Neighbourhood Development Partnership Grant

1

Neighbourhood Development Partnership Grant 1st
Quarter Report for Select Committee on Finance
(10 October 2006) Presented by Li Pernegger
(Chief Director NDP Unit)
2
NDPG Objectives

• To provide municipalities with assistance to
  develop appropriate project proposals for
  property developments in townships new
  residential neighbourhoods that include the
  construction or upgrading of community
  facilities, where appropriate, attract private
  sector funding input (DoRA, 2006)
• To fund township projects that provide community
  infrastructure create platform for commercial
  investment that
• Support project partnerships that improve quality
  of life facilitate private sector investment
• Facilitate mobilisation of dead capital in
  residential stock
• Support retention of local buying power
• Enable ongoing economic development

3
Status Quo

• Dual nature funds Technical Assistance Capital
  Grant allocated for MTEF period
• NDPG Budget
• Year 1 ? R50m Technical Assistance
• Year 2 ? R950m Mostly Capital Grant
• Year 1 ? R1.5bn Mostly Capital Grant
• To be in synergy with other grants that have LG
  focus, not duplication
• Capacity for Round 1
• Unit established in July
• Outsourced capacity mostly (staff only end 2006)
• Applications closed end August 2006

4
Applications to Date

• 243 applications from over 60 municipalities
• Aggregate request for R5.1bn for variety of
  projects costing R47bn in total (but only R6bn
  if strip out KZN non-eligible total project costs
  of R41bn)

Includes KZNs R41bn bulk infrastructure total
costs!
5
Project Categories

• MPCCs precinct development form 66 of bids by
  value
• Non-eligible applications form 21 of bids
  (mostly infrastructure)
• Other bids are for various community facilities

6
NDPG Process

• Collation some database verification in-house
• High level recommendations implications,
  preliminary projects evaluation complete
• Criteria
• ? ?

7
High-Level Observations 1

• Some applications demonstrate
• Visionary, big bang ambitious township
  redevelopment
• Many sports community facilities related
  projects
• Related to broader development strategic aims of
  LGs own IDP, or NDPG
• Private sector interest emerging strongly
  especially in bigger township projects, leverage
  on the increase

8
High-Level Observations 2

• Some applications not compliant
• Lack of alignment to NDPG goals
• No municipal Council Resolution
• Not in a township (often no maps provided)
• Other emerging issues
• Township renewal not prioritised enough across SA
• Big cities under-represented or not represented
  at all
• Applications for former white nodes on basis of
  changed demography
• Applications for areas adjacent to, but not in,
  but with direct impact on townships
• Project management capacity in LGs poor handle
  on project lifecycle costs sustainability issues

9
Going Forward

• Shortlist of Top 35 projects adopted in principle
  after review by Treasury NDPG Reference Group
• Now further verification, budget adjustments,
  allocations conditions underway of Top 35

10
Going Forward

• Top 35
• R88m (TA) R1.97bn (CG) with total project cost
  of R4.7bn
• 22 precincts or town centre developments (with 11
  emerging precinct developments) 3 MPCCs
• Includes strong private sector investment
  leverage potential
• Strategic alliance model ? 10-15 year programme
  budget over next 10 - 15 years
• Possible 2nd Round applications in October (?)
  2006