1. Presentation to the Portfolio Committee on: BEPP AND RECOVERY PLAN ON USDG 14 SEPTEMBER 2012

2. What is USDG? Schedule 4 Grant in terms of the Division of Revenue Act (DORA); Allocation to the metros to supplement their capital programme in respect of infrastructure development, land release; Leveraging additional capital financing to contribute to the development of human settlements and achieve the outcomes of Sustainable Human Settlements and Improved Quality of Household Life.

3. 3 Cabinet resolution in December 2010 that USDG be established MIG-Cities was established to promote integrated planning and to fund the urban built environment in the large cities MIG-Cities has, since been disestablished. USDG is intended as an instrument for metros to address linkage between public housing and economic growth to simultaneously contribute to Human Settlements Outcomes Background

4. Funding Funding allocation from the Human Settlements Development Grant (HSDG) and the previous MIG- Cities grant ; The funding is different from the MIG allocation.

5. Rationale for USDG Was introduced to address: – problems of inadequate control and management of investment in the built environment; – Inadequate coordination of planning and weak accountability of all role players; – Focus on the development of urban land and infrastructure that is intended to lay the foundation for local municipalities to gradually assume a greater role in managing built environment investments

6. Grant Outcome statements Sustainable human settlements and improved quality of household life defined by: – access to basic services and infrastructure – incremental improvements in security of tenure – access to social services and economic opportunities – improved rates of employment through skills development in the delivery of infrastructure – bridging the gap for infrastructure provisions within mixed income and mixed use developments

7. Outcomes: HS Plan to USDG OUTPUT 1: Investment in land and infrastructure development that is determined by need and guided by Integrated Development Planning and Land Use Management that promotes more compact and efficient built environment. OUTPUT 2: Investment in Infrastructure that:- i) Accelerates the provision of appropriately located serviced land with secure tenure and for accommodation for lower- income households, and simultaneously ii) Provides appropriately located serviced land to support economic development that results in job creation for the under-employed and unemployed urban dwellers.

8. Outcomes: HS Plan to USDG cont, OUTPUT 3: Investment in land that:- i) Accelerates the provision of appropriately located serviced land with secure tenure and for accommodation for lower-income households, and simultaneously; ii) Provides appropriately located serviced land to support economic development that results in job creation for the under-employed and unemployed urban dwellers.

9. Outcomes: HS Plan to USDG cont, OUTPUT 4: Human Capital & management capacity, including technical capacity Management Capabilities required for Built Environment Programme; Institutional and organisation arrangements (internal organisational arrangements, roles responsibilities, dedicated project management structures; Project Management processes (robustness of project identification, selection (assessment) and design process, Project implementation and procurement processes)

10. Outcomes: HS Plan to USDG cont, Intergovernmental coordination Supply Chain Management systems Oversight and Reporting arrangements (audit outcomes, reporting framework, oversight structures and arrangements, anti-corruptions strategy and systems) OUTPUT 5: Sustainable fiscal and financial management of built environment assets.

11. Built Environment Perf. Plan (BEPP) Integrated Plan that is compiled in terms of the USDG conditions and procedures as laid in the DoRA and the Grant Framework A Built Environment Performance Plan should be a practical vision that actively and consciously guides urban growth and development with the administrative and financial instruments necessary for implementation

12. BEPP cont, It should be a plan that confronts urbanisation by focussing on the need for land, services, shelter with security of tenure, jobs, transport, etc A plan that invests in preparedness to balance poverty and economic growth; The BEPP must include targets for the Medium Term Expenditure Framework, as well as s specific annual targets; The BEPP should be the basis for negotiation between the cities and other spheres of government including state owned enterprises

13. BEPP SUBMISSION DATES 1st Draft BEPP submission - 31 March BEPPs evaluation by the Panel - mid April 2 nd Draft BEPP submission - end May Review of 2 nd Draft BEPPs - mid June Final BEPP submission - 24 June 1st Tranche transferred to Metros - 7 July

14. Reporting Requirements, M & E Report on performance against the targets provided for in the BEPP Intermediate Results Indicators and in conjunction with the reporting requirements of MFMA Section 71 Municipalities must comply with reporting requirements as per DORA Section 9 (1) & Section 11 (2) The flow of the first instalment depends on the submission and approval of BEPP including agreed Intermediate Results Indicators; The flow of the 2nd, 3rd instalments is conditional upon submission and approval of signed-off quarterly reports

15. 15 IndicatorBudget Development of Cemeteries R 18 314 000.00 Water R 300 565 441.00 Land Acquisition R 62 000 000.00 Sub Total - Sewer/Sanitation R 157 537 753.00 Electricity R 23 500 000.00 Sports and recreation amenities R 33 000 000.00 Roads & Stormwater R 400 352 806.00 Bus and Taxi Facilities R 800 000.00 TOTAL R 996 070 000.00 TSHWANE BEPP 2012/13 There are no planned projects for informal settlements upgrading and social/rental housing Therefore - the City is not responding to all Outcome 8 outputs Roads & Stormwater takes the bigger share of USDG - R 400 352 806.00

16. Some of the City Strategies: Create the economic enabling environment in which investment can grow and jobs can be created Plan for urbanisation Provide improved services in in formal settlements and backyard rentals Provide Facilities which will make citizens feel at home Promote sustainable environment through the efficient utilisation of resources 16 CITY OF CAPE TOWN BEPP 2012/13 STRATEGIES & PLANNING

17. 17 IndicatorBudget Electricity Services R 149 305 000.00 Solid Waste Services R 50 000 000.00 Water Services R 184 200 200.00 Parks R 32 407 760.00 Sport, Recreation and Amenities R 73 570 000.00 Library Services R 13 504 919.00 Roads and Strormwater R 179 429 347.00 Transport R 3 596 520.00 Health Services R 9 700 000.00 Existing Settlements R 12 410 073.00 New Settlements R 127 498 117.00 Housing Land & Forward Planning R 22 035 120.00 Informal Settlements R 24 080 120.00 CITY OF CAPE TOWN BEPP 2012/13

18. 18 IndicatorBudget Development Services R 0.00 Urbanisation R 7 168 000.00 Social Development, Arts & Culture R 0.00 Spatial Planning and Urban Design R 0.00 Pre-Planning & Project Management Fees R 27 814 003.00 Province Allocation R 18 500 000.00 TOTAL R 935 219 179.00 CITY OF CAPE TOWN BEPP 2012/13 cont, The slide below illustrate Infrastructure priority areas and new housing projects Water services/provision takes the bigger share of USDG - R 184 200 200.00 The New Settlements Indicator includes library project which should be outlined under an indicator for libraries In overall planned projects do respond to identified strategies and Outcome 8 Large number of projects captured under wrong indicators

19. 10 km radius from Metropolitan node 5 km radius from Sub-metropolitan node DISTANCE FROM METROPOLITAN AND SUB-METROPOLITAN NODES Infrastructure priority areas and new housing projects Source: City of Cape USDG Presentation to Portfolio Committee – 29 August 2012

20. Key to development strategy or agenda is to service informal settlements, use well located land for higher density development. The plan highlight provision of efficient public transport to attracting nodes in order to promote regional integration in the City. Confirmation of strategy implementation - below slides highlight areas where above strategies are being realised. 20 ETHEKWINI BEPP 2012/13 STRATEGIES & PLANNING

21. Densification Top-Up KwaMashu Pinetown South CBD Mpumalang a Inanda Umkomaas Tongaat Umlazi KwaXimba Source: EThekwini USDG Presentation to Portfolio Committee – 8 August 2012

22. Ablution Blocks KwaMashu Pinetown South CBD Mpumalang a Inanda Umkomaas Tongaat Umlazi KwaXimba Source: EThekwini USDG Presentation to Portfolio Committee – 8 August 2012

23. 23 IndicatorNo. HouseholdsBudget 1.Formal Housing Densification Top-Up 1,000R40, 000 Servicing top-up 5,000R160,00 Purchasing of Strategic Land R56,000 Sub total 6,000R256, 000 2.Basic Community Services Ablution Blocks 12,100R188,280 Interim Services to Informal Settlements 3,300R66,000 Zones Plans 300,000R50,000 Sub total315,400R304,280 ETHEKWINI BEPP 2012/13

24. 24 ETHEKWINI BEPP 2012/13 cont, IndicatorNo. HouseholdsBudget 3.Bulk and Connector Infrastructure Water0 R 220,500 Sanitation0 R215,290 Civils0 R247,010 Solid Waste0 R8,720 Sub total0 R691,520 4.Support Programs R26,600 Grand Total321,400R1,278,400 Big share of USDG - the Metro will provide bulk and connector infrastructure at total budget of R691 520 000 Planned projects do respond to identified strategies and Outcome 8

25. 25 IndicatorBudget Electricity Services R 80 000 000.00 Sport, Recreation and Amenities R 24 800 000.00 Library Services R 13 800 000.00 Bulk Engineering Services R 366 733 000.00 Health Services R 25 000 000.00 Parks R 18 000 000.00 Cemetery R 22 000 000.00 Spatial Planning and Urban Design R 20 000 000.00 Informal Settlements Upgrade R 24 615 000.00 Land Acquisition R 40 000 000.00 Roads & Stormwater R 240 500 000.00 Water and Sanitation R 308 000 000.00 Mixed Development R 16 000 000.00 CITY OF JOBURG BEPP 2012/13

26. 26 IndicatorBudget Rental Stock R 39 300 000.00 Solid Waste R 35 000 000.00 TOTAL R 1 273 748 000.00 CITY OF JOBURG BEPP 2012/13 cont, Planned projects respond to all Outcome 8 outputs Bulk Engineering Services takes the bigger share of USDG - R 366 733 000.00 No clear indicators

27. 27 IndicatorBudget Electricity Services R 247 973 791.00 Sport, Recreation and Amenities R 29 800 000.00 Library Services R 1 700 000.00 Densification R 29 545 000.00 Social development, Arts and Culture R 37 250 000.00 Parks R 15 650 000.00 Cemetery R 3 750 000.00 Spatial Planning and Urban Design R 64 000 000.00 Disaster & Emergency Management Services R 18 200 000.00 Roads & Stormwater R 497 150 000.00 Water and Sanitation R 184 790 000.00 Traffic R 8 000 000.00 CITY OF EKURHULENI BEPP 2012/13

28. 28 IndicatorBudget Rental Stock R 8 000 000.00 Solid Waste R 2 700 000.00 Transport R 24 500 000.00 TOTAL R 1 173 008 791.00 CITY OF EKURHULENI BEPP 2012/13 cont, Total budget is below DoRA allocation – R1 212 537 000 Roads and Stormwater takes the bigger share of USDG - R 497 150 000.00 No clear indicators Nothing planned for informal settlements upgrade Precinct Stations Tokoza – Alignment of the project to Outcome 8 not clear

29. Strategies aimed at achieving integrated & sustainable human settlements: Develop a Compact City with improved integration of East and West areas N8 corridor development instruments – ignite nodal development – facilitate organic linear growth (not short term) – increased/improved connectivity & mobility Curb outward growth (settlement edge) Redevelop Botshabelo and Thaba Nchu ( as a new city node) Accelerate informal settlement upgrading Target strategically located vacant or underdeveloped land Implement an incentive-based LUM regime Enhance Regional Transport Efficiency Enhance Rural Development 29 MANGAUNG METRO BEPP 2012/13 STRATEGIES & PLANNING

30. What the City planned in response to identified strategies: Bigger portion of the USDG is allocated to servicing land/sites – R280 778 066. Less budget for informal settlements upgrading - but also forms part of serviced land/sites indicator Outcome 8 is covered by most identified indictors Not clear what will be the outcome of Large Cities Programme Requirements indicator 30 MANGAUNG METRO BEPP 2012/13 STRATEGIES & PLANNING

31. 31 IndicatorBudget Electricity Services R 2 000 000.00 Sport, Recreation and Amenities (Community & Sport Facilities) R 27 350 000.00 Development approval process (reduction of time for approvals) R 10 000 000.00 Improving capital financing R 20 000 000.00 Spatial Planning and Urban Design R 10 500 000.00 Large Cities Programme Requirements R 500 000.00 Land Acquisition R 19 500 000.00 Roads & Stormwater R 97 838 934.00 Serviced land/sites R 280 778 066.00 Informal Settlements Upgrading R 1 500 000.00 Social/Rental Housing R 16 000 000.00 TOTAL R 485 967 000.00 MANGAUNG METRO BEPP 2012/13

32. 32 IndicatorBudget Housing & LandR165,868,446 Water ServicesR167,131,554 SanitationR252,600,000 TOTAL R585,600,000 NELSON MANDELA BAY METRO BEPP 2012/13 The above budget is below the DoRA allocation of R592 870 000 In response to the strategic objectives, the Metro approach irt informal settlements upgrading is in two categories - Greenfields and In-Situ (Brownfield) The land for infill development identified in Fairview & Salisbury Metro human settlements strategy intends to achieve the following: Eliminate 71 411 housing backlogs by 2016; upgrade informal settlements; acquire strategic land for human settlements; develop integrated human settlements with a full basket of services.

33. 33 IndicatorBudget RoadsR105,000,000 SanitationR152,608,250 WaterR58,000,000 Land Acquisition and rehabilitationR17,764,000 RoadR57,200,000 Agriculture infrastructureR8,000,000 Economic Development InfrastructureR12,254,978 Public Safety and Health R12,500,000 ParksR2,000,000 CemeteriesR5,000,000 Community HallsR8,000,000 Sport & Recreation FacilitiesR9,000,000 BUFFALO CITY BEPP 2012/13

34. 34 IndicatorBudget HousingR43,818,600 Total BCM Capital BudgetR491,145,828 Operational BudgetR8,328,172 OVERALL BUDGETR499,474,000 BUFFALO CITY BEPP 2012/13 cont, Sanitation is allocated the bigger share of USDG - R152,608,250 Concern - budget allocation for agriculture projects Operational budget – amongst others for appointment of consultants To a certain degree planned projects do respond to identified Outcome 8

35. Urban Settlements Development Grant expenditure: 30 June 2012

36. DELIVERY PERFORMANCE Electricity for backyard dwellers Solid Waste Water and sanitation Retrofitting parks Sports and recreation amenities Transport projects Roads and storm water Social developments, Arts and culture New housing infrastructure Rehabilitation of existing projects Land acquisition Urbanization Spatial planning and Urban design Upgrading of informal settlements Provincial infrastructure programmes Human Capital and Capacity 36

37. BCMM: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

38. NMBMM: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

39. MANGAUNG: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

40. EKURHULENI: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

41. COJ: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

42. COT: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

43. ETHEKWINI: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

44. COCT: PERFORMANCE AS AT 30 JUNE 2012 AGAINST 2011/12 BUDGET

45. CHALLENGES No breakdown of 2011/12 BEPPs – portion of HS not clearly outlined Reporting by metros all over the show – as a result there is no certainty as to what to report and to who Difficulty in monitoring due to non-breakdown by projects, project description including amounts; USDG mistakenly viewed as the responsibility of 1 or 2 unit, yet it cuts across Metros not clear on what USDG can buy - owed to Human Settlements definition in draft USDG policy

46. Responsibilities to National : DoRA The national department must develop proper indicators for the outcomes The national department needs to have a structured forum to meet with municipalities on a quarterly basis Monitor and evaluate the financial and non-financial performance of the grant, including quarterly summary reports on performance across municipalities Provide support to municipalities with regards to human settlements delivery Undertake oversight visits to municipalities

47. Responsibilities to National : DoRA Facilitate strategic and spatial planning related to human settlements development Submit an evaluation report on the 2011/12 municipal grant to National Treasury by 14 December 2012 Provide systems (including the Housing Subsidy System) that support the administration of the human settlement delivery process Comply with the responsibilities of the transferring national officer outlined in the Division of Revenue Act (DORA) Review and approve BEPP and integrated human settlements implementation plan Develop built environment performance measurement indicators that take cognisance of associated sector departments norms and standards for access to services

48. Responsibilities to Municipalities: Submit 2011/12 annual reports in terms of the BEPPs and Implementation Plans to the transferring national officer on or before 28 September 2012 and to National Treasury by 14 December 2012 Ensure that the municipal planning on human settlements and the built environment development plan are consistent and aligned with national priorities and provincial human settlements plans Comply with the terms and conditions of the receiving officer as outlined in the DORA Submit BEPP with Human Settlements SDBIP portion

49. RECOMMENDATION Analysis of the current BEPPs and propose amendment Alignment of the USDG and HSDG needs urgent attention ; While the USDG process had its own pace and timing for 2011, this needs to be aligned to the main processes in DHS going forward, especially in terms of the HSDG planning and reporting process; Combined involvement in the crafting of the payment schedule – cash flow; Closely monitor and request recovery strategy from metros with spending below the benchmark during mid-year-review.

50. Recommendations cont. Developed USDG Business Plan template Established CFO forum; aims to discuss financial and project management challenges One on one session with the relevant Project managers and relevant officials Quarterly performance reviews Quarterly projects visits Task Team that includes the Dept’s Agencies and led by the Department’s PMU to assist municipalities with capacity constraints

51. Recommendations cont, TASKS RESPONSIBLE UNIT/S The national department must develop proper indicators for the outcomes (to be captured in the USDG Business Plan template) M & E The national department needs to have a structured forum to meet with municipalities on a quarterly basis IGR Monitor and evaluate the financial and non-financial performance of the grant, including quarterly summary reports on performance across municipalities M & E and Grant Provide support to municipalities with regards to human settlements delivery PMU & Entities Undertake oversight visits to municipalities ALL Comply with the responsibilities of the transferring national officer outlined in the Division of Revenue Act (DORA) ALL Finalise USDG Business Plan templatePlanning Review and approve BEPP and integrated human settlements implementation plan Planning

52. TASKSRESPONSIBLE UNIT/S Facilitate strategic and spatial planning related to human settlements development Planning Submit an evaluation report on the 2011/12 municipal grant to National M & E and Grant Develop built environment performance measurement indicators that take cognisance of associated sector departments norms and standards for M & E and Planning Provide systems (including the Housing Subsidy System) that support the administration of the human settlement delivery process M & E and MIS

53. PROGRESS TO DATE Implementation Task team formed CFO forum of Metros and CFO for Provincial Departments have been merged. The first CFO merged forum was held on the 13 August 2012. Provincial and Municipal Quarterly Reviews merged The first Provincial and Municipal Quarterly Reviews were held on 23 and 24 August 2012 Follow up Reviews planned for Gauteng Metros (Ekurhuleni, City of Tshwane and City of Johannesburg)

54. PROGRESS TO DATE cont. One on one sessions are planned to assist the struggling Metros BCM was visited on the 21 August 2012 to diagnose the situation in order understand support required A follow meeting is planned for September 2012 Monitoring and Evaluation Unit has developed indicators in line with outputs of the Grant Framework Planning unit developed a USDG Business Plan template Policy currently being reviewed to focus on human settlements mandate

55. THANK YOU