Government unlocked R54-billion performance-based funding for metro municipalities to improve infrastructure and service delivery over the next six years.
This metro trading services reform was introduced in July to assist in rebuilding and improving management in water and sanitation infrastructure, electricity, and solid waste service.
Finance Minister Enoch Godongwana said the grant should help these municipalities secure private investment and support municipal capital budgets.
Requirement to access incentive
“Metros will require clean audit outcomes to access the incentive. They will also need to achieve and maintain eight accountability commitments. And also perform against the indicators set out in their council-approved action plans.
“The incentive grant requires that metros match each R1 of the performance incentive with R1 from improved revenue or own borrowing,” said Godongwana.
He also mentioned that conditional grants to these municipalities will be reorganised as part of government’s budget reform initiative.
“Over the medium term, R19.3-billion for infrastructure associated with metro trading services will move from the urban settlements development grant to the performance-based urban development financing grant.
Review of infrastructure grants
“The aim is to enhance funding to scale up infrastructure delivery. To also improve the reliability of services in metropolitan municipalities by incentivising better performance,” said Godongwana.
He said the government is carrying out a detailed review of infrastructure conditional grants. This is following the recent completion of the broader conditional grants review.
He explained that this review will look at how provinces and municipalities are spending the funds and delivering projects supported by these grants.
The aim, he said, is to get better value for money. This by improving planning, implementation, and accountability. The first phase of the review is expected to finish by December.
Connection between homes and cities
He added that Operation Vulindlela also seeks to make cities more inclusive and productive. Ensuring a stronger connection between where people live and where they work.
“The public transport network grant has failed to meet its objectives to increase mobility and expand access to jobs and economic opportunities. Over the medium term, the grant will be phased out. It will be replaced with new arrangements to explore integrated public transport. As well as improvements to higher-density housing to maximise benefits,” said Godongwana.
