BUDGETS 2011-12

DCCI PRESENTATION 24 MARCH 2011

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OPERATINGBUDGET

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BUDGET FOCUS:2011/12 Recessionary impact Projected Inflation 6% Salary increase 6% Interest rates down Collection rates average – 95% Drop in interest earnings due to reduced cash on hand

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IDP AND THE BUDGET

Developmental challenges

• Unemployment & low econ. growth• Poor access to basic services• Poverty• Inadequate skills and literacy• crime

City’s vision

Africa’s most caring and livable City

Key choices

Densification

Ports and Logistics

Ecological integrityEco tourism

Public transport

Digital divide

Sustainability

Poverty/education

Successful City

Smart City

Democratic & equal city

Caring City

Resource management

Employment, growing local economy, BEE, SMME

Programmes to reduce increased poverty

Access to info and knowledge Customer

based cityNon sexism and tolerant citizenry

IDP 8 Point Plan

Budget

The IDP As A Strategic Driver

• Within the Long Term Planning framework, the IDP drives the way we PRIORITISE DEVELOPMENT, BUDGET and MEASURE OUR PERFORMANCE

CITY’S PERFORMANCE MONITORING SYSTEM

PERFORMANCE MANAGEMENT SYSTEM

CITY’S FINANCIAL ALLOCATION TO

STRATEGY

CITY’S STRATEGY

CITY’S ANNUAL DELIVERY PLAN

Done Once in Five Years Reviewed

AnnuallyDone annually with a three year projection

Done annually to manage delivery

CITY’S REPORT

Done annually to publicly report on

progress

ANNUAL REPORTSDBIPBUDGETIDP

• Mitigation and adaption of the City for Climate Change• Human Capital Development• Service Delivery Backlogs• Financial Sustainability• Water Crisis• Access to Public Transport• Economic Development• Energy Crisis• Health of Society• Food Security• Sustainable Spatial Form• Rural Development• Infrastructure Degradation• Undermining Natural Capital• Safer City• Human Settlements development

Key Strategic Issue Identified in the State of the Nation address as well as Provincial and National priorities. The budget addresses these challenges from a policy perspective an implementation is at an advanced stage in all areas. The key issues are:

IDP TARGETS ACHIEVED

- 149 000 housing units delivered in the past 10 years- Access to water to 175 000 households via water dispensers/standpipe- Roads and Streets

- Gravel to Blacktop: 222 km- New Roads: 255 lane km- Sidewalks: 320 km

- Pedestrian Bridges 96- Refuse removal service almost 100% - 500 000 households since 2006- Over 150 000 new electricity connections over the past 10 years - Free 9kl water to 300 000 households- Free electricity to 70 000 households- Property rates exemptions to more than 116 000 poor households )

BUDGET HIGHLIGHTS 2011/12 2010/11

Total Budget - Operating R 23 403.5m R 20 610.1m Capital R 4 614.9m R 5

370.5mR 28 018.4m

R 25 980.6mCAPITAL DECREASES- Water and sanitation projects decreased by R280m re. pipe replacement and

Western Aqueduct lower provision- Expenditure on Public transport plan decreased by R262m- New Housing expenditure decreased by R 146mOPERATING INCREASES- Bulk Purchases Electricity R 1.2bn: Water R 60m- Depreciation -R 195m- Salaries and allowances – R386m- Repairs and Maintenance – R191m- Interest paid on loans – R 256m

FREE BASIC SERVICES Rates: Life Line

-:- First R120 000 of property value - no rates charged-:- Pensioners: First R400 000 of property value – no rates charged-:- Vacant Land: First R30 000 of property value – no rates

Water First 9KL free, no fixed charge for properties valued under R190 000 Electricity First 65 kWh free to poor residents using less than 150 kWh Sewerage No charge if less than 9kl of water used Refuse Charge subsidised by equitable share allocated in terms of property value and levied on a sliding scale – No charge for property value less than R120 000 FBS funded from the National Equitable share grant

OPERATING BUDGETRATE AND GENERAL SERVICES

   ESTIMATE APPROXIMATES ESTIMATE2011/12 2010/11 2010/11

R R R

EXPENDITURE

SALARIES & ALLOWANCES 4,571,726,383 4,071,397,688 4,211,213,556GENERAL EXPENSES 7,391,322,486 6,949,894,319 6,631,944,918REPAIRS & MAINTENANCE 1,157,693,633 1,057,421,526, 1,084,608,294

CONTRIBUTIONS 1,432,801,866 1,709,437,4871,715,826,242

TOTAL EXPENDITURE 14,553,544,368 13,788,151,020 13,643,593,010   RECOVERIES -763,603,427 -732,624,774 -704,477,368CHARGE-OUTS -598,154,895 -548,539,906 -552,462,078TOTAL RECOVERIES & CHARGE-OUTS -1,361,758,322 -1,281,164,680 -1,256,939,446   NET EXPENDITURE 13,191,786,046 12,506,986,341 12,386,653,564   INCOME -13,191,786,046 -12,506,986,340 -12,386,653,565       

(Surplus)/Deficit 0 0 0

 YEAR ON YEAR INCREASE 6.5%      

       

OPERATING BUDGETELECTRICITY SERVICE

   

ESTIMATE APPROXIMATES ESTIMATE2011/12 2010/11 2010/11

R R R

EXPENDITURE

SALARIES & ALLOWANCES 768,879,470 656,953,270 684,315,890GENERAL EXPENSES 7,328,810,558 5,551,138,666 5,858,971,830REPAIRS & MAINTENANCE 655,791,870 604,072,750 591,684,240CONTRIBUTIONS 722,151,250 957,448,204 655,706,430TOTAL EXPENDITURE 9,475,633,148 7,769,612,890 7,790,678,390 RECOVERIES -179,688,570 -166,285,150 156,493,120CHARGE-OUTSTOTAL RECOVERIES & CHARGE-OUTS -179,688,570 -166,285,150 156,493,120 NET EXPENDITURE 9,295,944,578 7,603,327,740 7,634,185,270 INCOME -9,295,944,578 -7603,327,740 -7,634,185,270 

(Surplus)/Deficit 0 0

 YEAR ON YEAR INCREASE 21.7%           

OPERATING BUDGETWATER SERVICE

 

ESTIMATE APPROXIMATES ESTIMATE2011/12 2010/11 2010/11

R R R

EXPENDITURE

SALARIES & ALLOWANCES 439,611,670 404,478,074 407,078,807GENERAL EXPENSES 3,169,338,304 2,909,302,919 2,746,249,237REPAIRS & MAINTENANCE 396,534,754 405,142,809 370,154,471CONTRIBUTIONS 252,527,195 256,012,123 223,777,495TOTAL EXPENDITURE 4,258,011,922 3,974,935,926 3,747,260,010   RECOVERIES -366,350,390 -349,268,222 -319,385,220CHARGE-OUTS -121,711,708 -109,253,446 -123,378,510TOTAL RECOVERIES & CHARGE-OUTS -488,062,098 -458,521,668 -442,763,730   NET EXPENDITURE 3,769,949,824 3,516,214,258 3,304,496,280   INCOME -3,769,949,824 -3,516,214,258 -3,304,496,280       

(Surplus)/Deficit 0 0 0

      YEAR ON YEAR INCREASE 14.08%      

WATER - Targeting increase of : Residential

9,5% Business

12,5%- Umgeni Bulk Tariff Increase – 6.1%- Capital Expenditure – R1.86bn over 3 years (Previous 3 years R 3.83bn)- Maintenance R397m provided - Free Basic water remains 9KL per month - 690 000 customers - 175 000 households have access via water dispensers/standpipe - Reduced water loss from 37% to 30%, which translates to a R77m savings, mainly due to replacing aging infrastructure (over R300m provided 2011/12)- Collection rate 93%

WATERCAPITAL OPERATING

WATER TREND ANALYSIS• Additional operating expenditure of: R 322.5m • Additional 10 000 water connections • Increase in maintenance: R 26.4m• Collection rate of 92.9% mainly due to economic downturn

• Two major projects i.e. continuation of Western Aqueduct and design of Northern Aqueduct projects.

• Continuation of Water Loss Programme• Downward trend due to the winding down of the asbestos Concrete pipe

replacement programme and the reduction in backlogs.

ELECTRICITY - Proposed tariff increase 19.8%

- ESKOM increase of 26.71% - Capital Expenditure – R2.55bn over 3 years (Previous 3 years R 2.018bn)- Increase in Staff Costs due to the impact of the 6% salary increase in

together with the filling of critical vacancies - R57m - Electricity demand decrease due to tariff increases - Final tariff increase depends on NERSA approval - Electricity loss in distribution at 5% - 15 000 new customers each year on average - Free Basic Electricity allocation is 65 kWh (for indigent customers) - Maintenance budget increase from R592 to R661.3m

CAPITAL OPERATING

ELECTRICITY TREND ANALYSIS

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• Provision of new staff: R 25m• Maintenance budget increased to R 661.3m• Collection rate: 96%

• Upward trend in electricity budget due to extension and reinforcements of existing networks

• R150m replacement of 11kv distribution switchgear for Metro area over the next 3 years

• In excess of 15 Major new substations to be commissioned or refurbished to cater for increased electricity demand

• Compliance with legislation requiring Smart Metering to be implemented by 2012 – Total Project value in excess of R68m

• Control Centre Building to be upgraded to cater for more staff and improvements in technologies for speedier resolution of electricity outages

SANITATION - Proposed tariff increase 6.5%

- Expansion of Waste Water Treatment Works at Hammarsdale and

Phoenix. Upgrades at Northern, Umbilo and Hillcrest Works - Accelerated desludging of 45 000 VIP pit latrines –

now completed - Servicing of 130 ablution facilities for informal settlements - Capital Budget over 3 years – R2.162bn (Previous 3 years R1.289bn) - Provide sewer to an additional 10 000 properties - Backlogs in mainly rural areas being addressed

CAPITAL OPERATING

SANITATION TREND ANALYSIS • Additional net operating expenditure: R 66.3m

• Provision for maintenance expenditure: R 261m• Sludge disposal initiatives: R 51.6m• Security costs for the protection of assets: R29.5m

Capital main focus

• Focus on eradication of sanitation backlogs.• Expansion of Hammarsdale , Phoenix, Northern and Isipingo Treatment

Works• Continuation of provision of Ablution Blocks in Informal settlements.

SOLID WASTE AND CLEANSING - Proposed tariff increase 6.5%

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Continued expansion of services to achieve 100%- Expanding existing landfills sites - Recycling and waste minimisation actively pursued- 3 year capital budget R368.8m (Previous 3 years R300m)

CAPITAL OPERATING

• Achieving nearly 100% coverage in the municipal areas by utilising community based contractors to provide refuse removal services to all the informal areas within EMA (R 270.8m)• Waste minimisation Projects (R 4.6m)• Gas to Electricity – Income (R 22.9m)

• The focus areas include new cell development to increase the life span of the existing landfill sites and the development of the new Lovu Landfill site.• Council is establishing a new transfer station due to the closure of Bisasar Rd Landfill site• Replacement of ageing solid waste fleet over next few years.

RATE AND GENERAL - OTHER

- Proposed Rates increase 6,5%- Capital Expenditure – R2.981billion over 3 years

- Depreciation provided at R1.23billion- Maintenance increased by R81m to R1.16bn- Increase in Staff Costs due to the impact of the 6% salary

together with the filling of critical vacancies and conversion temps.

- Operating Budgets provided: Engineering R 1.6bn Parks, Recreation and Culture R 1.2bn Health R 368m Fight against crime R 525m

COMPARATIVE TARIFF INCREASES MAIN SERVICES2011/12 2010/11 2009/10 2008/09

Electricity 19.8% 25% 30% 27.25%

Water:• Domestic• Business

9.5%12.5%

9.5%12.5%

9.9%12%

9.9%

Refuse Removal 6.5% 7.5% NEW -

Sanitation 6.5% NEW

Rates:• Residential • Business

6.5%(average)

7.9% 5.6%11.9%

9.9%(average)

10 YEAR EXPENDITURE, TARIFF & CPIX COMPARISON

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02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12YEARS%

RATES

WATER

ELECTRICITY

CPIX

10 YEAR EXPENDITURE, TARIFF & CPIX COMPARISON

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cumulative

Rates ElectWater CPI

Water increase – includes takeover of Umgeni Areas. Electricity – Based on Eskom tariff increases- otherwise in line with CPI

TARIFF INCREASE COMPARISONS

TARIFF ETHEKWINI CAPETOWN J OBURG TSWANE

Rates 6.50% 5.90% 5.70% 8.00%

Water - Domestic 9.50% 8.28% 13.00% 9.00%

Water - Business 12.50%

Electricity 19.80% 19.94% 26.70% 20.38%

Refuse 6.50% 5.50% 5.70% 17.00%

Sewerage 6.50% 8.28% 13.00% 13.00%

TARIFF INCREASE COMPARISONS

TARIFF INCREASE COMPARISONS

HOUSING 13 000 new houses to be built depending on subsidies Additional accommodation for 1000 hostel dwellers The new development operating budget increased by 5% whilst the Hostel decreased by 1.23%

Housing Trend Analysis

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• New development budget increased to R84.3m

• Upgrading of housing rental stock (R6.1m)• Hostels budget R240m

•Reduction of the housing delivery program in view of reduced subsidies and the economic climate•13 000 New Housing Units •The construction of houses is dependent on National / Provincial

subsidies.•Over 149 000 homes delivered past 10 years•Policy for the conversion of hostels to CRU’s to be reviewed due to

reduced funding.

CAPITAL OPERATING

ACCESS TO HEALTH CARE 59 Clinics 15 Mobile Clinics 2,3 million people being served per annum Mobile air quality monitoring station established Further develop street children programme Further rollout of Family Health Care Negotiations with province re: rationalisation and funding of Primary Health Care will be continuing Budget increased by R21m to R368m

FIGHT AGAINST CRIME 122 vacancies to be filled over the next 2 years – Total

provision R 70m 270 trainee constables to be trained in the current year Number of staff – 2348 permanent and temporary staff Improve fines collections – pay incentive scheme – 967 000 fines issued annually 19 Police Stations 3 Satellite Stations Metro Police budget increased by R 126m to R525m

PARKS , RECREATION AND CULTURE Takeover of Umgeni Bird Park – R 5m Grass cutting – 7 cuts provided for Youth football development - R1m Total staff compliment – 4036 Total Budget increased by R81m provision R 1263.3m Provision of 4 336 jobs by the use of co-operatives and emerging contractors for grass cutting, maintenance of parks, cleaning at libraries and museums Commissioning of new facilities halls at Kwa Mashu G (R0.392m)and

North Coast road (R 0.375m), Mahatma Gandhi Museum (R 0.600m) Commissioning of 2 mobile libraries (R0.2m) and Inchanga Library ( R0. 5m) Additional R12m requested to staff existing facilities.

ENGINEERING

The spend increased by 202.4m to R1.6 billion Over 4000 plans approved Roads rehabilitation and maintenance – R 199m Gravel road maintenance – R20m Drains cleaning and maintenance – R 44m Zibambele poverty alleviation project – R 62.4m Full maintenance and cleaning contract on 400kms of high profile

roads Integrated service delivery in terms of a facilities management

contract , includes roads maintenance, grass cutting, canal maintenance etc

CAPITAL OPERATING

ROAD TREND ANALYSIS

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OTHER• Public realm and priority zone maintenance: R 60.0m

• Capital budget: R 703.9m• Increase due to the focus on improvement of road network and

infrastructure.• Focus on refurbishment and maintenance of existing road networks• Thus far constructed 255 Lane km of new roads, 320 km sidewalks,

built 96 pedestrian bridges, resurfaced 296 lane km of existing roads and converted 222 lane km of gravel to asphalt roads.

CAPITAL OPERATING

ETA TREND ANALYSIS

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• Outsourcing of robot maintenance will improve response time – R 23m maintenance budget

• Capital budget: R 82.6m• Decreasing trend in 2010/11 due to reduction in PTIS Funds for Transport

infrastructure increases in latter years.• Major projects include: - Area Traffic Control - Intelligent Transport System - Public Transport Fundamental Restructuring - Freight Management Infrastructure

CREATION OF DECENT WORK Municipality workforce increased to 23 588 members of

staff Further provision has been made for the balance of

conversion of contract to permanent EPWP Grant (R80m), Maximum payable is R100 per day of which R50 is subsidised by National Treasury Zibambele Poverty Alleviation (R62.4m) – 6 600 jobs created Water Pipe Replacements Co-ops – 12 000 notional jobs

created over a 3 year program

Jun-08 Jun-09 Jun-10 Jan-11 % inc 08 vs 11

NO OF PERMANENT EMPLOYEES

15 825 16 222 18 723 21 528 36%

NO. OF TEMPORARY EMPLOYEES 2 597 3 401 2 940 2 006 -22%

TOTAL 18 422 19623 21 663 23 588 28%

Permanent employees increased by 36% from 15825 to 21528 whilst the total number of employees increased by 5166 (28%) over the 3 year period .Temporary staff decreased mainly as a result of conversion to permanent.

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WORKFORCE

SKILLS DEVELOPMENT Workskills plan in place (WSP) Adult Basic Education Training (ABET) – R4.5m Computer Literacy Development Learnership/Apprentice/Skills Program – R5.6m Management Development Programs (MDP) – R3.9m Maximised possible trainee and apprenticeship programme

in engineering,electrical ,accounting ,IT and all other professional fields

Provision for 19 interns, 196 in service trainees and 391 learnerships at a cost of R 13.5m per annum

RURAL DEVELOPMENT, FOOD SECURITY AND LAND REFORM

Creation of dedicated structure to drive Agriculture, Aqua and Poultry farming

Agriculture – Projects include Soya Bean project, 20 Community Support Farms, Community Gardens, Cottonlands Hydrophonic Project - Production of Mushrooms

Seedling and compost together expertise to be provided to communities to alleviate poverty

EPWP funding to be used to create sustainable food farms and forests

Soup kitchens – R 7m provided (Following slide has greater detail)

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EPWP Agriculture / Environmental Sector

Description Objective Targeted Beneficiaries

Establishment of HUBS • ensure satellite centres of excellence

70,000

Plan 200 (Targeted 200 gardens 2010)

•Full farm cycle plan – links to market• Land preparation / soil preservation (To be done with EPWP land-prep teams)

3,000

1,000 fte jobs

Soya programme • encouraging the growing & consumption of Soya

720 / 9500

Aquaculture / Fish farming

• Hatchery (30,000 fish since Oct 2010• Establish aquaculture in the rural communities (rural ponds)

3,000

Rainwater Harvesting • 4 project areas (large) 1000 fte jobs

Composting programme • Reduction of carbon foot print reduction of transport costs

200 gardens

Schools / Training programme(one school / 25 gardens)

• Develop agric interest /skills for for agric & aquaculture• Training in schools models developed (training the educators)

120 gardens

150

BUILDING SUSTAINABLE COMMUNITIES Addressing carbon footprint, including

reforestation project at

Buffelsdraai Landfill Gas to Electricity Project, CER’s are sold to

generate income –R28m income for carbon credits

Gas to electricity income – R22.8m

Energy office – target 10% reduction in usage

ENERGY OFFICE PROJECTS• Energy Efficiency Demand Side Manage Program

– R68 Million project to replace lights in municipal buildings, robots and street lights

• Solar Water Heater Programs– Installing solar water heater on all RDP houses throughout the city at no cost

the municipality– Facilitating of Solar Water Heater for middle and high income houses

Hostels Program– Piloting heat pumps and solar water heaters in Hostels

Renewable Energy Projects– Developing 1 to 5 MV Solar Photo Voltaic Pilot– Developing a Wind Map for the City– Piloting four wind turbines for the city (installation and operation)

Residential Energy Efficiency Campaign Develop a Greenhouse Gas Inventory and carbon credit desk

MAINTENANCE GENERAL Constantly spending between 10% - 11% of operating

budget on maintenance Highest spend in the country – and was commended

by National Treasury during mid year assessments

on 17-18 February Total provision approximately R2.34bn

- new maintenance management system being developed in terms

of the Asset Management Plan

CAPITALBUDGETS

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Major strain on capital budget due to increased demands and eradication of backlogs

National Treasury model utilised to determine 10 year Budget and to assist with prioritisation

Capital budget has 5 key focus areas: - Social - Economic - Asset Management/ Rehabilitation - Environmental - Admin and support systemsModel also projects operating expenditure and impact of capital on

growth and incomeBiggest capital budget roll out 2008 to 2014, in the Country

CAPITAL BUDGET

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CAPITAL BUDGET BY SERVICE

TOTAL CAPITAL BUDGET R5 082.6M

TOTAL CAPITAL BUDGET R5 082.6M46

CAPITAL BUDGET BY FUNDING SOURCE

Public Transport Infrast Grant, 20.0mLoans, 2,0.0bn

Internal, 583.2mDividends Riverhorse , 55.0m

Dept of Minerals, 55.5mMunicipal In-frastr Grant,

650.8m

Urban Set-tlement Dev.

Grant, 440.7m

Dept of Housing, 714.7m

National Energy Regulator,

35.0m

Fuel Levy, 292.6m

Neighbourhood Dev Grant, 85.1m

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  Rm

INFRASTRUCTURE RMLand and buildings 14,725Roads, pavements, bridges & stormwater 810,861Water reservoirs & reticulation 588,935Electricity reticulation 868,151Sewerage purification & reticulation 508,200Housing 1,535,013Street lighting 17,900Refuse sites 131,000Other 418,490Sub-total 4,893,275

COMMUNITY Establishment of parks & gardens 6,750Sport fields 11,100Community halls 2,720Libraries 5,000Recreation facilities 3,920Museums & art galleries 1,700Other 55,406Sub-total 86,596

OTHER ASSETS Motor vehicles and Major Plant and Equipment 59,360Markets 1,365Sub-total 60,725

SPECIALISED VEHICLES Refuse 32,000Fire 10,000Sub-total 42,000

TOTAL 5,082,596

CAPITAL BUDGET-HIGH LEVEL SUMMARY

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PROJECTS

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MAJOR CAPITAL PROJECTS 2011/12

Water Water loss PROGRAMSWater Flagship Project – Western Aqueduct 276.500Northern AquEduct 20.000Relays & Extension 29.200 Electricity Sapref 132/33Kv S/Stn 45.000Ridgeside (Umhlanga) 132/11kv S/Stn 47.600MV/LV Replacement Reticulation 50.000MV/LV New Supply-Sundry 70.000 Housing Infrastructure Dev 670.312 Sanitation Expansion of Phoenix WTW 60.000Ablution Blocks - In Situ Upgrade 65.000Point Pump Station Upgrade 75.000Upgrade Northern WTW 40.000

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PROJECTS

R’m

MAJOR CAPITAL PROJECTS 2011/12

Solid Waste Marianhill Cell Phase 3 8.000Buffelsdraai - Cell Phase 2 11.000Lovu Landfill Cell phases and Infrastructure works 18.000Electron Road Waste Transfer Station - Construction 90.000 Roads Category A Road Rehabilitation 50.000Zone Plans 50.000Category B, C & D Road Rehabilitation 150.000Strategic Roads Asset Management 210.000Upgrade to Queen Nandi Drive 55.000 Health Strategic Social facilities 17.500Clinics Alteration 2.000 EmergencyFire and Emergency – Training Facility 9.000Verulam fire Station 6.976

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PROJECTS

R’m

MAJOR CAPITAL PROJECTS 2011/12

Metro Police CCTV ( 2010) 5.000

Economic development Town Centre Renewal - Tongaat 11.500Umlazi 43.500KwaMashu Town Centre 11.469Town Centre Renewal - Hammarsdale & Mpumalanga 8.000 Strategic Projects Beachfront Upgrade 7.500Precinct upgrade around training venues 5.000 Information Technology Payroll & HR Time and Attendance 6.206Fibre and Wide Area Network 14.000

INTRODUCTION State of Local Govt (Nationally)• New Growth Path 2010 (NGP)• Government’s number one priority is job creation• Service delivery protests• Local Govts in financial crisis State of Local Govt (eThekwini)• Balanced Budgets• Sustainable• Realistic• Multi-year Forecasts

STATE OF THE ECONOMY• The global crisis in 2008 impacted negatively on GDP growth during

2008-2009 with Durban recording a -1.6% growth over the period.

Cape Town eThekwini Johannesburg 2008 R199.8 bn R194.0 bn R298.8 bn 2009 R197.8 bn R190.8 bn R293.6 bn % Growth -1.0% -1.6% -1.7% 2010 (Forecasted)

R202.3 bn R197.5 bn R302.8 bn

Table 1: GDP Performance and forecasts at Constant 2005 prices (Source: Global Insight)

• GDP for eThekwini during 2010 was forecasted at R197.5 billion, a 3.5% increase over 2009, boosted by 2010 FIFA World Cup Soccer and increase in tourism activity

• Dig-out port (decision taken on DIA site. Private sector opportunities in development)

• Back of Port Planning (reaching finality)

• Cornubia (Partnership with Tongaat Hullett to unlock industrial; commercial and residential land in multi-income categories)

• Northern Urban Development Corridor • N3 Corridor (focus on Hammarsdale, Cato Ridge & Durban-Gauteng

corridor)

• Western Aqueduct• Beachfront Rehabilitation – 1000 jobs created

(landscaping, electrical, timber decking etc)

ECONOMIC DEVELOPMENT Key Developments

• Three areas of focus:– The Durban CBD & Inner City– Secondary CBDs– Key Townships Nodes

• Inner City– R1 billion worth of investment made in Durban’s inner city Urban Development Zone, reversing decay

and contributing to city’s high-profile business and residential status– Continued development of the Point – Warwick Junction upgrade – Priority Zone (high standard of urban maintenance)

• Secondary CBDs- Tongaat - Pinetown - Isipingo

– Increased focus on urban management and support to UIPs

ECONOMIC DEVELOPMENTPriority Nodes and Corridors

• Township Nodes– Securing R720m from National Treasury as part of NDPG Programme–Bridge City mixed-use development

•shopping centre operational; magistrates court & regional hospital being developed – R80m of NDPG funding spent

– Mpumalanga Town Centre •R30m NDPG Funding spent and further R12m secured from COGTA

– KwaMashu Town Centre •R40m spent and R20m to be spent next year

– Clermont Kwadabeka•R45m spent and balance of R100m to be spent over next 3 years

– Umlazi & Malukazi •R45m spent & balance of R200m to be spent over next 3 years

– INK •R40m spent and balance of R225m to be spent over next 3 years

Promoting Investment in priority nodes and corridors & NDPG

ECONOMIC DEVELOPMENTJob Creation

• Contribute towards National Growth Path target by growing Durban’s share of national employment

• Focus on new; emerging sectors and innovation sectors such as:– The Green Economy – City established an Energy Office– ICT - continued support for SmartXchange; development of Lamontville ICT hub and broadband

rollout programme

• Identify and enhance sectors presently growing in GDP and employment

ECONOMIC DEVELOPMENT Tourism

• Durban is the largest domestic destination in South Africa with projects in place to become one of the largest international tourism cities - played a major role in the growth of the city for decades

• Central beachfront upgrade which will see the Durban’s famous beachfront being remodelled, extended and transformed into a feature that will be a leading tourism asset to Durban and South Africa

• Development of the Inanda Heritage Route and Kingsway Tourism Corridor• Pursuing of partnerships to focus on tourism development at Inanda and Hazelmere Dams• Strengthening Umhlanga as a tourist node (development of the promenade & CBD improvements)• The city has been listed as one of the top ten family beach holiday destinations in the world by a travel

publishing heavy weight.• The Soccer world cup produced an increase in visitor numbers and international exposure• Some of the other major events planned to take place during the coming year are expected to have

an overall socio-economic impact exceeding R1.2 billion. Securing of major events at the ICC such as COP 17 (Climate Change Conference) & Tourism Indaba

• Olympic Games 2020?

• Rural Development Framework & Strategy being implemented– Investment in rural nodes (Kwa-Ximba, Inchanga, Umnini)– Agricultural Projects being implemented

• Free basic services• Informal sector support for survivalist businesses• Expanded Public Works Programme (EPWP)

ECONOMIC DEVELOPMENTPoverty Alleviation

• Support to Micro enterprises• SMME Fairs has grown significantly• Partnership with SEDA• Durban Tradepoint – to promote SMME export• Sector Support through partnerships with industry in the

following sectors:– Automotive; Chemicals; Clothing & Textiles; Furniture; Film

(including Film Mart); ICT; Maritime & Logistics.

ECONOMIC DEVELOPMENT Trade and Sector Support

ECONOMIC DEVELOPMENTMajor Government Projects

• Transnet Capital Programme – Replacement of rolling stock– Dig-Out Port – Transnet seeking partnership with private sector– Multi-purpose Pipeline

• Dube Tradeport – – Development of AgriZone

• City’s Capital Budget• King Edward Hospital Redevelopment• Bridge City Govt Projects:

– Development of regional hospital and magistrate’s court

COP 17 OVERVIEW & BACKGROUND

• The United Nations Framework Convention on Climate Change is an international treaty arising from the UN’s conference on Environment and Development.

• The treaty aims to stabilise greenhouse gas emissions to minimise their impact on the earths climate.

• The conference of the Parties (COP) is the governing body of the Convention, and advances implementation of the Convention through the decisions it takes at its annual meetings since 1995.

• The Kyoto Protocol expires in 2012 and it is expected that the extension of this protocol will form a key element of the negotiations at COP17.

• The COP/ CMP conference is one of the biggest international conferences.• It will bring delegates from over 200 countries around the world to Durban. • The official conference period is two weeks, (27th Nov to 9th Dec) with a week of pre-session

meetings (21 to 27th Nov).• Durban is expecting between 15 000 and 20 000 foreign visitors into the city for the conference

as official delegates. Many more are also expected to visit to attend side events, exhibitions and meetings.

• Delegates include thousands of foreign press staff; dignitaries; business people; ministers and possibly heads of state.

COP 17 – benefits to the City• The some of the main benefits to the City will be in the following areas:

– Huge international exposure – the eye of the world will be on the City. – Tourism –

• Accommodation across all forms will be fully booked for the event period (This period is traditionally a quiet period for the accommodation industry)

• Strong benefits will be felt in our food and entertainment industry • Curio’s and crafts will be bought• Local tourist attractions will be visited on delegates days off• The tourist transport sector will benefit from increased car hires, taxi trips, bus trips, tours taken etc

– Printing industry• Despite being a “green” conference, hundreds of thousands documents and leaflets will be printed

– Conference industry• The scale of the COP event and the range of side events will mean that Durban’s conference industry

will have many opportunities– Arts and Culture

• A range of social and other events are envisaged to be part of the COP event– The city can showcase our organisational and infrastructural capacity – leading to future investment in the

city.– The city can showcase our environmental projects and programmes– The potential to have a new environmental protocol named after our City – the Kyoto Protocol will make

way for the Durban Protocol!

Examples of the possible benefits of this event to the city in numbers.....

• A minimum of 15 000 people – each staying an average of 8 nights (a conservative figure)– = 120 000 accommodation bed nights– = 360 000 meals eaten in the city– = around 50 000 curio’s sold in the city– = at least 50 000 metered taxi trips– = probably over a million cups of tea or coffee sold– = at least an additional 5000 people visiting nearby tourist

attractions – most of whom will have significant disposable income.– If the event goes well, 15 000 people who will go back home and

report favourably on Durban as a destination of choice.– Hundreds of thousands of media articles written mentioning the city

Sustained collection rates Cost pressures, salary increases, budgeting within inflation Backlog strategy Impact of high electricity increase

65

OTHER CHALLENGES

• The Municipal Systems Act requires an IDP to be compiled and it is linked to the term of office for local councillors.

• During the course of the 5 year period the IDP is reviewed on an annual basis.

• It is a tool used by the Municipality to plan future development within eThekwini.

• It guides and informs all planning, budgeting, management and decision-making related to delivering services and development in the municipal area.

• The IDP process enables the Municipality to work with communities and other stakeholders

IDP REVIEWWhat is an IDP?

• Vision:“Africa’s most caring and liveable city by the year 2020”

• To achieve the Vision the IDP is divided into 8 separate but related plans.

• The plans are supportive of each other thus ensuring effective delivery.

• The plans are as follows:– Plan One: Develop and Sustain our Spatial, Natural and Built

Environment– Plan Two: Developing a Prosperous, Diverse Economy and

Employment Creation– Plan Three: Creating a Quality Living Environment

IDP REVIEW

– Plan Four: Fostering a Socially Equitable Environment– Plan Five: Creating a Platform for Growth,

Empowerment and Skills Development– Plan Six: Embracing our cultural diversity, arts and

heritage– Plan Seven: Good Governance and Responsive Local

Government– Plan Eight: Financially Accountable and Sustainable

City

IDP PLANS CONTD

• Performance Monitoring and Evaluation is a legislative requirement, and is a critical tool to measure Service Delivery in the Municipality

• It is a process which measures the economic, efficient and effective implementation of the Strategy (IDP) of the Municipality through the monitoring of Key Performance Indicators and providing an early warning signal for underperformance

• Accountability by the Political and administrative component of the Municipality is also ensured.

• Quarterly and annual reporting to Management, the Audit Committee and Council occurs to ensure an effective process.

PERFORMANCE INFORMATION

• Public Participation Process:– Advertised from 1 April 2011– Commenting period begins on 1 April 2011 – Documents will be available from Municipality’s website (

www.durban.gov.za) and Municipal libraries and Sizakala Centres.

– Deadline to submit comments 6 May 2011– Draft IDP to be amended, taking public input into account,

during May 2011– IDP tabled at Council in June 2011 for adoption– Adopted IDP to be then submitted to MEC for Cooperative

Governance

IDP REVIEW – WAY FORWARD

• All municipalities and municipal entities must prepare an annual report at the end of each financial year - Section 121 (1) of the Municipal Finance Management Act 56 of 2003 (MFMA)

• eThekwini Annual Report 09/10 was tabled at Council on 27 January 2011

• Annual Report released for public comment in February 2010• Oversight Report of Annual Report process and final comments

adoption by Council on 30 March 2011• Final print version of the Annual Report will be available by July

2011; the report is currently available on www.durban.gov.za

ANNUAL REPORT PROCESS

• Credit Rating – highest in the municipal sector• Audit Report - unqualified • Issues on SCM irregularities totaling R532m were raised - Expenditure deemed irregular ito procedure but not regarded as wasteful or

fruitless , Main items as follows: - R91m iro acceptance of quotations not routed via the Bid Adjudication

Committee(BAC) - Housing : R155m variation orders not routed via the City Manager . Also

R18m for consultants accepted via quotations not routed via bid. Note that the Head: Housing had delegated authority , however, new SCM requires revised processes

- R52m iro of contracts with employees of State, unbeknown to the municipality

- R156m over expenditure on contracts not submitted to BAC - Reports to the BAC have been prepared to regularise this expenditure

ANNUAL REPORT - OTHER

THE END

COUNCIL APPROVAL OF FINAL BUDGET 14 APRIL 2011

QUESTION AND ANSWER SESSION