Photo by: Duane Daws
As access to bulk infrastructure funding continues to remain a key constraint to the provision of municipal road infrastructure, particularly in the former homeland regions of South Africa, a proposal by the South African Local Government Association (Salga) could see the creation of a dedicated road infrastructure grant for municipalities, for which funding would be sourced from broader development grants.
While road infrastructure for poor households in both rural and urban communities was currently funded through conditional grants, National Treasury “assumed” that the general maintenance of road infrastructure for the entire municipal road network should be paid for by municipal rates and taxes.
However, Salga roads and transport planning specialist Sibulele Dyodo told delegates at the Southern African Transport Conference, on Monday, that as there was “virtually no” tax base in rural regions, these municipalities were unable to collect the revenue required for roads maintenance and development.
“Municipalities are struggling to provide roads infrastructure for both rural and urban non-poor households even though they get an equitable share from local government to assist with operations and maintenance. It’s simply not enough,” he asserted.
Dyodo noted that there were “pockets” of dedicated road-funding streams in the fiscal framework, which included the Urban Settlements Development Grant (USDG), the Municipal Infrastructure Grant (MIG), the Rural Roads Asset Management Systems Grant, the Public Transport Infrastructure and Systems Grant, developer contribution levies, equitable shares as well as municipal income from rates and taxes.
While Salga acknowledged the importance of these funding sources for roads infrastructure, it noted that further funding allocation was required, which could be realised by ring-fencing portions of general infrastructure grants.
“We are proposing the formulation of a designated road grant made up of a portion of the MIG, USDG, fuel levy as well as a percentage of the equitable share committed to roads.
“This then needs to be ring-fenced and should form part of the Land Transport Act and should address road rehabilitation, maintenance and refurbishment,” Dyodo said.
The existing municipal grant system was currently under review by National Treasury.