24 APRIL 2007
The Cape Town Regional Chamber of Commerce and Industry held a symposium on 24 April 2007 to open up communication channels between business and the City of Cape Town.
Executive Mayor Helen Zille delivered the keynote address.
SPEECH BY HELEN ZILLE, MAYOR OF CAPE TOWN
"ADDRESSING THE CONSTRAINTS TO ECONOMIC GROWTH "
I would like to thank Ms Janine Myburgh and the Cape Chamber of Commerce for inviting me to speak to you.
I have been asked to tell you about our plans for the City as we head toward 2010 and for the years that follow.
Before I do, I must make a few qualifications. Local government has very specific responsibilities, as set out in Schedules 4 and 5 of the Constitution. It is in terms of these functions that I will speak about our plans for the City. We cannot pretend to be all things to all people.
Public participation around Cape Town’s 5 year plan, the IDP, has so far indicated that the citizens of Cape Town want jobs, first and foremost. Bearing in mind that we cannot provide jobs directly, our number one priority has to be providing the kind of government that facilitates and encourages job-creating economic growth.
We must therefore listen to what you the business leaders of Cape Town have to say - especially to your criticisms about where we, as local government, are putting obstacles in the way of growth.
In this regard, Wesgro’s recent study (commissioned by the City) which investigated constraints to economic growth identified by businesses has been very helpful, and I hope that during question time we can discuss some of its findings in more depth. I have asked for the results of this study to be presented to the next MAYCO meeting for in-depth discussion.
Several of the most serious constraints mentioned in the study are directly related to various local government functions. Poor electricity supply, poor public transport, red tape at municipal level, and crime were repeatedly singled out as barriers to starting a business, operating a business, and investing from oversees. Where we have control over these areas in terms of the Constitution we have to do our best to remove the blockages.
The first way in which we intend to intervene is to invest in infrastructure. We want our key role to be appropriate investment in infrastructure to lead economic growth. For example, we plan to upgrade and expand electricity distribution networks and substations. The recent power outages across the province have been the result of Eskom’s failure to match its supply with growing demand. But if we do not invest in electricity distribution, we risk seeing power cuts caused by failed power lines and sub-stations as well. We have put about half a billion rand into electricity distribution over the next three years as part of our preparations for 2010, and we will be investing more after that.
We will also be investing in sewerage and wastewater treatment so that new industrial developments are not restricted. And we are going to spend on upgrading our roads and extending rail links. The City manager will also tell you about our plans for putting in a fibre optic network, which will go some way toward reducing telecommunication costs in Cape Town.
Our main challenge when it comes to infrastructure investment will be rolling out projects quickly and efficiently. Underspending of capital budgets has become a debilitating trend in local government in the new South Africa. Cape Town spent an average of 60% of its capital budget from 2002 to 2005. This increased to 74% in 2006, but it should be around 95%.
That is why we are dedicating a large portion of our draft budget for the year ahead to increased staff capacity. We are in the process of appointing project managers, technicians and engineers to ensure that projects are driven through relentlessly and at the required standard. We have filled nearly 1800 critical vacancies in the past year alone, and will be filling another 1700 in the year ahead. If we can get our infrastructure projects right, we will tackle some of the top disincentives to investment as identified by businesses in the Wesgro study.
The second way in which we will seek to promote investment and economic growth is to reduce red tape as far as possible. I can tell you from frustrating experience that red tape delays the Municipality’s own projects, especially when it comes to housing and the release of appropriate land for industrial development.
As far as business is concerned, the Wesgro study clearly identifies the key problems: the time taken by the City to respond to queries, to approve building plans, to approve re-zonings, and to approve building regulations, and the complications created by signage and environmental regulations.
Last year we commissioned a red tape review, which is looking into why these and other problems persist in the City. The results have not been finalised yet, but, broadly speaking, we have found that bureaucratic delays are created by legislation, and by a lack of appropriately skilled staff in the right places. We also lack a one-stop interface between the City and business that will make things easy for entrepreneurs and investors. We want to introduce such a facility into the municipality.
As soon as we receive the results of our red tape review, we will know the exact problem areas, so we can make the City more user-friendly for business and the general public. In the meantime, I have invited any members of the business community who experience unreasonable delays when going through legal processes with the City to contact me personally so that I can try to assist.
I must also point out here that there are some forms of red tape that we simply have no control over. Stringent environmental laws and the Municipal Finance Management Act create substantial delays, especially when it comes to releasing land for industry. But we are compelled to abide by them.
We intend to petition National Government to relax some of the requirements of these laws in order to make economic growth easier. But for the medium term, our goal will have to be to reduce red tape to the absolute minimum required in law.
The third area in which the City can intervene is crime. This is the most pervasive disincentive identified by businesses in the Wesgro study. We have a very specific and limited role in this regard, but it is an important one. The City’s core policing functions as described in national legislation and the Constitution are the enforcement of by-laws and traffic laws and regulations. The SAPS, which falls under the Provincial Government, is responsible for crime prevention.
Here, as in our other constitutional functions, we have committed ourselves to getting the basics right. A recent committee of inquiry carried out by the City found that the Metro Police have come to neglect their core business and in general are being poorly managed. Over the years the Metro Police have shifted their main operational priority to crime prevention in order to cover deficiencies in the SAPS.
It has been found that about 75% of their time is now devoted to crime prevention, while only about 25% is spent on traffic and by-law enforcement. It should be the other way around. We intend to get back to carrying out our legislated mandate first. Once the Metro Police are handling traffic and by-law enforcement effectively, we can then allocate resources to crime prevention.
We have appointed a task team to re-align the force to carry out its mandated functions properly. This may divide the service into separate units, with a head for traffic, a head for law enforcement, a head for crime prevention and a head for other specialist services like the anti-land invasion unit. At the same time, we are urgently completing the process of placing staff and establishing reporting lines in the Metro Police administration.
But there are other problem areas that we need to address in the Metro Police. The metro police used to be a decentralized force where management at precinct level took responsibility for key decisions and maintained a grass roots relationship with individual SAPS stations. Over the past few years it has come to be run by centralized management with no area specific responsibilities and only a high level relationship with the Provincial and National Police Commissioners.
For example, where the Metro Police in Milnerton used to co-operate directly with the SAPS in the area, they now go right to the Provincial Police Commissioner to find out about SAPS issues and to co-ordinate. There is no longer a linkage on the ground.
So we are pushing officials to attend joint operational meetings with SAPS and with community policing forums. We need to re-establish the relationship between the two. We are also shifting the way in which the police are deployed. More of our officers are being assigned to police transport interchanges, to tackle land invasions, to manage informal trading, to enforce public nuisance and to regulating taxis.
One of our major hurdles, though, is that we have to do all of this while bearing the National Minister of Safety and Security’s recent statement in mind that the Metro Police crime prevention arm might be taken away from the City. This would mean he would place all officers appointed under the SA Police Services Act under the command of the SAPS leadership, which would shrink our force considerably. His decision will be known soon.
The fourth way in which the City can intervene to reduce constraints to growth is to work in good co-operation with other spheres of government to achieve results. When it comes to public transport, another key problem area highlighted in the Wesgro study, we have made some very significant progress in co-operative governance. Together with the Western Cape Province, we have come a long distance toward creating a unified metropolitan transport authority, which will drastically improve the management of our transport systems.
We have also worked with Province to develop a Public Transport Implementation Framework. This is a blueprint to guide us in investing billions of rand ahead of 2010, and that will lead continued improvements thereafter. This framework is a plan of action that will enable us to provide a full network covering the city with linked rail and road public transport systems. The aim is to deliver a system that is of a high enough quality to attract existing car users and to reduce congestion on our roads.
This framework ties together a number of projects and sets clear deadlines. In the first instance, the City together with the SA Rail Commuter Corporation has developed a Regional Rail Plan aimed at major investment and upgrading of the rail network on key routes. One of the first steps we are taking in this regard is extending rail lines further into Khayelitsha.
The City is also working with the Provincial Government to carry out a major restructuring of the scheduled subsidised bus services (that is, the Golden Arrow Bus Services). This restructuring will involve upgrades to the level of service, and a network rationalisation from over 900 routes down to 150 line haul routes.
Several other public transport initiatives are also going to be co-ordinated within the Framework, including the N1 Corridor Busway, the Koeberg Road Median Bus Lane, a contra-flow scheme on Marine Drive, the Symphony Way corridor project, the Klipfontein Road project, the Claremont Public Transport Interchange, and the N2 bus and taxi lane.
The intended result of linking up the various modes of public transport – taxi, rail, bus, and even park and ride – is to ensure that people can climb off one mode and transfer to another in an efficient fashion at Interchange Stations. This will be made easier with a Smart Card system allowing different services to be utilised within a single, economical fare structure. This planned transport system is based on the same principle employed in large cities around the world, such as London, Paris, and New York.
Of course, while we are working well with other spheres of government, we must also build more partnerships with the private sector. I have been particularly happy about the results of our arrangement with the major banks in making housing finance available to low income earners. I have also been very happy with the work done by the City and the CCID in improving the state of the station deck.
For the past year my door has been open, and it remains open, to people from the private sector with innovative ideas for partnerships with the City. But when it comes to public private partnerships, as in many other areas, what we in the City say often does not gel with what we do. There is a disjuncture between word and deed because we do not understand and follow through on the implications of our vision and mission statements.
While there is a strong commitment in principle to partnerships, for example, even at very senior levels of the council, officials sometimes struggle to put them into practice. Part of the problem seems to come back to capacity constraints. But it also relates to a lack of ability to manage external partnerships.
For example, where the Cape Town Partnership has submitted proposals to work with the City to improve CBD parking management, our officials have not come back to them for over four months. Similarly, while Council acknowledges that it is looking for partners to manage public spaces, when the Cape Town Partnership offered to take up a lease to manage Church Square, it took the City over three months to respond.
I was glad to hear, though, that officials in the City are working with a more positive attitude toward Cape Town Partnership and other private concerns than they did a couple of years ago. I hope that this is a sign of growing trust in the private sector within government ranks.
Now the challenge is to get more of our officials used to working with private partners. We will also have place more officials in the right places to facilitate these working relationships, and to ensure that these individuals are not too risk averse when it comes to operating within the constraints of the notorious MFMA.
To conclude, I must say that although we have identified economic growth as our top priority, this notion has yet to sink in everywhere in the City. We still have officials neglecting pending approvals for the release of industrial land while running workshops or road shows that have little impact. We still have politicians within the City manoeuvring for their own personal gain instead of working toward a common goal. And we still have politicians in other spheres of government trying to trip us up because we are an opposition coalition. The delays and complications that these problems create are frustrating. But we are determined to push on, and we welcome your continued support and input, especially your constructive criticism.
I thank you.
City Manager’s Address to the Cape Regional Chamber of Commerce and Industry
“GEARING-UP FOR SERVICE DELIVERY”
Madame Mayor and Mayco Members, Mrs Janine Myburgh and members of the Cape Regional Chamber of Commerce and Industry, ladies and gentlemen – good morning.
You will agree that one of the cornerstones for business to thrive, is continued growth. Our city has experienced tremendous growth over the past 20 years and in fact, Cape Town has doubled in size.
With 3,2 million residents occupying an area of 2 500 square kilometres, 22 000 staff members and a R20 billion budget, the City of Cape Town is today the second largest metropolitan authority in South Africa.
In business terms, we could be compared to a sizeable listed company. The major difference is that we are financed by the City’s ratepayers money with the responsibility to render equitable basic services to all – including of course, the business fraternity.
Besides our position as the second largest metropolitan authority in the country, Cape Town also has the highest net migration rate in the country. In the past decade we have seen sustained population growth by an estimated up to 80 000 people per year, many of whom are desperately poor.
During this time, movement patterns have changed dramatically. The transport infrastructure network has become strained and traffic congestion is increasing. The structure and form of the city generates enormous amounts of movement at great economic, social and environmental cost to the public purse.
Inadequate shelter, overcrowding and indiscriminate development are growing problems in many parts of this and other cities. In stark contrast, some areas are very well off and continue to benefit from sustained investment. The gap between wealthier areas and poorer ones continues to widen.
Cape Town, just like our counterparts in Johannesburg, Durban and Port Elizabeth, is facing rising development challenges.
Despite a 4% annual increase in Gross Geographic Product (GGP), poverty, unemployment, drug-related crime and HIV prevalence have increased. Public transport has deteriorated.
These are challenges not only for local government, but also for our business partners. So - where do we begin to tackle these problems?
The City of Cape Town’s overall objective is to create a prosperous city:
With economic growth
Where we get the basics right and promote growth through investment in infrastructure
Where we have efficient city government with less red tape, good governance and no corruption.
However, to meet these goals is an ongoing and daunting task.
In order to ensure effective service delivery, we need to be working very hard to retain, optimally utilise and expand the expertise, intellectual capital and experience of our staff. This is the foundation of a successful local government.
It is most unfortunate that we have lost much of the institutional knowledge and expertise in the City Administration through the restructuring processes of past years. There is also the impact of natural attrition as staff retire, resign or pass away. Many of our competent and trained staff are also lured to surrounding municipalities and the private sector on an ongoing basis.
It is vital for us to have the trained staff, especially project managers and engineers, in order for us to be able to spend the available capital budget effectively. This is exactly what my team and I are busy with right now – gearing up for service delivery. We have to catch up after four years of below inflation increases in rates and tariffs. The proposed increases in the current draft budgets will help us to maintain and upgrade current infrastructure, as well as invest in new infrastructure.
We have put in place faster procurement and approval processes to be able to implement projects, although there is still room for improvement in this regard. Our operational budget, similarly, will receive special focus to enhance service delivery.
As you know, the instability in City and Western Cape politics over many years has lead to changes in City governments, leadership, policies and emphasis. This kind of turbulence makes it both very difficult but also essential for an administration of civil servants to maintain continuity.
Just the other day when talking to the Cape Town Press Club, I made the point that the City Administration must be a non-partisan workforce. It must serve all the residents equitably regardless of their political affiliations. This however, remains an ongoing challenge to any city government including the City of Cape Town. It is only natural for residents who support a particular political party to feel neglected when their party is not in government.
So it is absolutely crucial for an apolitical Administration to be able to reassure residents that service delivery – for all – will continue, irrespective of who is at the helm.
Today I can confirm that almost all the basic building blocks have been secured to allow us to move forward. Over the past number of months we have been driving a process to place staff into their correct positions with the view to optimising efficiencies.
And to that end, we have issued the majority of our 22 000 staff members with individual placement letters confirming their employment or placement within a single staff structure.
A single pay scale and a single set of conditions of service have also been offered to all staff members. Those who were previously underpaid have been or are being brought up to the minimum pay level within their job grades, and pay parity will be finalised in the 2007/08 financial year.
All executive directors have signed contracts of employment and performance agreements as required by law. Senior managers who wish to be permanent staff members have been or are being placed and those who prefer to sign contracts are doing so or have done so already. All displaced managers who had been removed from their previous jobs during the previous restructuring processes have been placed into productive posts or are in the process of being placed. These processes will be concluded over the next few months.
We are seriously committed to taking purposeful action to becoming much more efficient and productive. We can no longer hide behind the lack of capacity or the lack of money. And we cannot continue with the under-expenditure of budgets as evidenced over the past few years.
Between March 2006 and March 2007, we have gone to great lengths to fill some 1 780 of the more critical vacancies which existed on our staff establishment. The second batch of some 600 posts are in the process of being filled.
But, we have budgeted for further posts, most important of which are the project managers, engineers and technical staff - 160 posts. The staff budget has been increased considerably to accommodate the filling these critical posts with effect from 1 July 2007. These are essentially the posts that are needed to ensure that the city’s budget will be spent so that the much-needed infrastructure to support economic growth and job creation will be provided.
It should be clear that my team and I are now already preparing for the implementation of the five year plan. The aim is to hit the ground running at the start of the financial year on 1 July 2007. In a parallel process, we are also working on a model to further integrate all municipal operations and activities in a phased roll-out process.
So the City is committed to improve and expand infrastructure, become more efficient at service delivery and cut down on red tape. We have also made great strides to ensure an effective and corruption-free Administration. By doing these things we believe it will create and enhance the investment climate. If business and industry invest, jobs will be created for our residents.
I would like to thank and salute the business and industrial community of Cape Town and surrounds for their ongoing contribution. You are the entrepreneurs who invest not only for profits and shareholder returns, but because you fundamentally believe in and commit to Cape Town. You give your workforce livelihoods, but also training and professional growth. One regularly hears of gratifying international, regional and local success stories, exciting joint ventures, new technology, awards, share and incentive schemes for employees.
This is the lifeblood of a local and regional economy. Without this continued energy, a city such as ours will stagnate and decline. We cannot do your job. We can only do ours so that you can continue doing yours.
Despite the many problems and constraints we can all list, many things are going well. We still have our mountain, our people. We continue to be a top ten destination for tourists. And many travellers, conference goers and event participants later become investors.
We are gearing up to be hosts for World Cup 2010. This is the biggest sporting event in the world. According to research, hosting World Cup 2006 increased Germany’s tourism by 19,3% and Gross Domestic Product by 0,3%. There were 3,4 million spectators in the stadiums and 18,3 million in the fan parks with 18 000 media representatives showcasing not just the event but Germany to a cumulative global television audience of 25 billion!
Of course there are differences between Germany and South Africa, but there is no doubt that World Cup presents a major opportunity. Working according to our IDP, we are aiming not just for 2010, but for 2011 and beyond. We must plan for the kind of city, infrastructure and services we want and then use the investment, energy and synergy of World Cup – a national initiative – to get there faster.
Ladies and gentlemen I hope that you will agree that we are now well on our way to getting the basics right in order to make the City work as you and I would like to see it work.
I am not suggesting that everything in the City is as it should be. There is still much to do. We must always strive to improve our service delivery. But as you know, even then, local government will always have its critics.
However, in order for us to come much closer to achieving that prosperous City, it is important to realise that business, the residents and local government are essential partners, who collectively need to ensure that we do three key things:
That we continue to take meaningful action to address social needs and poverty
That we ensure that our natural beauty is maintained and sustained
That we invest in the growth and prosperity of this unique and special city.
I thank you.