Notice is hereby given in terms of the provisions of section 46 of the local Government Municipal Finance Management Act 56 of 2003 read with Section 21 of the local Government Municipal Systems Act 32 of 2000.
Polokwane Municipality has during its 2017/18 Financial Year IDP Consultation identified roads as the second priority in the Municipality. This then meant that roads in the municipality had to be prioritised for implementation.
In order to enable the municipality to cover sufficient roads in both urban and rural for rehabilitation and upgrading, a concession programme was introduced. The fees for this program will be based on the ECSA rates.
Municipality has prepared the financial model that seeks to support the project implementation of this programme and will unlock a total budget of R450 million which is going to be funded from the R300 million refinancing project loan facility as well as the R150 million contribution from the sinking fund. At the moment after detail analysis of the municipality financial resources available in the MTREF period, the affordability of this project is within the band of R450 Million over the MTREF period.
On road rehabilitation and upgrading programme, the impact on saving is illustrated as follows:
It is advisable that the municipality opt for the refinancing of road concession on the total value of R300 million from refinancing as opposed to R450 million because the Council will realise significant savings over the period of the tenure of the loan.
The project is funded to an extent that the council authorised accounting officer to unlock the funds through refinancing mechanisms and sinking fund contribution.
Council must first authorise the Accounting Officer to negotiate the refinancing of this project with DBSA since the maturity of the existing two loans are due to be in 2020/2021 financial year. The municipality will realise cash flow benefits because the capital repayment of this commitment will only start in 2021 financial year. Over and above this, the municipality can also withdraw funds from the sinking fund as part of the co-funding of this roads programme.
The Municipality must follow the section 46 of the MFMA read with section 21 of Municipal Systems Act before the refinancing can be concluded with DBSA. For any shortfall on the funding of this programme, the Council must authorise the accounting officer to explore the hybrid funding mix such as municipal bonds and Grant funding as part of the mechanism to fund roads in a long run.
Polokwane Municipality has to implement the upgrading of gravel to surfacing and rehabilitation of roads through concession program in all its Wards from Ward 1 to Ward 45.
For the 2018/19 financial year, a budget of R80 million is set aside to kick-start the concession programme as part of the sinking fund contribution.
Following a Mayoral Committee meeting held on the 03rd of December 2018, a resolution was taken to utilise the available budget of R80 million to implement prioritised RAL roads.
Below is the list of prioritised wards or roads to benefit from the available R80m:
The following is a proposed list of prioritised roads from Ward 1 to Ward 45:
All interested persons are invited to submit any comments, in this regard to the Municipality within 21 days of this notice.
Enquiries and comments
1. Mr Pilot Ramothwala
Tel: 015 290 2206
2. Ms Kulani Malubane
Tel: 015 290 2241
3. Funding & Financial model:
Mr Joel Makgata
Tel: 015 290 2354
4. Funding & Financial model:
Ms Zinzi Mphahlele
Tel: 015 290 2195
Correspondence to: The Municipal Manager
P O B OX 111
Physical Address: Cnr Landrosmare & Bodenstein Street
Civic Centre Building
Submission must be clearly marked: Section 46 Road Concession loan.
Person who are physically disabled or unable to write but need to participate in the process may present themselves during office hours at 1st Floor, Civic Centre Office 110, Roads and Storm Water where they can be assisted.