briefing to the portfolio committee on energy date:tuesday, 10 september 2013,

Municipal Infrastructure Support Agent____________________________________________________

The Role of the Municipal Infrastructure Support Agent in the Provisioning of Energy Infrastructure

Briefing to the Portfolio Committee on Energy

Date: Tuesday, 10 September 2013, Venue: M514, 5th Floor, Marks Building, Parliament,

Cape Town

CONTENTS

1. OVERVIEW OF MISA

2. KEY MISA PROGRAMMES AND PROGRESS ON IMPLEMENTATION

3. RELATIONSHIP WITH DBSA ON INFRASTRUCTURE DELIVERY

4. STRATEGIC INTEGRATED PROJECTS

5. ROLE OF MISA ON ADAM

6. CONCLUSION AND WAY FORWARD

23-04-24 MISA Briefing to Energy PC 2

OVERVIEW OF MISAInstitutional Form

• MISA was established by Presidential Proclamation 29 of 2012, which was gazetted on the 11th May 2012

• The establishment of MISA was one of the key thrusts of the Local Government Turnaround Strategy (LGTAS) aimed at creating a dedicated vehicle to support and build technical capacity in local government for the improvement of municipal infrastructure provisioning, refurbishment and maintenance;

• Anticipating the establishment of MISA, government took a decision to unbundle Siyenza Manje with the infrastructure component transferred to CoGTA and financial management component transferred to National Treasury, with effect from 01 April 2011.

• MISA is operationally ring-fenced from the Department of Cooperative Governance, but linked to it for policy implementation purposes.

• The head of MISA is the Accounting Officer in terms of the Public Finance Management Act, No.1 of 1999, as amended.

• MISA has been allocated its own operational budget of R820m over the MTEF period, with R262m allocated for 2013/14 FY.


OVERVIEW OF MISAVision and Mission

Vision:

Sustainable municipal infrastructure and service delivery.

Mission:•To provide technical support to municipalities towards accelerated delivery and effective management of municipal infrastructure;

•To enhance technical capacity of municipalities to ensure effective planning, delivery, operations and maintenance of municipal infrastructure for sustainable service provision.


OVERVIEW OF MISA Core Mandate

MISA’s two-pronged mandate can therefore be summarised as follows: i. To render technical advice and support in order to optimise municipal

infrastructure provisioning.ii. To coordinate the development and implementation of programmes

designed to strengthen the capacity of municipalities for planning, developing, operations and maintenance of their municipal infrastructure.

It is not within MISA’s mandate to provide funds/ grants to municipalities for either infrastructure projects implementation or the costs of maintaining and refurbishing such infrastructure. Its mandate is to give technical assistance to enable municipalities to perform these functions effectively.


OVERVIEW OF MISAMISA’s Role and Responsibility


Flowing from the mandate, MISA’s primary role and responsibilities are therefore:

1.To support municipalities to conduct effective infrastructure planning;2.To support and assist with the delivery of infrastructure in municipalities; 3.To support and assist with operation and maintenance of infrastructure in municipalities; and 4.To build the capacity of municipalities to undertake effective planning, delivery, operations and management of municipal infrastructure

KEY PROGRAMMESOverview of Key Support Programme


MISA has developed and is currently implementing the following programmes in order to be able to deliver on its mandate and fulfil its roles and responsibilities:

Municipal Technical Support Programme – to ensure that MISA provides technical support to those municipalities that require assistance with technical aspects of infrastructure planning, implementation, operation and/or maintenance. Support provided is based on a needs assessment and agreement with municipalities. This buy-in from municipalities is essential for ownership and sustainability of support initiatives.

Sectoral Support, Coordination and Grants ensures that resources from different departments and institutions are properly coordinated to address sectoral priorities towards eradication of service backlogs in water and sanitation, energy, solid waste management and roads and storm water. This programme also supports municipalities to ensure effective utilization of grants, especially the Municipal Infrastructure Grant.

KEY PROGRAMMESOverview of Key Support Programme Cont…


Capacity Development Programme ensures that technical capacity is developed in local government for planning, delivering, operating and maintaining municipal infrastructure. Capacity development is implemented through various programmes, including apprenticeships, young professionals, experiential learning and rotating key municipal officials to the private sector and academia for exposure. Bursaries are made available for studies in built environment, especially engineering, to build a pipeline of future technical officials for municipalities. The programme also provides mentorship opportunities for technical officials in municipalities to meet the requirements for professional registration. Working in partnership with other public institutions, private sector companies, tertiary institutions and professional bodies forms an important part of MISA’s capacity development strategy.

Vendor, Legal and Contract Management ensures that professional service providers are deployed to municipalities that require technical support, effectively managing their contracts and performance, and provide legal and contract management support to MISA.

Monitoring and Evaluation – MISA is currently developing a system that will ensure effective monitoring and optimization of the performance of the municipal infrastructure.

KEY PROGRAMMESProgress: Municipal Technical Support


• A total of 92 municipalities have been assisted to develop and adopt Integrated Support Plans; these are part of the 108 municipalities prioritised by CoGTA for LGTAS support. Included among these 108 municipalities are the 23 (+2) districts selected by cabinet for focussed support towards the reduction of their high service backlogs.

• An Integrated Support Plan (ISP) for each municipality was informed by the outcome of a diagnostic assessment conducted.

• The approach is to ensure that support provided is tailor-made for each municipality to respond to its peculiar challenges identified during the assessment.

• Support being provided to these municipalities is intended to mainly address their respective weaknesses in infrastructure and service provision.

KEY PROGRAMMESProgress: Municipal Technical Support Cont…


• MISA currently has 77 technical (engineering and planning) professionals deployed to support a total of 107 municipalities throughout the country.

• In addition to the deployed professionals a total of 25 Professional Service Providers (PSPs) have been contracted and assigned to support prioritised municipalities.

• The main role of PSPs is to assist each municipality in addressing specific issues pertaining to the infrastructure and service delivery backlogs and effective maintenance of existing infrastructure.

• Approximately 922 municipal infrastructure projects are currently being accelerated by MISA Technical Experts: Water & Sanitation (505 Projects), Roads (170 Projects), Electricity (58 Projects), Solid Waste (34 Projects) and Other (155 Projects).

KEY PROGRAMMESProgress: Sector and Grants Support


MISA is collaborating with sector departments in the provision of integrated support that seeks to address service and infrastructure backlogs, appropriate service delivery models and sector specific skills needs in respect of the key sectors such as water and sanitation; energy, waste collection and municipal roads.•MISA is providing support to 24 district municipalities that are Water Service Authorities (WSAs) in accordance with a joint support plan which was developed and is being implemented in conjunction with DWA. •In collaboration with DWA, backlogs analysis for water has been completed for all the 24 districts (analysis show backlogs per settlement classified in terms of: backlogs due lack of infrastructure, backlog due non-functional infrastructure, backlog due lack of sources and backlog due to new settlement extensions)•Work is underway to align the current funding (MIG, RBIG, MWIG and other) to address identified backlog per village/settlement

KEY PROGRAMMESProgress: Sector and Grants Support (Waste Management)


• Develop/review/update Integrated Waste Management Plans (IWMPs) for municipalities.– Eastern Cape – Engcobo & Sakhisizwe LMs– Free State – Masilonyana, Nala, Mohokare & Ngwathe LMs– KwaZulu Natal – Maphumulo & Ndwede LMs– Gauteng – Randfontein LM– Mpumalanga – Dipaleseng & Thaba Chweu LMs– Limpopo – Capricorn District LMs, Musina & Elias Motsoaledi LMs– Northern Cape – John Taolo Gaetsewe DM

• Licensing of Landfill Sites in Municipalities– Eastern Cape – Kouga LM (St Francis Bay Site), Koukamma LM (Ravinia site), Emalahleni LM (Indwe

Transfer Station) – Free State –Mohokare LM (Smithsfield & Zastron sites), Ngwathe LMs (Parys, Koppies, Vredefort &

Edenville sites)– KwaZulu Natal – Okhahlamba LM (Development & licensing of new site), UPhongolo LM (Pongola site),

Endumeni LM (Wasbank site), Big Five False Bay LM (Big Five site)– Mpumalanga – Dipaleseng LM (Balfour & Grootvlei Transfer Station)– Limpopo – Blouberg LM (Bochum site), Makhado LM (Rehabilitation Plan)– Nothern Cape – Hantam LM (Nieuwoudtsville site)

• Project Management Support on Waste Projects through Technical Consultants deployed in municipalities.– Eastern Cape – Great Kei LM (Kei Mouth & Chintsa Transfer Station) – Free State – Letsemeng LM (Koffiefontein: Upgrading of Existing Landfill Site)

KEY PROGRAMMESProgress: Sector and Grants Support (Energy)


• MISA is currently a member of Mini ADAM Steering Committee• MISA is supporting targeted Mini Adam municipalities to submit credible business plans to

get funding from DOE• The following are some activities being performed by MISA to support ADAM programme• Review/Update/Develop a Master Plan for Energy

– Eastern Cape - Engcobo, Emalahleni, Sakhisizwe, Gariep, KSD LMs– Free State – Masilonyana, Nala, Mohokare, Ngwathe LMs– Limpopo - Elias Motsoaledi LM– North West – Lekwa-Teemane, Mamusa, Tswaing, and Ratlou LMs

• Electricity Operations and Maintenance – Eastern Cape – KSD, PSJ LMs– Limpopo – Ba-phalaborwa LM– Northern Cape – Joe Morolong, Gamagara and Ga-Segonyana

• Electricity Loss and Revenue Management Strategies– Eastern cape – Nxuba– Gauteng – Lesedi, Westonaria LMs– Limpopo – Greater Tubatse LM

KEY PROGRAMMESProgress: Capacity Building Programme


• A key component of MISA’s capacity development programmes is the artisans development programme.

• Currently 32 municipalities in 8 Provinces are being supported with 311 apprentices, 228 section 13 (unemployed graduates) and 83 section 28 (municipal employees) respectively.

• A total of 114 apprentices have passed their trade tests and exited the programme as qualified artisans.

• A total of 469 apprentices including the current 311 and 158 new recruit apprentices will be placed in 56 municipalities for capacity development

• During the current financial year, 100 technical managers/ directors will be put on an up/re-skilling programme.

• 100 municipal engineering professionals will be mentored to support them towards professional registration with respective professional bodies

• Through our bursary programme intended to benefit students in the technical fields, MISA has sponsored 91 students since inception.

RELATIONSHIP WITH DBSA ON INFRASTRUCTURE PROJECTS• MISA is working closely with a number of organs of state that are involved in

supporting local government sphere on infrastructure and service provision. • The Development Bank of Southern Africa (DBSA) and MISA are working

closely on the support provided to municipalities to accelerate the reduction of basic service infrastructure backlogs.

• DBSA is responsible for SIP 6 which deals with Integrated municipal infrastructure and is aimed at addressing maintenance backlogs and upgrades in water, electricity and sanitation bulk infrastructure in the 23 least resourced districts.

• On the other hand, MISA provides technical support to these 23 districts in the implementation of their infrastructure projects.

• MISA and DBSA have agreed to develop a joint business plan to ensure coordinated support to these municipalities.


OTHER SIPS RELEVANT TO MISA’S WORK

The following are the SIPS that are directly linked to MISA’s work:• SIP 7 – Integrated Urban Space and Public Transport programme which is aimed at coordinating planning and implementation of public transport, human settlement, economic and social infrastructure;•SIP 8 – Green Energy in Support of the South African economy to support sustainable green energy initiatives;•SIP 10 – Electricity Transmission and Distribution for all, aimed at expanding the transmission and distribution network to provide access to electricity for all and support economic development•SIP 18 – Water and Sanitation infrastructure which is aimed at ensuring the provision of sustainable supply of water to meet social needs and support economic growth. MISA is building capacity to provide coordinated support on these SIPs.


ROLE OF MISA ON ADAM PROGRAMMEBackground to ADAM


Backlogs on electrification are currently at 3.5 million households and growing at a rate of

7% per annum. It is projected that at the current rate of connecting households, it would

take another 17 years to achieve universal access, without factoring in future growth

requirements.

Most municipalities are also faced with massive and growing backlogs in relation to

maintenance and refurbishment of their distribution assets.

These municipalities lack requisite institutional capacity and funding required to address

these two challenges.

It was anticipated that the six (6) Regional Electricity Distributors (REDs) would address

these challenges upon establishment. The process of establishing the REDs was halted in

2010 when Cabinet took a decision to discontinue the restructuring of Electricity

Distribution Industry (EDI).

ROLE OF MISA ON ADAM PROGRAMMEBackground on ADAM Cont…• In 2012 DoE, adopted a strategy called the Approach to Distribution

Asset Management (ADAM). • This multi phased program in addressing electricity distribution

challenges, was aimed at addressing the backlog in maintenance, refurbishment and upgrading of the Electricity Distribution networks.

• The initial work undertaken in implementing ADAM focused on addressing the capital and skills shortage that exists in the electricity distribution industry which was driven by the Electricity Distribution Industry (EDI) Holdings.

• The establishment of the Regional Electricity Distributors (REDs) was aimed as an institutional mechanism to address these challenges.

• Although EDI has since been disestablished and Regional Electricity Distributors (REDs) have been discontinued, there is still a need to address poor infrastructure maintenance and weak management capacity in electricity distribution


ROLE OF MISA ON ADAM

• MISA serves in the Mini- ADAM Steering Committee• MISA has two sub-programmes designed to support the implementation of ADAM:

i) Support provided through the Sectoral Technical Support programme ii) Support provided through the Business Adopt -A -Municipality (BaaM) framework

Through the Sectoral Technical Support programme, MISA is supporting targeted Mini Adam municipalities to submit credible business plans to get funding from DOE. MISA is currently also supporting municipalities in the following areas:

• Review/Update/Develop a Master Plan for Energy– Eastern Cape - Engcobo, Emalahleni, Sakhisizwe, Gariep, King Sabatha Dalindyebo– Free State – Masilonyana, Nala, Mohokare, Ngwathe – Limpopo - Elias Motsoaledi – North West – Lekwa-Teemane, Mamusa, Tswaing, and Ratlou

• Support on Electricity Operations and Maintenance – Eastern Cape – King Sabatha Dalindyebo, Port St Johns – Limpopo – Ba-phalaborwa LM– Northern Cape – Joe Morolong, Gamagara and Ga-Segonyana

• Electricity Loss and Revenue Management Strategies– Eastern Cape – Nxuba– Gauteng – Lesedi, Westonaria LMs– Limpopo – Greater Tubatse LM


ROLE OF MISA ON ADAM… cont

• The BaaM programme entails a partnership with Eskom to support struggling municipalities on electricity issues; 27 municipalities have been identified for Phase 1 support

• The provision of support to the selected municipalities is preceded by an assessment to establish the exact needs of these municipalities.

• Although the assessment will determine the final areas of support per municipality, the following areas have been identified as common challenges facing a number of municipalities: – Maintenance and rehabilitation of existing infrastructure;– Increased investment in new and existing infrastructure– Need to address high non-technical electricity losses;– Revenue management and tariff setting– Technical skills development


ROLE OF MISA ON ADAM AND SIPSBAAM Priority Municipalities Province Priority MunicipalitiesEastern Cape Nxuba LM Buffalo City Metro King Sabata

Dalindyebo LM

Free State Ngwathe LM Nala LM Phumelela LM

Gauteng Westoneria LM Randfontein LM Lesedi LM

Kwazulu-Natal Msunduzi LM Mtubatuba LM Upongolo LM

Limpopo Sekhukhune DM Greater Letaba LM Ba-Phalaborwa LM

Mpumalanga Thaba Chweu LM Nkomazi LM Greater Letaba LM

Northern Cape Sol Plaatjie LM Ge-segonyana LM Magareng LM

North West Ventersdorp LM Mamusa LM Ratlou LM

Western Cape Matzikama LM Cederberg LM Kannaland LM


ROLE OF MISA ON ADAM AND SIPSMenu of Support

Total menu of support agreed with Eskom :


Leadership and Management Training and

Development

Maintenance and Operations

Demand Side Management

Investment, Networks &

Master Planning

Business and Financial

Management Support

Contact Centre Access and/or Setup

Energy Losses Management

Pricing and Tariff Structure

Technical Skills Development

Technical Standards Credit and Revenue

Management

Improving Efficiency in

Procurement

OTHER ISSUES TO CONSIDER

• During a special Presidential Infrastructure Coordinating Commission (PICC) Manco meeting held on the 27 September 2012, the PICC took a decision that all capital equipment for the electricity distribution system (new build and maintenance) as well as electricity connections be centrally procured through Eskom;

• This will not only ensure financial savings to the state but will ensure acceleration of the electrification programme;

• On the 16th of August 2013, CoGTA MINMEC discussed the PICC recommendation and supported the PICC decision;

• The meeting also agreed that COGTA and the PICC should come up with mechanism and process for the implementation of this decision. This mechanism is currently being developed.


CONCLUSION

• Improvement in the management (operations and maintenance) of distribution infrastructure by municipalities is critical for the sustainable supply of electricity in their respective areas.

• MISA is looking at ways of strengthening its overall support to municipalities on electricity supply and other key sectors.

• CoGTA will continue to strengthen its collaboration with the Department of Energy (DOE) to ensure coordinated supporting to municipalities.

• DCoG will continue to facilitate the provision of free basic energy to households, including indigents, currently without access.

• CoGTA has also prioritized the strengthening of its activities to facilitate the implementation of the relevant SIPs.


briefing to the portfolio committee on energy date:tuesday, 10 september 2013,

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