Johannesburg, Tshwane, Ekurhuleni Metro performance; Committee Report on Provincial Treasuries 2016/17 expenditure

NCOP Finance

02 August 2017
Chairperson: Mr C de Beer (ANC, Northern Cape)
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Meeting Summary

Documents handed out:
City of Ekurhuleni: Presentation to the Finance Select Committee
City of Johannesburg: Presentation to the Finance Select Committee
City of Tshwane: Presentation to the Finance Select Committee [awaited]

The Ekurhuleni metro told the Select Committee on Finance that it had a 10-point plan, which included the revitalisation of manufacture and land being made available for strategic development. Small, medium and micro enterprises (SMMEs) were supported through public procurement, and public transport had been improved. Infrastructure investment and skills development were prioritised. Industrial and commercial economic nodes had been created. Water revenue had been a challenge, due to water restrictions. The city had done well on property rates and taxes. Spending on the Human Settlements Development Grant (HSDG) had improved from 83% to 94%. A revenue ‘war room’ had been established to increase revenue. 10 000 unemployed youths had been targeted for information technology (IT) and digital technology initiatives. The township economy would be improved. There had been planning towards the establishment of a university. Spatial targeting had been prioritised.

In discussion, there were remarks and questions about re-industrialisation and manufacturing, and the fourth industrial revolution; challenges with the Urban Settlements Development Grant; corporate legal expenses; under-spending of capital and maintenance budgets; unemployment; linkages between the budget and the Integrated Development Plan (IDP); debt costs; the impact of migration; engagement with industry; the upgrading of informal settlements; township development; housing and sanitation backlogs, and expenditure ceilings and fiscal consolidation.

The Johannesburg metro had set targets for economic growth, investment attraction and poverty reduction by 2021. There was support for the informal economy, SMME development, and transformation towards sustainable settlements. The city was committed to pro-poor governance,  the fast-tracking of title deed delivery to beneficiaries, and inner city revitalisation. 1 450 social housing units for disadvantaged beneficiaries had been constructed. Walkways and cycle lanes had been built. There was an emphasis on primary health care services and the supply of chronic medication to old age homes. Challenges were low economic growth and high unemployment, upgrading of informal settlements, inner city security, service delivery protests, drug abuse and land invasions.

In discussion, there were remarks and questions about the measurement of deliverables; hijacked buildings; drug abuse and rehabilitation; less costly services for the poor; road transport development; unemployed youth; spatial targeting; integrated planning among the three metros; access to sanitation; walkways and cycle lanes, and delivery of chronic medication to old age homes.

Tshwane metro said it was experiencing increased housing demand, but the provincial and national departments were still promoting housing development far from job opportunities, which prevented densification. There was a long-term strategy for the upgrading of informal settlements. Service backlogs were influenced by in-migration. Youth employment and SMME development were prioritised. 168 000 new work opportunities had been created and 900 cooperatives were supported through mentorship and training. Inner city regeneration was promoted through strong spatial governance. There were challenges around service delivery provisions that were not adequately funded. Progress had been made with reducing the basic services backlog. The rapid transit system promoted spatial integration. Tshwane was committed to stabilisation, revitalisation, cost containment, and improved supply chain management processes.

In discussion, there were remarks and questions about the time frames for the government boulevard; the smart meter issue; transport system options; the housing project infrastructure; consequences for unauthorised and irregular expenditure, and water harvesting.

Meeting report

Introduction by Chairperson

The Chairperson pointed out that the day’s meeting was linked to the engagement on 26 May 2017 with the National Treasury (NT) and the Department of Human Settlements (DHS), about the Urban Settlements Development Grant (USDG). An engagement on the day before had dealt with the development of more productive, inclusive and sustainable cities. There would be a series of meetings with the metros. The engagements were to focus on the budget performance of metros, the delivery on infrastructure plans, and built environment performance plans. The Integrated Development Plan (IDP) and the budget had to speak to each other. Communities had to be informed about the budget and the IDP. Metro councillors had to do that annually, as it was they who had to submit the budget vote.

He referred Members to page 22 of the briefing by the NT on the day before, regarding allocations by provincial treasuries to municipalities. The National Council of Provinces (NCOP) had been responsible for fiscal oversight and coordination of support. Objectives had to fit into the NCOP framework. Metros were highly important to boost economic growth. The metros’ economies were growing faster than the national economy, and were responsible for 60% of the gross domestic product (GDP). Members also had a research document and an analysis by the NT.

The Select Committee did not invite metros to fight with them, but they would be asked what they were doing in terms of the national framework to improve the lives of people. The NCOP had a duty to improve intergovernmental relations. It was only in the NCOP that the national, provincial and municipal spheres could be brought together under one roof.

Briefing: Ekurhuleni metropolitan municipality

The briefing was presented by Councillor Doctor Xhakaza, Member of Mayoral Committee (MMC): Finance; Mr Joe Mojapelo, Chief Operating Officer (COO); and Ms Gugu Malaza, Group Chief Financial Officer (GCFO).

The metro had drawn up a 10-point economic development plan to create jobs and revitalise manufacture. Land had been made available for strategic development. Small, medium and micro enterprises (SMMEs) were being supported through public procurement. The public transport system had been improved. Infrastructure investment and skills development were priorities. Commercial and industrial economic nodes had been created. There were water revenue challenges on account of water restrictions. The metro did well on property rates and taxes. There had been under-spending on repairs and maintenance, as invoices had come through late. Spending on the Human Settlements Development Grant (HSDG) had improved from 83% to 94%. There had been 100% spending of the Equitable Share.

A revenue war room had been created to enhance revenue. A health awareness campaign had been launched with an emphasis on HIV/Aids and birth control. Two libraries had been built. There had been spending towards enhancement of the electrical network. 10 000 unemployed youths had been targeted for information technology (IT) and digital technology initiatives. A commission had been established to investigate fraud and corruption. Stage gate tracking had been introduced for planning, and a capital expenditure (capex) war room had been created. The metro was committed to improving the township economy and to pursue the issue of establishing a university. The number of local clinics would be increased.

Discussion

Ms T Motara (ANC, Gauteng) referred to a broad question that had emerged the day before. The metro had referred to a key focus on re-industrialisation and manufacturing. She asked how the metro focused on re-industrialisation, manufacturing and the management of human resources, and how that linked with the fourth industrial revolution. It had to be seen if a planned university would impact negatively or positively on re-industrialisation. She asked about the reasons behind the surrendering of R323 million in 2016. The Human Settlements Minister and the NT had given different reasons for the surrender. She asked about challenges related to the spending of the grant, and whether its own revenue could sustain what had been lost through surrendering.

The Chairperson asked what the effect had been on service delivery.

Mr F Essack (DA, Mpumalanga) remarked that corporate legal expenses were a sore thumb. The city was still running behind target after R412 million had been spent on the taxi rank upgrading. The Select Committee had to look into the matter on oversight visits. R170 million had been spent on mobile toilets. He asked where those toilets were. This also had to be looked into during oversight.

The Chairperson said that the Select Committee would be visiting Gauteng in September, and that those matters could be looked into on that visit.

Mr O Terblanche (DA, Western Cape) remarked that he was glad to see the name of the metro had been officially approved. He asked where the City Manager was. The presentation had stood out as futuristic to him. Promises had been made. He was concerned about under-spending in important areas. Capital works and maintenance budgets had not been spent. Money allocated had been not used to the benefit of the people. The City Manager had to take the Committee’s comments seriously. There was a 53% unemployment rate. Money had to be spent to create jobs. Capital works expenditure patterns were normally a bell-shaped curve, but the metro’s was a ‘rocket that took off to the moon.’ The briefing had not provided a proper picture of what had been going on on the ground. The Select Committee had to visit the metro.

Mr T Motlashuping (ANC, North West) commented that the NT had referred the day before to linkages between the budget and the Integrated Development Plan (IDP). The Select Committee had been worried about what was implementable and achievable in terms of the IDP. He differed from Mr Terblanche, as he saw the country moving in the right direction. The metro had a 10-point economic development plan that had to be linked to the NDP. When government borrowed money, there were costs involved, whether the money was spent or not. There were water service debts. There were limited credit control measures. Eskom’s cuts were bringing the country down. He asked what measures were in place to address that. Did the IDP processes include meeting with all sectors? It had been stated that R5.5 million had been spent on township entrances, but the townships were dirty and had to be cleaned up.

Mr L Nzimande (ANC, KZN) commented that the metro was located in the corridor of three provinces. He asked if cognizance had been taken of the impact of people migrating into the metro. He asked about the ratio with regard to the influx of people, and if the effect on education had been taken care of, as it could affect planning. Successful allocation of resources was important to the economy of the metro. He asked if industry sectors engaged with the captains of industry, and whether there had been a specific programme. Issues related to indigents had to be addressed.

Mr L Gaehler (UDM, Eastern Cape) enquired about the high rate of pregnancy among the youth. He asked how many informal settlements there were. The cost of services to informal settlements had been remarked on the day before. Informal settlements had to be made more habitable through the upscaling of services. In Cape Town, the train station was 20 km from some hostels. He asked if there were plans to bring the private sector into the townships for development. In Soweto, shopping complexes were situated in the township. Captains of industry had to be involved to reduce the cost of transport for the poorest of the poor.

The Chairperson remarked that the President and the Minister of Finance were engaging with chief executive officers (CEOs) of companies. The engagement had to be taken down to the grassroots level. He asked what the metro had been doing to grow its economy. The metro had not pronounced on the housing and sanitation backlogs. The metro had cash, and the question was how it was to be used to address the challenges.

Ekurhuleni’s response

Cllr Xhakaza responded that the key focus on re-industrialisation and manufacturing had been in accorance with the demands of the fourth industrial revolution. The object of the 10-point plan had been to make the metro a capable city. It would be a well managed city by 2020. It was linked to the Gauteng city region, and the development strategy took into account that the metro was part of corridor development. The right infrastructure had to be developed to support key investment drives in industrialisation.

With regard to spending, he remarked that commitment in terms of money should be established earlier in the year, to avoid the problem of money coming in late. There were 119 informal settlements that housed a 100 000 people. The city had been looking at alternative methodologies to address the challenge. Efforts had been made to move people to built houses and to improve service intervals.

He responded to Mr Terblanche’s query about the City Manager, saying that he had been the Finance Manager, and that the COO and CFO were also present. Mr Terblanche had termed the presentation as futuristic. It had to be conceded that Ekurhuleni was a new metro. The Mayor would speak on the following day, to reflect on the way forward. Some finances were bound to improve. The metro planned and acted in synchronisation with the NT. The Mayor had emphasised demand management. Supply chain management (SCM) and oversight systems had to improve. There had been a finance oversight committee whose reports were consistent with those of the NT.

Eskom presented a challenge in terms of supply chain areas related to collection. The metro wanted to take over distribution in terms of the Constitution, to supply electricity. It needed support in order to become the sole provider.

He replied to the question about the involvement of all sectors in the IDP process. There were ward meetings with industry, and the youth and churches were engaged with. The Mayor had been working with the mining companies. There were partnership with the private sector, as some manufacturing projects were government programmes. Land had been being made available for proper bulk services. Communities had to understand the priorities. The township development strategy was part of the 10-point plan. The question was how to turn around and formalise spaza shops. Allocations were needed to reduce the cost of services to the poor, as the indigent register was large.

The Chairperson commented that what the metro wanted and could get, had been affected by expenditure ceilings and fiscal consolidation. There were challenges. The question was how to link up with the private sector. There had been a target of involving 10 000 youth in IT training. He asked about progress made with that. The metro had to connect with society through work committees.

Ms Malaza responded about the R323 million that had been surrendered to the NT. The relevant department had been without a head of department (HOD) for quite a while, and it had been not possible to know what it was able to spend. An HOD had been appointed, and there had been action at ground level. The situation had begun to improve during the second and third quarter. She answered about the costs attendant to the money borrowed. The metro had a treasurer from the NT. It went to the bond market only when capital payment pressure was on. There had been borrowing only for projects that were backed up by revenue. The metro did not hold on to external funding. It was against hoarding.

Mr Mojapelo replied about re-industrialisation. A two-day indaba had been held about the matter. The dynamics of change could not be ignored. China played a pivotal role, as it had a global footprint. It had positioned itself as the hub on industrialisation. A university was needed to advance technology. It could not be traditional in approach, as it had to produce the required skills in engineering and aviation. There had to be demand management planning to address under-expenditure. The business community had been engaged with in the IDP process. Not all of Ekurhuleni was sustainable. There were not enough police. Communities had to be engaged with. There was a huge crime problem. The air travel industry was crucial to the development of the city. Oliver Tambo airport was the gateway to Africa. R600 million had been allocated for further development. There had been engagement with the private sector.

Cllr Xhakaza added that the airport would remain a national asset. The province also had a part to play.

The Chairperson commended the enthusiasm of the metro. Its role was to serve the people. There would be a follow up on the metros and further engagement with the NT. He encouraged Members to study the document from the day before about the enhancement of sustainable cities. He welcomed South African Local Government Association (SALGA) members present. SALGA was part of the NCOP, in terms of the Constitution.

Briefing: Johannesburg metropolitan municipality

The briefing was presented by Dr Ndivhoniswani Lukhwareni: City Manager, and Mr Herman Pienaar, Director: City Transformation.

The 2016/17 IDP objectives of the metro were to work towards economic growth, job creation, investment attraction and poverty reduction by 2021. There was support for the informal economy and SMME development, and transformation towards sustainable human settlements. The IDP had been complemented by a new 10-point plan. There was a commitment to pro-poor governance, and the creation of a professional skilled civil service. Corruption had been declared public enemy number one. The metro was committed to fast-tracked title deed delivery to beneficiaries. Inner city revitalisation was a priority. 15 000 community work opportunities had been created city-wide. Support had been granted to 12 886 SMMEs city-wide. 1 450 social housing units had been developed for disadvantaged beneficiaries. There were 42 775 metrobus passenger trips per working day. 115 kilometres of walkways and cycle lanes had been constructed. The city provided primary health care services through 81 clinics. Chronic medication was delivered to senior citizens at 13 old age homes. 87 libraries were spread city-wide through the seven regions. Challenges were low economic growth and high unemployment; upgrading of informal settlements; inner city security; service delivery protests; drug abuse and land invasions. The future Johannesburg model had been envisioned to be compact and polycentric. Spatial targeting was a priority, with the city being divided into deprivation areas, transformation areas, and economic areas.

Discussion

The Chairperson commented that the aim of the day’s engagement was to measure deliverables. It was an exercise in measurement. Future presentations had to compile briefings in a way that made measurement possible. The NT had to assist with guidance, so that the Committee Researcher and Content Adviser could also be assisted. The same applied to any municipality or government body that appeared before the Committee. Gauteng was the economic heartbeat of Africa. When one flew over Musina by air, one could see things happening. O R Tambo airport played a crucial role and the metro had to contribute to maintain that.

Mr Gaehler agreed that it would be good if the NT could provide a template for briefing that would make measurement possible. He referred to hijacked buildings. Some buildings belonged to the private sector. He asked how that would be dealt with. There had been TV reporting on drug abuse, especially amongst the youth, and he asked what was being done to assist with rehabilitation. The private sector and State Owned Enterprises (SOEs) had to be engaged to develop new structures. He asked about efforts to make services around their areas less costly for the poor. More had to be said about road transport development. He asked about plans for unemployed youth in the form of internships, for example.

Mr Terblanche commended the focus on spatial targeting, which the NT had referred to on the day before. It was most important. The Chairperson had alluded to the fact that Gauteng and Johannesburg in particular was the hub of SA and the whole of Africa. It was important to emphasise the triangle consisting of Johannesburg, Ekurhuleni and Tshwane. He asked if the three metros did integrated planning for a rollout to the rest of the country and Africa. Great strides had been made within the triangle with public transport in the form of the Gautrain, yet there were still traffic congestion problems. He asked what could be done, as many man-hours could be saved if congestion problems were relieved.

The Chairperson said it had been stated that 46.5% of households in informal settlements had access to sanitation, but performance had been hampered by ‘non-award.’ He asked what was meant by ‘non-award,’ and whether there were programmes to address that. It had been stated that walkways and cycle lanes were being created. It was important to move on that, as most road deaths involved pedestrians. He commended the fact that chronic medication was delivered to senior citizens at 13 old age homes. It was a crisis in the rural areas, especially in his constituency in the Northern Cape, where there were 600 km of gravel roads, with only 70 km tarred.

Dr Lukhwareni replied about the poor performance with regard to sanitation in the informal settlements. The challenge was that it had been difficult to award contracts to service providers, as there were rivals in the community. The situation had been allowed to drag on for too long. It was a supply chain issue. It was legally possible to submit an interdict against the awarding of a contract to a service provider. When tenders went out, people wanted information about it, which resulted in court interdict processes. The solution was for the metro to have in-house capacity.

The Chairperson asked if the metro needed assistance with that.

Dr Lukhwareni replied that it was difficult, as the laws allowed for a query process. It was uncalled for from a service delivery point of view. It was a crucial service and it would be best if the metro could provide it from its own capacity. The metro had been succesful with pedestrian walkways, which included pedestrian bridges across highways. Extended Public Works Programme (EPWP) personnel were used to provide chronic medication to old-age homes. The programme had made an impact, as the aged could not be expected to collect medicines.

He answered about hijacked buildings, saying that there were laws about derelict buildings that were privately owned. If there were illegal connections, and the municipality could not recover what it was owed, it could act. Derelict or abandoned buildings that contravened by-laws could be taken over by the municipality, and this had been done.

Drugs were a national problem. Communities like Eldorado Park had written to the President and had involved relevant stakeholders to address problems. There had been no panacea, except for drug rehabilitation centres. The drug problem was linked to unemployment. The Mayor had targeted bringing order to the inner city. There were opportunities to actualise development with the private sector. The conversion of inner city buildings would not be from the balance sheet of the metro. Services to bring law and order had to be guaranteed.

Mr Pienaar replied to the question about consultation between the metros in the golden triangle. Johannesburg had been looking at economic hubs and nodes outside of its own boundaries, especially in Ekurhuleni and Tshwane, so that they could be tied in. Development frames had been discussed in Gauteng, but there was room for improvement at the development strategy level. Questions had to be asked about where and when to develop, for improved integration. Economic information had to be provided at the Gauteng level.

Systems had to be linked up for integrated public transport. Traffic congestion was a key issue in all world cities. There was less dependence on private car use in other world cities. It took time for new systems to mature. There had to be transformation towards high density in SA, but in terms of city development, 10 or even 20 years was a short period. There was strong support for public transport interventions, and much could be achieved within the following 20 years.

The poor had to be linked into the urban system. The inner city held opportunities for housing and jobs. Re-investment in the inner city was required. Land had to be made available along the corridors for social housing, to integrate poor communities into urban areas. There had to be holistic development from a social and economic point of view.

Mr Ishwar Ramdas, Assistant GCFO, replied about opportunities for unemployed youths. Interns were being placed at different levels for a two-year period. They could be absorbed into employment within the city. This had been done in partnership with the NT.

Mr Lufuno Mashau, Financial and Economic Adviser, replied about drug problems. There had been planning to respond to the issue. Five sites had been set aside for clinic facilities, and there was a 24-hour crisis line. Pilot sites had been identified for detoxing facilities. The NCOP could assist in establishing a partnership with the national Department of Social Development to respond to the issue.

The Chairperson commented that there were regional structures in each region in the Northern Cape. He asked if intergovernmental relations exercises were being performed in the metro.

Mr Mashau replied that the three spheres of government had to be involved.

The Chairperson commented that emphasis had to fall on the lower levels. The NCOP could assist with deployment.

Mr Essack remarked that he had read in the press that there was a billing crisis in the revenue department.

Dr Rabelani Dagada, Finance MMC, replied that the billing crisis had turned out to be bigger than anticipated. It had initially been assumed that the matter could be policed in three months, but it had turned out that there were 100 000 queries dating back to 2005. People had received double billings in February. The queries had been brought down to 40 000, out of one million customers. It could not be said to be a crisis, and could be close to being settled by next March.

Briefing: Tshwane metro municipality
The briefing was presented by Ms Mare-Lise Fourie, Finance MMC, and Ms Nosipho Hlatshwayo, Head: City Strategy.

Tshwane faced an increasing housing demand, but the province and national government still promoted housing development far from opportunities, which opposed the principles of densification. The city was developing a long term upgrading of informal settlements strategy. Service backlogs were influenced by in-migration. To deal with youth unemployment, opportunity creation and SMME development had been prioritised. More than 168 000 new work opportunities had been created, and 900 cooperatives were supported through mentorship and training.

Inner city regeneration depended on strong spatial governance through directing and engaging with all stakeholders. ICT connectivity was an instrument to build growth infrastructure. There were challenges around provincial service delivery projects that were not adequately funded. There had been planning towards the establishment of a government boulevard. Progress had been made towards reducing the basic service backlog. Economic challenges required collaborated efforts to increase access to opprtunities through spatial economic integration.

The rapid transit system was a facilitator for spatial integration and increased density, but the best mode was still to be decided upon. There were concerns about the national instruments used for spatial development. The city was committed to stabilisation, revitalisation and a delivery focus, cost containment measures, and improved supply chain management. There was a focus on eradicating wasteful expenditure. There were sanitation challenges.

Discussion

The Chairperson remarked that it had been hard to follow figures at the pace at which they had been presented.

Mr Terblanche commended the presentation. It was evident that things were happening. He asked about the time-frames for the government boulevard.

Mr Essack commented that if the metro went to court about the R950 million smart meter issue, and the ruling went against it, there had to be financial planning in place to deal with it.

The Chairperson commented that the presentation had asked if the planned transport system had been the best option. Cities had to learn from each other. Mexico City had to deal with 21 million commuters. With regard to housing, he said that the Select Committee had looked at housing projects in KZN during 2014/15. There had been a good development, with a total infrastructure of schools, clinincs, playgrounds and other facilities being provided for. It had been designed that way, and presented a good model.

The MMC had referred to unauthorised and irregular expenditure. Consequences for transgressors were provided for in terms of the law. The NT, the Auditor-General (AG) and the anti-corruption task team had joined forces in Limpopo during the four-year intervention in that province.

He referred to water harvesting. He had met that morning with the Chairperson of the Financial and Fiscal Commission (FFC). There had to be a rethink about water harvesting. Schools were being built without gutters or water tanks. There had to be a change, and townships and informal settlements were in a position to harvest water. It had to be made possible. In Namaqualand, it became a matter of adapt or die. Programmes had to be rolled out.

Tshwane’s response

Ms Fourie replied about the smart meter issue. A contract had been entered into with a supplier by the previous administration, without going through a bidding process. 60 000 meters had had to be replaced with smart meters. The supplier would receive 19.5 cents of every Rand sold through pre-paid meters. The electricity service did not even make a profit of 19.5 cents by itself. 13 000 meters had been replaced. The supplier had started with the big industrial electricity users, and huge amounts had been paid out in commissions over two years. It had had a serious impact on the financial viability of the city.

The AG had started asking questions and in 2015 the contract had been cancelled, without adherence to correct procedures. Contract conditions had been changed to 9.5 cents for every Rand of electricity sold, but an extra amount had been included for payment of the supplier infrastructure. It had amounted to R950 million at year end. If one divided R950 million by 13 000 meters, it meant that the metro had to pay over R70 000 per meter, in addition to the payment for the system and meters. The previous administration had appointed a new contractor on the condition that the city had to pay the R950 million that had to be paid to the previous contractor. The city had been supposed to pay out R950 million by the end June 2016.

At that point, the AG had said that this was unacceptable, as the contract had been irregular. The city had gone to court and the judge had said that it did not have to pay out. He had a case before him for review of the contract. It had been brought back on to the roll, but he had serious concerns about the contract as a whole. The city had at first opposed court action because it had been the owner of the contract. The new administration had stated that it agreed that the contract had been unsustainable and irregular, so it had officially withdrawn opposition to the case. The case would be heard in October. The senior counsel (SC) who assisted the metro said that it had a strong case, as it could be expected that the contract would be deemed irregular. There would have to be negotiation about fair compensation for the contract from beginning to end. A total amount of R3.5 billion had been paid out over three years for 13 000 meters.

The city had a positive attitude that the whole contract would be deemed irregular. The city could extricate itself without paying the R950 million. Because the matter was not fully resolved, the city accrued the 10 cents extra levy in a separate investment account that was not used. Over and above the R950 million, the city had R500 million for provision if the case was lost. There was a separate contract, a flow-over from the previous one, which the city deemed to be questionable.

The city supported smart pre-paid meters. It benefited revenue collection and prevented illegal connections and tampering, but the meters were not compliant wit the requirements of the SA Bureau of Standards.

The metro supported water harvesting and the green economy.

A week was devoted to economic sustainability of all services, including electricity and mining. All sectors were brought in. The IDP framework had to combine commercial, residential and office space. Services had to be brought closer to where people shopped and worked. What was envisioned was to have specific nodes closer to where people stayed. Economic nodes had been revitalised to attract investment. R10 billion had been targeted, and to date R2.5 billion had been achieved. The city was positive about the partnership between government and the city. Integrated development had to recognise all factors, not only housing.

Ms Hlatshwayo replied about the government boulevard. It was a multi-year project, with the Department of Public Works (DPW) as the main investor. It was not a project that could commence in the current financial year and be completed in the following financial year. The city had come up with a development plan, which included the introduction of the necessary by-laws. Land allocation reports were being considered by the councillors.

With regard to the transport system, numbers had to be known in order to roll out a system. The question was whether the numbers were sufficient to justify the system, or whether alternatives had to be looked at. There was not sufficient information about the instruments currently used by the public. A reliable single mode of transportation had to be found. The three spheres of government had to work together on housing. The NT had been talking to the metro about an integrated urban network system. National and provincial government had to invest.

The Chairperson remarked that scrutiny had to be uniform. The town of George had started a new bus transport system that had been successful. The former Minister of Transport had been involved in the project. Best practice had to be looked at.

Ms Fourie concluded that the metro could have given a performance report, but it had chosen not to. If the Committee needed additional information, it could be provided. The metro performance report would be audited.

The Chairperson asked the NT to make concluding remarks.

National Treasury comments

Mr David Savage, Programme Manager, City Support Programme (CSP), remarked that SA had an urban future. It was crucial to get it right. A long term strategy for urban spatial transformation had been discussed the day before. There were structural constraints. The Select Committee had commented the day before that the strategy was too abstract. The meeting of the day had asked if instruments were being taken up, and had shown a clear connection to the ideas expressed the day before.

Practical strategies had to be forged in an intergovernmental context. Cities were growing fast. There had to be responses to the current problems of informal settlements, among others. Foundations had to be laid for the future, and that had to be linked to an analysis of the national development plan (NDP). Historically, people had been pushed to the periphery. The racial segregation path had to change. Spatial challenges had to be acknowledged. It was not just a question of words. Practical actions had to be taken to break away from a 200-year path, and cities had to be rebuilt.

Tshwane had to be commended for acknowledging the need for stabilisation of the revenue and expenditure system. The reconstruction challenge had to be taken up with vision and leadership from the cities. Metros understood the context, and had to be granted the authority to lead. Partnership with society was required, as 80% of investment in the metros came from households and firms. It was necessary to get into the pipeline of project implementation. Public funding had to be spent rightly. To create an enabling environment, tensions had to be ironed out through intergovernmental engagement.

The Department of Transport could link grants to an insistence on a bus transport system, but each city was different. In matters of human settlement and economic development, the discretion of metro authorities to make the right specific technology choices had to be relied on. Measurement was not yet good enough, and there had to be a standardised template for measuring outcomes. It had to correspond to the Medium Term Strategic Framework (MTSF) of government as a whole. The built environment performance plan was an intergovernmental venture, and results were starting to emerge.

The Select Committee could benefit from oversight visits. The NT had developed a day programme to take mayors to see the good and the bad in a metro. Public transport was used. Senior managers of Tshwane would travel by public transport to Mabopane.

The Chairperson thanked everyone for their contributions. He reminded Members that it had been said at the start of the Committee term in 2014 that the aim would be to enhance good government and sound financial management. He was accountable to people in his constituency in that respect. With reference to the division of revenue, it had to be asked where money went to. The future had to be shaped in terms of the Constitution. Every sector in SA had to contribute to economic development. The country was at the turning point. All sectors had to join forces for a solution.

Committee matters

The Committee’s report on the provincial treasuries’ preliminary expenditure for 2016/17 was adopted with minor technical alterations, and the Chairperson advised Members to read through the report again after the corrections were made.

The minutes of 28 June were also adopted with minor technical corrections.

The Chairperson adjourned the meeting.

 

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