DEPARTMENT OF COOPERATIVE DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL GOVERNANCE AND TRADITIONAL

AFFAIRSAFFAIRS

PRESENTATION TO THE STANDING PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATIONSCOMMITTEE ON APPROPRIATIONS

Municipal Infrastructure Grant (MIG) Municipal Infrastructure Grant (MIG) Projects and FundingProjects and Funding

February 2015February 2015

Outline of PresentationOutline of Presentation1. BACKGROUND2. SUMMARY OF MIG EXPENDITURE BY PROVINCE AS AT

END JAN 20153. EXPENDITURE IN LAST SEVEN MONTHS OF FINANCIAL

YEAR4. MIG EMIG ALLOCATION, BENEFICIARIES AND

EXPENDITURE PER SECTOR 5. EXPENDITURE PER SECTOR AS AT JAN 20156. CHALLENGES 7. SUPPORT TO MUNICIPALITIES8. STOPPING OF MUNICIPAL INFRASTRUCTURE GRANT

(MIG)

BackgroundBackground• Municipal Infrastructure Grant programme is the largest local

government infrastructure development funding in South Africa. • The programme was introduced as part of major reforms

implemented by government to improve service delivery in a coordinated manner (that involves all government spheres).

• The Department of Cooperative Governance manages the MIG by exercising its mandate to foster cooperative governance and to develop capacity in the local government sphere.

•  The MIG was started in 2004/05, through the merger of:– Consolidated Municipal Infrastructure Programme, – Local Economic Development Fund, – Water Service Capital Grant, – Community Based Public Works Programme, – Building for Sports & Recreation Programme and – Urban Transport Grant.

Summary of MIG Expenditure by Summary of MIG Expenditure by Province as at end January 2015Province as at end January 2015

Province Allocated (R'000)

Transferred to date

Expenditure to date

Expenditure as %

allocation

Expenditure as % transferred

Balance Unspent

Eastern Cape

2 916 227

1 663 196

1 452 710 49.81% 87.34%

210 486

Free State 813 654

566 378

354 701 43.59% 62.63%

211 677

Gauteng

453 318 331 732

225 822 49.82% 68.07%

105 910

KwaZulu Natal

3 207 141

2 176 888

1 586 366 49.46% 72.87%

590 522

Limpopo

3 064 058

1 514 828

938 962 30.64% 61.98%

575 866

Mpumalanga

1 707 250

1 126 639

871 952 51.07% 77.39%

254 687

Northern Cape

450 944 332 245

268 564 59.56% 80.83%

63 681

North West

1 598 850 952 582

748 025 46.79% 78.53%

204 557

Western Cape

472 393 362 154

273 463 57.89% 75.51%

88 691

TOTAL

14 683 835

9 026 642

6 720 566 45.77% 74.45%

2 306 076

Expenditure in last seven months of the municipal financial Expenditure in last seven months of the municipal financial year (June 2014 – Jan 2015)year (June 2014 – Jan 2015)

Province Spent by Province

Spent by Province

Spent by Province

Spent by Province

Spent by Province

Spent by Province

Spent by Province

July August September October November December January

Eastern Cape 150 999

117 074

216 107

243 458

-

617 652

107 420

Free State

58 919

50 099

38 238 44 992

72 072

44 297

46 084

Gauteng

7 236 29 172

43 117

49 588

28 675

32 118

35 916

KwaZulu Natal 149 570

256 449

209 669

266 699

233 256

238 158

232 565

Limpopo

43 351

112 673

171 152

128 760 168 468

153 222

161 336

Mpumalanga

56 900

107 588

120 882

98 412

179 786 185 025

123 359

Northern Cape

32 768 43 310

45 866

43 915

68 110

19 183

15 412

North West

112 831 183 366

82 997

79 107

104 695

78 246

106 783

Western Cape 18 768

43 861

49 947

43 544

55 136

14 267

47 940

TOTAL

631 342 943 592

977 975

998 475

910 199

1 382 168

876 815

MIG Allocation, Beneficiaries and Expenditure MIG Allocation, Beneficiaries and Expenditure per Sectorper Sector

Province

Water and Sanitation Roads and Storm water

Allocation Planned Households Expenditure Allocation Planned

Households

Planned Kilometers of Roads (km)

Expenditure

Eastern Cape 671 088 146 283 374 393 902 947 384 991 787 23226 768 139 845 915

Free State 272 182 728 265 078 121 379 534 224 148 474 18381 126,90 95 667 650

Gauteng76 010 181 120 007 27 065 925 266 465 347   76,35 143 099 320

KwaZulu Natal 1 322 367 236 1 814 562 991 217 567 388 172 900 797 389 0 348 322 482

Limpopo 1 827 659 568 488 413 442 471 390 971 180 229 16 733 362 276 749 408

Mpumalanga 806 342 190 635 846 340 111 967 361 423 306     597 735 123

Northern Cape 224 298 156 429 504 147 672 139 114 736 263 30 383 133.2 40 072 188

North West 549 252 765 110 461 255 218 518 576 081 988 66 887 0 204 901 498

Western Cape 274 002 131 45 663 159 596 322 121 192 720 0 12 766.46 77 697 425

TOTAL 6 023 203 101 4 192 908 2 878 636 309 3 408 393 014 952 999 14 030 1 924 091 009

MIG Allocation, Beneficiaries and Expenditure MIG Allocation, Beneficiaries and Expenditure per Sectorper Sector

ProvinceCommunity Lighting Sport Facilities

Allocation Planned Households Expenditure Allocation Planned

Households Expenditure

Eastern Cape 7 377 886 15 071 3 080 975 51 624 289 24 499 14 232 053

Free State 24 593 828 72 865 4 650 745 148 498 460 501 741 283 328 343

Gauteng 5 428 655 31,585 149,529 49 724 129 152,727

35,631,665

KwaZulu Natal 6 455 291 48 582 6 455 291 71 736 815 467 173 71 736 815

Limpopo 13 096 000 25 999 998 631 119 288 452 181 342 37 061 428

Mpumalanga 12 226 295   7 085 407 46 169 152 46 618 35 017 232

Northern Cape 394 085 41 522 928 162 12 035 426 31784 1 542 474

North West 32 268 687 40 099 10 165 251 46 249 254 41 349 21 684 762

Western Cape 4 448 789 1 666 977 457 57 940 651 35 363 23 404 802

TOTAL 106 289 516 245 804 34 341 919 603 266 628 1 329 869 488 007 909

MIG Allocation, Beneficiaries and Expenditure MIG Allocation, Beneficiaries and Expenditure per Sectorper Sector

ProvincePublic Facilities Solid Waste

AllocationPlanned

Households Expenditure AllocationPlanned

Households Expenditure

Eastern Cape 81 553 856 53 810 35 730 356 8 130 000 8 945 6 515 693

Free State 98 137 330 568 026 54 837 654 17 419 902 141 006 9 588 392

Gauteng14 103 298 126,248 6,588,673 11 915 133 212,224

2,678,502

KwaZulu Natal 146 501 939 837 577 135 326 219 4 615 863 195 648 4 615 863

Limpopo 169 425 150 120 630 45 864 320 1 625 460 32 766 1 004 106

Mpumalanga 48 858 236 379 533 25 452 903 10 480 896 173 993 6 370 506

Northern Cape 18 936 690 90 766 13 645 228 347 196 14 761 108 881

North West 170 591 914 68 960 44 944 372 69 853 652 192 892 33 407 994

Western Cape 13 417 998 12 578 4 069 462 14 009 620 16 646 6 100 380

TOTAL 724 636 866 2 205 624 361 466 427 132 601 618 724 000 69 710 184

ChallengesChallenges • The following depicts some of the challenges identified and

are being addressed:– Inadequate planning in the context of Integrated Development

Planning.– Lack of Intergovernmental cooperation (Municipalities, provinces, and

sector departments involvement in MIG implementation)– Lack of capacity to manage MIG projects (Project Management Units)– Appointing service providers or contractors who cannot deliver– Late payment of service providers– Council decisions take too long (approval of projects and budgets)– Delays in Technical reports and Environmental Impact Assessment

(sector departments)– Use of MIG funds for operational budget pressures

Support to municipalitiesSupport to municipalities• CoGTA’s main responsibility speaks towards the oversight on MIG

processes and procedures which promotes sound inter governmental relations, coordination between stakeholders, stakeholder support to municipalities and stakeholder participation in MIG project pre-implementation and implementation phases: – Supporting municipalities during the pre-implementation phase of

projects by supporting and guiding municipalities to meeting the objectives of the MIG Programme.• Infrastructure programme planning support to ensure that municipalities will

have projects aligned to deal with remaining backlogs • Projects verification support to municipalities to ensure that projects to be

implemented by municipalities do meet the cross cutting and sector specific conditions of the grant

• MIG implementation planning support to ensure that MIG projects are appropriately planned and scheduled for implementation.

• Support municipalities to set spending trajectories on their MIG programmes

 

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• Assisting municipalities during the implementation phase of projects by supporting and guiding municipalities to meeting the objectives of the MIG Programme.– Support municipalities by ensuring that positive spending trends are

maintained as per the pre-set payment scheduled. This includes frequent engagements with municipalities on maintain spending discipline (under expenditure) and set remedial actions on how to overcome poor expenditure trends

– Coordinated site visits to targeted projects in which all relevant stakeholders participate to confirm that projects are implemented as approved.

• COGTA with the cooperation of provinces has established teams that are visiting specific municipalities to address identified challenges

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Support to municipalitiesSupport to municipalities

MUNICIPAL SUPPORT STATISTICS MUNICIPAL SUPPORT STATISTICS

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ProvinceB2B

Dysfunctional

B2B function

al not doing well

B2B doing well

LGTAS

MISA Supported Municipalities

From LGTAS

List

From Siyenza Manje Prog.

Requests from

ProvincesTotal

EC 14 13 18 19 16 4 1 21NW 15 4 4 8 5 - 8 13NC 15 6 11 13 7 - 10 17WC 2 8 20 9 6 - - 6FS 9 7 8 10 9 - - 9GP 0 2 10 5 5 - 1 6MP 7 7 7 9 9 - 3 12KZN 8 18 35 23 23 - - 23LP 16 8 6 12 12 - 2 14National 86 73 119 108 92 4 25 121 278NB. Back to Basics actual support will be factored upon finalization of the assessment and provincial action plans. 2 municipalities. In LP were not assessed but the province identified them under ICU.

TECHNICAL RESOURCES PER PROVINCETECHNICAL RESOURCES PER PROVINCE

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MISA Focus Areas of Support - Engineering MISA Focus Areas of Support - Engineering • PMU and Project Management Support to fast track MIG expenditure• Contract Management, O&M Support• Basic Water & Sanitation Services Support• Audit of existing infrastructure projects• Bulk Water Supply – Planning & Construction of Regional Water

Scheme• Exploration and development of boreholes for water extraction• Maintenance and refurbishment of water purification works • Revamping of ageing infrastructure• Funding Model for Waste Water-Roads-Electrical-Water Infrastructure• O&M Support• Infrastructure Master Plans to ensure sustainable infrastructure

development• Integrated Waste management Plans• Dolomite Risk Strategies,• Water and Sanitation Asset registers • Environmental Impact Assessments• Geo-technical Studies

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The following planning support is currently provided to various municipalities in nine (9) provinces through MISA Planners and Professional Service Providers (PSPs).•Infrastructure Master Plans (water, sanitation, energy, solid waste and roads & storm water) to ensure sustainable infrastructure development•Spatial Development Plan Reviews•Water Conservation and Water Demand Management•Land-use Management Systems•Water Conservation and Water Demand Management•Infrastructure Asset Registers•Infrastructure Asset Registers, •Infrastructure Asset Management Plans •Operations and Maintenance Plans•By-laws (Technical and Town Planning)•IDP Review

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MISA Focus Areas of Support – Town MISA Focus Areas of Support – Town PlanningPlanning

CURRENT SUPPORTCURRENT SUPPORTMunicipalities Receiving SupportMunicipalities Receiving Support

Municipalities Kind of Support9. North West Cont.: Tswaing, Ratlou, Moretele, Kgetlengrivier, Mamusa, Moses Kotane, Madibeng, Ventersdorp, Dr Ruth Mompati DM, Lekwa-Teemane, Ngaka Modiri Molema DM, Naledi and Kagisano-Molopo (13)

• Institutional Arrangements of Water and Sanitation Provision • Roads and Storm Water Master

Plans• Develop Energy Master Plan• Operations & Management

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IMPACT OF MISA SUPPORTIMPACT OF MISA SUPPORT

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Municipality Before AfterChief Albert Luthuli Bushbuckridge Dipaleseng Dr Pixley ka Seme

These mentioned municipalities had landfill sites which were not compliant to provide environmental friendly communities against the negative impact of waste disposal activities .

Identified landfill sites within the four mentioned municipalities have been licenced through the assistance of MISA.

IMPACT OF MISA SUPPORTIMPACT OF MISA SUPPORT

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Municipality Before AfterSiyancuma, John Taolo, Ga-Segonyana, Joe Morolong, Gamagara, Khai Mai, Kamiesberg, Thembelihle

5000 buckets were identified to be replaced by proper sanitation facilities in the Northern Cape Province

Removal of 1600 buckets by constructing water borne sanitation facilities for these communities through the implementation of Bucket eradication programme with Human Settlements and DWS.

Lesedi Local Municipality Lesedi LM housing backlog was estimated at 6000 and through Obed Nkosi project a reduction in the backlog was realised.

Through MISA support a total of 699 households were constructed and also access to water, sanitation and waterborne sanitation. 200 temporary jobs were also created during implementation.

IMPACT OF MISA SUPPORTIMPACT OF MISA SUPPORTMunicipality Before AfterVhembe DM Previously water was

provided on a 12 hourly basis and run out of circulation.Poor operation and maintenance of water and waste treatment plants resulting in poor quality of drinking water and a supply shortage due to the low capacity of staff required to operate the water treatments plants towards efficient supply within the District

The district has confirmed that there is 60% improvement in water quality and its provision. After the intervention the supply of water has substantially improved to 24hour provision.

Kgetleng Local Municipality A total of 6 dysfunctional sewer pump stations where dysfunctional in Koster – Kgetleng Local Municipality from June to November 2014.

To date a total R2.8million has been secured from DWA under ACIP to deal with the emergency of sewer spillages. To date the 6 sewer pump stations are functional and managed to save the community from diseases such as cholera and other diseases.

Dipaleseng, Lekwa, Govan Mbeki and Emalahleni

No Energy Master Plans,Roads and Storm Water Master Plans Integrated Waste management Plans

Improved asset management including planning for these municipalities

Stopping of Municipal Stopping of Municipal Infrastructure Grant (MIG)Infrastructure Grant (MIG)

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Implementing Division of Revenue Act: Implementing Division of Revenue Act: withholding, stopping and reallocationwithholding, stopping and reallocation

• The DoRA provides for Transferring Officer (DCOG) to:– withhold (delay) the transfer of a grant (MIG)– Recommend stopping of funds to National Treasury– Re-allocate the stopped funds to same or other municipalities in consultation

with NT• On the grounds of:

– The province or municipality does not comply with any provision of this Act;– Roll-overs of conditional allocations approved by the National Treasury in terms

of section 21 have not been spent; or– Expenditure on previous transfers during the financial year reflects significant

under-expenditure, for which no satisfactory explanation is given.• This is done to:

– Facilitate compliance with the Act – Minimize the risk of under spending

Definition of TermsDefinition of Terms• With holding : This refers to the application of

s17 of DORA when transfers are eminent (Delaying transfer for 30 days)

• Stopping : Revise the allocation and cut in terms of section 18 of the DORA

• Re-allocation : Funds are re-allocated to other municipalities. Funds could also be allocated to the same municipality depending on improvements demonstrated

• Off-setting : Reduction of the ES to pay for unspent grants back to national revenue fund

• Based on the Municipal Infrastructure Grant (MIG) analysis of the end of January 2015 MIG expenditure report, the DCoG anticipated that some of the municipalities receiving the MIG would substantially under-spend on their allocations by end of June 2015.

• The DCoG will recommended to the National Treasury that a portion of some of those municipalities’ 2014/15 allocation be stopped and the National Treasury to send notices of intention to stop the MIG transfers to the affected municipalities.

• The DCoG wrote and will meet with the municipalities that had reported an expenditure of 40 percent and below, of their 2014/15 MIG allocation, as at end January 2015.

• Following the engagements with those municipalities, the DCoG will engaged with the National Treasury and further recommended to the National Treasury that a portion of some of those municipalities’ 2014/15 allocation be stopped.

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Rationale for stoppingRationale for stopping

RecommendationsRecommendations• The Committee to note :

– the performance of municipalities regarding the implementation of MIG Programme;

– COGTA support to municipalities through MISA programme, and

– the challenges affecting municipal performance and on-going support provided to municipalities

THANK YOU!THANK YOU!