Date: 25/05/2004
Source: Ministry of Provincial and Local Government
Title: S Mufamadi: Parliamentary Media Briefing, May 2004
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PRESENTATION BY OF PROVINCIAL AND LOCAL GOVERNMENT MINISTER, FS MUFAMADI, ON BEHALF OF THE SOCIAL SECTOR ONE CLUSTER
25 May 2004

RURAL DEVELOPMENT AND URBAN RENEWAL

Unemployment, poverty and underdevelopment are key challenges facing policy design and implementation. Government intervention in dealing with these challenges is driven through inter alia the Integrated Sustainable Rural Development Programme (ISRDP) and Urban Renewal Programme (URP); the Expanded Public Works Programme (EPWP); the Municipal Infrastructure Grant (MIG); the provision of housing; free basic services such as water, sanitation and electricity; food security and land restitution.

From a budgeting point of view, we have been facing challenges. We have drafted for discussion and finalisation a Financing Protocol relating to the 21 rural and urban nodes will be finalised within two months. This is meant to improve the effective and coordinated financing of these programmes by three spheres of government. However, between these departments and others not represented here in this Cluster, we have spent R5, 9 billion in rural nodes and R4, 2 billion in the urban nodes in the last financial year.

The problems we are faced with in these 21 nodal areas relate to backlogs in infrastructure and is a public sector contribution to t he goal of sustainable development by intervening to raise the level of investment in infrastructure, especially in areas of the country which were previously marginalized. That is why government has seen it as necessary to create conditions for growth, in line with last year's resolutions of the Growth and Development Summit.

As a result, government has allocated R45 billion over the next five years for municipal and provincial infrastructure grants of which one third (R15 billion) will go towards the Expanded Public Works Programme (EPWP) to assist with creating 1 million job opportunities.

The programme focuses on the use of government expenditure in labour-intensive projects to create additional employment opportunities. It is a national crosscutting programme that will be funded through line-function budgets, and not only through the National Department of Public Works budget.

A substantial amount of this allocation will find its way into the 21 rural and urban nodes and will accelerate the implementation of these programmes.

In the infrastructure sector, the conditions placed on the Municipal Infrastructure Grant (MIG) and Provincial Infrastructure Grant (PIG) have been finalised and published through the Division of Revenue Act 2004 (DORA). According to DORA, provinces and municipalities are required to implement a portion of their infrastructure projects in 2004-05 financial year, using labour intensive construction methods.

Guidelines have been finalised for the implementation of the EPWP.

Its success will depend on:
* Partnerships with business, labour and civil society
* Co-operation between the three spheres of government and across government departments
* Active role of Sector Education and Training Authorities (SETA's)
* Ability and capacity to spend capital works allocation, particularly for infrastructure development.
* Effectiveness of the EPWP Unit in aggressively driving the programme

A monitoring and evaluation framework has been designed.
Some of the key performance indicators for the EPWP will include:
* Number of job opportunities created
* Overall spending on EPWP Projects
* Average length of employment created
* Total number of EPWP Projects
* Number of training days provided

The R15 billion Municipal Infrastructure Grant, which will be officially launched next month, will also deepen the implementation of the EPWP.

Our emphasis on infrastructure, particularly at the local sphere of government, has to do with two critical areas. Firstly, the provision of basic services to our people and secondly, the commitment of our government to create conditions for sustainable local economic development.

We are also dealing with the challenges of urban renewal and rural development through water infrastructure and investment.
* As pointed out by the President last week, we will ensure that within the next five years, all households have easy access to clean running water;
* By December this year, through our programmes, we will provide clean and potable water to the 10th million South African since 1994;
* During the current year more than 300 000 households will be provided with basic sanitation. Currently 18,5 million people do not have access to adequate sanitation. To this end, we will be working with local government to prioritise the eradication of bucket system in rural and peri-urban areas while continuing to deliver sanitation in rural areas.
* We will ensure that schools and clinics that do not have access to water will be provided with water tanks as an interim measure.

A key focus for us will be to continue investing in infrastructure to ensure water security. Construction has already begun on Phase One of the Olifants River Development Project to meet the needs of Limpopo Province's agriculture and rapidly expanding platinum mines. Construction has also begun on the Berg River project to meet the growing needs of the Cape Peninsula.

Agriculture, particularly food security, remains the critical component for rural economy and therefore, recovery support measures are required to ensure sustainability. To this end the Comprehensive Agriculture Support Programme has been launched to enhance provision of support tentatively to LRAD for this financial year R200 million will go to On farm Off farm infrastructure.

In three months the modalities of agricultural credit scheme will be announced and be capitalised with R1 billion which has been collected through Agriculture and Management Act.
The AgriBEE framework will be published for public comment by July 2004. This process is going through consultation with agriculture industries.

Addressing asset poverty through speeding up housing delivery is at the core of this cluster.
* A comprehensive programme dealing with human settlement and social infrastructure, including rental-housing stock for the poor will be presented to Cabinet within three months.
* In the next three years we will spend R14, 2 billion to help our people to have access to basic shelter.
* From this financial year we will also address the trend in some provinces where there has been a slow-down in housing delivery as well as addressing the broader question of spatial settlement patterns and implications of this in our efforts to build a non-racial society.
* The department of housing has embarked on a programme to improve rural housing to make sure that they comply with at least the minimum health and safety as well as quality standards.
* The department of housing is embarking on a capacity building programme for local authorities to align housing functions with the integrated development planning process. Increased capacity will, among others, help enhance delivery in the provinces and local authorities. We also want to give as many municipalities as possible accreditation to implement housing projects as developers. We have also devised a strategy to unblock projects that have been stalled by various reasons such as land legal matters (transfer), poor administration at the time and the impact of inflation and will continue to support provinces to speed up the pace of housing delivery.
* The informal settlement re-development strategy will be implemented together with the broader strategy for urban renewal including a medium density programme to support integrated urban development programme we introduced four years ago. Through the Job Summit Pilot Presidential Rental Housing Projects and the implementation of the Urban Renewal Projects in areas such as Alexandra and Umlazi, we have learnt much about the reconstruction of communities and human settlements in an integrated manner. We believe informal settlement upgrading and the delivery of rental/social housing at scale can play a significant role in urban renewal programme. It will give people an opportunity to select housing options that meet their respective needs and help us deal with informal settlements that already exist. In so doing, we will also be paying more attention to the renewal of the inner city areas and to the so-called dysfunctional communities.

In conclusion, this cluster has as one of its major tasks, the promotion of rural development and urban renewal. Judging by our performance indicators that we have just spelt out to you, the task ahead is a challenging one but is not insurmountable. Government is committed to inspire higher economic growth, reduce unemployment and poverty by half by 2014, provide skills required by the economy, build capacity and provide resources across society to encourage self-employment.

The President set these targets during the State of the Nation Address last week and Ministers from the Cluster are here to unpack them.

I thank you.

Issued by: Ministry of Provincial and Local Government
25 May 2004