Municipal Infrastructure Grant

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Municipal Infrastructure Grant Sport and
Recreation 15 February 2005
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What is the MIG Programme?

• MIG Programme is a new municipal infrastructure
  funding arrangement that combines all the
  existing capital grants for municipal
  infrastructure into a single consolidated grant
• The consolidated programmes
• Local Economic Development Fund (managed by dplg)
• Water and Sanitation Capital Grant (managed by
  DWAF)
• Urban Transport Fund(managed by DoT)
• National Electrification Programme (managed by
  DME)
• Building for Sport and Recration Fund (managed by
  SRSA)
• Consolidated Municipal Infrastructure Programme
  (managed by dplg)
• The MIG Programme does not replace the roles of
  other sectors in policy and regulation.

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Vision of MIG

• The vision of MIG is to provide all South
  Africans with at least a basic level of service
  by the year 2013 through the provision of grant
  finance aimed at covering the capital cost of
  basic infrastructure for the poor.

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MIG approach

• MIG is based on a demand driven approach where
• All infrastructure grants are integrated into one
• Infrastructure planning is done by municipalities
  themselves
• Municipalities play a central role in
  co-ordinating development activity and the
  delivery of municipal infrastructure in their
  jurisdictions
• Funding allocations are linked to Integrated
  Development Plans (IDPs)
• Communities participate in identifying projects
• Capital grant allocations are predictable
• Service delivery is decentralised to
  municipalities
• Programme co-ordination takes place through one
  national structure, called the MIG Unit.

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• Sector departments
• Policy making, including the setting of norms and
  standards for the sector and services
  infrastructure,
• Support municipalities to prepare and implement a
  service development plan (e.g. Water Services
  Development Plan),
• Monitor the performance of municipalities in the
  provision of sector infrastructure and compliance
  with service related conditions (e.g. meeting
  targets for specific services),
• Provide support to municipalities in terms of
  feasibility studies, business plans and
  implementing services capital projects,
• Initiate intervention related to specific
  services activities,
• Sector planning oversight (regional service
  development plans)
• Ensure that funds allocated for sector
  infrastructure are properly spent.

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MIG allocation
Division of the MIG total fund allocation
MIG Fund
Allocation to all municipalities according to MIG
formula
SMIF
Capital fund Municipalities
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MIG Formula
Capital fund Municipalities

• MIG(F) B P E N M
• B- Basic residential infrastructure (new and
  rehabilitated)
• Proportional allocations for water supply and
  sanitation, electricity, roads) and other
  (Street lighting and solid waste removal)
• P- Public municipal service infrastructure (new
  and rehabilitated)
• E- Allocation for social institutions and
  micro-enterprises infrastructure
• N- Allocation to all nodal municipalities

NB Sport and recreation projects fall under the
P-Component
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The MIG Formula 

• Making the horizontal split
• Having the national totals, as described, the
  amounts then need to be split to each metro and
  local municipality. This is referred to as the
  horizontal split. The split is based on the
  following parameters.
• Backlogs in specific services.
• Poverty.
• Identification as a node.

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The MIG Formula 
Making the vertical split (2004/2005 2005/2006
financial years) As South Africa has a two tier
system of local government, the amount allocated
to each local municipality area needs to be
shared 'vertically' between the local
municipality and district municipality. The
methodology for doing this is based primarily on
an assessment of where the function for each
municipal service lies.
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2004/2005

• The MIG allocations for 2004/2005 financial year.

NB The allocations are based on the MIG formula
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2004/2005

• The total expenditure on infrastructure projects
  by Municipalities up to December 2004 was R2,
  085.16 million. This is 47 of the total
  allocation of R4 439.94 million.
• The total amount disbursed to Municipalities from
  dplg up to December 2004 was R2 490.92 million
  which is 57 of the total allocation.

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2004/2005

• The value of registered MIG projects up to end of
  December 2004 for multi purpose sport centre /
  fields is R63.39 million.
• The actual expenditure on MIG projects up to end
  of December 2004 for multi purpose sport centre /
  fields is R6.507 million.
• 19 206 households benefited from completed multi
  purpose sport centre / fields by the end of
  December 2004
• The scenario reflects that the implementation is
  behind schedule. It implies that the Building
  for Sport and Recreation Department should
  enhance its support to municipalities.

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MIG Allocations 2005/2006

• Prioritized existing commitments from CMIP and
  DWAF
• Allocation to 88 municipalities during 04/05
• Additional municipalities to be introduced
• Medium Capacity Municipalities - 60
• Low Capacity Municipalities - 11
• Total - 71
• Total receiving municipalities for 05/06 159

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The MIG Parameters 
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2005/2006

• The MIG allocation for infrastructure in the
  2005/2006 financial year is R5, 236 161.000
  million.
• On 20/12/2004 a letter was sent to Sport
  Recreation with the following.
• 1.      The provisional MIG allocations to
  municipalities for the 2005/2006 financial year.
• 2.      A copy of the letter sent to their
  office on 14 October 2004 regarding the Service
  Levels and Unit Costs A Guide for
  Municipalities.
• 3.      A Copy of the fax sent to their office
  on 15 July 2004 regarding the Municipal Services
  Options Definition of a Basic Level of Service
  and Unit Cost for MIG.
• 4.    The Guideline for Basic Level of Services
  and Unit Costs for Municipalities
• 5. A copy of a letter sent out to the Provincial
  Programme Managers with a copy of the project
  list as received from DSR office with a letter
  dated 9 December 2004.

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2005/2006

• dplg received a letter from Sport and Recreation
  on 20 January 2005 with a list of 54 projects in
  34 municipalities that have been identified.
• dplg responded with a letter on 24 January 2005
  where the following issues were addressed
• Municipalities are responsible for planning
  municipal infrastructure and for utilising MIG
  funds to deliver the infrastructure. This is
  reflected in the MIG policy framework, which
  supports the devolution of responsibility for
  municipal infrastructure development to the
  lowest possible level.
• Allocations are made to municipalities and not to
  individuals. All MIG projects must be identified
  in the municipalitys IDP and cannot be
  registered unless it has been included in the
  three-year capital plan.
• dplg requested DSR to advise the municipalities
  to register the listed projects as MIG projects
  for the 2005/06 financial year.

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THANK YOU