The Midvaal Story
Top quality of life
In May 2010 the Gauteng provincial government published the results of a Quality of Life survey for the “Gauteng City-region”. Among the findings – described as a “reality check” by the Gauteng Premier – one municipality stood out for the satisfaction evidenced by its residents: Midvaal. It was the only municipality where more than sixty percent of all residents reported that they were either satisfied or very satisfied with their local government. Only seven percent were “dissatisfied”. By contrast, across the whole province, only four out of ten interviewees were satisfied with their municipality.
What made these findings particularly satisfying for the political leadership of Midvaal is that they had been striving to improve quality of life for all ever since being elected to office in 2000. Although the municipality boasts some of the best aggregate new service infrastructure figures for the whole country, this is only one aspect of what Midvaal has always sought to deliver. The focus has always been integrated development, which aims to ensure that not only are services delivered but that this is done in tandem with access to jobs, education, health and social amenities. This requires a far more sophisticated management of scarce resources, including social capital, than is needed to simply throw nationally funded infrastructure at developmental backlogs. That one of the smallest municipalities in Gauteng has managed so much better than any of its peers is a tribute to its consistent application of principles.
The “balance” imperative
It is difficult to over-emphasise the importance of balance in municipal governance in South Africa. Scarce resources have to be carefully managed to meet a range of social, economic and environmental needs and moreover this has to be done consistently over time. While simultaneously expanding its local economy, a successful municipality also has to meet social needs, maintain infrastructure and ensure that its own capacities grow in parallel with delivery. As is all-too well documented, the vast majority of South African municipalities have failed to meet the challenge.
Many South African municipalities are simply organizationally incoherent; others however have succumbed to the temptation to lay out as much infrastructure as possible while failing to develop their own organizational capacities. They have failed to recognise that municipal government is in fact a fragile set of institutions, requiring careful management, constant organizational development and tight management of scare resources.
But Midvaal is different. Under DA stewardship since it was created in 2000, it has consistently met the challenge every year for 11 years. However these achievements have nothing to do with Midvaal’s historical legacy and the assets it inherited when the present local government system came into being in 2000. In fact so disadvantaged was the municipality 11 years ago that an impartial observer almost certainly have expected it to fail. It is difficult to imagine a more fragile institution than Midvaal as it was in 2000.
Midvaal was formed in December 2000 when Meyerton was split from Vereeniging and combined with five rural local area committees. This represented a division of resources that massively disadvantaged the new municipality. The local area councils had no resources bar a few tractors as all their services had been delivered by outside contractors. All the assets in Meyerton – vehicles, computers, desks, chairs and even the lightbulbs – were spirited away to neighbouring Vereeninging. The then municipal manager had to open the local authority’s bank account with R50 out of his own pocket. The new municipality had effectively been left destitute.
At the time of its creation Midvaal was notably poor even by South African local government standards. To meet the needs of 83 000 people, the council passed a 2001/02 budget of a mere R125m . Furthermore this was a purely operational budget; there was nothing available for capital expenditure. By comparison the operational budget for 2012/13 is R680m with an additional R120m available for capital investment. That 500% increase is quite simply the result of 11 years of carefully balancing responsibilities, husbanding resources, delivering what was possible and looking to future sustainability.
The same careful balancing act can be seen with regard to human capital. In its first year, Midvaal had to spend far too much on the 320 staff it had inherited, many of them anything by fit to purpose for the new roles allocated to local government. By contrast, in 2012 Midvaal employs fewer than twice that many staff (620) while possessing has five times the assets. The municipalities staffing ratio in 2012 is an effective 28%.
Executive Mayor Tim Nast recalls that a decade ago, “very few people were interested in living (in Midvaal), infrastructure was badly neglected and there was no investor confidence” . Nast recalls seeing people queueing at the municipal buildings to hand back vacant stands because land values were so low that it wasn’t worth paying monthly rates and taxes. A decade later those same stands are worth between R300 000 and R700 000.
In the process, Midvaal has had to cope with an ambiguous relationship with Gauteng and virtually no assistance from the Sedibeng District Council. While the provincial department of housing has made RDP grants monies available, as required by law, Province has been less than helpful in other ways. There are currently no provincial projects in the municipal area and Midvaal receives no provincial funding. It is wholly dependant on its own sources of funding, which make up 90% of income, and the transfers it is entitled to from the National Fiscus (equitable share and Municipal Investment Grants). Sedibeng District spends most of its money on salaries with very little left for such designated tasks as development planning, dolomite risk assessment and pollution monitoring.
A top municipality
In the same year that Midvaal was rated best in Gauteng in the province’s Quality of Life Survey, it was also listed in Municipal IQ’s Top Ten municipalities in South Africa, a status it retained in 2011 . The municipality has consistently collected all revenue owed – the only municipality in Gauteng to do so – while simultaneously expanding its rates base, as we shall see below. As a result, in 2012, it is in position to favour its poorest residents by implementing one of the most generous Indigent policy in the country . The Indigent policy already serves 3 015 households. In July 2012, the qualifying threshold was raised to R3 200 which will allow a larger number of poor households to qualify for free and subsidised service. Beneficiaries will also be offered such extras as free burials. Over the same decade, Midvaal has enjoyed ten unqualified audits from the Auditor-General.
The strength of the Midvaal machine was demonstrated in 2009 when the global recession bit. Unlike many municipalities, Midvaal both recognised the problem in time and acted to save itself. It did not have the cash reserves that bigger, longer established municipalities usually possess. The municipality faced the prospect of not being able to pay salaries and bulk suppliers (Eskom and Rand Water) within three months. Costs had to be cut to the bone. Meals served at council meetings were eliminated (this remains the case in 2012) along with all other unnecessary expenditure – stationery, conferences, travel, overtime and even performance bonuses for management. Staff members were consulted at every turn and rose magnificently to the occasion. Work that was previously outsourced was brought in-house and employees re-skilled and took on new jobs without expecting more pay. Within a year the situation was normalised, the overdraft paid off and service delivery resumed.
An efficient municipality can implement any number of ideas not open to less efficient ones and Midvaal municipality is now a machine that works very efficiently. It has implemented an electronic system for building plans where the comments of various concerned departments can be made in parallel rather than sequentially. The record under this system, from submission to approval, is five days and the average under 30 days. The municipality is now trial testing the system for land use applications. The municipality is in the process of adopting an open tender decision system similar to that pioneered in Cape Town. Under such a system, any member of the public will be able to attend any tender committee meeting. This is as open as local government tender process can be.
Midvaal inherited no formal apartheid townships. However in terms of delivery this is no advantage as all the areas of backlog are in fact informal settlements. Development of such areas has to be done from scratch and includes such complications as demarcation, land re-proclamation and head counts. The largest by some distance is Sicelo, adjacent to Meyerton and consisting of some 2000 households (12-13 000 people). The other six informal settlements are on private land, or land owned by other government entities, and consist of between 100 and 400 households each.
All settlements have water delivered to at least RDP standards, while services such as refuse collection, grass-cutting and road maintenance are delivered equally to all parts of the municipality. While the muncipality’s objective is to deliver services at the same level in all parts of Midvaal, this can be more difficult in some parts of the informal settlements. Some facts illustrate the point:
The largest settlement, Sicelo was established only in the mid-1990s (and is named after Sicelo Siceka, then Gauteng MEC for Local Government). As it has been formalized and developed, so it has grown. The pattern has been for families to vacate shacks in the eastern part of Sicelo (Ward 8) in order to move into the RDP houses built in the western part of the settlement (Ward 10). But this has never opened up the eastern part for development as indigent families have immediately taken occupancy of every vacated shack. The upshot is that while two-thirds of Sicelo is now developed, the informal, eastern one (Ward 8) is as large as ever and constitutes an on-going development challenge.
- The other, smaller informal settlements illustrate another range of problems. Most are on land that is owned privately or by other government bodies. Many residents are originally farmworkers who remained in-situ when the farm ceased operation. However as Midvaal has thrived the value of the land has multiplied. Basic services are delivered and development is happening (a full plan is now in place for Memelo, the second largest settlement, located near Vaal Marina) but higher land values have undoubtedly delayed matters. A further problem is the large number of foreigners resident in these settlements. The Piels Farm settlement in the northern part of Midvaal is largely inhabited by workers for Mozambique, originally brought in by a Portuguese-speaking farmer, and abandoned when the farm ceased functioning. The problem of course is that such individuals do not qualify development grants.
- Midvaal has deliberately chosen to emphasise quality of life and thus opportunities, over the ad hoc delivery numbers. The objective is to consolidate communities, providing access to employment, education, health, social and communal facilities, a process best described as “integrated development”. The delivery of Multi-purpose Centres [MPCs] (which include community halls, libraries, and sports and recreation facilities) is a part of this. The library in the MPC in Sicelo offers better facilities than that in Meyerton, including free internet access. In keeping with the same ethic, the municipality solicited funding from The Hollard Foundation for an Early Childhood learning Centre in Sicelo, situated only a stones throw from the school. However sustainable, integrated development is slower, more complicated and more difficult than simply dumping “delivery infrastructure” in poor neighbourhoods.
- Balanced development requires that bulk infrastructure be expanded in tandem with housing developments. Even though “the need to formalize and upgrade the (informal) settlements is a priority” it is necessary to first ensure that sewerage and bulk water plant is in place. Midvaal invested R7,2m in sewerage infrastructure in 2010 -2012 in order to ensure that large scale housing development could subsequently follow. It had already secured water supply with new reservoirs at Vaal Marina and Klipriver. Limited resources are further mopped up by the need for municipal infrastructure around RDP houses as the grant monies do not pay for such elements as water connections, tarred roads, stormwater drains and electrification. Midvaal will be spent R5,5m from own sources in 20100/11 on tarring roads in Sicelo and is currently installing footbridges and stormwater drains in the same township.
Despite these hurdles, Midvaal boasts some of the most impressive delivery statistics among South African municipalities in its class. According to the Department of Cooperative Governance and Traditional Affairs, Midvaal has reduced the backlog in water and sanitation from 29% in 2001 to 2% in 2010 (national average backlog in 2010 = 20%). In water supply, Midvaal has reduced the backlog from 14% in 2001 to zero in 2010. The Midvaal clinic – which the municipality runs for the Province – serves 30 000 people and has a turn-around time of 2 hours per patient, 50% better than the provincial average.
It has to be pointed out that Midvaal funds 90% of its own budget. Its (population weighted) equitable share – the monies transferred from the national fiscus – is still calculated in terms of the 1996 Census which gives Midvaal a population of 83 000. However, given population growth of about 4,5% per year, this shortchanges the municipality by about 20%. Its own planning takes into account a population figure of over 100 000.
Midvaal has deliberately set out to capture industrial investment. With a northern boundary only 5kms from the huge Alrode Industrial Park and easy access to two national highways (N1 and N3) as well as OR Tambo International Airport and the East Rand, it is well situated to do so. But the council has not passively relied on locational advantages. It has actively wooed investors, meeting directly with them at the highest level and offering such incentives as capped rates for a period of time.
The results have been impressive. This small, predominantly rural municipality has attracted some of the biggest private sector investments in recent years. The Heineken bottling plant near Meyerton (which also serves Coca Cola) and the Ferro Rocher factory are now well-known. But at the time of writing other large companies are moving in too. Pick& Pay has selected Midvaal for its Southern Gauteng distribution centre, a facility that cost R110m while a major South African trailer manufacturer is also building factory in the area. The Heineken plant has already been expanded, effectively doubling its floor space.
Economic growth in Midvaal has been impressive. Gross Geographical Product increased from R1.5 billion in 2001 to 4.5 billion in 2009 and is probably in the region of R6bn in 2012. What is particularly important about investment is that it creates jobs. Midvaal has the highest rate of employment in Gauteng and one of the best in the country. According to ratings agency Global Insight, in 2009 a mere 7% of its workforce was unemployed against a national average of 23% (both figures in terms of StatsSA’s narrow definition). Although post 2008 recession figures are not available, it seems evident that with the on-going flow of investment into the municipality, Midvaal’s comparative performance will probably look even better.
One of the objectives of Midvaal’s balanced approach to development is to ensure that business opportunities are shared. Two initiatives are especially worth mentioning in this regard:
- Midvaal has set out to compile a data base of local SMMEs that can be put in touch with sub-contracting opportunities provided by the larger firms that invest in the municipality. It is effectively doing business linkages. Further impetus is provided by a private sector mentoring scheme for existing SMMEs, implemented by Standard Bank and hosted by the municipality. There is no Small Enterprise Development Agency Office (Seda) in Midvaal, yet another example of how other spheres of government starve this opposition-run municipality of resources. However the two thrusts currently in place are almost certainly more effective that the usual over-bureaucratised Seda processes.
- Bantu Bonke agri-village is a post-apartheid restitution settlement south of Meyerton. A recipient of the full municipal infrastructure package it nevertheless faced one quality of life challenge: unemployment. This was addressed through a hydroponics project started in 2006. The project has now 15 plastic tunnels and grows tomatoes, green peppers, cucumber, lettuce and brinjals. It was co-funded primarily by the Rand Water Foundation. Bantu Bonke today is an eye-pleasing rural settlement with tarred roads, full electrification and a large number of satellite TV receivers.
Quality of life revisited
Midvaal municipality has deliberately set out to improve the quality of life for all its residents. While it is still work in progress it is appropriate to ask whether it is succeeding? The data all suggests that it is.
Midvaal has the best Human Development Index (HDI) in the Sedibeng District council at 0.64 (where 1 = fully developed and 0 = no development at all). The scores for the neighbouring municipalities are Lesedi 0, 56 and Emfuleni 0,6) . The HDI Index is a composite index that appempts of quantify quality of life in terms of income, literacy and life expectancy. Moreover the poverty rate in Midvaal is a mere 17,2% compared to Sedibeng’s average of 38,4% .
Comparative HDI figures over time are not available. However there are other indications that Midvaal is heading in the right direction. The 400% increase in GGP since 2001 is one of these. So too is Midvaal’s top 10 ranking in the Municipal IQ Productivity Index which measures 5 factors including poverty levels and the municipal response to poverty.
Just as Rome was not built in a day, so delivery in South Africa’s municipalities cannot happen overnight. The process of improving the quality of life for all is incremental. Delivery of subsidised housing and municipal infrastructure has to be balanced against longer term investment in bulk infrastructure, maintenance and the facilitation of private investment. These goals cannot be allowed to get out of kilter as any imbalance threatens not just future delivery but also past achievements. At the same time the municipality has to invest in its own organizational development. Midvaal has succeeded in pulling off this delicate balancing act better than the vast majority of South African local authorities. The results are already there for all to see while the basis for future developments could not be sounder.