Municipalities To Take Over Housing and Public Transport

Cape Town - Building new low-cost houses and rolling out public transport would be devolved to municipalities and greater technical support will be provided in rural areas, the Minister of Finance Pravin Gordhan said on Thursday.

Tabling his Medium Term Budget Policy Statement in the National Assembly, Gordhan said local government would also see a R500 million reduction in their equitable share to offset unspent conditional grant monies owed to the National Revenue Fund.

Transfers to municipalities would rise from R78 billion this year to over R100 billion in 2015/16.

He said from reprioritisation and drawdowns on the contingency reserve, a total of R12.3 billion is added to the local government budget framework over the next three years, including spending by national departments on behalf of municipalities.

Increased funding is also proposed for the integrated national electrification programmes and projects to improve infrastructure maintenance and stem leakages of water and electricity will be supported.

Gordhan said discussions were currently underway with metropolitan cities on a support strategy to address spatial patterns that exacerbate social inequality.

This will include further investment in public transport systems, development of settlements closer to work opportunities and greater support for small businesses.

He said the challenge to mayors and councils was to ensure that their delivery machinery was ready for the transformation of towns and cities.

"Our economic progress and social development will be largely determined by the pattern of urban development over the decades ahead," he said.

He said allocations to rural municipalities for the delivery of water, sanitation and electricity would also be increased.

"We also expect provincial governments, who are key role players in rural development, to accelerate the provision of agricultural services in these municipalities," Gordhan said.