21 849
Free Basic Services Co ordination
267
350
935
1 260
3 247
4 085
5 415
Municipal Service Partnerships
2 294
2 420
2 541
Public Participation and Empowerment
4 094
903
1 755
3 094
3 383
3 610
5 429
Total
11 376
7 427
11 199
19 016
28 989
33 726
39 262 4

6. Budget Allocations: Fiscal Transfers
Subprogramme
Expenditure Outcome
Adjusted
appropriation
Medium-term expenditure estimate
Audited
Preliminary
Outcome
R Thousand
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
Provincial Transfers -
Consolidated Municipal Infrastructure Programme
51 887
38 408
Municipal Infrastructure Grant
40 733
43 558
46 171
Local Government Transfers
Consolidated Municipal Infrastructure Programmme
47 000
Local Economic Development Grant
80 459
86 944
Total 5

7. OVERVIEW OF THE BRANCH PROGRAMMES
FREE BASIC SERVICES 7

9. FBS MILESTONES 2003/04 Free Basic Electricity pilot projects
Contracting the Free Basic Non Grid Energy pilot in Limpopo and KwaZulu Natal.
Rollout of the Free Basic Electricity by metros and bigger municipalities. Implementation in the smaller municipalities delayed due to some challenges experienced by municipalities
Development of the Funding Agreement to guide implementation of Free Basic Energy between the municipalities and the service providers

10. FBS MILESTONES 2003/04
The National Free Basic Services Task Team made up of dplg, DME, DWAF, ESKOM, DPE, STATSSA, NER was established to facilitate the rollout of the free basic services by municipalities.
DPE resolved the financial concerns raised by Eskom regarding the non-energy costs of providing Free basic services.
Standard Tariff across the board negotiated with NER
Established Provincial task teams to facilitate and support implementation of FBS

11. FBS MILESTONES 2003/04
Stabilised the service authority /service provider relationships between municipalities and service providers
Developed and facilitated the signing of the funding agreement between Eskom, Energy concessionaries and the municipalities for the implementation of the free basic services.
Initiated the assessment study on the challenges in the implementation of FBS (phase 1 completed in March 2004)

12. CHALLENGES Poor communications between municipalities and communities
Lack of adequate capacity support from some province
Lack of internal capacity in most municipalities to deliver FBS
Insufficient funding compounded by lack of data on actual beneficiaries
High cost of providing alternative FBS in areas where infrastructure is not available

13. Free Basic Services CHALLENGES
Poor monitoring mechanisms
Ability to pay vs. willingness to pay
Lack of impact indicators of success
Poor linkages with other social grants
Poor metering and billing systems
Poor communication
Funding constraints for poor municipalities

14. Free Basic Services Overview : 04/05 Business Plans
Develop guidelines for indigent policy
Develop a monitoring system to measure impact
Develop a credible database for all municipalities
Consolidate the monitoring teams at provincial level to ensure synergy
Develop capacity of municipalities to enhance deliver of FBS
Develop communications guide for municipalities
Review FBS policies

15. OVERVIEW OF THE BRANCH PROGRAMMES MUNICIPAL INFRASTRUCTURE GRANT (MIG)13

16. Municipal Infrastructure Grant
Main outputs of MIG Program:
Funding basic infrastructure development
Enhancing the EPWP
Enhancing LED
Job Creation
Partnerships
Inter-governmental coordination (MITT & MIT3) 14

17. MIG MILESTONES 2003/04
CMIP:
R2,246 billion transferred to municipalities.
42,79% of the total allocated to nodes.
Employment opportunities created
Training provided (31% youth, 20% women).
336 SMME’s utilised in construction. 15

18. MIG MILESTONES 2003/04 R40.9m of the R47m utilised for MIG pilots
MIG Policy Framework / MIG Formula
Finalized MIG- DORA, cross-cutting and sector specific conditions
DORA Allocations for 2004/05 determined:
96% (R4,4b) - Municipal infrastructure (includes committed DWAF and CMIP as well as uncommitted funds)
3% (R133m) SMIF (guidelines under development)
1% Program Management (R44 m)
The PMUs at municipal level have been identified
MIG funding agreement completed 16

19. BUDGET ALLOCATION Province CMIP (Rm) DWAF (Rm) New MIG (Rm) PMU (Rm)
Total Fund (Rm)
E/ Cape
54.503
20.332
F/ State
37.134
68.430
11.769
Gauteng
15.170
KZN
24.759
N/Cape
91.191
32.253
5.610
Limpopo
64.057
15.314
M/Langa
48.705
94.355
10.365
N/West
36.800
12.104
W/cape
6.899
16.562
8.214
Total

20. Service projection for 2004/05 in respect of CMIP & DWAF committed projects (Includes upgrading, new and rehabilitation projects)
R (millions)
CMIP
Estimated h/holds to be serviced
DWAF
Total
(CMIP &
DWAF)
h/holds
Average cost / h/hold
Water
1085
R3 050
Sanitation
476
48 000
R3 300
Roads
705
R3 866
Solid Waste 80
R 478
Community lighting 79
72 000
R1 102
Community facilities
141
R 548

21. MUNICIPAL INFRASTRUCTURE GRANT
An amount of R million is allocated to the nodal areas
R million is allocated to the urban nodes and million to rural nodes.
There is a further households that could benefit from new MIG funds at the total cost of R453,03 million for water.
There is further households that could benefit for sanitation at the total cost of R192 million.
The two above projections are based on the formula. This could be changed by the IDP priorities.

22. Municipal Infrastructure CHALLENGES
Institutional Activities
The full establishment of MIG unit
Establishment of MIG management structures (PPMUs & PMUs)
Monitoring and Evaluation
Develop the monitoring system
Communication
Technical MIG workshops to all Municipalities
Clarification of sector roles
MIG Launch
Funding Vs Modeling of Infrastructure
The quantification of capital and O&M budgets of municipalities as require by DORA 2004
Review the costing model and also creating a GIS linkage Develop the Municipal Infrastructure Investment Framework 18

23. MUNICIPAL INFRASTRUCTURE
CHALLENGES
Macro control
Establishment of an independent macro control audit function
LEDF Non-infrastructure commitments
Determining municipal infrastructure investment levels and grant requirements
Development of MIG business processes
The quantification of capital and O&M budgets of municipalities as require by DORA 2004 17

24. Overview : 04/05 Business Plans
Transfer, administer and manage capital funds.
Special Municipal Infrastructure Fund (SMIF)
The full establishment of MIG unit by 31 March 2005.
Establishment of MIG management structures (PPMUs & PMUs by 30 June 2004, PMITT by 31 July 2004)
Develop the monitoring system by end November 2004 19

25. Municipal Infrastructure Overview : 04/05 Business Plans
Communication
Technical MIG workshops to all Municipalities by 31 March 2005
Clarification of sector roles by September 2004.
MIG Launch by end of July 2004
Funding Vs Modeling of Infrastructure
Reviewing the costing model and also creating a GIS linkage by 31 March 2005
Develop the Municipal Infrastructure Investment Framework by 31 March 2005
Macro control
Establishment of an independent macro control audit function 20

26. MUNICIPAL SERVICES PARTNERSHIPS (MSPs)
OVERVIEW OF THE BRANCH PROGRAMMES
MUNICIPAL SERVICES PARTNERSHIPS (MSPs) 21

27. Municipal Services Partnerships
Objectives :
Create an enabling environment for the participation of the private sector in service delivery
Enhance the levels of delivery by the public sector as a preferred option
Encourage the sharing of capacities for efficient service delivery
Establish the MIIU to encourage private sector participation in service delivery 22

28. MSP MILESTONES 2003/04 National MSP Task Team established.
MSP Stakeholder workshop
MSP Training to 360 Councilors and officials
Completion on the Support Unit for the Public Provision of Services (SUPPS) 23

29. Municipal Service Partnerships
CHALLENGES
Finalising MSP regulations and guidelines
Further training on MSPs
Impact assessment of MSPs
Implement SUPPS model
Develop exit strategy for the MIIU
HR capacity of the Chief Directorate
Current legislation constraints – time consuming and feasibility study too expensive 24

30. Overview : 04/05 Business Plans
Audit existing MSPs in municipalities
Hold provincial MSP workshops
Publicize the MSP guidelines
Develop an Exit Strategy for MIIU
Complete the MSP training
Organise an international conference on MSPs 25

31. OVERVIEW OF THE BRANCH PROGRAMMES Public Participation & Empowerment26

32. Public Participation & Empowerment
Objectives :
Facilitate effective communication between municipalities and communities
Support the establishment of the Community development workers
Ensures proper linkages between the Ward Committees and the CDWs
Ensures effective participation of communities in the decision making machinery of the municipalities 27

33. Public Participation & Empowerment Milestones 2003/04
 CDW National Stakeholders workshop.
CDW Rollout in 5 Provinces and Provincial CDW Task Teams established
740 CDWs in learnerships 28

34. Public Participation & Empowerment
CHALLENGES
Strengthen intergovernmental communication and coordination
Develop monitoring and evaluation system
Secure funding in three provinces namely:Western Cape, Free State and North West
Encourage ownership of the program by municipalities 29

35. Municipal Service Partnerships Overview : 04/05 Business Plans
Capacitate Ward Committees
Strengthen CDW Program
Develop monitoring & Evaluation system
Hold provincial workshops
Develop user friendly materials 30

36. I thank you.