1. 1 Consolidated Municipal Infrastructure (CMIP) and Municipal Infrastructure Grant (MIG) DPLG PRESENTATION TO THE PORTFOLIO COMMITTEE ON LOCAL GOVERNMENT Budget review 10 March 2003

2. 2 Municipal Infrastructure Grant (MIG)

3. 3 PROBLEM STATEMENT Ω Supply vs demand driven approach not responsive to community needs-unsustainable Ω Centralised disbursement from different depts- admin burden Ω Inequitable allocations to municpalities Ω No clear spending accountability Ω Programme not supportive municipal capacity and development

4. 4 OVERVIEW (C0NT ) Infrastructure is key to social security and economic development Decentralization recognises municipalities as primary agency for infrastructure delivery MIG approach seek to to enhance accountability in terms of policy outcomes and outputs National and provincial departments provide support and capacity to municipalities

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

6. 6 PRINCIPLES ﻐEquity in the allocation and use of funds ﻐDecentralization of spending authority ﻐEfficient use of funds ﻐPromote integrated development objectives of the three spheres ﻐPredictability and transparency

7. 7 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

8. 8 INSTITUTIONAL ARRENGEMENTS  Multi-departmental accountability fund- DPLG take financial accountability  Policy making and regulatory functions of each of the national depts. Remains intact  MIPTT- for policy decisions  TMITT-for operational coordination

9. 9 MIG BUDGET 2003/04R 47million 2004/05R117million 2005/06R97million

10. 10 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

11. 11 Pilot sites  Nodal 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

12. 12 CHALLENGES MIG only provides basic services Need for concession for poor municipalities with no revenue base No guarantees for proper O&M implementation capacity ( sustainability) Lack of Technical support for mostly rural municipalities to deliver infrastructure

13. 13 Consolidated Municipal Infrastructure Grant (CMIP)

14. 14 Progress Since inception approximately 2,5 million households benefited from CMIP 1760 projects completed value R 2345m Currently 936 projects under construction value R2335m

15. 15 Consolidated Municipal Infrastructure Programme

16. 16 URBAN RENEWAL PROJECTS ALLOCATION R70 MILLION INTERGRATED SUSTAINABLE RURAL DEVELOPMENT PROJECTS ALLOCATION – R230 MILLION CMIP : ACHIEVEMENTS - 2002/2003

17. 17

18. 18 CMIP BUDGET 2003/04R2246million 2004/05R2724million 2005/06R3016million

19. 19 CMIP : OUTPUT DELIVERABLES - 2003/2004

20. 20 CMIP : PROJECTED OUTPUT DELIVERABLES - 2004/2005 & 2005/2006

21. 21 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

22. 22 THANK YOU