Local Government Day of Local Government - PPPs and Human Settlements Department
Reflect on current PPPs in City of Ekurhuleni's Human Settlements Department and explore potential investment areas for private sector partnership. Guided by local government policy framework, including Municipal Finance Management Act and PPP regulations.
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Presentation Transcript
LOCAL GOVERNMENT DAY OF LOCAL GOVERNMENT PUBLIC PRIVATE PARTNERSHIP (PPPs) HUMAN SETTLEMENTS DEPARTMENT 16 July 2024 16 July 2024 1
CONTENTS PURPOSE PPP POLICY FRAMEWORK CURRENT PPPS IN THE CITY OF EKURHULENI (COE) AREAS OF POTENTIAL INVESTMENT THAT THE METRO IS OPEN TO PARTNERING WITH THE PRIVATE SECTOR
PURPOSE To reflect on the current PPPs in the City of Ekurhuleni - Human Settlements Department, and to showcase areas of potential investment that the Metro is open to partnering with the private sector.
GUIDING POLICY FRAMEWORK Local Government: Municipal Finance Management Act 2003 Municipal Public- private Partnership Regulations Municipal Finance Management Act (Act no 56 of 2003) In terms of the MFMA Chapter 8, Part 1, the municipal manager is the accounting officer, and is directly accountable for the efficient management of the municipal budget to achieve the municipality s public mandate. The accounting officer needs constantly to evaluate value-for-money choices. Such options may include a PPP for the delivery of a public service, or to achieve a public good. By its nature, a municipal PPP entails: Targeted public spending, principally on outputs to agreed standards Leveraging private-sector finance and efficiencies Allocating risks to the party best able to manage them. Public- Private partnership means a commercial transaction between a municipality and a private party in terms of which the private party - performs a municipal function for or on behalf of a municipality, or acquires the management or use of municipal property for its own commercial purposes, or both ; and assumes substantial financial, technical and operational risks in connection with the performance of the municipal function; the management or use of the municipal property; or both; and receives a benefit from performing the municipal function or from utilising the municipal property or from both, by way of consideration to be paid or given by the municipality or a municipal entity under the sole or shared control of the municipality; charges or fees to be collected by the private party from users or customers of a service provided to them; or a combination of the benefits
Current PPPs in the CoE Human Settlements Leeuwpoort Mega Project Project Overview Leeuwpoort project represents 750ha of pockets of infill land The development plan proposes a mix of Housing typologies as presented hereunder Project Name Total Project Yield Housing Programme Planned Units per Programme 19 453 BNG Low Density BNG High Density FLISP / First Home Finance 3 099 Social Housing Bonded 1 957 5 010 Leeuwpoort Mega Project 5 752 3 635
Current PPPs in the CoE Human Settlements Leeuwpoort Mega Projects PPP agreement Overview The City owns the land of the development The Developer assumes full financial and risk liability for the component of bulk dedicated the bonded project component The CoE assumes full liability for the component of bulk relating to subsidised housing Developer will develop a % of the land development components and up to proclamation / stand level while the rest will be sold as building opportunities to other property developers in the market who will in turn be responsible for internal services for those land portions The CoE receive a profit share and the land sales increase the nett profit that reverts back to CoE The Developer shall compensate the EMM for the land sold in accordance with valuations and market value. The fee at which the developer shall implement and execute on the housing component shall be equal to a predetermined percentage of the total cost of the subsidised component.
Areas of potential investment that the Metro is open to partnering with the private sector FLISP /First Home Finance Programme Programme Overview Potential Roles Of Private Sector First Home Finance was developed by the Department of Human Settlements to enable sustainable and affordable first-time homeownership opportunities to South African citizens and legal permanent residents earning between R3,501 and R22,000 per month, (the affordable or gap market). Individuals in these salary bands generally find it hard to qualify for housing finance; their income is regarded as low for mortgage finance, but too high to qualify for the government free-basic house. Developer Financer Conveyancer
Areas of potential investment that the Metro is open to partnering with the private sector FLISP /First Home Finance Projects Project Programme Total Project Yield units Actual delivered 2025/25 & beyond Planned 1 129 1 129 4 498 0 1 440 0 2 459 0 1 511 0 1 280 0 1 455 0 3 099 0 670 0 738 0 1 810 0 1 400 0 21 489 1 129 First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance First Home Finance Clayville 45 Clayville 50, 71 & 76-80 Esselen Park John Dube 2 Brakpan 13 Tsakane 22 Chief Luthuli 6 Leeuwpoort Van Dyk Park Palmietfontein Rietspruit / Rietfontein Zwartkopppies Total 3 061 1 440 2 459 1 511 1 280 1 455 1 438 670 738 1 810 1 400 17 262
Areas of potential investment that the Metro is open to partnering with the private sector Social Housing Programme INSTITUTIONAL/ SECTOR ROLES DELIVERY PROCESS ND promotes the mobilisation and development of the social housing sector Local authorities (identify restructuring zones and mobilize local SHI s) Provinces (put forward Restructuring zones to ND for approval) agents. Leadership Delivery Local authorities provide land, infrastructure & public environs SHIs, PPP, municipal entities and the private sector are housing delivery and management Funding Regulation Province/ accredited local authority monitors project level compliance. Federations set code of good practice for members Facilitation SHC / SHF disburses capacity building grants Service providers compete to provide capacity building services Risk mitigation/ guarantees to SHIs etc. SHI s, PPP s, municipal entities and the private sector compile project proposals within approved restructuring zones and submit to the Province s/ accredited local authorities. Provinces administer disbursement of grant finance NHFC and private sector provide loan funding
Areas of potential investment that the Metro is open to partnering with the private sector Social Housing Projects Project Programme Actual Delivered 2024/25 & beyond Planned Total project Yield Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing Social Housing 0 0 0 0 0 0 0 0 0 0 0 0 112 344 0 0 0 0 Clayville 45 Clayville 50, 71 & 76-80 Tembisa 25 Esselen Park John Dube 2 Brakpan 13 Chief Luthuli 6 Leeuwpoort Van Dyk Park Palmietfontein Rietspruit / Riefontein Zwartkopppies Delville Fire Station Germiston Station Pirrowville Queen street Social Development Kempton Park Social Housing (Erven R2676 and 1/ 2676) Clayville Ext 45 Social Housing (Kempton Park) Portion 62 Airport Park Ext.2 Total 452 2 182 314 1 440 2 459 1 512 1 454 5 752 670 737 1 810 1 400 112 344 484 1 000 98 84 452 2 182 314 1 440 2 459 1 512 1 454 5 752 670 737 1 810 1 400 0 0 484 1 000 98 84 Social Housing Social Housing 0 0 456 452 188 22 944 452 188 22 488
