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End of Year Statement by Minister Zweli Mkhize on Progress Made by CoGTA in Implementing Programme of Action

It has been a hectic, challenging but also a very productive year for the Cooperative Governance and Traditional Affairs portfolio.

Around March this year we indicated that seven percent of the country’s municipalities were classified as well-functioning, about 31% as being reasonably functional, thirty-one percent as almost dysfunctional and the remaining 31% as dysfunctional or distressed.

The municipalities faced a number of perennial political, service delivery, financial management and governance as well as service delivery challenges.

We identified 87 dysfunctional municipalities that required urgent support to deal with governance, financial management and service delivery issues.  In addition, the National Treasury indicated that 166 municipalities facing serious financial challenges and that 122 have unfunded budgets. We launched the Municipal Recovery Programme (MRP), which is informed by the principles of CoGTA’s Back to Basics programme in order to assist struggling municipalities achieve a turnaround.

  1. THE MUNICIPAL RECOVERY PROGRAMME

Since April this year, we have undertaken Ministerial visits to the Free State, Mpumalanga, Limpopo, Eastern Cape, Gauteng and North West as part of implementing the recovery programme. Discussions were held with the Premiers, MECs for finance and local government, traditional leaders, business and other stakeholders to discuss and agree and on turnaround plans for the affected municipalities. Plans were finalised, with clear targets in terms of financial management, governance and administration as well as service delivery improvement. All municipalities have been directed to improve their audit outcomes and to manage public finances prudently.

  1. Debts Owed by Municipalities

A major challenge continues to be the high number of municipalities that are unable to pay their debts to Eskom and water boards. A lot of progress was made this year in dealing with this matter. Our position is that we need to find lasting solutions to the problem through strengthening municipalities as short-term solutions such as litigation will not solve the problem in a sustainable manner.

As at the 31st of May 2018, the total overdue debt to Eskom was over R14 billion. Government also had to deal with the dispute between municipalities and the SA Local Government Association with regards to jurisdiction with regards to the reticulation of electricity.

An Inter-Ministerial Task Team was set up to deal with these matters and an Advisory Panel was appointed to assist the IMTT. The recommendations were presented to Cabinet on 5 December 2018 and Cabinet adopted a framework for resolution of impasse on Eskom debt by municipalities.

Cabinet adopted recommendations of the IMTT on Eskom debt and gave two months for the implementation plan to be developed. The IMTT has achieved progress in getting a unanimity amongst Eskom and municipalities to adopt a binding and cooperative approach in resolving the huge debt owed by municipalities and avoid a court battle amongst themselves in line with intergovernmental relations framework.

1)    Recognition of the constitutional Mandate for the reticulation and supply of electricity of municipalities. The interpretation of Constitution means that service delivery agreements need to be drawn to regulate the relationship between municipalities and Eskom. This must take into account the infrastructure investment made by Eskom and the obligations of Eskom as a business to ensure that all services supplied realise the returns. The management of the agreement must ensure Eskom balance sheet is protected by the agreement.

 

2)    Nersa licensing procedures must take into account that licenses issued are in line with the above spirit of aligning responsibilities and facilitate resolution of any impasse between Eskom and municipalities.

3)    Restructuring of the Eskom debt to municipalities has to be looked into. This must be seen in the context of visible efforts by municipalities to honor agreements. This has to be done taking into account Eskom balance sheet, the history of each debt and various other relevant regulations in managing debts.

 

4)    Installation of prepaid meters must be introduced to improve the rate of collection. Existing evidence indicates much higher rates of collection from prepaid meters as compared to conventional meters.  The experience of the performance of prepaid meters must be tabled to cabinet to show lessons learnt in different municipalities where prepaid meters are already being implemented. This installation must be done in a manner that will not negatively impact on the fiscus. This means various options should be explored to ensure a package can be implementable without unreasonably passing the cost to consumers.  The implementation plan must provide for the protection of the indigent population in terms of the free basic services. The different situations applicable to Eskom and water boards must be analyses to avoid a one size fits all approach to the solution.

 

5)     Involvement of independent collecting agents must be considered to facilitate the installation and  the roll out of prepaid meters to improve the efficiency of collections. The experience of prepaid meters and private sector must be analyses to ensure the system is foul proof. The Directors Generals and CEOs of entities must provide a framework to analyse potential service providers, vetting them, registering them into a panel and auditing and monitoring them to eliminate unscrupulous conduct and ensure proper bench marking and achieve consistency of service and value for money for Eskom and municipalities.

 

6)    Strict management of defaulting municipalities. The Directors-General must create a protocol to detect defaulting municipalities and interventions to bring them to line long before there is a need for Eskom to take them to court. The protocol must involve holding municipal leaders to account and consequence management, which must be followed by statutory interventions by other spheres of government to ensure that government responds appropriately in line with intergovernmental framework and achieve better results for the utilities long before a need for court applications.

 

7)    Fixing municipalities is critical. COGTA and National Treasury must priorities the municipal recovery plan to ensure that the municipalities are turned around on issues of governance and administration, financial recovery, infrastructure and service delivery. Well-functioning municipalities are capable of collecting revenue and paying debts.

 

8)    Culture of payment must be promoted by all levels of government to encourage payment for services. A clear plan must be tabled to cabinet in this regard.

 

Cabinet will consider a detailed implementation plan in February 2019. It is urgent that such an implementation plant will go a long way to prevent future challenges of low collection for electricity and reduce the debt as well as promote responsible communities that take responsibility for payment of services. We have also made progress in dealing with litigation arising from debts owed to Eskom.

In Maluti-a-Phofung in Harrismith we established a committee comprising government, business and civil society to finalise a Recovery Action Plan following a court order on which we had cooperated as parties.  The committee has finalised the Plan and it will be submitted in the next few days to the Minister.Action is also being taken against fraud and corruption. The Directorate for Priority Crimes Investigation (Hawks) arrested four senior officials in Maluti-A-Phofung municipality and a director of a private company on allegations of fraud and corruption involving a security services tender.

In Emalahleni in Mpumalanga province, solutions based on constructive partnership between business and government have also been prioritized and a recovery plan is expected to be implemented in the first quarter of 2019. We want to follow the same approach for other affected municipalities. We thank the business community for working with us to find lasting solutions.

  1.     Promoting Good Governance and Fighting Fraud and Corruption

Building functional municipalities include ensuring clean governance. Fraud and corruption continue to be addressed with the assistance of law enforcement agencies. The Hawks are investigating municipalities, through the Clean Audit project.  Out of the 311 cases, 98 are in court, 178 are under investigation, while 35 are considered finalised or withdrawn.

A number of investigations are being undertaken in a few municipalities, probing fraudulent qualifications, alleged fraud and corruption or the appointments of candidates that did not qualify for certain posts. We are grateful to the Special Investigating Unit which has seconded staff to COGTA to assist us with such cases.

 

Since the amendment of the Municipal Systems Act in 2011, a total of 1651 municipal employees were dismissed for misconduct, and 130 resigned prior to the finalisation of the disciplinary proceedings. The offences include financial misconduct, corruption or fraud, gross misconduct involving dishonesty or gross negligence, as well as the breach of the code of conduct for municipalities. We have established a database and all new recruits are checked against the database to ensure that if they have been found guilty of any misdemeanour they are not appointed.

 

The despicable fraud and corruption reported at VBS Mutual Bank continues to receive attention. We will continue to support the various ongoing investigations and to take the necessary steps to ensure that those who stole funds from the poor face the long arm of the law.

I asked the affected MECs in terms of Section 106(4)(a) of Municipal Systems Act to investigate maladministration, fraud, corruption or any other serious malpractice. Provinces have announced action for example Limpopo Province announced that the governing party would withdraw seven mayors who were implicated in the VBS debacle. North West has also taken action while in Gauteng the forensic investigations are being undertaken.

Many municipalities have already taken action and have suspended Municipal Managers and CFOs as per the list below;

 

Municipalities that invested with VBS

No Municipality Province Capital plus interest Capital investment Outstanding Forensic report completed Suspended Officials  Mayor stepped down/ Cllr Suspended Police case opened by the council
1 Vhembe Limpopo 316 345 541       300 000 000  300 000 000 MM & CFO
2 Giyani Limpopo 153 254 435       150 000 000  148 656 000 CFO dismissed
3 Elias Motsoaledi(interest) Limpopo    100 000 000       100 000 000           48 247
4 Fetakgomo-Tubatse Limpopo 240 649 836       230 000 000  230 000 000 MM & CFO
6 Lepelle-Nkumpi Limpopo 155 343 824       150 000 000  150 000 000 MM & CFO
7 Collins Chabane Limpopo 122 410 521       120 000 000  120 000 000 MM & CFO
8 Emphriam Mogale Limpopo 83 428 490         80 000 000    80 000 000
9 Makhado Limpopo 62 734 416         60 000 000    60 000 000 Former MM
10 Merafong LM Gauteng 50 011 653         50 000 000    50 000 000 Forensic investigation is underway  No official or mayor suspended pending the completion of investigation
11 West Rand District Gauteng 77 319 603         75 000 000    75 000 000 Forensic investigation underway  No official or mayor suspended pending the completion of investigation
12 Moretele LM North West 50 447 438         50 000 000    50 000 000 Internal investigation underway The council tabled its intention to suspend the MM
13 Madibeng LM North West 31 504 247         30 000 000    30 000 000  Three officials  One councillor charged case number 47/9/2018
14 Mafikeng LM North West 83 440 312         80 000 000    80 000 000 Forensic investigation underway MM No councillor charged at this stage
15 Dr Ruth Segomotsi Mompati District North West 150 000 000       150 000 000  150 000 000 Internal investigation concluded and to be tabled in Council on 18 Dec 2018
The following municipalities invested and withdrew funds before VBS can be placed under curatorship
No Municipality Province Year
1 Polokwane Limpopo 2017/18
2 Capricorn Limpopo 2015/16
3 Thulamela Limpopo 2016/17
4 Makhuduthamaga Limpopo 2017/18
No Information
Provinces appointed the following forensic Companies to investigate VBS:
1. Gauteng Gauteng – Deloitte Still awaiting the finalisation investigation
2. Limpopo Grant Thornton PS Advisory (Pty) Ltd Investigation finalised and report still outstanding
3. North West Sekelaxabiso Investigation finalised and report submitted to CoGTA

 

We await full official reports from the provinces on the outcome of the investigations.

Last week I responded to the Public Protector who requested information from COGTA as part of her investigation into the VBS case. We will provide any support that she requires as she probes this scandal.

  1. Municipalities under administration: Section 139 Interventions

A number of municipalities are currently being administered by provincial governments under Section 139 of the Constitution. These interventions were triggered by challenges ranging from lack of service delivery, financial mismanagement, and deficiencies in governance systems and administration.

 

We continue to monitor progress made by the municipalities and to provide support. Over the past two years, since the last local government elections, there has been 27 interventions which were invoked in seven provinces. Of these interventions, 24 are ongoing or current.

 

The North West has eight current interventions, which is the highest number of current interventions in one province. The municipalities concerned are Ditsobotla, Ramotshere-Moiloa, Maquassi Hills, Kgetlengrivier, Kagisano-Molopo, Naledi and Mahikeng local municipalities, as well as Ngaka Modiri Molema District Municipality. Cabinet also imposed a section 100 intervention on the province and took over the oversight over the province including the local government sphere. A lot of work is being done by the IMTT on North West to achieve the recovery of provincial departments including municipalities.

 

North West is followed by KwaZulu-Natal with seven interventions, at Emadlangeni, Edumbe, Inkosi Langalibalele, Mpofana and Dr Nkosazana Dlamini Zuma local municipalities, as well as Umzinyathi and Uthukela district municipalities. The Free State and Eastern Cape jointly hold the third position with each having three interventions.

 

Mafube, Masilonyana and Maluti-a-Phofung local municipalities are the three Free State municipalities with ongoing interventions, while in the Eastern Cape the three municipalities concerned are Walter Sisulu, Great Kei and Enoch Mgijima local municipalities. The Western Cape, Limpopo and Gauteng each have one intervention at Kannaland LM, ModimolleLM and Emfuleni LM, respectively.

 

  1. Infrastructure and Service Delivery

Beyond promoting good governance, we also focus on improving service delivery so that our people can have water, sanitation, electricity and other important basic services.

In August we announced the deployment of more than 80 engineers and town planners in 55 out of the 87 identified dysfunctional or distressed municipalities to build capacity to plan, deliver, operate and maintain infrastructure. Our active interventions and support has led to some progress. There are some distressed municipalities that have improved and which in our view deserve to be removed from the list of 87 distressed and dysfunctional municipalities soon.

Distressed Municipalities that have shown some improvements that may be removed from the dysfunctional/distressed list of 87

 

EASTERN CAPE
District Municipality Local Municipality % Spent @ end Sept 2018 Comments
GAUTENG
Sedibeng Lesedi 30 Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

Improvement in governance issue – regular sitting of the   SCM committees and the appointment of service providers

Achievement of targets on acceleration/Implementation Plans and improved payment to service providers

West Rand Rand West City 38 Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges.

Achievement of targets on acceleration/Implementation Plans and improved payment to service providers

KWAZULU-NATAL
Uthukela Inkosi Langalibalele 30 Projects at implementation phase

Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

Umkhanyakude Jozini 32 Projects at implementation phase

Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

Ilembe Ndwedwe 52 Projects at implementation phase

Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

Zululand Abaqulusi 100 Projects at implementation phase

Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

MPUMALANGA
Nkangala Emalahleni 30 Review of project documentation, project/construction management advice and guidance

Regular site meetings are held – interaction with service providers on technical matters and mitigation of challenges

NORTH WEST
Ngaka Modiri Molema Ditsobotla 43 MISA has been supporting the municipality to verify projects together with provincial MIG teams to ensure fast tracking payment of invoices as the municipality is put under the cost reimbursement process.

Most of the governance issues have been addressed as the municipality has appointed the Municipal Manager and the Administrator has been appointed.

WESTERN CAPE
Cape Winelands Langeberg 19 Langeberg Municipality and was identified as municipality in distress  , because of MIG under-expenditure in the year of 2016/17 due to a huge amount added to the MIG allocation for sports projects during the same year of implementation.

The municipality is functioning well. MIG expenditure was at 31% end October and at 48% at the end of November 2018 meeting their 40% threshold.

Garden Route Bitou 19 Bitou Municipality was identified as a municipality with risk, because of MIG under-expenditure in the year of 2016/17 due to a huge amount added to the MIG allocation for sports projects during the same year of implementation.

The municipality is functioning well. MIG expenditure was at 31% end October and at 48% at the end of November 2018, meeting their 40% threshold.

Garden Route Oudtshoorn 20.5 MISA has been supporting the municipality in the past through the Back to Basics Programme. Their technical and other capacity improved over the past 2 years and they are doing well, so much that they graduated from the Back to Basics Programme. Most of the governance issues have been addressed through assistance from the Western Cape Provincial Government. MIG expenditure was at 24% end October and at 31.5% at the end of November 2018 and will meet their 40% threshold in Dec 2018.
Overberg Swellendam 33.9 MISA has been supporting the municipality in the past through the Back to Basics Programme. Their technical and other capacity improved over the past 3 years and they are doing well, so much that they have graduated from the Back to Basics Programme. Most of the governance issues have been addressed through assistance from the Western Cape Provincial Government. MIG expenditure was at 33.9% end October and at 40.6% at the end of November 2018 to be meet 40% threshold.
Overberg Cape Agulhas 69.8 MISA has been supporting the municipality in the past through the Back to Basics Programme. Their technical and other capacity improved over the past 3 years and they are doing well, so much that they have graduated from the Back to Basics Programme. MIG expenditure was at 69.8% end October and at 69.8% at the end of November 2018.
Central Karoo Central Karoo District Municipality N/A MISA has been supporting the municipality in the past through the Back to Basics Programme. The capacity has improved over the past 3 years and they are doing well, so much that they are busy graduating from the Back to Basics Programme.

 

We had indicated earlier this year that when local municipalities are unable to spend their MIG funds, the practice of sending the money back to the National Treasury should cease, and the money should be given to the district municipalities to run the infrastructure projects instead. In this way, the poor who need water, sanitation, electricity and other municipal infrastructure would not be penalised.

 

The National Treasury, in consultation with COGTA, announced this week that the MIG funds would be reallocated from local municipalities that had failed to spend them to district councils.

 

The table below provides a break-down of the affected Municipalities that have had their funds reallocated

 

Category No. Municipality 2018/19 Main allocation Roll-overs Adjustment 2018/19 Adjusted allocation
      R ‘000 R ‘000 R ‘000 R ‘000
Eastern Cape
B EC104 Makana 23,976 – (23,976) 0
C DC10 Sarah Baartman District + 23,976 23,976
Free State
B FS181 Masilonyana 23,019 -(23,019) 0
C DC18 Lejweleputswa District + 23,019 23,019
Northern Cape
B NC071 Ubuntu 9,862 -(9,862) 0
C DC7 Pixley Ka Seme District + 9,862 9,862
North West
B NW393 Mamusa 15,462 -(15) 15,447
C DC39 Dr Ruth Segomotsi Mompati District 135,482 + 15 135,497

 

The National MIG Unit in collaboration with the MISA District Technical Support Teams will identify municipalities with challenges or problems and provide support to correct the situation.

 

Municipalities in the COGTA Watch List

Through our monitoring and support mechanisms, we have also identified municipalities that are at risk of not spending at least 40% of their 2018/2019 MIG allocations, and which may be at risk of having their funds stopped next month, in January 2019.

 

Through MISA the following measures will be undertaken to mitigate the risk of stopping of MIG funds in January 2019:

  • Assist municipalities in project and construction management (project monitoring and reporting)
  • Increase site supervision to ensure that targets on the Implementation Plan are met.
  • Assist municipalities on the reporting on ‘MIGMIS’ to ensure that expenditure is correctly captured
  • Deploy young graduates, where feasible, to enhance the technical capacity in municipalities.

 

Letters are being sent to the mayors to inform them of the risk and actions that may come their way.

If the funds are stopped, they will be re-allocated to the district municipality as per agreement with the National Treasury. In the event of that mechanism not working, we are also looking at invoking Section 20/21 of the Division of Revenue Act (DORA) and convert the grant into an indirect grant and appoint an implementing agent to manage it on their behalf.

 

To be able to provide more support, MISA has advertised posts for more engineers and town planners to fill the remaining vacancies by 31 March 2019. We are also investing in long-term capacity of municipalities through a skills development programme that includes the following;

  • An Apprenticeship Programme with 170 Apprentices
  • An Artisan Placement programme with 101 Artisans and Process Controllers,
  • An Experiential Learnership Programme with 47 Learners,
  • A Young Graduate Programme with 59 Young Graduates,
  • A Technical Skills Training Programme for Municipal Officials aimed at training 500 municipal officials.

The Municipalities that are on the COGTA Ministry’s Watch List, which are at risk of having their MIG funds stopped in January are the following;

No. Municipality 2018/19 Main allocation Expend @ 30 Sept Expenditure as a % of allocation           
    R ‘000 R ‘000 R ‘000  
Eastern Cape
DC44 Alfred Nzo DM 367 914 57 082 13.88% Slow procurement affected the 1st quarter performance and some projects on the 2018/19 PIP were not registered however the matter had been resolved.
EC102 Blue Crane Route LM 14  117 87 0.62 Procurement challenges (delayed appointment, bid committee seating, etc.) and contract management (litigations) challenges affected performance of the municipality in the 1st quarter.

Capacity challenges at technical department

EC137 ENgcobo LM 37 794 1 082 2.86 Municipality had capacity (technical resource) challenges however the situation has improved with appointment of a technical director and a CFO in August 2018.
EC108 Kouga LM 31 186 3 685 11.82 The Technical Director has very little support with reference to capacity and expertise – Project implementation is cumbersome.

Due to the impact of the drought on the municipality, the municipality has focused on the implementation of drought relief programmes rather than on MIG expenditure.

EC104 Makana LM 23 976 0 0 Technical capacity in municipality is very limited with a high vacancy rate

The technical director is suspended and majority of technical positions are vacant;

Dilapidated infrastructure and Lack of Operation & maintenance;

Lack of sound financial management are affecting the municipality (Makana has no CFO);

Bloated structure (non-core departments);

EC441 Matatiele LM 59 690 5 339 8.94 Municipality is experiencing service delivery protest that are hindering performance.
EC122 Mnquma LM 61 352 7 596 12.38 Procurement challenges (non-sitting of the bid committees) affected the municipal performance in the 1st quarter and also delayed approval of the budget by council due to political instability affected the performance.
EC154 Port Saint John’s LM 33 705 0 Municipality is struggling to cope with the backlogs created by the under-performance in the previous financial year.

Large scale disruptions occurred due to protest actions

Free State
FS205 Mafube 22 064 0 0 The governance and administrative challenges at the district municipality has a serious impact on the local municipality.

Invoices processed for payment cannot be finalized due to the absence of personnel at the DM to sign-off.

FS181 Masilonyana 23 019 0 The MIG funding to the municipality has been transferred to the district.

The lack of capacity in the technical department results in no project implementation

Governance and administrative challenges in the municipality has a direct impact on service delivery

FS161 Letsemeng 29 949 2 732 9 Municipal budget constraints/cash flows delayed implementation of projects. Land mining dispute and community strike has affected the implementation of infrastructure projects since Sep 2018.12.13

 

 

KwaZulu-Natal
KZN223 Mpofana 11 878 156 1.32 The municipality is under Section 139 (b) intervention. The Municipality has unplanned expenditure and is failing to adhere to the grant conditions, KZN CoGTA could not process invoices until the municipality complies with the grant requirements
KZN225 Msunduzi 193 316 12 880 6.66 The municipality’s unstable administration leadership is affecting the MIG Programme. The PMU does not only deal with MIG projects and is not sufficiently capacitated even though the municipality has advertised for Project Managers.

The municipality is not receptive of MISA technical support and the main challenge raised on assessment was lack of funding to replace aging infrastructure.

DC22 UMgungundlovu 99 828 11 415 11.44 Municipality was engaged for monitoring of MIG expenditure on the 24 and 29 October 2018 wherein a MIG acceleration plan with revised cash flow projections which aims to improve expenditure by the end of the financial year.
DC24 Umzinyathi 184 485 24 981 13.54 The municipality is under Section 139(b) intervention

The PMU Manager position has been advertised.

KZN436 Dr Nkosazana Dlamini Zuma 26 666 3 772 14.15 The municipality is under Section 139(b) intervention.

The Technical Director and the PMU manager positions are both vacant and the advertisement and appointment are planned before December 2018.

Limpopo
DC47 Sekhukhune DM 464 936 45 719 9.83 Poor project and contract management by municipal officials.

Appointment of service providers without capacity to implement projects.

Poor workmanship in some of projects implemented.

LIM341 Musina LM 28 492 410 1.44 Due to the financial difficulty experienced in the municipality funding is being diverted away from projects resulting in service providers not being paid.

Although the municipality has a PMU manager and a Technician, the Technical Director not yet appointed.

LIM361 Thabazimbi LM 32 600 0 0 Project planning for the current year project is done by the Waterberg DM and there’s a delay in finalising the designs by District municipality.

The municipality has long list of litigations and the transfer will be made based on the invoices verified for payments to safeguard MIG funds.

LIM354 Polokwane LM 330 877 45 225 13.68 Late appointment of service providers due to internal supply chain processes.

The municipality has outsourced PMU functions and has indicated that they don’t require the support that Misa is providing.

Mpumalanga
MP307 Govan Mbeki 56 651 7 387 13 Low capacity in the technical department. The PMU section as at 30th September 2018 had only two technicians assisting the Programme Management Unit (PMU) manager as project managers for all the projects

PMU manager plays a multi-functional role.

SCM meetings are continuously cancelled.

Project procurement dates have had to be rescheduled several times.

Northern Cape
NC074 Kareeberg 7 972 0 0 The procurement of contractor was delayed.

The municipality has appointed the same contractor for both MIG projects contractor is under performing and not reaching monthly production targets and subsequently the cash flow targets.

NC075 Renosterberg 7 426 430 6 Municipality has delayed appointments due to SCM processes.

Poor reporting on MIG MIS resulting in expenditure not been accepted by provincial MIG.

NC076 Thembelihle 9 352 205 2 SCM delays in contractor appointments. Municipality has not been consistently reporting on MIG MIS resulting in expenditure not being registered/recognised by provincial MIG.
NC085 Tsantsabane 15 312 54 0.5 PMU office not fully resourced.

Consultant appointed however poor reporting on MIG MIS resulting in expenditure not been accepted/recognised by provincial MIG.

Delays in contractor procurement.

NC087 David Kruiper 24 652 0 0 Melkstroom bulk water project affected by cancellation of water use licence by DWS

Klein Mier project has been moved into the 2019/20 year.

Community strikes have stopped the Louisvale roads project for more than 1 month

North West
NW375 Moses Kotane LM 146 535 16 941 12 Late appointments of contractors: 12 were appointed, 3 on tender evaluation and 3 projects are waiting for DWS approval.
Western Cape
WC012 Cederberg 15 434 1 000 11.5 New PMU manager appointed -no technical person was appointed for a year.

No proper planning – 2 projects under construction and both required intervention

WC053 Beaufort West 13 776 103 1.1 Technical capacity is very low in the PMU and technical managers are appointed in acting capacities.

Project management capability is limited.

The quality of work is not acceptable on roads projects

WC041 Kannaland 10  156 1 200 12.4 Municipality did not plan the correct projects in the past to address the W&S needs due to low capacity of Technical staff.

Not enough funding for all the backlogs – RBIG funding is non-responsive.

Lack of capacity, slow start of implementation.

  1. Support to 57 municipalities to boost economic development

We have identified 57 municipalities with a potential to boost the economy, in contribution to the President’s economic stimulus package announced in September. They include the eight metropolitan municipalities, six district municipalities and 43 local municipalities.  The municipalities account for over 87% of all households living in informal settlements or backyard dwellings and for over 70% of all backlogs in South Africa.  They are also the areas in which 84% of the GDP of South Africa is generated. Over 10 000 projects totaling over R57 billion each financial year are presently being implemented in these municipalities.  Support to these municipalities to invest in economic recovery will be a key focus area in the new year by the IMTT on Service Delivery.

This year has seen several areas being hit by the sewer spillages and other problems which impugn the dignity of our people. We have intervened in a number of areas through MISA and have also called in the SA National Defence Force for support in areas such as Ditsobohla and Emfuleni Municipalities.

We are talking to various private sector stakeholders in search of funding models to accelerate the refurbishment of faulty infrastructure such as sewerage treatment plans and the connection of bulk water to reticulate water to nearby villages.

We have also begun working on a Municipal Infrastructure Fund to expand infrastructure and refurbish derelict or degenerating infrastructure in municipalities and to support new growth, human settlements and other investments.

The Fund will mobilise institutional and Development Finance Institutions, locally and internationally, and respond to new infrastructure development requirements, rehabilitation and renewal of aging infrastructure together with operations and maintenance.

  1. Building viable municipalities

As we implement the Municipal Recovery Programme, we are also cognizant of the fact that many municipalities are dysfunctional as a result of the design that rendered them structurally non-viable due to being an amalgamation of small towns and villages and peripheral townships, without their own revenue base and only dependent on the transfers from the fiscus. We are reviewing wall to wall municipalities as well as the redetermination of the powers of local and district municipalities. We need to decide whether it is ideal to deliver services based on district or local municipal model.

  1. NATIONAL DISASTER MANAGEMENT

Significant strides made by the IMTT on drought and Water Scarcity. The IMTT on Drought and Water Scarcity, through the technical work of the National Joint Drought Coordinating Committee (NJDCC), mobilised an amount of R3.2 billion to deal with drought and water scarcity with effect to October 2018. The country has been able to break the drought through integrated efforts of state and non-state role players including communities in line with the provisions of the Disaster Management Act 2002.

This milestone was effected through the Appropriations Act, No 4 of 2018, Section 6 (1) by the Minister of Finance. The Appropriation Act, 2018 was signed off on 02 August 2018.

The South African government has also allocated an amount of R1.62 billion to deal with storm damages affecting WC and KZN provinces during July and October 2017 respectively. The intervention will see over 3250 houses being repaired, 37 roads networks being fixed, 109 schools being repaired, 13 health facilities, over 143 municipal infrastructure being repaired or rebuilt and 16 government buildings being repaired or rebuilt.

Fire services play a critical role in the protection of the country’s network of economic infrastructure.

A significant number of fire services across the country are not in a position to adequately protect strategic assets in their areas of jurisdiction, due to an inappropriate policy and legislative framework, ambiguous assignment of roles and responsibilities across the three spheres, inadequate funding and resourcing of fire services to name but a few.

We have identified the Fire Brigade Services Act of 1987 as too old and requiring modernization in this democratic era and will be submitting the draft White Paper on Fire Services to Cabinet for approval.

  1. TRADITIONAL AFFAIRS

a.    Status of Kingships

Government has issued a certificate of recognition to His Majesty Kumkani Zanozuko Tyelovuyo Sigcau as the King of AmaMpondo in terms of the Traditional Leadership and Governance Framework Act, 2003. We wish Kumkani and the AmaMpondo people well in this new era.

On 26 September 2018, the High Court dismissed the application for leave to appeal the judgement that upheld the findings of the Nhlapo Commission and which determined Mr Thulare Victor Thulare as the rightful King of Bapedi.  Government has noted that the Supreme Court of Appeal has now been petitioned to appeal the ruling.

We will cooperate with the courts towards the finalization of this dispute, whereafter we will begin with the process of recognizing the rightful King of Bapedi people as provided for in Section 9(2) of the Traditional Leadership and Governance Framework Act.

b.    Customary Initiation

We are currently in the middle of the summer initiation season and the country has sadly witnessed a loss of lives of initiates. Far too many young lives are lost season by season with the Eastern Cape experiencing the highest number of deaths year in and year out.

Government is currently working closely with all stakeholders, especially, traditional leaders and parents to ensure that challenges of initiation are addressed not only in one province but all provinces were this tradition is practiced.

The local monitoring committees should intensify their efforts to monitor their oversight and where instances of criminality are detected, together with SAPS they must act and bring all those responsible to book.

We have issued guidelines which amongst others direct that initiates must be given drinking water and we are aware that this is not happening yet.

As we stand today, the statistics for those who have lost their lives are as follows:

–       Eastern Cape    = 15

–       North West     = 2

–       Western Cape    = 2 and

–       Northern Cape    = 2

The Customary Initiation Bill which will help regulate the customary initiation practice was adopted in the National Assembly and referred to the National Council of Provinces. The NCOP processes will commence in 2019.

Government will continue to pursue the Zero Deaths campaign and shall not rest until it is realized. We cannot continue losing our young people in this manner.

 

c.     As part of promoting economic activities and sustainable development in rural areas, COGTA has over the last few months embarked on the conceptualisation of an Agrarian Revolution Programme. 

Working with traditional leaders, the Agrarian Revolution Programme seeks to identify available communal land and mobilise key role players in the agricultural value chain to support communities to ensure that the land is put to good agricultural use.

CONCLUSION

A lot of work has been done over the past few months to build viable municipalities which deliver services efficiently to our people while also creating space for economic development and job creation in the municipal spaces.

A lot more work still remains to be done, working with other departments and other spheres of government.

We thank all stakeholders for supporting our work as this calendar year draws to a close.

Enquiries

Musa Zondi

Cell: 072 800 6449