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South Africa’s Municipal Infrastructure Investment Unit

South Africa’s Municipal Infrastructure Investment Unit. Introduction & Overview Ms. Marlene Hesketh Chair, MIIU Board. Background. Legacies of Apartheid Huge infrastructure backlogs Estimated financial requirements High expectations for rapid development

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South Africa’s Municipal Infrastructure Investment Unit

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  1. South Africa’sMunicipal Infrastructure Investment Unit Introduction & Overview Ms. Marlene Hesketh Chair, MIIU Board

  2. Background • Legacies of Apartheid • Huge infrastructure backlogs • Estimated financial requirements • High expectations for rapid development • Limited municipal resources and expertise • Limited bank financing available • Limited municipal borrowing capacity • Limited intergovernmental funding

  3. MSPs – Policy Support • RDP • Constitution • White Paper on Local Government • Draft White Paper on MSPs • DCD’s MPPP programme • DPLG’s MSP Guidelines • Municipal Systems Act

  4. What is the MIIU? • Cabinet Memorandum, No. 14, 1997 • Non-profit private Company, est. 4/98 • Financial & tech. support from USAID • PPU & Project Preparation Fund • Grants & TA to support local MSPs • Management services provided by DBSA • 5-year life-span

  5. Guiding Principles • Demand led • Oriented toward (1) capital investment & (2) management improvement • Focused on basic services • Local govts share costs • Opencompetition on all procurement • Maximum involvement by local consultants

  6. The MIIU Board Independent BOD, representing: • Private sector banks & investors • Depts of Finance and Provincial & Local Government • The Development Bank of Southern Africa • Private individuals and business people • Local governments

  7. The Project Preparation Fund • Initial capitalisation by RSA: R20m • Grant funds from USAID: R7.8m • MTEF allocations from national govt. • Other donor contributions actively solicited • Annual audits • Cash management by DBSA

  8. The Menu of MSP Options • Operations & Management (O&M) (e.g., mgmt contracts) • O&M plus Capex (e.g. concession contracts) • Divestiture(sale of “non-core” assets) • Corporatisation (utilities, agencies, etc.) • Municipal bonds

  9. Completed MSPs:Operations & Maintenance (O&M) ContractValue • Jnb info tech R 113 m • Jnb parking R 12 m • Thabazimbi solid waste R 10 m • Harrismith water R 6 m • Western MLC solid waste R .6 m • Robertson solid waste R .5 m

  10. Completed MSPs:O&M plus Capex ContractValue • Jnb Fleet R 2,400 m • Nelspruit water R 1,446 m • Dolphin Coast water R 386 m • Pretoria airport R 306 m • Tzaneen waste R 20 m • Richards Bay Airport R 17 m

  11. Completed MSPs:Divestiture ContractValue • Jnb Rand Airport R 28 m • Jnb Metro Gas R 386 m

  12. Completed MSPs:Corporatisation • Jnb Produce Market (plus R50m city investment) • Eastern Cape IT (ECMSS) • Jnb Metro Bus

  13. Completed MSPs:Total Values ContractsValues • O&M R 142 m • O&M plus Capex R 4,575 m • Divestiture R 414 m • Corporatisation R 50 m ---------- Total R 5,181m

  14. Project Pipeline • In conceptual development – 18 • In feasibility Study – 17 • Being tendered – 11 • In negotiation –7 • Public-public contracts – 4 • Discontinued – 13 • Expressions of interest 101

  15. Mid-term Project Review • USAID-funded 2-year review • International and domestic evaluators • Conclusion: one of the most successful donor projects of its kind • USAID: prepared to offer three additional years of TA funding

  16. MSP Lessons Learned in SA • Importance of financial & technical assistance to local govt • Need for thorough technical & legal prep • Key role of legal & regulatory framework • Need to consult with organised labour on specific projects • The role of lenders • Capacity building through projects

  17. Summary • MIIU created to supplement govt resources • Facilitates private sector financing & mgmt for benefit of local govt & residents • Demand-driven & “User friendly” • Funding from national government • 55+ active projects – most in “core” services • Independent assessment: highly successful

  18. Thank You. For more information visit… http://www.miiu.org.za

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