Investment in urban infrastructure is important for the development of the local economy, combating poverty and the provision of universal access to municipal services. Rapid inward population migration, declining household sizes and greater economic activity places pressure on existing municipal infrastructure and require larger investments in the periods ahead. In addition to the rollout of service delivery infrastructure, the municipality’s capital expenditure is also directed towards economic stimulus and job creation.
The capital budget is directly informed by the needs submitted by the community through the IDP process. In view of borrowings being maximised and the present economic climate, the high levels of capital expenditure cannot be sustained.
The ability of the Municipality (Parent) to deliver on progress depends a lot on its funding sources which are summarised as follows:
Government grants are budgeted to continue to fund the bulk of capital expenditure over the next three years, covering 57 % of the cumulative expenditure.
URBAN SETTLEMENTS DEVELOPMENT GRANT
The urban settlements development grant is and integrated source of funding to provide infrastructure for municipal services and upgrade urban informal settlements in metropolitan municipalities. The grant is allocated as a supplementary grant to cities. A combination of grant funds and own revenue is used to develop infrastructure and integrated human settlements. Progress on these projects against the targets set in the service delivery and budget implementation plans are reported regularly. The grant is allocated mainly to Economic Development Projects R 338 mil ( town centre renewals & tourism nodes / corridors ) , Housing infrastructure and Interim Services R1.34bn, Roads R 216mil ( sidewalks, road upgrades and upgrade gravel to surface ) , EThekwini Transport Authority R 473mil ( Cornubia Boulevard and traffic calming ), Water R 1bn ( supply infrastructure mainly water flagship project - Western and Northern Aqueduct and rural water ), Sanitation infrastructure R 1.26bn ( Ablution Blocks and rural sanitation ), Electricity supply infrastructure R 186mil ( substations, transformers, informal settlements connections, Zonal plans community projects R 554mil and other small projects ). Details of USDG funded capital projects are reflected in Annexure B.
2016/2017 RM
2017/2018 RM
2018/2019 RM
Total Capital Budget 6, 626 7, 048 7, 172
Funded as follows:
Grant Funding Internal Funding External Funding
3, 667 1, 959 1, 000
4, 025 2, 023 1, 000
4, 194 1, 978 1, 000
6, 626 7, 048 7, 172
44 1.6.2 INFRASTRUCTURE EXPENDITURE TRENDS
CAPITAL OPERATING
Neighbourhood Development Partnership Grant used to create economic infrastructure in undeveloped areas that attracts private sector investment
Focus on strategic township development, town centre renewals, Industrial renewals, upgrading of tourism nodes and corridors, sector support programmes and LED projects such as ICT, Renewal Energy technologies.
Economic Development Programmes: R 26.8 m Durban Film Office: R 5.1m
Global Marketing Strategy : R 19.6 Reforestation Projects : R 18.1m
Business Support Operational Projects: R 14.3 m Travel and Tourism Trade Show : R 15.2 m Durban Business Fair & Regional Fairs-: R 31 m Bid Support & Presentations : R 4.1m
Durban Tourism Events : R 36.0 m Durban Tourism brand advertising &
Domestic Marketing : R 13.1 m Convention Support : R 2.7m
CAPITAL OPERATING
Maintenance budget increased to R 1 012.5 m Provision of new staff: R 92.9 m
Eskom tariff increase: 7.86 % Loss in distribution: 10.08 % Collection rate: 97.5 %
Capital budget of R 2.0 bn over next 3 years
Ongoing extension and reinforcements of existing networks In excess of 10 Major new substations to be commissioned or refurbished
CAPITAL OPERATING
Capital budget: R 1 bn Major projects include:
- N2 Interchange
- Go Durban IRPTN –Corridor C3 - Bridge City terminal
- Harry Gwala Rd upgrade - Newlands Expressway extension
People Mover: R 26.5 m Public Conveniences: R 11.0 m Durban Transport: R 231.5 m Transport for disabled: R 11.1 m Traffic Signals: R 11.5
CAPITAL OPERATING
Reduction of the housing delivery program in view of reduced subsidies and the economic climate
5 500 new housing units – 2016/17 year, targeting a total of 20 500 units by 2018/19
The construction of houses is dependent on National / Provincial subsidy allocation
Interim services rollout to prioritized informal settlement dwellings
New development budget increased to R 144.3 m
Hostels budget: R 460.4 m
Upgrading of housing rental stock : R 60 m
46
CAPITAL OPERATING
Replacement of ageing Solid Waste Fleet: R 61.7 m Shongweni landfill site infrastructure : R 20.0 m Buffelsdraai landfill site : R 17.6 m
Nearly 100% coverage in the municipal areas by utilising community based contractors to provide refuse removal services to all the informal areas:
R 276.2 m
Expand recycling to cans, glass and waste minimization projects : R 16.3 m
Provision for refuse bags: R 92.0 m
CAPITAL OPERATING
Additional net operating expenditure: R 143.9 m Provision for maintenance expenditure: R 310.6 m Sludge disposal initiatives: R 46.7 m
Security costs for the protection of assets: R 45.3 m Provision for VIP pit latrine clearance: R 43.9 m Water consumption at Ablution Facilities: R 72.6 m
Provision of Ablution Blocks: Informal settlements: R 258.9 m Expansion of Phoenix Waste Water Treatment Works: R 34.3 m Umbilo Waste Water Treatment Works expansion: R 48.0 m Southern Waste Water Treatment Works- Digester Online: R 73. m Rural Sanitation: R 40.0 m
CAPITAL OPERATING
Upward trend due to investment in infrastructure and addressing of backlogs.
Provision of R 353 m for the Western and Northern Aqueducts projects respectively
Continuation of Water Loss Programme: R 40 m PRV Installation project: R 30 m
Rural Water Project: R 22 m
Total Expenditure increased by R 538 m to R 5.9 bn
Income Foregone – budget increased by R 174.9 m to R 880.3 m so as to accurately reflect the cost of free basic services.
Bulk water purchases: Increased by R 145.4 m as a result of a tariff increase of 11.2 % from Umgeni Water.
Increase in maintenance: R 22.9 m
Water loss in distribution budgeted at 37 %
CAPITAL OPERATING
Capital budget: R 579 m
Increase is primarily due to improvement of roads and infrastructure
Focus on refurbishment and maintenance of existing road networks
Roads & Streets maintenance : R 200 m Zibambele Poverty Alleviation: R 88.6 m Public realm and priority zone maintenance:
R 36 m
Gravel maintenance: R 83.8 m
Drains cleaning and maintenance: R 25.6 m
48 1.6.3 MAJOR ITEMS OF EXPENDITURE
ITEM / DESCRIPTION R’ m
1.6.3.1 HUMAN SETTLEMENTS, ENGINEERING, TRANSPORT AND INFRASTRUCTURE
· Umbilo waste water treatment works upgrade
· Shongweni landfill site infrastructure
· Southern waste water treatment works: digester online
· Rural water & sanitation
· Expansion of Phoenix water treatment works
· PRV installation project
· Western Aqueduct and Northern Aqueduct projects
· Water loss management project
· Provision / maintenance of ablution facilities
· Zibambele poverty alleviation project: roads/verge maintenance
· Housing delivery programme: 5 500 units
· Rehabilitation and upgrading of housing rental stock: 600 units
· Upgrading and conversion of hostels into family units: 120
· Roads and streets maintenance
· Gravel roads maintenance
· Electricity network maintenance
· Drains cleaning and maintenance
· Maintenance of priority routes
· Stormwater Infrastructure
· Structural maintenance: bridges etc.
· People mover
· Durban Transport bus service
· Rivers and streams maintenance
· Lines and signs maintenance
48.0 20.0 73.0 62.0 34.3 30.0 353.1 40.0 414.2 88.6 643.9 60.0 45.0 200.0 83.8 946.8 25.6 36.0 19.3 11.5 26.5 231.5 20.0 20.0
1.6.3.2 CORPORATE AND HUMAN RESOURCES
· Continual roll out of employee wellness interventions
· Talent Management Framework and strategy implementation
· Medical Surveillance: detection and management of occupational diseases
· Management Development Programmes: development of the municipality’s leadership
· Adult Basic Education & Training (ABET): general level of education
· Learnerships/Skills/Apprenticeships Programmes: Learnerships will be implemented/ continued
· Student Financial Assistance
· Bursaries for high achieving matriculants
3.1 1.6 2.7 6.5 4.5 10.1 4.5 5.6
1.6.3.3 SUSTAINABLE DEVELOPMENT AND CITY ENTERPRISES
Economic programmes, improve and grow the economic base of the city 26.8
Durban Film Office programmes 5.1
Reforestation project: Buffelsdraai, Inanda, and Paradise Valley 18.1
Global Media campaign: Tourism 19.6
Tourism Indaba-Travel and Tourism Trade Show 15.2
Durban Tourism brand advertising, domestic and destination marketing 13.1
Durban Tourism Events 36.0
Business Support operational projects 14.3
Durban Business Fair: Create platforms for interactions and networking amongst business 31.0
Town Centre Renewal 56.0
Neighbourhood Development Programme 51.0
Tourism Development 32.0
Beachfront landscaping : maintenance and development 15.5
1.6.3.4 GOVERNANCE
· Food Aid Programme: 36 soup kitchens
· Senior Citizens Programme: special events recognising our senior citizens
· Printing and distribution of Municipal Gazette: eZasegagasini
· Ward Committees Stipend
· Repairs & maintenance – buildings : Sizakala Centres & City Hall
· Mayoral Imbizo
· Security services for councillors and Sizakala Centres in the municipal area
· Youth development programmes
· Grant in Aid – non profit organisations
42.1 13.6 13.0 12.0 8.3 4.2 94.4 1.9 4.4
1.6.3.5 OFFICE OF THE CITY MANAGER
· Legal Fees: Litigation
· Sale of broadband: Income
· Maintenance, management and monitoring of the municipality’s IT network
· Programming: Applications and systems software
· Special events: special and ad hoc events, conventions / international conferences
· Licensing Fees: Software
· Cato Manor ABM operational projects
· Umlazi operational projects
19.8 25.2 38.2 29.6 134.1 18.4 3.4 4.6
50 1.6.3.6 COMMUNITY AND EMERGENCY SERVICES
· Fleet maintenance for Fire & Emergency unit
· Specialised fire fighting support vehicles
· Verulam Fire Station
· Illovo training facility
· Disaster management operations
· CCTV camera repairs
· Installation and maintenance of the Emergency Services System
· Implementation of Safer Cities Plan
· External security for safeguarding of council assets
7.6 19.0 18.0 5.8 3.3 5.2 1.9 3.2 530.0
· Providing 16 cyber zones for libraries 6.5
· Grass cutting and weed control: contractors
· Provision of pool chemicals at swimming pools: Water quality
· Essence festival: Durban
· Provision of library services at shopping centres
· Air pollution monitoring within EMA
· Provision for HIV/AIDS services
· Medical requisites for clinics
· Improvements to clinics
65.0 5.0 11.0 17.8 2.1 2.6 5.2 2.6 13.0
1.6.3.7 FINANCE
· Centralisation of mechanical plant workshops / vehicle and bus licencing and registration
· Land and property rights acquisitions
· Vehicle & bus fleet replacement programme
· Maintenance of vehicle and bus fleet
· Energy saving marketing projects
· Depot upgrade and expansions
22.8 3.9 121.9 204.6 3.1 71.4