Municipal Service Partnerships & "Sports for all": briefing

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Cooperative Governance and Traditional Affairs

13 September 1999
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE

PROVINCIAL & LOCAL GOVERNMENT PORTFOLIO COMMITTEE
14 September 1999
MUNICIPAL SERVICE PARTNERSHIPS; "SPORTS FOR ALL'' AS A PUBLIC-PRIVATE PARTNERSHIP: BRIEFING

Provincial & Local Government website

SUMMARY
Ms Moloi briefed the Committee on the nature of Municipal Service Partnerships and their importance in accelerating service delivery in South Africa.''Sports for all'' gave a briefing as an example of public-private partnerships.

MINUTES
Municipal Service Partnerships
The chairperson, Mr Carrim, introduced the subject of Municipal Service Partnerships to the committee. Because of the immense backlog in the provision of services and infrastructure at local government level, the government is supporting public-private partnerships to aid in service delivery. Private partners with expertise and the necessary financial backing are sought for such partnerships.

Mr Carrim argued that public-private partnerships differ from privatisation. Privatisation involves the sale of a corporation. In terms of a partnership, the state leases out the right to use resources and deliver the service. In such a partnership the municipality ultimately remains responsible for service delivery even though they are not the service provider. The municipality also reserves the right to restrict tariffs and profit margins of the partner delivering the service. He went on to say that the South African unions were prepared to support partnerships as long as they did not amount to privatisation.

The chairperson went on to say that internationally there have been some remarkable successes but also some failures in the area of public-private partnerships. He raised many issues about the capacity development of the municipalities as well as suggesting how such partnerships may support democracy by aiding service delivery.

According to the current government standpoint, the public sector is the preferable service provider. However, where it can be shown that the private sector would be able to deliver the service more efficiently and at a lower cost, then delivery for that particular service should be handed over to the private sector.

The chairperson then invited Ms Gugu Moloi of the Department to brief the Committee.

Ms Moloi began by alluding to a government Consolidated Infrastructure Programme to provide basic services. She said that the government was committed to ensuring delivery in areas where there were no other service providers such as international organisations or NGOs. She claimed that municipalities needed to take greater responsibility in ensuring the delivery of such services. They would remain the service authority even if they were not the service provider.

According to recent research R7-12 billion would be needed to adequately address the backlog of service provision in the country. If current spending is sustained the government would have addressed the backlog by 2065. The government is unable to provide the necessary finances and therefore the co-operation of NGOs, CPOs and the private sector is necessary to provide services as soon as possible.

A Municipal Service Partnership is conceptualised as a legal contract between a municipality and a service provider. Two major contracts of this type are those concerning Nelspruit and the Dolphin Coast. In these contracts it was stipulated that the new service provider must at least meet the current level of remuneration of the workers. This was to assure the labour unions that the workers were not going to be negatively affected by the public-private partnerships. A Sectoral Forum has been established to discuss these issues further.

Ms Moloi then referred to an existing policy document that set out the tendering process in terms of these partnerships. She highlighted that the municipality would set out beforehand the criteria for the provision of the service before the bidding process. Ms Moloi emphasised the need to gain information on international companies and their track records to prevent unscrupulous companies from bringing corrupt practices into the country.

In terms of municipal capacity building, the department feels that municipalities need to be provided with the necessary legal resources to draw up contracts. Many international companies are very experienced in this area and in some cases this can lead to companies taking advantage of the municipalities. the government has set up a Municipal Service Policy Unit ? to monitor these contracts. The government also envisages a local Public Protector of sorts to provide a forum for public complaints about service delivery.

Questions and Answers
A member enquired as to whether the cost of policing such contracts may not exceed the cost of delivering the service itself.

Ms Moloi responded that no study had been done to determine the cost of monitoring the contracts. However, she maintained that cost would be borne by the service provider.

Another member asked how the demarcation process would affect those public-private partnerships already in place.

There was no response to this question.

A question was posed concerning the protection of the poor if service delivery was relegated to the private sector.

Ms Moloi replied that it is the responsibility of the municipality to ensure provision to the poor. In some cases the partnerships would save the municipalities money which could then be spent on supporting the poor.

A member commented on the need to make the bidding process as competitive as possible in order to achieve as efficient and as low-cost a service as possible.

Ms Moloi voiced her agreement

A member enquired about the extent of the government's involvement in the partnership process.

Ms Moloi responded that to date there has been substantial involvement because the contracts in Nelspruit and the Dolphin Coast were two major new contracts and needed to be closely monitored.

The chairperson enquired as to whether a date had been set for the green paper to be tabled.

Ms Moloi said that no date had been set.

''Sports for all''
Wayne Phillips from ''Sports for all'' gave a brief presentation on the 30 Local Economic Development centres that they hope to establish. These centres would comprise sports facilities, libraries, payment points, health and educational centres etc. The idea is to establish one-stop shop centres where all township facilities would be clustered together. By using sport as a catalyst, these centres hope to provide employment for township residents, reduce crime in the area by creating a necessary distraction for the youth and empower people through the transference of skills.

Mr Phillips pointed to the various partnerships that ''Sports for all'' had developed within the business community to ensure that the centres were self-sustaining. A pilot project is planned for Umlazi near Durban.

There are various advantages envisioned. Existing sports facilities in the townships will be upgraded. R40-50 million will be channeled into each community centre. 20 000 Children will receive sports coaching for a period of 40 weeks each through these facilities. Those that are especially talented will be transferred to elite training facilities.

Questions and Answers
A member was concerned about the centres not catering for rural communities.

Mr. Phillips responded that the project had to start somewhere and that feasibility and sustainability placed certain constraints on the positioning of centres. The centres needed a schools, main roads and a minimum population amongst other things in order to operate.

A member asked whether the National Sports Council had been consulted. Mr Phillips replied that it had.

The chairperson concluded the meeting by urging members to mull over the proposal and think about how to move forward with the idea.

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