1. Municipal Infrastructure Grant Sport and Recreation 15 February 2005

2. What is the MIG Programme? MIG Programme is a new municipal infrastructure funding arrangement that combines all the existing capital grants for municipal infrastructure into a single consolidated grant The consolidated programmes: –Local Economic Development Fund (managed by dplg) –Water and Sanitation Capital Grant (managed by DWAF) –Urban Transport Fund(managed by DoT) –National Electrification Programme (managed by DME) –Building for Sport and Recration Fund (managed by SRSA) –Consolidated Municipal Infrastructure Programme (managed by dplg) The MIG Programme does not replace the roles of other sectors in policy and regulation.

3. Vision of MIG The vision of MIG is to provide all South Africans with at least a basic level of service by the year 2013 through the provision of grant finance aimed at covering the capital cost of basic infrastructure for the poor.

4. MIG approach MIG is based on a demand driven approach where: All infrastructure grants are integrated into one Infrastructure planning is done by municipalities themselves Municipalities play a central role in co-ordinating development activity and the delivery of municipal infrastructure in their jurisdictions Funding allocations are linked to Integrated Development Plans (IDPs) Communities participate in identifying projects Capital grant allocations are predictable Service delivery is decentralised to municipalities Programme co-ordination takes place through one national structure, called the MIG Unit.

5. Sector departments Policy making, including the setting of norms and standards for the sector and services infrastructure, Support municipalities to prepare and implement a service development plan (e.g. Water Services Development Plan), Monitor the performance of municipalities in the provision of sector infrastructure and compliance with service related conditions (e.g. meeting targets for specific services), Provide support to municipalities in terms of feasibility studies, business plans and implementing services capital projects, Initiate intervention related to specific services activities, Sector planning oversight (regional service development plans) Ensure that funds allocated for sector infrastructure are properly spent.

6. Division of the MIG total fund allocation: Capital fund Municipalities MIG Fund Allocation to all municipalities according to MIG formula SMIF MIG allocation

7. Capital fund Municipalities MIG Formula MIG (F) = B + P + E + N + M  B- Basic residential infrastructure (new and rehabilitated) Proportional allocations for water supply and sanitation, electricity, roads) and ‘other’ (Street lighting and solid waste removal)  P- Public municipal service infrastructure (new and rehabilitated)  E- Allocation for social institutions and micro-enterprises infrastructure  N- Allocation to all nodal municipalities NB: Sport and recreation projects fall under the P-Component

8. The MIG Formula Making the horizontal split Having the national totals, as described, the amounts then need to be split to each metro and local municipality. This is referred to as the horizontal split. The split is based on the following parameters. Backlogs in specific services. Poverty. Identification as a node.

9. The MIG Formula Making the vertical split (2004/2005 & 2005/2006 financial years) As South Africa has a two tier system of local government, the amount allocated to each local municipality area needs to be shared 'vertically' between the local municipality and district municipality. The methodology for doing this is based primarily on an assessment of where the function for each municipal service lies.

10. 2004/2005 The MIG allocations for 2004/2005 financial year. NB: The allocations are based on the MIG formula

11. 2004/2005 The total expenditure on infrastructure projects by Municipalities up to December 2004 was R2, 085.16 million. This is 47% of the total allocation of R4 439.94 million. The total amount disbursed to Municipalities from dplg up to December 2004 was R2 490.92 million which is 57% of the total allocation.

12. 2004/2005 The value of registered MIG projects up to end of December 2004 for multi purpose sport centre / fields is R63.39 million. The actual expenditure on MIG projects up to end of December 2004 for multi purpose sport centre / fields is R6.507 million. 19 206 households benefited from completed multi purpose sport centre / fields by the end of December 2004 The scenario reflects that the implementation is behind schedule. It implies that the Building for Sport and Recreation Department should enhance its support to municipalities.

13. MIG Allocations 2005/2006 Prioritized existing commitments from CMIP and DWAF Allocation to 88 municipalities during 04/05 Additional municipalities to be introduced: Medium Capacity Municipalities - 60 Low Capacity Municipalities - 11 Total- 71 Total receiving municipalities for 05/06 159

14. The MIG Parameters

15. 2005/2006 The MIG allocation for infrastructure in the 2005/2006 financial year is R5, 236 161.000 million. On 20/12/2004 a letter was sent to Sport & Recreation with the following. 1. The provisional MIG allocations to municipalities for the 2005/2006 financial year. 2. A copy of the letter sent to their office on 14 October 2004 regarding the Service Levels and Unit Costs: A Guide for Municipalities. 3. A Copy of the fax sent to their office on 15 July 2004 regarding the Municipal Services Options: Definition of a Basic Level of Service and Unit Cost for MIG. 4. The Guideline for Basic Level of Services and Unit Costs for Municipalities 5.A copy of a letter sent out to the Provincial Programme Managers with a copy of the project list as received from DSR office with a letter dated 9 December 2004.

16. 2005/2006 dplg received a letter from Sport and Recreation on 20 January 2005 with a list of 54 projects in 34 municipalities that have been identified. dplg responded with a letter on 24 January 2005 where the following issues were addressed: 1.Municipalities are responsible for planning municipal infrastructure and for utilising MIG funds to deliver the infrastructure. This is reflected in the MIG policy framework, which supports the devolution of responsibility for municipal infrastructure development to the lowest possible level. 2.Allocations are made to municipalities and not to individuals. All MIG projects must be identified in the municipality’s IDP and cannot be registered unless it has been included in the three-year capital plan. 3.dplg requested DSR to advise the municipalities to register the listed projects as MIG projects for the 2005/06 financial year.

17. THANK YOU