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view is that roads are not being maintained and repaired adequately, despite the large allocations. Cape Town spent a similar amount on sanitation as on roads, while Johannesburg’s focus has been on electricity infrastructure, and eThekwini has prioritised water infrastructure. Another aspect of effectiveness is whether or not the cities achieve value for money through their spending. Cost efficiencies for delivering municipal infrastructure and services are difficult to benchmark because local cost drivers and conditions vary. In addition, some variations are inexplicable. For example, the cost per kilometre of constructing dedicated busways ranges from US$1-million in Jakarta to US$20-million in Islamabad. 12 In South Africa, Phase 1A of the Rea Vaya service in Johannesburg cost R37.7-million and Phase 1B cost R34.7-million per kilometre, while the first phase of new dedicated busways for Cape Town’s MyCiTi cost an average of R49.4-million per kilometre. Cost variations can usually be explained by the type of infrastructure specified in the design of the systems, and by input costs such as professional fees, materials and labour. With robust systems for assessing capital expenditure, cities would be able to make more efficient investment decisions based on more credible costs and benefits. Financial health of the cities In its most recent annual assessment of the state of municipal finance, National Treasury made the point that an unqualified audit opinion does not mean that a municipality has no financial problems (National Treasury, 2014c). In 2009, the Ministry of Cooperative Governance and Traditional Affairs (COGTA) launched its Operation Clean Audit (OCA), a programme aimed at improving financial management practice and results. However, this intervention was ill-conceived and had little chance of success (Powell et al., 2014): there was no correlation between the OCA targets and the actual condition of municipalities and provincial departments, no factual basis for believing the targets could be met, and no adjustment of the targets to the actual results. More importantly, as financial management matters largely fell outside of COGTA’s legislative mandate, the department did not control the levers of change and so had to rely on persuasion and indirect implementation. COGTA also lacked any means to enforce compliance, as no sanctions were applicable in the event of targets being missed. An important lesson from this experience was the need to be clear about the limitations of information and control when implementing policy reforms. South Africa is ranked among the top five countries with regard to transparency in public finance management. 13 At local government level, the municipal financial management challenges are similar to those experienced globally (Farvacque-Vitkovic and Kopanyi, 2014). For example, South African 12 For these and other examples, see http://www.chinabrt.org/en/cities/param-quan.aspx?param=26 13 “SA national budget remains one of the most transparent in the world. South Africa ranked 3rd in the world during 2015, beating the US, UK, Germany and France.” http://www.stanlib.com/EconomicFocus/Pages/ SAnationalbudgetremainsoneofthemosttransparentintheworldSouthAfricaranked3rdintheworldduring2015.aspx 260 State of South African Cities Report 2016
cities have low capital expenditure patterns, give less attention to the repair and maintenance of infrastructure, and are best assisted through capacity development programmes when they experience financial difficulties. National Treasury uses eight key measures to assess the financial health of municipalities (National Treasury, 2007): • Cash as a percentage of operating expenditure • Persistent negative cash balances • Overspending of original operating budgets • Underspending of original capital budgets • Debtors as a percentage of own revenue • Year-on-year growth in debtors • Creditors as a percentage of cash and investments • Reliance on national and provincial government transfers • The extent of repairs and maintenance as a percentage of property, plant and equipment A few of these indicators are discussed in greater detail below. Table 7.7 highlights how operational expenditure is under pressure in the metropolitan municipalities. Most showed marginal overspending (averaging 2%) until 2011/12, but in 2013/14 this was substantially higher at 6%, representing a decline in financial health in the metros. Table 7.7: Overspending of operating budgets in metro municipalities (2010–2014) 2009/10 2010/11 2011/12 2012/13 2013/14 Metropolitan municipalities (8) R Million R Million R Million R Million R Million Total original operating budgets 96 657 109 105 124 931 138 942 149 512 Total overspending of original operating budgets 1 980 2 633 2 051 – 8 984 Overspending as % of original operating budgets 2% 2% 2% 0% 6% Number of municipalities who overspent by less than 10% of their operational budget 5 6 4 8 2 between 10% and 25% of their operational budget 0 0 0 0 5 more than 25% of their operational budget 3 2 4 0 1 7 The underspending of capital budgets is an indicator of either limited capacity for project implementation, or poor project planning and budgeting. As well as issues associated with the conditionality of some grants. As Table 7.8 shows, the metro municipalities have a fairly good track record in capital expenditure: in 2013/14 the municipalities underspent only 13% of their original capital budget. Finance and Innovation 261
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State of south african cities Repor
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The cities covered in the SoCR Limp
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FOREWORD by the Chairperson of the
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Buffalo city ekurhuleni ethekwini J
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Overview: State of South African Ci
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CH3 PRODUCTIVE CITIES Spatial trans
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INTRODUCTION Our cities: status quo
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State of Cities Reporting Over the
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Figure 1.2 shows the projected grow
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The consequence of this rapid urban
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LEARNING ACROSS BRICS: from city-re
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Addressing these challenges require
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TRANSFORMING OUR WORLD: THE 2030 AG
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Key issues for South African cities
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! ! ! ! ! ! ! ! ! ! ! ! Cities and
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Figure 1.8: Population change total
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Figure 1.10 shows that, while popul
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Significant densification through b
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Increased densities and demand have
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Global networks versus domestic res
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Informed by five years of research
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Key Messages 1 2 3 4 5 Spatial tran
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In cities, economic and social ineq
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Undesirable current spatial configu
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neighbouring municipalities are not
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! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
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Built environment investments not s
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The cost of fragmentation In additi
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associated land uses benefit all, n
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Local government is best placed to
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Competing land interests need to be
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PRE-1994 building POLICY 1994-2003
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The 2011 State of South African Cit
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The most recent National Household
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Figure 2.6: Alternate transport-urb
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SPATIAL TRANSFORMATION: Tracking tr
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Spatial transformation needs respon
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What is Required to Transform South
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Transformation of management and ca
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PRODUCTIVE CITIES Spatial transform
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Introduction South Africa is headin
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Congestion and pressure on resource
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transportation networks. Land-use p
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strategies in separate silos, with
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The Economic Role and Performance o
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• Johannesburg is South Africa’
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Nevertheless, recent economic fores
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• In the last five years, Tshwane
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Figure 3.7 shows the average labour
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Over the last 10 years, at a sector
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There is a marked correlation betwe
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Figure 3.13: Estimated city share o
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Figure 3.15: City gross fixed-capit
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development role set out in the 199
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Table 3.3: Key economic development
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• eThekwini has an active economi
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Both types of township are low-inco
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Informal economy and self-employmen
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South Africa’s Expanded Public Wo
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PRODUCTIVE CITIES 123 3
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Key Messages 1 2 3 4 5 6 Cities sti
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Andile’s story This is based on a
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of that ward participate in making
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Cape Town metro Mangaung Mamre Pell
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These service delivery gains have c
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YOUTH STUDY: Youth potential and vu
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However, when the NWAC is superimpo
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Tshwane, Figure 4.7: Johannesburg C
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As mentioned, urban integration is
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Table 4.2: Change in lowest income
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Ethekwini metro Northdale Hambanath
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Urban safety South Africa’s citie
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City’s unemployment rate is about
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Collective violence 7 Two main dime
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Towards More Inclusive Cities Citiz
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Furthermore, citizen education and
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South Africa requires a spatial pol
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SUSTAINABLE CITIES Leveraging the t
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Introduction Since 1994, the govern
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will need to have low-emissions gro
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Most of South Africa’s energy con
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Figure 5.3: Average baseline energy
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• Tshwane initiated its A Re Yeng
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WASTE: legislation, policies and pl
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500 0 400 200 0 2011 2013 2015 2017
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facility (i.e. waste is sorted manu
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Figure 5.10: Depiction of in- and o
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As Figure 5.12 shows, Cape Town and
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Accelerating the transition to sust
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disadvantaged groups, through facil
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Accelerating the transition to food
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Biodiversity South Africa is the th
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Open spaces Ecological and social o
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in the city and in their homes then
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Emissions reduction to mitigate cli
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Principles of a Sustainable City Ur
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Recommendations Develop and embed a
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Key Messages 1 2 3 4 5 Cities have
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informal political and social cultu
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Section 51 of the Municipal Systems
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While these dynamics are critical a
Page 210 and 211: Blurred intergovernmental responsib
Page 212 and 213: Access to information As many ward
Page 214 and 215: Figure 6.5: Turnout for national an
Page 216 and 217: COMMUNITY-BASED PLANNING: Strengthe
Page 218 and 219: The right people are not necessaril
Page 220 and 221: Local government will require new k
Page 222 and 223: All the cities have performance man
Page 224 and 225: Unethical behaviour is one of the r
Page 226 and 227: Figure 6.9: Municipal audit consist
Page 228 and 229: Service Delivery and Development As
Page 230 and 231: Still playing catch-up on basic ser
Page 232 and 233: knew anything about the city’s ID
Page 234 and 235: The established routines need to ch
Page 237 and 238: FINANCE and INNOVATION Sustainable
Page 239 and 240: Introduction With total expenditure
Page 241 and 242: In 2013/14, unauthorised, irregular
Page 243 and 244: Figure 7.2: Nelson Mandela Bay Muni
Page 245 and 246: The challenge is that the interface
Page 247 and 248: Phase 3: City autonomy and accounta
Page 249 and 250: National Treasury uses Uniform Fina
Page 251 and 252: As Figures 7.5 and 7.6 show, Johann
Page 253 and 254: In the case of property development
Page 255 and 256: distribution. Johannesburg’s capi
Page 257 and 258: • Despite this, the overwhelming
Page 259: Effectiveness of spending and servi
Page 263 and 264: An encouraging development is that
Page 265 and 266: 3. Political interventions • Some
Page 267 and 268: Smart city strategies Smart city st
Page 269 and 270: encourage non-compliance. If priced
Page 271 and 272: • Municipalities could rightfully
Page 273 and 274: Recommendations If spatial transfor
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Page 278 and 279: Key Messages 1 2 3 4 5 A Call to Ac
Page 280 and 281: 1. The Spatial Transformation chapt
Page 282 and 283: Statements of intent in the SOCR St
Page 284 and 285: WARWICK TRIANGLE: A fragile public-
Page 286 and 287: Arguably, the primary constraint pr
Page 288 and 289: Figure 8.1: The quadruple helix - t
Page 290 and 291: • Completing the National Framewo
Page 292 and 293: development agency) that took place
Page 294 and 295: MILE’s strategic objectives are:
Page 296 and 297: Public participation should be the
Page 298 and 299: The implementation of CBP through t
Page 300 and 301: According to Cloete (2015) a partne
Page 302 and 303: The chapters in this State of Citie
Page 304 and 305: Overall Recommendations Urban space
Page 306 and 307: Ensuring city transformation throug
Page 308 and 309: Roadmap to the city dashboards All
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Buffalo City @refinedrevolt
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CITY FINANCE economy Municipal reve
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Overview of flagship programme The
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Reflections While the development o
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People and Households Size of city
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Design Capital Introduction Cities
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Manenberg Contact centre Source: P.
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City of Ekurhuleni @moography
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme Situ
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the corporate structure and governa
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Go!Durban Introduction Integrated p
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Go!Durban will include new railways
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City of JOHANNESBURG @jayjay_gregor
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100% 80% 60% 40% 20% 0% CITY FINANC
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Overview of flagship programme The
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However, the success of the Corrido
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Naval Hill Introduction Heritage is
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In December 2012, the redevelopment
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Msunduzi @natesvw
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100% 80% 60% 40% 20% CITY FINANCE e
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important tourist sites, there have
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In addition, the PURP includes the
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Safety and Peace through Urban Upgr
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A number of other projects have tak
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City of Tshwane @drae_savvides
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100% 80% 60% 40% 20% 0% CITY FINANC
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Wi-Fi is a significant enabler that
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The coverage map below shows the pl
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Introduction A key part of the deve
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These indicators were evaluated on
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SCODA is a partnership between citi
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Indicator PRODUCTIVE CITIES Definit
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Indicator SUSTAINABLE CITIES Defini
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2016 State of Cities Report Spatial
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Acronyms ACSA Airports Company Sout
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FIGURES Figure 1.1 State of South A
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. . . Figure 6.7 Percentage of seni
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References for Chapter 1 AfDB (Afri
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FFC (Financial Fiscal Commission).
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Cameron B. 2009. Integrated Rapid P
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References for Chapter 4 Balbo M. a
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Venter C and Cross C. 2014. Access
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DPME (Department of Planning and Mo
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National Treasury. 2006. Local Gove
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Tel: + 27 11 407 6471 • Fax: + 27
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