DEVELOPMENT BANK OF SOUTH AFRICA
DEPARTMENT OF CONSTITUTIONAL DEVELOPMENT

Review of the South African Government's Grant-Funded
Municipal Infrastructure Programs



SUMMARY DOCUMENT
February 1999

Center for Urban Development Studies

World Bank
Urban Infrastructure Project, PHRD Grant No. 027018


TABLE OF CONTENTS


PREFACE

This report presents the findings and recommendations of the review of the South African Government's Grant-Funded Municipal Infrastructure Program. The report is presented in two parts: Volume I - Program Assessment and Volume II - Review and Assessment of 45 Selected Projects.

The Study Team began its work in South Africa with workshops on October 12, and 13, 1998 with the Steering Committee and the Provincial Program Managers and their consultants. The Provincial Program Managers presented the projects they had selected for evaluation in the field visits. The strategy assessment framework and evaluation methodology were discussed and revisions incorporated into the study and summarized in the Inception Report dated October 28, 1998. The field visits to the nine provinces were undertaken jointly by the Harvard team and the Palmer Development Group team in October 1998. Preliminary findings and major issues in program management were reviewed during a workshop held on November 4, 1998 with members of the Steering Committee, Provincial Program Managers, Department of Constitutional Development (DCD) and DBSA.

In December 1998, an Interim Report was distributed summarizing the project assessments and presenting the detailed reviews for the 45 projects. Comments received from DCD, DBSA and the Provincial Program Managers were incorporated into the Final Report. A final workshop on January 26, 1999 provided the Study Team, DCD, DBSA, members of the Steering Committee and the Provincial Program Managers an opportunity to discuss the assessment of the program strategy and activities as well as the recommendations presented by the Study Team. The workshop discussed the integration findings and recommendations in the operational strategies of the ongoing infrastructure programs.

The Study Team is particularly grateful to the United Nations Development Program (UNDP) for making available a grant that has funded Palmer Development Group's participation in the Assessment as part of a skills transfer and capacity building experience.

The Study Team greatly appreciates the assistance it received from the staff of the DCD Directorate of Municipal Infrastructure as well as the provincial program managers and their consultants and staff all of whom took time to prepare documentation for the purposes of the review, organize site visits and respond to follow-up requests. The interest they took in the assessment and their active participation in workshops allowed the study to cover the range of issues highlighted in the assessment as well to address ways which findings and recommendations can be integrated into ongoing activities.

The Study Team appreciated the opportunity to meet with Members of the Executive Council in different provinces, the mayors, their deputies, other council members and Transitional Local Council officials in various municipalities, and community representatives and residents to discuss program benefits and assess impacts. They all gave generously of their time and their gracious cooperation allowed the teams to review and assess a broad range of issues in the short span of 3 days in each province, the maximum allowed by time and budget constraints.

Finally, the support received from the Director of Municipal Infrastructure at DCD, the Provincial Program Managers and their consultants, and the principal policy analyst at DBSA was instrumental in the successful completion of this challenging assignment.

0.0 SUMMARY

The mandate of South Africa's Municipal Infrastructure Program (MIP/EMIP) is to "improve the quality of life of the poorest sections of the South African communities through ensuring access to at least a basic level of services." The Department of Constitutional Development (DCD) has been responsible for the integration of MIP projects into broader, multifaceted development programs in order to improve economic conditions and enhance the sociocultural environment of the communities. The MIP ensures community participation and fosters the empowerment of previously disadvantaged groups. Program planning and management are administered through provincial managers and the procedures followed seek to build a constructive interface between communities, municipalities, provincial and central authorities and to ensure that the process remains community-driven. The collaborative process for acquiring MIP funds is as follows:

  • The community submits a project proposal to its municipality for approval, assistance and support.
  • The municipality prepares a business plan for the project and submits it to the Provincial Cabinet for approval and mobilization of grant funds.
  • The provincial government receives the grant funds from the national government and manages the funds in accordance with the approved business plans.

The program received R 751 million for the 1994/95 financial year. An additional R 600 million was made available in 1995/96 to extend the program as demands from communities far exceeded the resources initially allocated. From the time of its inception until the start of the successor program (C-MIP) in March 1998, the achievements were quite remarkable. No fewer than 1,045 projects were completed, reaching the poorest and most remote communities in each province.

In 1998, the Government of Japan and the World Bank made available a PHRD Grant to the South African Government to undertake a comprehensive review of MIP's achievements. The Development Bank of South Africa administers the grant funds on behalf of the Government. The stated purpose of the review is to evaluate the performance of both the original Municipal Infrastructure Program (MIP) and its extension (EMIP), in order "to ensure that appropriate approaches are followed in future." The Unit for Housing and Urbanization at the Harvard University Graduate School of Design was selected to undertake the review.

1.0 METHODOLOGY

The assessment was undertaken as a joint effort between the Harvard Study Team and Palmer Development Group of South Africa, in close collaboration with DCD, DBSA, the provincial program managers and their consultants, local public officials and community representatives. Forty-five MIP/EMIP projects in the nine provinces were reviewed in the field between October 19 and November 2, 1998. The projects in each province included two Best Practices to demonstrate the program's potential; two average projects representing overall program performance in the province; and one under-performing project illustrating prevailing constraints and impediments.

The strategy assessment framework developed for the review related MIP project activities to the program's strategic objectives and covered two critical determinants of success: Program Performance¾ how well did the programs deliver the required services, and Strategy Assessment¾ how are the program's outputs contributing to fulfilling its strategic objectives. The framework detailed the outputs generated by each activity and defined indicators to measure achievements for each outcome. It was also structured to provide the flexibility needed to respond to wide disparities in context, development potential, institutional capacity, human resources and financial means among the localities where MIP projects have been implemented.

2.0 SUMMARY OF NINE NOTEWORTHY PROJECTS

At least one project in each province stood out as being particularly impressive in each of the following areas: addressing infrastructure needs, ensuring sustainability, generating economic opportunity, building capacity and fostering development through self-reliance. An analysis of these projects permits a better understanding of the processes for achieving success and highlights the positive impacts on the community. The following projects were selected

2.1 KLAPMUTS, WESTERN CAPE PROVINCE

The original water supply system in Klapmuts was a borehole that had become polluted over the years. With MIP funds, the community constructed a new 1.2-ML reservoir, bulk water supply and water reticulation system using labor-intensive methods. The projects gave the strong and motivated leadership an opportunity to tackle head-on the challenge of development in a previously marginalized community and to demonstrate how residents can assume responsibility for improving their living conditions through initiative and self-reliance. Strong community participation in project design resulted in a sharp increase in the payment of water rates, with 95% of households paying their service bills. An awareness-building effort has been organized to improve collections where they are still lagging. In response to the needs of two squatter communities of La Rochelle and Mandela City, a housing project was implemented with strong support from the community. Houses were allocated in a random fashion, thereby integrating residents and improving relations among members of the community. People were told from the project's inception that they would have to pay for the new services provided, and they began saving accordingly. Overall, the project was extremely successful and illustrates the partnerships that can be formed between community members. The payment rate in the new housing development (80 to 85%) is impressive, despite the fact that a payment location has not yet been arranged. In addition, because people can finish the houses themselves, the urban environment is more diverse, and people take personal pride in their homes. At least three shops have opened in private houses.

Klapmuts, Western Cape Province : As a result of the MIP projects, squalid squatter shacks are being replaced by self-built houses.
95% of households are paying their bills, a direct result of both community awareness campaigns and a satisfaction with the services delivered.

2.2 MIDDLEDRIFT, EASTERN CAPE PROVINCE

Middledrift has the potential to become a service center for both agricultural and small business developments, but has been hampered by a severe lack of services. Through MIP funding, the badly deteriorated municipal infrastructure was rehabilitated, including water reticulation, sewage treatment works, roads, and stormwater surface drains. Community outreach and participation are reflected in the willingness of users to contribute the R 200 connection fee. In addition, collection of utility bills has increased from under 10% to over 65%. Furthermore, through the implementation of these projects, the municipality has improved municipal services, provided employment and skills training, strengthened local governance and ensured community participation and empowerment. The projects have provided the opportunity for increased economic activity, and, together with the planned housing projects and the new taxi rank, have opened up opportunities for new and existing businesses. For example, members of the Eastern Cape Development Association, which comprises 10 small businesses, reported that they were pleased with the new services and felt that the improved status of Middledrift as a result of the new infrastructure would increase economic development. Small businesses, such as Mr. William Landingwe's butcher shop, and Ms. Bukelwa Kona's sewing shop, have benefited from the improved services and the increased economic activity. The MIP projects have had a number of direct impacts on the new health center as well, including the usage of the new town hall for health workshops, improved sewerage, and reliable water supply. In the past, the center's septic tanks had to be pumped frequently, and the rainwater system often ran dry. A proposed low-income housing project will help to alleviate the growing housing demand, and the infrastructure will be upgraded for adjacent houses. The improved infrastructure is instilling a sense of hope and pride in the community and economic opportunities are increasing.

Middledrift, Eastern Cape Province : New roads and stormwater drains are helping Middledrift realize its potential for becoming a service center for both agriculture and small business development.

Middledrift, Eastern Cape Province : Bukekwa Maureen Kona built a successful sewing business after saving diligently for eight years. She is appreciative of the MIP programs for providing the necessary infrastructure for her shop to operate.

2.3 ATTERIDGVILLE, GAUTENG PROVINCE

The water reticulation system had fallen into a state of disrepair. With MIP funding, main waterlines were upgraded, individual water meters for on-site taps were installed, and the number of service valves and hydrants was increased. The new system was designed to supply 200 l/c/day and benefit a population of 70,000. Labor intensive methods (including the employment of a substantial number of women) have resulted in approximately R3 million in wages being injected into the local economy, contributing to the emerging prosperity of the area. Water meters are read monthly and residents pay for the water that they consume. Many of the houses are being upgraded and extended, and the living environment is neat and attractive with individually maintained gardens and lawns. The drab public housing project is being transformed into a pleasant neighborhood capable of attracting and retaining a diverse and upwardly mobile population. Good levels of services have led residents to appreciate the value of infrastructure and they are convinced of the government's commitment to upgrading living conditions in the disadvantaged areas of town.

Atteridgville, Gauteng Province : Prosperity is evident in many areas of Atteridgeville. Many of the roads are now lined with grass borders, adjacent to yards with small, well kept lawns and flower gardens.

2.4 MHLUZI, MPUMALANGA PROVINCE

The meters that had been installed in a previous project had fallen into a state of disrepair and were not being read. With MIP financing, the water supply was upgraded and new meters were installed. Six emerging plumbing contractors received training in small contract management and meter installation before undertaking the work. Apart from the obvious benefit of an upgraded water supply, residents of Mhluzi are particularly pleased because they now pay according to the water they consume rather than being assessed a flat rate. As a result, payment levels have increased and the level of trust between the community and the municipality has improved. The municipality built technical capacity and project management skills, empowering residents to obtain permanent employment, earn decent incomes, and improve their living standards. The newly trained emerging contractors have succeeded in securing work on the 2,500-unit RDP housing program in the town.

Mhluzi, Mpumalanga Province : Apart from the obvious benefits of an upgraded water supply, the residents of Mhluzi are pleased because they now pay according to what they consume.

2.5 ITSOSENG, NORTH WEST PROVINCE

One of the main problems facing the 45,000 residents of Itsoseng was the lack of an adequate transport facility. The confusing ranking system made commuting difficult for residents and visitors, and street vendors had no defined location or shelter thereby limiting economic activity. An upgraded facility for taxis and buses was constructed as a joint venture between the municipality (22%) and the MIP (78%). General economic activity has expanded due to increased traffic flow, while vendors have been provided with covered space for selling their goods. Commuters are now sheltered from the sun and rain and have access to seating, toilet facilities and improved safety provided by high-mast lighting. Strained relations between the different operators were alleviated through the formation of the Itsoseng United Taxi Association that represents the interests of taxi and bus operators using the facility. It is currently in negotiations with the council as to how levies will be charged for the use of the facility. The public transport facility is developing into a major activity node, surrounded as it is by shops, the council offices, and the community center.

Itsoseng, North West Province : Economic activity has been revitalized by increased traffic flows and commuters now have access to covered seating and toilet facilities.

2.6 NDALENI, KWAZULU-NATAL PROVINCE

Over the last few years, Richmond has been in the headlines as an area ravaged by violence, causing the area to remain critically under-serviced and causing ordinary residents and councilors to become apathetic and despondent. Using MIP funds, the access road from Richmond to Ndaleni was rehabilitated by widening the existing gravel road from five to six meters and upgrading the surface from gravel to a double chip and spray sealed surface. Two culvert crossings and stormwater management measures were also constructed. The project provided employment and training opportunities to emerging sub-contractors and local labor, and has greatly improved access and security. Having the different wards participate and collaborate on the construction of the road provided a significant initiative in the process of re-uniting different factions in this war-torn area, while it also acted as a catalyst for development. It has improved confidence and unity among the local councilors, who have acquired new skills and are more optimistic about the future. In addition, the Ndlovu District Council (under which Richmond falls) is initiating a new project to further unite the different communities. The construction of a stadium, sports fields, and general facilities is underway which will provide the opportunity for the youth to become involved in constructive activities.

Ndaleni, KwaZulu-Natal Province : A strong joint effort between the community officials and the residents on the MIP project has improved confidence and unity, and has acted as a catalyst for a shift from conflict to development. The poor conditions of roads in Richmond, an area recently ravaged by violence, was an urgent problem. Cooperation between the different factions on the MIP project signaled hope for a shift from violence to development in this poorly serviced area.

2.7 CORNELIA, FREE STATE PROVINCE

The town faced a severe water shortage, exacerbated by the limited capacity of the existing borehole and the rapid growth of the population. Water availability dropped to a substandard level averaging 13 liters per capita per day. The MIP-funded project provided the infrastructure for water to be pumped 36.5 kilometers from the town of Frankfort. Construction took place over eight months and the labor force peaked at 186 with 170 of the laborers recruited locally. The improved system has resulted in economic revitalization. Existing factories that had threatened to leave town are now looking to expand their operations. The sale of water to the industries has increased revenue for the municipality. The clinic and school have also benefited from improved services and residents have planted vegetables and ornamental gardens improving the urban environment and quality of life.

Cornelia, Free State Province : The MIP Project provided the infrastructure for water to be pumped 37 km from Frankfort to Cornelia.

2.8 NABOOMSPRUIT NORTHERN PROVINCE

The community of Mookgophong identified the control of stormwater flooding as their top infrastructure priority. The high density of development and the natural flow of water had been causing flooding from the central business district of Naboomspruit. Labor-intensive techniques were used to pave the roads and construct stormwater drains. The success of Mookgophong is a result of partnerships between the different stakeholders, represented by a steering committee. The steering committee comprised ward councilors, representatives from different community organizations, a technical team of officials from the municipality and the consulting engineer. In addition, strong community support was an essential part of the program. When services had to be cut temporarily as a result of the construction activities, the community was accommodating despite the inconveniences that the interruptions caused. The project has encouraged people to take greater care and pride in their living environment, as demonstrated by their new gardens and lawns. Silt-laden runoff has substantially diminished, reducing maintenance costs for the municipality.

Naboomspruit, Northern Province : The MIP Project was implemented using two emerging contractors who employed local labor, mostly women. One emerging contractor manufactures both road-paving bricks and kerbs, and has entered into an agreement with the council to manufacture these for at least all the MIP related street-paving and stormwater management projects.

2.9 RITCHIE, NORTHERN CAPE PROVINCE

The municipality faced two problems: a high incidence of non-payment and poor relations between councilors and the community. After Ritchie used MIP funding to improve the water supply to its 10,000 residents, with its cost savings it funded a creative awareness-building campaign to educate the community on the respective rights and responsibilities of residents and their local government. The campaign aimed to improve the quality of service rendered by the municipality and increase the residents' rate of payment for infrastructure. As a result, attitudes towards the council members are more positive and the community is more cooperative; people are starting to take their problems to the municipal office and get involved in project planning. In addition, payment levels have risen from 28% to 62% and the council hopes to reach a repayment rate of 80%.

Ritchie, Northern Cape Province : Ritchie had a high incidence of non-payment. An awareness campaign was implemented and payment levels have risen from 28% to 62%.

3.0 IMPACT OF INFRASTRUCTURE PROJECTS ON MUNICIPAL FINANCE

Local governance in South Africa has been restructured to focus on the provision of basic infrastructure to un-serviced and under-serviced urban and rural communities. Grants and transfers from the central government supplement local resources in order to fulfill national development goals and optimize equity in the allocation of these services. In addition, MIP/EMIP funds are intended to strengthen the newly established local government units. Involvement of the communities in project decisions is an integral part of building capacity for project implementation, operation and maintenance.

Local governments are expected to provide supplementary funding from their own resources to provide services above the basic level provided for in the MIP/EMIP grant. To meet this obligation, municipalities need to generate the revenues necessary to defray both capital investment and recurring operation and maintenance expenditures. A detailed analysis of the municipal budgets of six Eastern Cape municipalities (Queenstown, Tsolo, Bizana, Port St. John, Middledrift and Flagstaff) showed that property rates accounted for 30% to 70% of local revenues; intergovernmental grants and other miscellaneous income, 8% to 16%; water rates, 8% to 19%; sanitation fees, 9% to 19%; and refuse collection fees, 3% to 10%. Given the significance of service charges as a source of local revenues, it is essential that the municipalities' current average collection rate of 30% be increased since it becomes easier to collect rates when services increase to a good level.

Municipalities will have to develop their capacity to set fee schedules that reflect fairly the delivery cost of services and to improve the enforcement of collections in order to reach a level of credit-worthiness that will enable them to finance capital improvements. Ideally, a feasibility analysis should be performed to ensure each project's technical and financial viability, assess the extent to which user charges should be raised, and determine whether annual expenditures can be recovered from increases in public revenues. Few municipalities have the technical capacity to undertake this type of analysis. While the expertise does exist at the provincial level, it is unrealistic to assume that this task could be undertaken given the manpower and budget constraints at this time. Local capacity building in the area of financial impact analysis will be necessary to ensure the long-term viability of the MIP/EMIP programs.

4.0 PROGRAM ASSESSMENT

The program has met its mission to deliver infrastructure to remote locations most in need of assistance and to marginalized urban communities. As a result of the program, local authorities have started to redress historical inequities by providing equal access to land and services, empowering local residents and engaging them in the improvement of their living environment. The evaluation of the program's impacts was made from the viewpoint of the different stakeholders. Documented outcomes demonstrated the extent to which the program has been able to meet the government's strategic objectives to build infrastructure and improve living conditions in previously disadvantaged communities. It also highlights economic, social, financial, and environmental improvements that have occurred.

In the 45 projects analyzed, 27 have upgraded the living environment and promoted social equity; 9 were community driven; 8 promoted the integration of former apartheid cities and towns; 21 succeeded in leveraging MIP funds; 24 generated new economic activities by encouraging the use of local labor and providing associated training programs; and 19 improved the coordination of MIP and Housing Grant Programs activities. Generally, municipalities that succeeded in integrating the program into their planning function achieved greater efficiency in the planning and prioritizing of projects.

Opportunities generated from the expansion of several factories have increased the population of Ashton from about 10,000 in 1995 to an estimated 14,700 in 1998. As the town's urban area was doubling, an urgent need for a new water supply system was identified.

Improving the leverage of MIP inputs is directly linked to promoting an atmosphere of proactive partnership in the development of infrastructure and expanding the range of activities that can be addressed through public/private partnerships. It is equally linked to the ability to mobilize local resources through the commitments made by municipalities and the contributions made by recipient communities. Local capacity to meet these commitments and the users' willingness to pay for services are also critical factors underlying the financial performance of MIP projects and their sustainability. In many instances, linkages to housing and other social programs independently legislated and regulated can become a constraint on optimizing the fulfillment of other objectives.

Western Cape Province : Before the implementation of the new water supply system, Klapmuts was one of the most disadvantaged communities in its district, with 2000 households sharing one polluted borehole. The MIP project povided 3480 meters of water reticulation lines, 2,250 meters of bulk supply lines, and a new reservoir with a capacity of 1.2 million liters.

5.0 CREATING A STRATEGIC MANAGEMENT PROGRAM FRAMEWORK

Today, the program has to meet challenges far more complex and intertwined than originally anticipated. In order to be more responsive to changing contexts while building its own capacity to plan and implement infrastructure improvements, the program management team needs to:

  • Establish a strategic planning group with members from both central and provincial levels.
  • Develop an information system capable of supporting strategic planning and management functions.
  • Adopt communication strategies and mechanisms to interact with different stakeholders and develop appropriate procedures for interaction, dialogue and feedback from the users of MIP.
  • Institutionalize mechanisms for vertical and horizontal integration, interaction and dialogue.
  • Establish mechanisms and procedures for continuous feedback from the field.
  • Devise and institutionalize mechanisms for the identification, recognition and dissemination of successful and innovative experiences among provinces, municipalities, NGOs and communities.
  • Develop a priority ranking system, which integrates measures of project impacts linked to the MIP strategic objectives.

Even though Mooi River suffered from violence in the past, conflicts have been resolved and peace restored recently. As a result of the MIP project, community members and officials have begun to cooperate and communicate their needs more effectively.

6.0 REFOCUSING OPERATIONAL STRATEGIES TO ENHANCE PERFORMANCE

The five strategic operational recommendations presented below take into consideration the changes introduced in the program since 1997 and incorporated in C-MIP. They reflect issues and concerns identified by the study team during the field visits and discussed with the program management team at DCD and in the provinces and are intended to improve program performance.

6.1 BALANCING PROGRAM ACTIVITIES TO PROMOTE LOCAL DEVELOPMENT AND COMMUNITY EMPOWERMENT

The recently instituted Integrated Development Planning Process (IDPP) provides the framework and procedures for municipalities to balance economic and social development objectives. In spite of a comprehensive, well-structured and detailed manual, the process is complex and places a substantial administrative burden on the smaller and less endowed municipalities.

The vast majority of South African municipalities do not have an integrated development plan and lack the capacity to prepare one. Yet it is essential that local officials and council members acquire an understanding of the purpose and structure of development planning in a time of fast-paced change. They must become aware that the level of service selected will affect the pattern and character of development, as well as the costs of operation and maintenance. Understanding this interrelation is critical to the ability to make informed choices, but, given the realities observed during the field visits, municipalities will need time to build the required capacity and experience. The MIP provincial program managers and their staff will have to help municipalities receiving MIP grants assess the opportunities created by the new infrastructure and the implications of the choices they make.

By highlighting economic, social and environmental considerations, as well as technical issues, in identifying, preparing and implementing projects, the MIP would in fact be assisting municipalities to lay the groundwork for integrated development planning. In this context, narrowing the scope of C-MIP to focus on bulk infrastructure, while justified in many cases, is constraining and should be reconsidered.

The scope of the Municipal Infrastructure Programs should cover roads, rehabilitation of networks, and internal reticulation, as well as community facilities.

6.2 INCORPORATING IMPACTS IN THE PRIORITIZATION OF ACTIVITIES

Selecting projects among those competing for mip funding is no easy task. Some provinces follow the model developed by DBSA; others use criteria that more closely reflect local conditions. Neither of these approaches provides a measure of project impacts beyond direct temporary employment in construction. In order to relate infrastructure investments to the program's strategic objectives, the program's provincial management teams need to develop explicit measures of each project's probable impact on local social and economic development as part of the prioritization procedure. The collection of appropriate indicators will allow more effective monitoring and evaluation of project impacts, a critical component of strategic management. This will enable each province to adjust operational strategies and activities and calibrate its allocation procedures.

Incorporating impacts in the prioritization of projects will optimize returns on the public investments in infrastructure.

6.3 REFORMULATING THE LINKAGES TO HOUSING AND OTHER SOCIAL PROGRAMS

Linking the delivery of infrastructure services and housing is a rational way to coordinate and reinforce public investments in two mutually supporting sectors. However, earmarking 65% of C-MIP funds to provide bulk infrastructure to greenfield housing projects adopted in C-MIP has tied up the disbursement of funds in slow-moving housing projects. Housing projects, particularly when delivering a finished product, take much longer to complete than infrastructure.

Moreover, bulk and connector service can contribute better to integration and social inclusion if they serve strategically located parcels in buffer zones - parcels that can be developed for commercial uses rather than for housing. Priority should be given to projects that can service both existing communities and new extension zones. Relating service levels to the character of surrounding zones helps blur the edges and diminish contrasts perpetuating the "us" and "them" attitude undermining social inclusion.

Priority should be given to projects that can service both existing communities and new extension zones.

6.4 RESTRUCTURING INSTITUTIONAL CAPACITY BUILDING TO PROMOTE SUSTAINABILITY

The lack of technical and managerial capacity at the local level emerges as the single most critical constraint impeding performance on the ground. A lack of capacity to plan is delaying the processing of project applications and the approval of business plans. Inadequate managerial capacity has resulted in undue delays, cost overruns and strained relations between municipalities, communities, consultants, and contractors. There are numerous instances where services are badly operated and ill maintained. Defective billings and collections systems result in non-payment by users and strain local resources. This is undermining the sustainability of the infrastructure provided by MIP. DCD was acutely aware of this problem and earmarked 5% of MIP project funds for capacity building and training purposes. However, this component has not been as effective as originally planned.

The program's strategic objectives entailed the use of emerging contractors, local labor and materials, and labor-intensive construction methods. The funds earmarked for capacity building and training were directed at mostly unemployed, unskilled laborers, and emerging contractors.

Assistance to ensure the sustainability of new infrastructure should be provided by restructuring the present allocation of 5% of project funds to build municipal capacity. A grant equal to about 2% of project cost, phased over a three-year period, should be allocated to build municipal capacity to operate and maintain the infrastructure provided. The remaining 3% would still be devoted to capacity building and training of local contractors and labor. The grant would be renewed annually, conditional on the local government achieving pre-negotiated targets for the improvement of billings and collections of fees and the adequate maintenance of the infrastructure in place. At this stage in the development of South African municipalities, linking capacity building and limited assistance in operating and maintenance is the only guarantee of sustaining the infrastructure provided through the MIP program.

Building the capacity of municipalities to manage infrastructure insures the sustainability of improvements.

6.5 RECOGNIZING AND DISSEMINATINGBEST PRACTICES IN THE MANAGEMENT AND DEVELOPMENT OF INFRASTRUCTURE

Feedback from the field must inform strategic planning and management decisions. This information must be fed into the national policy dialogue in order to refine strategic objectives and ensure that "appropriate approaches are followed in future programs." This task requires more than building a sophisticated database.

The lessons learned from creatively conceived MIP projects should be disseminated within South Africa as well as abroad. Municipalities trying to cope with seemingly intractable problems will find it comforting to know that there are other municipalities, in South Africa and elsewhere, struggling with these very same issues. Exchange of information among provinces and municipalities will help disseminate successful solutions and best practices in planning and management of programs and projects. Communication strategies must be formulated and implemented fostering interaction among the different stakeholders involved in the provision of infrastructure and the delivery of services. Mechanisms for interaction and dialogue must be institutionalized.


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