SPEECH BY THE EXECUTIVE MAYOR OF CAPE TOWN, ALDERMAN PATRICIA DE LILLE ON THE OCCASION OF THE COUNCIL MEETING TO PRESENT THE FIVE YEAR IDP PLAN AND BUDGET FOR THE 2012/13 FINANCIAL YEAR

Good morning, goeidag, molweni,

Mr. Speaker,

There are certain principles according to which this city is governed. They are the principles contained in the Constitution. They are the principles of our guiding pieces of legislation in local government. And they are the principles of effective, modern government.

These principles are tempered with the reality of South African cities. These realities include cities that do not have full executive functions within their borders. They include a divisive history. They include injustice. And they include a very sad legacy of spatial differentiation.

Both of these factors, guiding principles and historical legacies, are not unique to Cape Town. They are this country's story written up and down this land with minor adaptations for local circumstance.

But apart from their replication in our cities, those two factors have something else in common: they are creatures of the near or distant past.

There are many great cities of old, cities that stood for great lengths of time and withstood many challenges. Many of those cities are thriving today. But many of those great cities that seemed they would last forever are distant memories in history. They are relics for the curious now.

What distinguishes those cities that live and those that die? Those that live build on their past and are not trapped by it. Those that live see difficulties as challenges to grow stronger and not to be blocked with. Those that live see the future, plan for it and then manage their resources accordingly.

That is the crucial difference that sets Cape Town apart: our ability to use our past constructively as a means of finding our way to a better future.

It is that ability which makes South Africa not only world-class but, in an age where cities increasingly compete against each other especially in the developing world, the African city of the future today.

We have spent the past year carefully planning for the duration of this term of office in crafting the Integrated Development Plan (IDP).

Our IDP is our plan for the future. It is our plan to build a better city, one that encourages growth and jobs as well as helps the poor.

It is a plan that will help us redress the imbalances of the past for a more lasting reconciliation, a reconciliation that places our diversity at the heart of the ideal of a city that delivers opportunities and services for all.

Mr. Speaker, at this special budget meeting, the proposal for this year's budget is different as I propose this budget to Council with the proposed IDP for the next five year cycle.

As this Council is aware, the IDP is a legislative requirement. However, like many requirements, it is sometimes viewed in many places as a compliance mechanism, not a strategic vision.

This IDP changes that proposition.

The proposed IDP, if passed by Council, will become the guiding document of all Directorates within the City. The document has been carefully crafted to turn the five pillars into the City's five strategic focus areas.

They are the Strategic Focus Areas (SFAs) of: the Opportunity City; the Safe City; the Caring City; the Inclusive City; and the Well-run City.

Each of these SFAs are broken up into objectives. And each objective would be managed by a lead Directorate. And these will be managed transversally and monitored by the new Strategic Policy Unit (SPU).

Throughout it all, however, all Directorates, and all City personnel, would be working towards giving life to the five pillars as principles to work towards in the city. There has been fair debate whether something should be measured under the focus area of ‘opportunity' or the focus area of ‘inclusion,' for instance.

Of course such debate will arise. This only reinforces our view that these strategic areas complement each other; that they exist because of each other and not in isolation.

We have been reporting to this Council throughout the IDP process. All councillors will have engaged with the proposed document at various stages, whether at public meetings, in caucus or in Portfolio Committee meetings.

The public has certainly engaged with this document. Indeed, this has been the most extensive project of public participation undertaken by this administration.

For months, we held public meetings, we had social media engagements and we had general information advertisements. In all, we have reached over one million people. As such, if adopted by Council, we will truly be able to say that this is a plan endorsed by the people of this city.

This IDP would become a living strategy for the City of Cape Town and has been designed for that purpose.

All strategies, however, must have detailed plans of implementation. Every year, these come in multiple formats, include the variety of Directorate plans as debated and approved by numerous bodies of this Council.

However, chief among them are the details of the annual authorisations to spend in the total Council budget.

Also proposed at this meeting is the budget for the 2012/2013 financial year, which, if passed, will help give life to our strategic imperatives and the broad vision of the IDP.

This proposed budget, which has also followed an extensive round of public participation that has seen significant changes from the draft, is proof that this administration is pro growth, pro jobs and pro poor.

It is this combination, that of balancing delivering opportunities and historical redress, that makes Cape Town's reconciliation a lasting one of universal social and economic development.

Furthermore, it is a proposed budget to maintain our competitive advantage within South Africa as a reliable service provider. It is precisely because of our efficient budget that we have the best provision of basic services in the country and not a billing crisis, endless potholes, water that doesn't run and lights that don't work.

As such Mr. Speaker, the proposed IDP has as its partner the proposed budget for 2012/2013.

I believe that this proposed budget, if passed, will allow Cape Town to continue creating the economic enabling environment in which jobs are created and opportunity thrives by committing ourselves to infrastructure-led growth and also social investment, such as the cash infusion of over R8 million recently, through the Expanded Public Works Programme, into some of Cape Town's poorer areas.

Indeed, this proposed budget would allow us to fulfil our Constitutional mandate of being the drivers of economic and social development.

The total budget for 2012/2013 is R30,2 billion. Just over R24,3 billion, or 80,4%, is allocated to Operating Expenditure, or OPEX. Just over R5,9 billion, or 19,6%, is allocated to Capital Expenditure or CAPEX.

The total operating expenditure has increased from R22,1 billion in 2011/2012 to R24,3 billion in 2012/13. This is a rise of just over 10%.

Major increases can mainly be put down to the increased cost of bulk purchases and more spent on contracted services such as for IRT roll-out.

The operating revenue increases from R21,9 billion in 2011/12 to R23,9 billion in 2012/2013. This is a growth of 8,7% in revenue.

The Capital budget increases from just over R5 billion in 2011/2012 to just under R6 billion at R5,9 billion in 2012/2013. This is an overall growth of 16,4%. This is a greater portion of the budget on Capital Expenditure than the larger metro of Johannesburg in both percentage and absolute terms, once again demonstrating that Cape Town remains the leader in infrastructure-led growth.

The proposed major Capital spending is in: Utility Services at R2, 2 billion; Transport, Roads and Stormwater at R2,3 billion; and Human Settlements at R604 million.

In Utility Services, the major Capital Projects include: a total electrification figure of R175 million; a new building complex at Bloemhof for R147 million; a Bellville Waste Water Treatment Works at R89 million highlighting the special focus we place on the Voortrekker Road Corridor; the replacement and upgrading of the city-wide water network for R63 million; and the replacement and upgrading of the city-wide sewer network at R47 million.

Our increased funds to the Voortrekker Road Corridor are part of a broader focus on revitalising min-CBDs as urban regeneration projects. This sees us prioritising the Vooortrekker Road Development Corridor and starting our area action committees in a range of areas including: Manenberg, Hanover Park, Lotus Park, Bishop Lavis, Valhalla Park, Bonteheuwel, Kuyasa, Atlantis, Athlone, Ocean View and Mitchells Plain Town Centre.

Significant Capital Projects in Transport, Roads and Stormwater include: IRT related infrastructure at R1,2 billion, connecting the whole city especially the South-East at Mitchells Plain and Khayelitsha; and the reconstruction of vital metro roads at R76 million in a roll-out that addresses unequal investment as a result of apartheid spatial planning, which led to the disrepair of roads in disadvantaged areas.

Significant Capital Projects in Human Settlements include: Upgrade of rental units and hostels for R281 million;  land acquisition for future housing at R28 million; Phase One of the Pelican Park Phase housing project at R11,5 million; The Scottsdene (CRU) housing project at R25,3 million; and the

Hangberg (CRU) housing project at R17,2 million, further demonstrating our commitment to reintegrating that community into the metro.

Furthermore, Cape Town has been the leader in addressing maintenance backlogs built up after a generation of lost infrastructure spending. This budget proposes the continuation of that policy. There is a priority given to repairs and maintenance. The total operational repairs and maintenance allocation for 2012/2013 amounts to R2,6 billion and represents a growth of 44% in relation to the 2011/12 budget.

Furthermore, this City places a premium on the needs of our poorer citizens. Up to 276 000 people will benefit from the free basic services for formal residential properties as part of the Basic Social Services Package. This is for the valuation of properties at R400 000 and lower. There is another procedure whereby those households with a median income of below R3 000 per month can apply. Senior citizens earning under R10 500 per month will also qualify for a rates rebate. There is an additional qualifying rates rebate where people earning between R3 000 and R4 000 in monthly income qualify for a 50% rebate.

This would amount to a total rates rebate of R1,2 billion, benefitting those who need it most. What is more, those benefits will help affect a real social change in this city as part of a reconciliation effort that addresses the needs of those whose circumstances were caused largely by past injustices.

For those who do not live in formal residential properties, this budget also makes generous provisions to assist and improve lives.  Just over R137 million is proposed for the provision of improved services in informal settlements and backyarder communities. These funds are in addition to those allocated for crucial provisions like janitorial services in previously neglected areas.

And we will continue investing in all communities as part of our wider redress policy, especially those areas that were once neglected. As such, this budget proposes a new clinic for R6 million in Site B, Khayelitsha and new Early Childhood Development Centres in Rocklands, Dunoon and Delft for a total of R14 million. It further proposes R34 million for the building of a new library in Kuyasa, Khayelitsha and a further R25 million for the construction of a new library in Bloekombos.

And to give a helping hand to people who need relief, an allocation of R45 million to Expanded Public Works Programmes under the Mayor's Special Job Creation programme is proposed.

And, as previously announced, this budget proposes R10 million for the Mayoral Redress Programme, which will see additional financial allocations to the poorest wards in the city. This would be in addition to ward allocation increases for each ward by a further R200 000.

To give the resources to our implementing changes, that is our Directorates, we have ensured that the proposed finances are aligned with our strategy of creating opportunity for all in a caring and inclusive city that is safe and well-run.

For Community Services, an OPEX of R1,3 billion and a CAPEX of R199 million.

For Corporate Services, an OPEX of  R1,7 billion and a CAPEX of R250 million, most of which will go to rolling out the broadband infrastructure that will change the way this City communicates and does business, thereby changing the lives of Capetonians.

For Economic, Environmental and Spatial Planning, an OPEX of R444 million and a CAPEX of R52,4  million.

For Finance Services, an OPEX of R1,7 billion and a CAPEX of R48 million.

For Health Services, an OPEX of  R770 million and a CAPEX of R27,4 million.

For Human Settlements, an OPEX of R27,4 million and a CAPEX of R252 million.

For Safety and Security, an OPEX of R 1,3 billion and a CAPEX of R52,4 million.

For Social Development and Early Childhood Development, an OPEX of R58 million and a CAPEX of R11,6 million.

For Transport, Roads and Stormwater, an OPEX of R1,8 billion and a CAPEX of R2,3 billion. This includes an additional R500 million from the National Treasury on top of what was allocated in our draft budget, which will enable us to have the backbone of the MyCiti bus service to the south-east corridor, including Mitchells Plain and Khayelitsha, in place by June next year, for a final service roll-out in December next year.

For Utility Services, an OPEX of R12,3 billion and a CAPEX of R2,2 billion.

For Tourism, Events and Marketing, an OPEX of R412 million and a CAPEX of R77 million.

In conclusion Mr. Speaker, I believe that the proposed budget will help us meet the needs of the poor. It will help us meet the needs of ratepayers. It will help us meet the needs of business. It will help us use our resources in the best way possible.

Through these proposed allocations, we mean to invest in those areas that have faced under-investment, provide to those areas that need services maintained and continue to lay the infrastructure that supports all these needs as well as the needs of the next few decades.

Cape Town is a South African city and proudly so. We have the same legacy as other metros. But where we differ is how we plan for the future.

Cape Town will not be one of those cities vaguely remembered. We will be leading the charge over the coming years, especially as we develop and grow with other mid-size cities, especially those from the developing world.

The competition between cities as the engines of global growth is growing more fierce. The gap between those cities that make the choices that will determine whether they live or die will only grow wider.

I believe that we are making the right choices for the resources we have and the strategies that will help us reach our potential, achieve our ambitions and give life to the principles that have guided us this far.

In the interests of taking Cape Town to the next level, I table the proposed budget and the proposed IDP.

Thank you.

Issued by the Communication Department, City of Cape Town, May 28 2012

Click here to sign up to receive our free daily headline email newsletter