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Finance Minister strengthens the hand of municipalities

23 February 2017

 

Finance Minister Pravin Gordhan has added R1-billion to the local government equitable share in the 2018-2019 Budget in view of rising household numbers and infrastructure maintenance requirements in cities.

 

Delivering his Budget speech in the National Assembly on Wednesday February 22, Minister Gordhan said Johannesburg would, together with other municipalities, play a critical role in achieving the objectives set out in the Integrated Urban Development Framework.

Minister Gordhan also allocated R18.4-billion to the Regional Bulk Infrastructure Grant and a further R12.5-billion to the Water Services Infrastructure Grant over the medium term. These allocations, he said, continued to prioritise water provision in the 27 most-impoverished district municipalities.

He said municipalities would be the key drivers in changing South Africa’s economy, adding that sustainable communities would require strengthened co-operation between the national government, provincial governments and municipalities.

Minister Gordhan noted that progress was being made by municipalities, including Johannesburg, in reversing the spatial legacy of apartheid through targeted investment in high-density corridors linking townships to cities.

In line with its Growth and Development Strategy 2040 (GDS2040), the City of Johannesburg is implementing new spatial plans based on the Transport-Orientated Development (TOD) Strategy. The developments in Johannesburg include the Rea Vaya Bus Rapid Transit (BRT) system and other transport systems.

“This spatial transformation is a massive challenge involving land acquisition and development, infrastructure and transport services, housing and industrial and enterprise support. Much of this depends on collaboration between the government and the private sector,” said Minister Gordhan

He said national government would continue to work with cities to improve the safety and reliability of public transport services. The minister added that all municipalities had undertaken a portfolio of catalytic, integrated urban development projects that would lead the way in reshaping South Africa’s cities.

They include:

  • Johannesburg’s “Corridors of Freedom”, now known as Special Development Zones, linking Soweto, Alexandra, Sandton and the CBD. This includes the new bridges on the M1 freeway;

  • Cape Town has also adopted the TOD Strategy, including the mixed-use development of the Bellville Transport Interchange, upgrading of the Phillipi East Station Precinct and the redevelopment of the Athlone Power Station; and

  • In Ekurhuleni, development along the corridor linking Tembisa to Kempton Park has been prioritised.

Gordhan said there had been a substantial investment in township precincts in response to the Neighbourhood Development Partnership Grant.
More than 190 projects had been completed and a further 55 were in the construction phase.

The Minister announced that the National Treasury was working with municipalities on measures to reduce the cost of dealing with construction permits, obtaining electricity connections and registering property.

He said the government continued to invest in improving the financial capability of municipalities. The Minister said the National Treasury and its provincial counterparts had agreed to focus their efforts on four “game changers”:

  • The new Municipal Standard Chart of Accounts, which will be implemented from 1 July 2017, contributing to greater transparency and consistency of municipal finances;

  • Targeted supply chain management interventions to achieve cost savings and combat fraud;

  • Enhanced revenue management, including appropriate tariff-setting, regular billing and effective collection systems; and

  • Improved asset management, including adherence to 8% of the value of assets being spent on their maintenance.

“If we make progress in local financial management, we will transform the lives of millions of people,” he said.

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