MIG - Municipal Infrastructure Grant

Notice Board

INDUSTRY GUIDE: INFRASTRUCTURE SERVICE DELIVERY LEVEL AND UNIT COST

MIG: INDUSTRY GUIDE: INFRASTRUCTURE SERVICE DELIVERY LEVEL AND UNIT COST

In December 2005, the Department of Local Government released the working document in relation to the Municipal Infrastructure Grant namely the “Basic Level of Services and Unit Costs: A Guide for Municipalities”. The purpose of this document was to provide guidance for municipalities regarding the selection of service levels and unit cost for basic services. During 2006, concern had been expressed by stakeholders, that the guideline document and the unit cost values reflected therein, are too static and do not reflect regional market factors and local economic trends.

The 2005 Guide was subsequently revised and converted to a sustainable nationwide system of guidance for municipalities and ultimately national government in terms of the provision of weighted basic infrastructure service provision cost values that reflect national and regional impacts. The overall objective of the evaluation was to provide better guidance in budget determination linked to infrastructure development. The revision process and methodology were geared towards delivering on the following result areas:

• Equipping Municipalities and PMUs in South Africa’s nine provinces with means of providing more relevant cost estimates;
• Ensuring that unit cost values reflect the trend of current development and economies in South Africa, and also area specific trends & developments;
• Equipping the National Treasury with a means of costing infrastructure backlogs that reflects national and regional trends, settlement patterns and economic development impacts, through regular updating.
Please take note that the proposed date should not overlap with the dates set for the IDP analysis week in your province.

As a result, a comprehensive revision process was undertaken by the dplg, and a draft “An Industry Guide : Infrastructure Service Delivery Levels and Unit Costs” was released in August 2007. The document was made available to provinces and municipalities towards the end of 2007 through the dplg’s website. However, it was withdrawn because of non-alignment with sector sanitation unit costs. As a result, the dplg is currently engaged in a process of updating this draft Guide to reflect infrastructure costs applicable for 2009/10 as most unit costs would not be applicable due to price escalations.

NB: Municipalities are cautioned that the Industry Guide : Infrastructure Service Delivery Levels and Unit Costs document is still a draft and thus should be used as a guide to infrastructure costs in the country and not necessarily what MIG funds, in particular with regard to roads projects. MIG currently makes a provision of a maximum of R3,12 million per km for roads.

The Industry Guide : Infrastructure Service Delivery Levels and Unit Costs 2007 is accessible : from the notice board above.