A NNEX C: P UBLIC S ECTOR I NVESTMENT
This document is an annex to the URP Impact Assessment: Impacts of Investment in Khayelitsha and
Mitchells Plain 2002/3-2010 report. It serves to provide additional information on Public Sector
Investments from the following sources:





External Financing fund (EFF)
Municipal Infrastructure Grant (MIG)
Neighbourhood Development Grant (NDPG)
Urban Renewal Grant (URP grant)
Various PGWC and National sources, such as funding from the Department of Health,
Department of Transport and so forth.
1. I NTRODUCTION
TO
URP F UNDING M ETHODOLOGY
Urban Renewal Programme has no substantial dedicated funding source that had been allocated to
programme. The funding methodology is meant to be an integrated approach that allows financial
and technical resources from all three spheres of government to be channelled to nodes for
development. The funding on nodal projects and programmes has been through a process of funding
alignment and budget and re-prioritisation linked to integrated Development plan (IDP) processes
and the national budgeting and planning processes in order to ensure linkages and create synergies
between budgets and out puts of the three spheres. Based on the fact that funding sources would
be fragmented a strong co-ordination and integration role for nodal municipalities is envisaged using
inter-governmental co-ordination mechanisms.
It is also expected of provinces and national departments to ensure that these nodal areas are
prioritized in terms of funding and other support. Some successes have also been achieved in
encouraging international donors and the private sector to support development in the nodes.
CONDITIONAL GRANTS
Conditional Grants to Local Municipalit
Municipal Infrastructure Grant (MIG)
Municipal Infrastructure Grant (MIG) is one form of funding levers utilized in the nodes to contribute
towards development of physical infrastructure. The MIG grant is allocated to the municipalities
within which these nodes are geographical found. It combines all the existing capital grants for
municipal infrastructure into a single grant. MIG allocation is distributed to the municipality through
the formula. The municipality who are hosting the municipality receives an extra 5% of the MIG
allocation1.
1
M IG A L L O C A T I O N
MUNICIPAL INFRASTRUCTURE GRANT
2004/05
5% Nodal
Allocation
R'000
2004/05
R'000
2005/06
5% Nodal
Allocation
R'000
2005/06
R'000
2006/07
5% Nodal
Allocation
R'000
2006/07
R'000
2007/08
5% Nodal
Allocation
R'000
2007/08
R'000
Grand
Total
Buffalo City
(Mdantsane)
3 036
71 270
3 546
85 603
4 088
97 156
4 496
109 470
378665
Nelson Mandela
Metro (Motherwell)
2 217
65 469
2 589
71 372
2 985
179 125
3 282
109 536
436575
City of Johannesburg
(Alexandra)
3 698
217 330
4 319
247 721
4 319
284 522
5 476
329 585
1096970
eThekwini (Inanda &
KwaMashu
5 691
22 133
6 647
260 311
7 664
304 940
8 428
342 455
958269
1 617
20 617
1 889
23 753
2 178
16 983
2 395
25 610
95042
10190
26449
154 387
551 206
11,901
30,891
167 802
856,562
13 722
34,956
33 000
915,726
15 090
39167
219 485
1136141
625577
3591098
Sol Plaatjie
(Galeshewe)
City of Cape Town
(Khayelitsha
and Mitchell's Plain
Total
Note: Shaded Column represents 5% allocation to the node in terms of MIG formula
2007/8 MIG Allocation for City of Johannesburg includes R10m that was reallocated back to the municipality
2007/8 MIG Allocation for Sol Plaatjie includes additional funding of R8,517m for bucket eradication
Source: DPLG
(http://www.thedplg.gov.za/urp/documents/POLICIES/Municipal%20Infrustrure%20Grant(MIG).xls)
17% of total URP MIG allocations went to cape town nodes between 2004/5 and 2007/8.
Unfortunately no data for more recent years was available at the time of conducting the study.
Neighbourhood Development Partnership Grant (NDPG)
The Neighbourhood Development Partnership Grant (NDPG) is conditional grant with a core focus to
stimulate and accelerate investment in poor, underserved residential neighbourhoods such as
townships by providing technical assistance and grant financing for municipal projects that have a
distinct private sector element in the project.
The NDPG is driven by the notion that public investment and funding can be used creatively to
attract private and community investment to unlock the social and economic potential within
neglected townships and neighbourhoods and that this in turn will contribute to South Africa’s
macro-economic performance and improve quality of life among its citizens.
WBS
Element
C10.25002F1
C10.96015F1
C11.00069F1
C09.95062F1
C10.96009F1
C10.96010F1
C08.10502F2
C06.41752F2
C07.01059F2
C10.10584F1
C11.13100F1
C08.18329F1
C08.18330F1
C11.18302F2
WBS Element
Description
Harare Square
Business Hub
Work live units
Ntlazane Road
Lentegeur Pub Space &
Civic Office Upgra
Monwabisi Coastal
Node
New MPC incl Library,
Harare Khayelitsha
New Regional Library
Kuyasa Khayalitsha
Khayelitsha Rail
Extention TI
Lentegeur & Mandalay
Station PTI's:Dsg
Mitchell's Plain Station
TI
Site C Transport
Infrastructure D
Harare Square EHO
and Youth centre
Harare Score
Supermarket Square
Lentegeur Public Space
& Civic Office Up
Site C - Public Square
footways and Land
Actual Exp
2007_2008
Actual Exp
2008_2009
Actual Exp
2009_2010
Original
Budget
2010_2011
May
Adj Budget
2010_2011
Aug
Approved
Budget
2011_2012
May
Approved
Budget
2012_2013
May
GAMAP
Fund Source
Desc
0
0
0
12,500,000
13,500,000
7,500,000
0
CGD
4 NT NDPG
0
0
0
2,700,000
3,300,000
0
0
CGD
4 NT NDPG
0
0
0
0
1,500,000
0
0
CGD
4 NT NDPG
0
0
0
2,000,000
0
8,000,000
20,000,000
CGD
4 NT NDPG
0
0
9,293,923
10,400,000
13,400,000
0
0
CGD
4 NT NDPG
0
0
0
6,000,000
6,000,000
20,000,000
15,000,000
CGD
4 NT NDPG
4,612,003
17,350,762
18,314,586
15,000,000
15,000,000
20,000,000
25,000,000
CGD
4 NT NDPG
0
300,000
80,000
17,000,000
15,951,971
15,000,000
25,000,000
CGD
4 NT NDPG
1,632,393
24,500,000
8,862,181
14,800,000
14,800,000
14,220,000
25,000,000
CGD
4 NT NDPG
0
0
0
4,600,000
5,800,000
18,000,000
30,000,000
CGD
4 NT NDPG
0
0
0
0
2,900,000
0
0
CGD
4 NT NDPG
0
2,809,404
0
0
0
0
0
CGD
4 NT NDPG
0
2,326,954
1,609,466
3,000,000
0
4,000,000
0
CGD
4 NT NDPG
0
0
0
3,000,000
0
5,500,000
4,400,000
CGD
4 NT NDPG
A Conditional Grant to Provinces
Infrastructure Grant and specific purpose to Provinces
The Infrastructure Grant to Provinces set supplements the funding of infrastructure programmes
funded from provincial budgets to enable provinces to address backlogs in provincial infrastructure
A province must ensure that its provincial departments responsible for education ,health and roads.
The grant is used to fund the construction, maintenance, upgrading and rehabilitation of new and
existing infrastructure in education, roads health and agriculture.
UNCONDITIONAL GRANT
Equitabl e Shar e Alloc ation (refered to as URP Gra nt in CoCT Accounti ng System)
The Equitable Share consists of unconditional transfer made to provinces and municipalities. The
Equitable Share of revenue for local government is determined pursuant to the Division of Revenue
Act, which is modified annually to take account of the current fiscal situation. The Act determines
the vertical division of nationally raised revenue among the three spheres of government. The local
government's Equitable Share is then distributed to individual municipalities by the Department of
Provincial and Local Government based on a formula that ensures an equitable and predictable
system of transfers.
The Equitable Share for local government will enable municipalities to provide basic services to low
income households and ensure basic services are provided. It is the responsibility of municipalities to
establish appropriate targeting mechanisms for passing this subsidy to the poor. The Department
has issued guidelines to assist municipalities in targeting poor households in the provision of basic
municipal services2.
What is the Local Government Equitable Share?
The Local Government Equitable Share (LGES) is one element in a system of transfers that flow to
local government. Along with local government’s own revenue raised mainly from its taxes and user
charges2, transfers make up the total resources available to local government. By definition,
transfers originate outside of local government – they are raised by other spheres of government
using revenue instruments particular to those spheres. In South Africa between 15 and 20% of all
local government revenue comes from national and provincial grants, depending on the method of
calculation. Some municipalities in rural provinces tend to be more dependent on national transfers
– in some cases national transfers make up over 50% of a municipality’s resources.
Within the CoCT’s accounting system, this funding source is referred to as “URP Grant” 3. In order
to be consistent with the City’s accounting records, ESF is referred to as the URP Grant in the main
report.
Municipal Budgets
2
3
E QU I T A B L E S H A R E A L L O C A T I O N
URP Grant Khayelitsha carries code GD7500151 and URP Grant Mitchells Plain carries code GD7500152
within the City’s accounting system.
The municipality within which the nodes are geographically located uses their own budgets to
address the underdevelopment and poverty in these nodes. Considerable amount of the funds on
the projects implemented in the nodes are funded by the municipalities.
Donor Funding and Private Sector Investments are another source of finance.
The External Financing Fund (EFF)
When loans are obtained from external sources, they must be paid into the EFF. The corresponding
cash should be invested until utilized for the purpose of acquiring fixed assets. When the external
loan is utilized to finance fixed assets in a service entity it should be recorded in an “advances”
account in the EFF. Where a loan has a fixed period the instalments should be calculated to
determine the cash that should be set-aside in the EFF. This is done so that there will be sufficient
money to repay the loan when it matures as well as any interest charges as they occur. When the
loan is an annuity loan, the cash required to be paid into the EFF should be based on the actual loan
repayments. Once the money has been received by the EFF, the cash would be used to repay the
loan. When the EFF is consolidated with the various services, the “advances made” account in the
EFF will contra with the “advances received” account in the various service entities.
EFF KHAYELITSHA
Actual Exp
2003_2004
Actual Exp
2004_2005
Actual Exp
2005_2006
Actual Exp
2006_2007
Actual Exp
2007_2008
Actual Exp
2008_2009
Sub-total:
Actual
spend
0910 Adj
Budget
2009_2010
1011
Original
Budget
2010_2011
1011
Approved
Budget
2011_2012
1011
Approved
Budget
2012_2013
Total:
planned &
actual
733,581
1,203,529
2,468,458
13,096,87
3
3,055,003
2,098,060
22,655,5
05
14,012,611
0
0
0
36,668,11
6
Health Services
1,753,987
6,125,419
141,104
1,319,709
470,392
96,726
9,907,33
8
13,116,398
2,250,000
250,000
238,912
25,762,64
8
Water Services
3,473,300
4,010,636
643,679
0
7,977,570
1,020,787
17,125,9
73
0
0
0
0
17,125,97
3
Transport
172,227
338,387
1,311,189
3,956,532
1,568,994
472,851
7,820,17
9
0
0
0
0
7,820,179
Parks
274,309
464,745
622,529
442,432
1,597,751
592,141
3,993,90
7
2,505,658
800,000
0
0
7,299,565
96,051
1,202,770
2,160,502
0
0
0
3,459,32
3
0
0
0
0
3,459,323
Planning and Building
Development
Management
1,167,468
531,933
711,309
101,351
0
0
2,512,06
1
0
0
0
0
2,512,061
Economic and Human
Development
0
0
1,391,386
180,763
32,047
0
1,604,19
6
0
0
0
0
1,604,196
1,450,634
0
0
0
0
0
1,450,63
4
0
0
0
0
1,450,634
0
115,000
39,900
253,031
0
0
407,931
0
0
0
800,000
1,207,931
Sport , Recreation and
Amenities
Tourism Development
Library Services
Environmental
Resource
Management
Specialised Technical
Services
0
191,476
0
0
0
0
191,476
0
500,000
200,000
0
891,476
Operational
Coordination
0
0
539,716
0
0
0
539,716
0
0
0
0
539,716
New Settlements
0
429,877
0
0
0
0
429,877
0
0
0
0
429,877
Metro Police
0
0
0
0
7,438
0
7,438
400,000
0
0
0
407,438
256,714
0
0
0
0
0
256,714
0
0
0
0
256,714
Governance &
Interface
EFF Khayelitsha per department
Sport , Recreation and Amenities
Health Services
Water Services
Transport
Parks
Tourism Development
Planning and Building Development Management
Economic and Human Development
Library Services
Environmental Resource Management
Specialised Technical Services
Operational Coordination
New Settlements
Metro Police
Governance & Interface
2%
0% 0%
1%
3%
1% 0%
0%
0%
3%
6%
36%
8%
17%
23%
Sport , Recreation and Amenities
Health Services
Water Services
Transport
Parks
Tourism Development
Planning and Building Development
Management
Economic and Human Development
Library Services
Environmental Resource Management
Specialised Technical Services
Operational Coordination
New Settlements
Metro Police
Governance & Interface
36%
22%
17%
8%
6%
3%
2%
2%
1%
0%
0%
1%
0%
0%
0%
100%
Operational & Soft EFF Khayelitsha over time
15,000,000
10,000,000
5,000,000
0
2003
2004
2005
2006
2007
2008
2009
2010
Sport , Recreation and Amenities
Health Services
Water Services
Transport
Parks
Tourism Development
Planning and Building Development Management
Economic and Human Development
Library Services
Environmental Resource Management
Specialised Technical Services
Operational Coordination
New Settlements
Metro Police
2011
2012
EFF M I T C H E L L S P L A I N
Sub-total:
actual
spend
0910 Adj
Budget
2009_2010
May
1011
Original
Budget
2010_2011
May
1011
Approved
Budget
2011_2012
May
1011
Approved
Budget
2012_2013
May
0
0
0
0
0
0
1,000,000
9,000,000
0
0
0
0
18,468,67
1
15,508,01
1
11,745,56
0
Total:
Planned
and actual
spend
Actual Exp
2003_2004
Actual Exp
2004_2005
Actual Exp
2005_2006
Actual Exp
2006_2007
Actual Exp
2007_2008
Actual Exp
2008_2009
Transport
2,065,634
6,251,703
2,880,612
1,270,722
6,000,000
0
Water Services
1,508,197
1,000,000
370,699
0
0
0
0
2,629,115
11,745,56
0
0
0
0
5,508,011
11,745,56
0
6,394,239
1,567,970
51,900
0
175,602
131,416
8,321,127
3,105,028
0
0
0
11,426,15
5
0
0
4,970,357
487,487
0
0
5,457,844
0
0
0
0
5,457,844
0
0
569,827
307,341
552,040
113,610
1,542,818
0
2,824,000
0
0
4,366,818
1,587,019
224,362
1,284,770
272,216
184,256
0
3,552,623
0
0
0
0
3,552,623
901,454
28,367
0
318,728
169,286
349,940
1,767,775
400,000
0
200,000
0
2,367,775
487,138
-821
1,100,000
175,328
0
0
1,761,645
0
0
0
0
1,761,645
0
0
0
170,029
79,811
100,000
349,840
0
0
0
0
349,840
114,091
0
0
0
0
0
114,091
0
0
0
0
114,091
0
0
0
0
23,948
0
23,948
0
0
0
0
23,948
Electricity Services
Sport , Recreation and
Amenities
Planning and Building
Development
Management
Operational
Coordination
Roads and Stormwater
Parks
Spatial Planning and
Urban Design
Health Services
Environmental Resource
Management
Metro Police
18,468,67
1
Spatial
Planning
and
Urban
Roads and Design
Stormwater 3%
EFF Micthells Plain per department
Health Services
1%
6%
Operational
Coordination
2%
Parks
3%
Transport
30%
Planning and
Building
Development
Management
9%
Sport , Recreation
and Amenities
18%
Water Services
9%
Electricity Services
19%
Environmental
Resource
Metro Police
Management
0%
0%
Transport
Water Services
Electricity Services
Sport , Recreation and Amenities
Planning and Building Development
Management
Operational Coordination
Roads and Stormwater
Parks
Spatial Planning and Urban Design
Health Services
Environmental Resource Management
Metro Police
30%
9%
19%
18%
9%
2%
6%
3%
3%
1%
0%
0%
Operational & Soft EFF Mitchells Plain over time
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
-2,000,000
2003
2004
2005
2006
2007
2008
2009
Transport
Water Services
Electricity Services
Sport , Recreation and Amenities
Planning and Building Development Management
Operational Coordination
Roads and Stormwater
Parks
Spatial Planning and Urban Design
Health Services
Environmental Resource Management
Metro Police
2010
2011
2012