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SA: Moses Makwakwa: Address by the MMC for Finance in the Ekurhuleni Metropolitan Municipality, at the Alberton Council Chamber, Alwyn Taljaard Avenue, Alberton (28/04/2016)

Moses Makwakwa
Moses Makwakwa

28th April 2016

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Madam Speaker, Cllr Patricia Kumalo;
Executive Mayor of the City of Ekurhuleni, Cllr Mondli Gungubele;
The Chief Whip of Council, Cllr Robert Mashego;
Members of the Mayoral Committee;
Chair of Chairs and Chairpersons of Oversight Committees;
Leaders of All Political Parties in Council;
Honourable Fellow Councillors;
City Manager, Mr Khaya Ngema;
Senior Management of the Municipality and CEOs and CFOs of the municipal entities; The Leadership of Business, Labour and Civil Society;
Fellow residents of Ekurhuleni;
Distinguished Guests;
Members of the Media; and
Ladies and Gentlemen.
Madam Speaker;


At the outset let me add my voice to those of many South Africans, who have expressed shock at the passing of 10 Ekurhuleni residents, who were also members of the African National Congress.
These volunteers perished in a fateful accident 11 days ago while carrying out their obligation of actively participating in the activities of their beloved organisation. Indeed, we may have laid them to rest in dignity, but their spirit will live on for they made the ultimate sacrifice for the love of the people of Ekurhuleni, and South Africa in general.

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Just like their families, our hearts are still sore, but we continue to pray for Godspeed to their families. May their souls rest in eternal peace.

Fellow Councillors;

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I stand before this august house, and the people of Ekurhuleni, with a great sense of appreciation for the opportunity afforded to me to present the last Integrated Development Plan (IDP) and Medium Term Revenue and Expenditure Framework (MTREF) for the team of 2011 to 2016 -under the leadership of the Executive Mayor, Councillor Mondli Gungubele.

This budget speech is being delivered a day after multitudes of South Africans came together to celebrate Freedom Day, a day in which we commemorate the liberation of our country and the majority of its people from a long period of difficult and costly oppression.

Honourable Councillors;

It was President Nelson Mandela who once said, “To deny people their human rights is to challenge their very humanity.” This may have been many years ago, but this statement is still relevant today.

t is, therefore, appropriate to state that the African National Congress, working together with the people of South Africa, led the struggle against apartheid and this resulted in the birth of democracy and restoration of human dignity.

Madam Speaker;

Indeed, the journey was never smooth, but it was one that a majority of South Africans - led by the ANC - had decided to pursue and pay the ultimate price, if need be.
As a result, today we are walking tall because our collective efforts culminated in the realisation of a free society and a democratic South Africa. We are now a country that is progressively striving to build a non-racial, non-sexist society and a great sense of hope and prosperity.
Out of this hard earned democracy and freedom, not only do the people have the liberty to choose the government of their choice, but they equally have the right to shape the manner in which government should use the budget as a tool for transforming and bettering their lives.

Madam Speaker;

Our consistent community engagements, through the IDP and Budget consultative processes, have strengthened the voice of our people and propelled them to actively participate in matters of local government.

It is for this reason that I can say, without fear of contradiction, that our budget has always - and continues to be - driven by the will of the people because we are forever soliciting their views.
As the Freedom Charter stipulates, “No government can justly claim authority unless it is based on the will of the people.”

In view of this, I can state that as the ANC-led government in Ekurhuleni, we have earned our legitimacy because we have been listening, and serving, guided by the aspirations of the people.

Fellow Councillors;

We thank the people of Ekurhuleni for having entrusted the ANC with the responsibility to accelerate the provision of services, and lead the charge for transformation in this region.
Many were right to believe in us, because we are not here for ourselves but to address their aspirations.
As a government of the people, to stay true to our commitment, we have consistently invested our limited municipal resources to:

  • Provide sustainable basic services;
  • Broaden services where the was none; and
  • Support initiatives that attract investments for city growth and development.

Honourable Speaker;

Reflecting on the past five years, I am sure that our people will be inspired by the progress we have made in attending to the imperatives of the 2011 local government mandate.

Building local economies to create more employment, decent work and sustainable livelihoods
Just over R25 billion was invested towards accelerating the on-going massive infrastructure development and maintenance programme through large scale projects covering energy; water and sanitation; public transport; and information technology communication infrastructure.

Together with the private sector, we have created no less than 200 000 work opportunities through the infrastructure development and maintenance programme. Through the institutional review process 1 049 vacant positions were identified, and are being filled in phases.
Improving local public services and broadening access

Fellow Councillors;

In speeding up the provision of access to quality water and sanitation, to promote human dignity, over R4 billion was spent on infrastructure and maintenance. This money went to, among others:

  • Upgrading water networks to enable the City to provide quality water and maintaining the Blue Drop status;
  • Replacing water pipes, installing meters in unmetered areas, and new meters under the water loss eradication programme; and
  • Upgrading of outflow sewer pipeline and network.

In the area of energy provision and maintenance, a total of R6 billion was utilised. Projects undertaken include:

  • Construction and upgrading of sub-stations;
  • Provision of solar lighting devices to informal settlements; and • Installation of high mast lighting and meters.

A further R4.7 billion went to the construction and maintenance of roads and storm-water systems.

On the Social Package
In expanding access to free basic services we spent R10 billion towards the social package programme as a relief to households, whilst we continue providing water and ablution services to 119 informal settlements.
Our social package includes:

  • 100% rebate on assessment rates;
  • Free - 9 kilolitres of water;
  • Free - 9 kilolitres of sanitation;
  • Free - refuse removal; and
  • 100 kilowatts of free basic electricity.

Building united, non-racial, integrated and safer communities
Basic services for informal settlements Basic services, such as water, sanitation, electricity, safety, security and roads are part of the constitutional right that is afforded to our residents. This includes the provision of solar lighting, sanitation and re-gravelling.

Improving public transport

Transport is a key enabler to integrate communities. To date, over R1.3 billion was spent in bringing the integrated rapid public transport network to the people of Ekurhuleni.
We have increased the bus fleet with modernised buses that cater for disabled people. Furthermore, we have opened new routes as part of Gauteng City Region to improve mobility.

Intensifying safety and security of our citizens

  • R290 million was spent on new vehicles for the Metro Police and Emergency departments;
  • 58 ambulances were acquired to supplement the existing fleet;
  • Three fire stations were constructed and operationalised, and a further six are under construction;
  • R339 million was spent on the building and upgrading of 21 clinics, and seven Early Childhood Development centres in Tembisa, Tsakane, Duduza, KwaThema, Daveyton, Etwatwa and Katlehong.

Ensuring more effective, accountable and clean local government

Madam Speaker;

In reflecting on the work done on the implementation of the manifesto commitments, residents of Ekurhuleni will be pleased to know that we have received two consecutive clean audit opinions by the Auditor General South Africa, for the financial periods of 2013/14 and 2014/15.

We have also strengthened transparency by opening up public access to the viewing of the tender adjudication process every Monday from 13h00 - in this very venue. This is now a normal process and a demonstration of just some of the initiatives we are implementing to counter against corruption, through openness.

Let me also indicate that I am very excited to further report that during this term of office we managed to:

  • Maintain very solid financial results;
  • Grow our capital infrastructure programme; and
  • Increase our repairs and maintenance.

In light of the above, and the continuous positive feedback from the majority of the people of the City, we are convinced that we have moved service delivery a step forward.

Madam Speaker;

Whilst we are mindful of the persisting challenges Ekurhuleni residents can, however, attest to the fact that today is better than yesterday and that tomorrow holds a better future under the ANC-led municipality.

SOCIO-ECONOMIC OUTLOOK

Madam Speaker;

We are presenting the IDP and MTREF under challenging economic conditions with sluggish economic growth, high prices of food and services as well as an increasing interest rate.

The 2008 structural changes in the global economy has certainly impacted on our economy.
During the Budget speech the Minister of Finance, Mr Pravin Gordhan, cited that, “South Africa still faces the challenges of lower economic growth, widespread unemployment and inequality.”

We agree with his assertion, noting that since 2011 Ekurhuleni has experienced a consistent decline in the economic growth - from 3.9% to 1.9% in 2014. Unemployment remains stubbornly firm, especially among young people.

Our population is estimated to increase by an average of 2.5% between 2014 and 2019, with a proportionally low disposable household income.

Adding to this, is the declining contribution by the manufacturing sector with low export earnings. This is despite concerted government interventions to rejuvenate the sector through the revitalisation of the manufacturing and industrial sectors.

Although there are concerns, our economy has been resilient and we are working hard to improve our growth prospects and to build investor confidence.

Honourable Councillors;

Despite this status quo, we have maintained a pro-poor orientation on public spending to improve social development through sustainable provision of basic services. This is due to our prudent and sustained macro-economic policies, as well as consistent and sound budgetary policies.
Our robust economic policy, and the tone set by the Executive Mayor in the State of the City Address, demonstrate that our City is on a growth trajectory.

Fellow residents;

Let me take this opportunity to bring you up to speed with how we, as the City working collectively with yourselves and private sector, will be responding to these challenges. We have set out a credible budget implementation plan to address challenges and achieve our imperatives and goals, as guided by the Growth and Development Strategy (GDS) 2055.

The GDS directs us to do, amongst others, the following:

  • A compact and sustainable urban city that enables mobility and enhances the functionality of the economy;
  • An economic growth that is linked with job creation;
  • An environmental well-being that must result into a clean and green city;
  • Empowerment and prosperity through social cohesion; and
  • Effective co-operative governance.

Outlining the MTREF based on the economic functional corridors


An amount of R141 million (R550 million for MTREF) has been allocated to re-industrialise the City. This will cover, among others:

  1. R88 million to strengthen industrial competiveness through the development of the following:
  • the Aerotropolis nerve centre;
  • Investor information centre; and
  • Ekurhuleni innovation hub.
  • R19 million to acquire tourism route busses, high-tech tourism management systems and developing waterfront facilities, which include conference and hospitality facilities at Germiston Lake.
  • R15 million to develop an enterprise hub in Reiger Park and vocational skills centre in Ramaphosa to promote small, medium enterprises.

To re-industrialise corridors, R211 million has been set aside (R461 million for MTREF) in order to drive economic development. For the installation of bulk infrastructure to enable new development, R100 million is budgeted for. Key developments in this corridor include Tambo Springs Inland Port and Prasa manufacturing plant in Nigel.

A figure of R33 million has been allocated to sustain agriculture activities, which include:

  • R15 million for the development of part of the Spaarwater farm into a commercialised eco-tourism facility, training academy, lodge and game farm; and
  • R18 million to expand the wholesale market at the Fresh Produce Market.

An amount of R78 million goes toward promoting township economies through tourism and industrial: • R30 million is allocated to building and operationalising fabrication laboratories in Duduza;

  • R20 million for the development of Labore and Withoek Industrial Park in Tsakane;
  • R10 million goes to the creation of a tourism node in Khumalo Street, Thokoza;
  • R8 million will fund trading facilities in Lamola Street in Nhlapho section, Katlehong, and other priority areas.
  • R10 million will refurbish Council-owned shops, as part of township economies.

Ekurhuleni is ready for business - join us in moving the City forward.

The City will be releasing strategic land parcels, like Germiston Central Business District precincts and Germiston Lake precincts. We will, however, partner with the private sector through public, private partnerships.

To re-urbanise the City so as to achieve sustainable urban integration, R3.2 billion (R10.9 billion for MTREF) has been allocated to, among others:

  • R696 million for the construction and upgrading of roads and storm-water systems; • R550 million for human settlement which include:
  • R80 million for the construction of 465 subsidised housing units at the Germiston Fire Station and Delville;
  • R120 million for the bulk infrastructure and construction of housing units as part of the mixed-use development in Leeuwpoort; and
  • R240 million for the servicing of stands.
  • R494 million to secure water supply, and to deal with sewer problems;
  • R165 million for the construction of reservoirs;
  • R80 million to build outfall sewers;
  • R777 million for the continuation of phase one of the Integrated Rapid Public Transport Network (IRPTN), which will cover the automated fare collection system, bus stations, trunk and feeder routes; and
  • R649 million for the supply of energy, of which 36% is for substations.

Repairs and maintenance in re-urbanising the City
Repairs and maintenance has increased over the years, mainly due to some of our areas being 100 years and older.
It is, therefore, important that we spend the allocated amount for repairs and maintenance to protect the integrity of our infrastructure, and ensure sustainable quality services to our people.

A total of R2.9 billion, amounting to 6,3% of the carrying value of the assets, has been allocated for repairs and maintenance of, among others:

  • Energy repairs and maintenance (11% of the asset value);
  • Water and sanitation repairs and maintenance (8% of the asset value); and • Roads and storm-water infrastructure (3% of the asset value).

Over and above this, we have allocated an additional R200 million in the Capital budget for the reconstruction of the roads and storm-water system.

Madam Speaker;

Re-generate to achieve the environmental well-being of the society
In this regard, R266 million has been allocated to ensure an environmentally friendly city. In creating a socially cohesive environment, we will upgrade and develop parks in Springs, Etwatwa, Tembisa, KwaThema, Benoni, Zonkezizwe and Vosloorus.
Over and above this, we will continue with the following programmes: • Rodent control;

  • Litter picking;
  • Lungile Mtshali;
  • Illegal dumping;
  • Grass cutting; and • Clean City.

Madam Speaker;
Re-mobilising in order to build a responsive and active citizenry
An amount of R507 million (R1.5 billion for MTREF) has been allocated for the construction and upgrading of community facilities, and the acquisition of emergency services vehicles.
This will include:

  • Esangweni, Selope Thema, Tsietsi, Crystal Park, and Kwa-Dukathole clinics, which will be
  • completed in 2016/17;
  • Construction of new clinics in Duduza, Lindelani Extension 9, and Esselen Park;
  • R60 million for early childhood development centres in Vosloorus, Tsakane and Thokoza;
  • R86 million to construct and upgrade swimming pools - Eden Park, Reiger Park, Primrose,
  • Delville, and Olympia Park;
  • Building of new swimming pools in Duduza, Van Dyk Park, Daveyton, Kempton Park and
  • Boksburg.
  • The resealing of tennis courts around the City;
  • Completion of the Germiston Theatre, which is due to open before the end of the calendar year;
  • R97 million to upgrade and rehabilitate libraries: Etwatwa and Bonaero Park will get new
  • libraries during the MTREF period; and
  • Replenish the ambulance fleet with approximately 50 vehicles.

The Executive Mayor, in delivering the State of the City Address, raised the matter of safety and security, especially the number of police officers.

I have taken heed of the call and we will fund the employment of an additional 450 police officers. The principle, therefore, is that as we increase capacity overtime claims must significantly go down.
At this point, I wish to pause and emphasise this particular point. NO employee must plan their monthly income based on the anticipated overtime. I have instructed the Finance Department to be extremely vigilant on this issue.
Honourable Speaker;
Re-governing the City to achieve effective co-operative governance
Building long-term fiscal strength is critical for the future sustainability of the City. In this regard Council has approved Section 78 of the Municipal Systems Act, which allows us to initiate the process of restructuring the municipal entities.
Having reviewed the performances of our entities and business requirements, it has become imperative to restructure the nature, form and functionality of our entities to make them more effective and financially sustainable.
In addition, we are at an advance stage in establishing the Ekurhuleni Development Agency which, among others, will spearhead catalytic project programmes.
An allocation of R607 million (R1.9 billion in MTREF) has been allocated towards building a capable developmental and sustainable City. It sees:

  • R305 million go towards digitising and modernising the City; and
  • R250 million for the upgrading of municipal properties, and the acquisition of land and buildings

to bring our government closer to the people.
The people of Ekurhuleni can rest assured that our commitment to building local economy through increasing procurement opportunities, job creation, and reducing unemployment and poverty within the City is unwavering.
We are continuing with the advancement of radical economic transformation that supports local economies and inclusive growth. In this regard, R3.5 billion has been set aside for the Community Empowerment Package, namely Mintirho Ya Vula Vula, for the upcoming financial year. Through this allocation we intend to:
Expand procurement spent to youth-owned entities;

  • Solidify the foundation and growth of Vukuphile learner contractors;
  • Change the outlook of our townships through the Lungile Mtshali Community Development
  • Project, and other community works programmes.
  • Support social entrepreneurship through Grant-in-Aid; and • Step up on the Black Industrialist programme.

Madam Speaker;
The successful implementation of Mintirho requires dedicated processes and structure. As such, we will undertake the following:

  • Establish a properly capacitated project management unit within supply chain to drive this imperative programme;
  • Identify and ring fence projects across departments for the Mintirho pool;
  • Dedicate procurement committees to process Mintirho projects consistent with SCM policy; and
  • Call for feasible, viable and bankable proposals in respect of Black industrialist.


Fellow Councillors;

We believe that the above is realistic, implementable and a response to the growth and development trajectory.
It must be clear that there is no room to further tolerate under spending, as this will undermine the realisation of our plan.

Madam Speaker;

I now turn to budget funding. The provision of sustainable services and the building of a capable, delivering and livable City is, to a greater extent, dependent on our financial stability and the ability to continue to generate revenue.
Thanks to the many individual and business account holders who realise this important factor and pay for services, we continue to do what is expected of us. In our efforts to fulfil our core mandate of providing basic services, we propose the following tariffs:
Assessment rates will increase by 7.5%. This is lower than the average rate increase of other metros of 8.1%.

Madam Speaker;

Let me remind the house that our pensioners, who are earning a monthly income of R2 840 qualify for a 100% rebate. The monthly income threshold for a 40% rebate has improved from R12 750 to R13 640.
Based on the Nersa approval, the electricity tariff will increase between 7.64% to 9.4%, depending on the consumption level.
Other increases are as follows:

  • Water tariff will increase by 9%;
  • Sanitation will increase by 9%;
  • Refuse removal goes up by 8%, for both business and residential; and
  • There is 0% increase in cemetery fees for Ekurhuleni residents, but 10% for outsiders.

Having listened to our people’s cries about the rate of night vigil tariffs for traditional churches and non-profit organisations, we have reduced the tariff from R900 to R450 per hour.
Key to note is that there will be no increase for the following services: • Library and information services;

  • Use of arts, culture and heritage facilities; and
  • Sport and recreational facilities.

The 2015 independent report by South Africa Cities Network, in respect of Cities State Finances, states that Ekurhuleni’s comparative cost of services packages was the lowest, and that the City is the cheapest for type A municipalities in the country.

Madam Speaker;

We have made it easier for customers to pay their accounts by introducing the e-Siyakhokha payment channel, a platform through which revenue is collected in a modern and smart way.

Almost 250 000 accounts are registered, compared to 170 000 reported during the 2015/16 budget speech. We urge account holders who have not yet registered to log on to www.esiyakhokha.co.za, and register in order to view their statements, log queries and make payments.

Honourable Members;

I have commissioned the Department of Finance to conduct value engineering processes on revenue in energy and water infrastructure, to minimise and eventually reduce leakages.
This is triggered by the continuous decline of our revenue, especially in electricity. It is a matter of grave concern that the City is losing income on illegal outdoor advertisements. We will be clamping down on this activity.

We have also, however, identified strategic areas for outdoor advertisements that will be released to the market in the near future. In the same vein, we have set revenue targets for the Department of City Planning in this area.

Fellow Councillors;

  • Based on the assessment of our draft budget, as presented to National Treasury, the conclusion is: • Credibility - the budget assumptions are credible;
  • Relevance – evidence of alignment of the Capital budget to the SDF, IDP and BEPP; and
  • Sustainability – cash flow sustainability over MTREF, there is adequate cash coverage.

EXPENDITURE ON COST CONTAINMENT

The main drivers of the operating expenditure are employee cost, bulk purchase, repairs and maintenance, and depreciation.

Bulk purchase for water, sanitation and energy of R9.1 billion represent an increase of 4.3% year- on-year.
Employee cost of R7.0 billion represents 21% of the total operating expenditure and repairs and maintenance of R2.9 million covers 9.1% of total expenditure.

Our call is that during the ordinary course of incurring expenditures, the principle of cost containment must always prevail. In this regard, we will increase our efforts to reduce cost through some of the following cost containment measures:

  • Travelling both domestic and international will be managed by a team, based on an annual plan.
  • Limitation has been imposed on the number of trips and the number of travellers per year. This team will meet twice a year and will only in exceptional cases consider a trip that was not planned for.
  • Excessive expenditure on overtime has led to the drive to increase the number of Metro police officers. Strict measures are implemented and the relevant head of department will have to account for any excess cost.
  • The procurement of certain cross cutting commodities will continue to be centralised. These include furniture, operational cars, ICT equipment, and consumables, to mention few.

It has come to my attention that some officials use Council vehicles for private use. I will like to appeal to our communities to report any Council vehicle parked at private residences or spotted outside Ekurhuleni at this whistle blowing number - 0800 10 2201.

CONCLUDING REMARKS

Madam Speaker;

We pride ourselves that since 2011 we have done our best to respond to the aspirations of the residents of Ekurhuleni, inclusive of the middle class and business sector.
The service delivery journey is never ending, but of importance is that there must be hope of an even better future. Thus far, we can look back with pride knowing that judging from where we come from, where we are, and where we want to go, the future looks even brighter with better prospects for transformation and development.

We urge our people to continue working with us because we are conscious we have the political will, a strategy and a plan to better the living conditions of all who live in this City of peace.
We, therefore, further commit to continue liberating our people from existing bondage of outstanding service delivery backlogs, persistent poverty, unemployment, inequality, economic deprivation and any other form of suffering. Beyond the 2016/17 set plans, working together with our communities we will continue to:

  • Further improve access to municipal services while reducing its outsourcing thereof;
  •  Enhance the capacity of the municipality to deliver on our core mandate;
  • Develop and strengthen local economies with a view to create jobs and promote job placement
  • especially among young people;
  • Improve public participation and accountability; and • Place education amongst our priorities.

People of the City of Peace;

In just over three months, we will again exercise our most fundamental right in this democracy – the right to vote.

The late President Nelson Mandela, when giving his speech at the first Bram Fischer Memorial Lecture in 1995, said, “I waited over 70 years to cast my first vote. As the world held its breath, South Africans together made their mark to bring into being one of the truly remarkable events of this turbulent century.

“I voted not only for myself alone, but for many who took part in our struggle. I felt that with me when I voted were Oliver Tambo, Chris Hani, Chief Albert Luthuli and Bram Fischer.

“I felt that Josiah Gumede, GM Naicker, Dr Abdullah Abdurahman, Lillian Ngoyi, Helen Joseph, Yusuf Dadoo, Moses Kotane, Steve Biko and many others were there.

“I felt that each one of them held my hand that made the cross, helped me to fold the ballot paper and push it into the ballot box.”

Honourable Speaker, Fellow Councillors, Distinguished Guests, Ladies and Gentlemen;

We have tabled before you a budget that builds on the advances we have made over the past four years. This budget is also a building block for the future, which we are laying with an understanding of the imperatives of going back to basics.

As the ANC-led government we re-commit to continuously serve the people and build a public service that is more responsive, transformative and accountable. We shall continue to work tirelessly with our communities to undermine poor service delivery and persistent inequality.

Honourable Speaker and Fellow Councillors;

I must also thank members of this Council who represent the multitudes of our people for always ensuring that we are always on course, focused and that we direct our attention to the acceleration of service delivery and focused development.

A special thanks to our residents, the business community, NGOs, religious sector and other stakeholders who are forever providing us with valuable inputs.

To the City Manager, senior management and staff of the Metro, we have come this far and through team work, I dare say, we can achieve even more if we continue working together in this fashion.
As I close let met thank the team responsible for putting this budget together. Your hard work and determination is much appreciated.

To my family, thanks for always being there for me, even when the chips are down.

Honourable Speaker and Fellow Councillors;

It is my sincere hope that, as we look back over the road we have traversed, we should all with pride declare that our collective achievements are indeed significant. In this budget we build on our experience of the past four years and aim to do even better as we seek to do more going forward.

Madam Speaker, I hereby table the budget and related budget policies.

Hi khensile. Ndiyabulela. Ngiyabonga. I thank you. Ke a leboga.
 

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