4. PHASE 3: COMPILE INVESTMENT AREA PLANS AND PROGRAMMES
4.2. Funding options
44 the complete implementation of infrastructure projects such as installing paving, trees and street furniture on planned activity spines, we need to ensure that no building construction takes place on the road reserve and this can be achieved through on-going planned maintenance/grass cutting. It should also be noted that deliberate steps need to be taken in ensuring synergy of activities within programme areas; e.g. an arterial road which passes through a high activity node will need assume a different character. The implications thereof are that this arterial would have to be furnished with pedestrian friendly structuring elements and traffic calming measures. Thus vehicular speed within the node along this arterial would differ from other parts of the road outside the node.
The above made example emphasises the need to approach programme development from a holistic point of view bearing in mind the different roles that other stakeholders including other internal Departments and Regions would have to play.
45 of (i) a custom controlled area (CCA) (defined and administered in terms of the Customs and Excise Act (Act 91 of 1964); and (ii) an industry service area and „world class‟ infrastructure linked to an international port of entry. The custom controlled area is also referred to as a Customs Secured Area as it is designed to have its own SARS facilities and staff. The area is deemed to be extraterritorial for customs purposes, to allow the import of raw materials on a duty free basis for the investors operating in the area. The industry service area, which is adjacent to the custom secured area, is for service and supply industries which provide logistical support to the firms in the custom secured area.
SARS offerings in IDZs:
• Relief from customs duties at time of importation into a CCA
• Simplified customs procedures:
• Fiscal incentives on goods when:
• Subsidised infrastructure
Conditions: • Detailed conditions stipulated by SARS.
Focus areas: Approved IDZsEast London, Richards Bay, Coega (Nelson Mandela Bay).
Special Economic Zones (SEZ) Date of Inception: 2013
Objectives: A Special Economic Zone is an economic development tool to promote economic growth and export by using support measures in order to attract targeted foreign and domestic investments and technology.
(2) The purpose of establishing Special Economic Zones includes—
(a) facilitating the creation of an industrial complex, having strategic economic
advantage for targeted investments and industries in the manufacturing sector
and tradable services;
(b) developing infrastructure required to support the development of targeted
industrial activities;
(c) attracting foreign and domestic direct investment;
(d) providing the location for the establishment of targeted investments;
(e) enabling the beneficiation of mineral and natural resources;
(f) taking advantage of existing industrial and technological capamunicipality, promoting
integration with local industry and increasing value-added production;
(g) promoting regional development; and
(h) creating decent work and other economic and social benefits in the region in which it is located and promoting skills and technology transfer.
Mechanism: Draft legislation: Special Economic Zones Bill, 3 of 2013
National government, a provincial government, a municipality, a public entity, a municipal entity or a public-private partnership, acting alone or jointly, may apply to the Minister in the form and manner prescribed for a specified area to be designated as a Special Economic Zone.
Supported by Special Economic Zone fund (in terms of Bill)
46 Special Economic Zones (SEZ)
There are different categories of the SEZs that South Africa will make use of, namely:
• A free port;
• A free trade zone;
• An industrial development zone; and
• A sector development zone.
Conditions: • Details specified in Bill.
Focus areas: South Africa's Department of Trade and Industry (DTI) has identified 10 potential Special Economic Zones (SEZs) countrywide, and will soon be conducting feasibility studies to determine their viability, says Trade and Industry Minister Rob Davies.
Davies said that SEZs included free ports, free trade zones, industrial development zones (IDZs), and sector development zones.
He said the country's three existing IDZs - in Richards Bay, East London, and Coega outside Port Elizabeth - would fall under the Special Economic Zones programme.
Social Housing Restructuring Zones Date of Inception: 2008
Objectives: The Social Housing Act, 16 of 2008, defines a restructuring zone to mean
“a geographic area which has been (a) identified by the municipality, with the concurrence of the provincial government, for purposes of social housing; and (b) designated by the Minister in the Gazette for approved projects.”
According to the Guidelines, “restructuring via social housing seeks to achieve three main dimensions of restructuring:
• Spatial restructuring by bringing lower income (and often Black) people into areas where there are major economic opportunities (both with respect to jobs and consumption) and from which they would otherwise be excluded because of the dynamics of the land market on the one hand and the effects of land use planning instruments such as large-lot zoning (minimum erf sizes) on the other (in contexts such as the US large lot zoning has been successfully challenged legally as exclusionary and therefore unconstitutional). This it should be stressed is the primary
meaning of spatial restructuring as it used in social housing policy.
Indirectly social housing as understood here contributes to spatial restructuring by increasing densities and compacting growth thereby ensuring that the poor are not pushed out to marginal locations at the edge of the municipality.
• Social restructuring by promoting a mix of race and classes.
• Economic restructuring by promoting spatial access to economic opportunity and promoting job creation via the multiplier effect associated with building medium density housing stock.”
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Mechanism: • Agreement on restructuring zones: Restructuring Zones are Geographic Areas that are:
o Identified by the Local Authority – by a council resolution o Supported by province for targeted, focused investment –
for subsidy commitment
o Then Agreed with National Department of Human Settlements (NDoHS) – (by MOU)
• Area(s) that accommodates medium density, multi-unit
complexes requiring institutional management – Social Housing Institution (SHI)
There are 3 Designation process currently:
– Phase 1 – Provisional Restructuring Zones – Phase 2 – Formal Restructuring Zones – Phase 3 – Expanding the programme
• Funding: Grants for Social Housing include:
o Restructuring capital grant o Top-up from provinces o Staff gear-up grant
o Project acquisition and feasibility grant o Pre-accreditation grant
o General capamunicipality building grant
Conditions: • As stipulated in Social Housing Regulations 2012 in terms of Social Housing Act 2008 and draft Guidelines.
Focus areas: Proclaimed restructuring zones in the following municipalities:
More tailored funding options include the following.
Integrated Municipality Development Grant (ICDG) Date of Inception: 2013
Objectives: Support metropolitan municipalities to identify and establish integration zones within cities, including the establishment of measurable
performance objectives, indicators and targets. Metropolitan
municipalities will also be assisted to plan and programme a series of catalytic investments withing these integration zones. The establishment of the zones will firstly, allow all public interventions to be focussed in an identified spatial context in order to leverage a private investment response. Secondly, it will enable all spheres of government to measure and manage the change of the spatial form and space in our cities.
Mechanism: Conditional Grant via DORA.
Conditions: Part of Cities Support Programme initiative. Subject to performance in terms of agreed indicators; Urban Network Plan including identification of Integration Zones.
Focus areas: Metropolitan municipalities.
Neighbourhood Development Partnership Grant (NDPG) (being restructured)
48 Date of Inception: 2006
Objectives: To support and facilitate the planning and development of neighbourhood development programmes and projects that procide catalytic
infrastructure to leverage third party public and private sector developent towards improving the quality of life of residents in targeted underserved neighbourhoods (generally townships)
This objective is now being reformulated – urban network approach Mechanism: Conditional grant to municipalities via DORA.
Schedule 5b and 6b DORA 2013.
Conditions: Being revised. Based on Urban Network Plan, in coordination with ICDG (see above).
Focus areas: Township areas / underserved neighbourhoods
Urban Settlement Development Grant (USDG) part b of schedule 4 DORA 2013 Date of Inception: 2011
Objectives: The USDG is a financial instrument – a direct grant from national
government to local municipalities for the purpose of supplementing the capital investment programme to improve the performance of the built environment and thus contribute to the development of sustainable cities.
The strategic goal of the USDG will be achieved through accelerating the provision of well located serviced land with secure tenure for
accommodation for lower-income households in large urban areas and simultaneously providing appropriately located serviced land to support economic development that results in job creation for the under- employed and unemployed urban dwellers.
The differences between the MIG Cities Grant and the USDG are as follows:
i. MIG Cities focused only on 6 metropolitan municipalities. The USDG has been expanded to include all 8 metropolitan municipalities (including the new metros of Mangaung and Buffalo Municipality) and will be extended to other
identified local municipalities in future;
ii. MIG Cities supported the overall capital programme of cities in pursuit of their development objectives including supporting infrastructure planning delivery and management. The USDG has in addition to this puts more emphasis on land development;
Mechanism: Conditional grant to metropolitan municipalities via DORA (Dept of Human Settlements)
(Evolved out of MIG Cities Grant)
Conditions: Specific, medium-term outputs and targets are identified and agreed with eligible municipalities / urban settlements and will be contained in the Built Environment Performance Plan, and approved by Council as the Capital Investment Programme component of the Budget. There are 4 Outputs:- Metros should respond to each of 4 Outputs, but not restricted to these:-
OUTPUT 1: Households upgraded through housing Programmes.
OUTPUT 2: Households with access to basic services such as water,
49 Urban Settlement Development Grant (USDG) part b of schedule 4 DORA 2013
Sewerage, Electrimunicipality, and Refuse Removal.
OUTPUT 3: Land availability, purchasing, acquisition, planning, servicing and titling
OUTPUT 4: Number of Jobs Created through output 1, 2 and 3 above.
Indicators are measurable results related to Outputs that are bound by time and financing. Eligible municipalities are not required to have to deliver on all Indicators though they have to deliver on all Outputs using at least one or more Indicators.
Focus areas: Metropolitan Municipalities
Human Settlements Development Grant (HSDG) Date of Inception: 1994
Objectives: To redress the prohibition on the ownership of property by the vast majority of people in the country (via the provision of subsidised housing to qualifying households).
(Integrated Housing and Human Settlement Grant – IHHSG?)
Mechanism: Conditional grant via DORA (Dept of Human Settlements); allocation from the national fiscus that is in terms of the Housing Act transferred to Provinces who then transfer to municipalities: Specific grant to Provinces:
Schedule 5A (DORA 2013)
Grant funds various programmes, e.g. Upgrade of Informal Settlements, Institutional Housing, Social Housing, Individual Subsidies, etc.
Conditions: • Individual / household conditions (e.g. income level, citizenship, etc.) for qualification.
• Institutional conditions: accreditation of municipalities to directly administer National Housing Programmes (e.g. Level 3 accredited municipalities can receive direct transfers of HSDG) (not extended to Individual Subsidies).
Focus areas: Seventy per cent of the country’s slums were located in the eight main metropolitan areas, and between 65% and 72% of the HSDG was spent in those metros. (2011). Ap
Public Transport Infrastructure (and Systems) Grant (PTIS) Date of Inception: 2009?
Objectives: The intent of the PTIS Grant is to catalyse a transformation of South Africa’s public transport sector into a safe, secure, and high-quality experience for the passenger.
To provide for accelerated planning, construction and improvement of public and non-motorised transport infrastructure.
Mechanism: Conditional Grant via DORA Schedule 5B DORA 2013
Conditions: There are a wide range of potential project types that qualify for investment from a PTIS Grant. Amongst the types of projects that meet these requirements are:
i. Transformation of conventional bus or minibus-type operations into quality services based upon a reformed business model, including
adherence to all standards and requirements set out in the 2009 National
50 Public Transport Infrastructure (and Systems) Grant (PTIS)
Land Transport Act (NLTA), regulations of the South African Revenue Service, and all applicable South African labour laws;
ii. Preparation and enactment of planning and regulatory provisions under the 2009 National Land Transport Act (NLTA);
iii. Development and implementation of dedicated priority public transport infrastructure along corridors in municipalities, including associated terminals, depots, and control centres;
iv. Development and implementation of quality feeder and
complementary services connecting communities to rail services, road- based trunk services, and other local destinations; and
v. Development and implementation of non-motorised transport services that connect communities to rail services, road-based trunk services, and major local destinations.
Focus areas: The grant is focused on IRPTN implementation in up to 12 cities in accordance with Phases 1 and 2 of the Public Transport Strategy and Action Plan.
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