Public Infrastructure Financing / Financing

Mobility Infrastructure

CASE STUDY City of cape Town – Roads and

Stormwater Resource Planning

Mobility Situation in the Western Cape

• Population of Cape Town and Surrounds (including Stellenbosch

and Drakenstein Local Municipalities) is ~4,9 million, with close to 4

million use various transportation modes

• Formal and informal employment is estimated to be 3 million with

1,6 million who do not have access to work and are unemployed.

• The size of the region is 4 800 sq, km.

• The transport profile is mainly motorised with only 18 to 20% NMT

• Economic (easy access to decent work) and social (inter-cultural

interaction development is restrained by mobility

• Wellness and recreation based on being mobile is on the increase

• 90% of commuters are dissatisfied with transport modes utilised

• The cost of commuting is the biggest deterrent in choice of mode

Mobility infrastructure project rollout to address there needs

are largely restricted by access to finance

2

Functionality Dimensions – Planning vs Resource

3

100% 1

2 3 4

45

46

47

0%

25%

50%

75%

29 30 32 33 34 35

36 37

38 39

40

41

42

43

44

48

49

50

51

52

53 54

55 56

57 58 59 60

Organisational

Purpose

Strategy & Annual

Business Planning

Technology

Enablement

Human Capital Business

Processes

Financial

Management Systems

Culture, climate

Diversity

Sustainable

Service Delivery

3

1

• Strong financial

management and strategic,

business and engineering

mobility plans is critical

• Functionally can be

dimensionally measured

which helps

Resource planning must be functional and is a critical part of mobility

planning

Strategy Architecture with Business Process, and BI Project

Alignment to Resource Plan

4

Customer /

Stakeholder

Strategic

Objectives

Financial

Strategic

Objectives

Internal

Process

Strategic

Objectives

Organisational

Strategic

Objectives

Customer /

Stakeholder

Strategic

Objectives

Financial

Strategic

Objectives

Internal

Process

Strategic

Objectives

Organisational

Strategic

Objectives

Customer /

Stakeholder

Strategic

Objectives

Financial

Strategic

Objectives

Internal

Process

Strategic

Objectives

Organisational

Strategic

Objectives

DepartmentBranch

Operations

Resource

Plan

R&SW STRATEGY / BUSINESS PLAN

BIP #1

IT HR R

BIP #2

IT HR R

BIP #3

IT HR R

BIP #4

IT HR R

BIP #5

IT HR R

BIP #6

IT HR R

BIP #7

IT HR R

BIP #8

IT HR R

BI

PROGRAMME

Financial

Human Resource

BIP Suggestions

Str

ate

gic

Init

iati

ve

s

+ =

ANNUAL SDBIP

• Executing on the Vision of a

City, Town or Village

• Planning, projects and

resourcing steps are all

critical:

− Financial resources

− HR capacity

CFO’s are often extremely frustrated – budgets vs financial plans

Financial Planning Analysis - Grant Funding Trends

5

R -50

R -

R 50

R 100

R 150

R 200

R 250

R 300

R 350

Plan Actual Plan Actual Plan Actual Plan Actual

2006/2007 2007/2008 2008/2009 2009/2010

Millions

Capital GGR -

National

Capital GGR -

Provincial

Capital PCDR

Dev Con/Dev Lev/BICL

Other

• How do the different sources

of funding made up?

• Analysis shows that not all

funding sources are utilised

• Likewise revenue sources

and trend analysis is equally

critical

Translating the need into a funding and financing requirement to explore the

required financial resources and right instruments

Trends in Capex Flows – Actual vs Budget

• Spending capex

according to plan is

dependent on the

strength of project

management

• Unspent funds by

government

departments are a

threat to financing the

future mobility build

6

R -

R 100

R 200

R 300

R 400

R 500

R 600

R 700

R 800

R 900

Budget Actual Budget Actual Budget Actual Budget Actual

2006/2007 2007/2008 2008/2009 2009/2010

Millions

Mobility build across integrate modes is threatened by underspent

CAPEX

City of Cape Town Road Network Master Plan

• Linking and master plan to financial projections

usually presents a major challenge

• Engineering / technical and

finance rarely have a

meeting of minds

• Financial analysis is

critical for decision-making

amongst the access to

scarce resources

7

Integrated master planning needs to be in sync with financial planning

City of Cape

Town Cycling

Master Plan

Cost Saving and Revenue Enhancement through Business

Improvement Projects [BIP’s] & Mobility Strategic Projects These BIP’s are real

sources of funding that can

make a major difference to

operating costs and more

efficient revenue generation

Capital productivity savings

can be 15 to 20% of

CAPEX

Operating productivity

savings can be up to 30%

of expenditure

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BIP Name of BIPBenefit

CategoryBenefit Description

Cost/ Income

Bucket Impacted

Short Term

Benefit

Implementation

cost

Operational

cost

Timeline

(Months)Start Date

Resultant

Wave

1

Reactive Maintenance

Performance Improvement Productivity

Increase the Measurable

productivity of teams. Obtain

accuracy of work measured to

ensure teams are 100% utilised

Salaries and wages

R 37 600 000 R 2 902 000 R 1 172 000 12 09/2011 1

2

Establishing an Integrated

Infrastructure Asset

Management System Productivity

R1 spent today on proactive

maintenance will return far better

value in future life expectancy in the

future than R1 spent today on

Reactive Maintenance.

Repairs and

Maintenance

R 2 250 000 R 19 000 000 R 5 800 000 24 07/2012 3

3

Enhancing Human Capital

Development to build a

Competent and Capable

Workforce Productivity

Enhanced Operational Productivity

and Service delivery capacity

through filling vacancies. Reducing

the under spend in Budgeted

Salaries and Wages will mean

vacancies are filled and business

units are better capacitated to

deliver services

Salaries and Wages

R 21 000 000 R 500 000 R 1 330 000 18 09/2011 1

4

Building and Managing

R&SW Knowledge with

Accessible Records

Retrieval for Effective

Service Delivery and

Continuous Improvement Productivity

Less Time wastage in document

management and reworking.

Salaries and Wages

R 1 935 000 R 800 000 R 230 000 9 01/2012 2

5

Improving Strategic and

Operational Planning for

Effective Management of the

R&S Infrastructure

Increased in

Budget Increased CAPEX grant

Increased Capex

R 600 000 000 R 1 300 000 R 240 000 6 09/2011 1

6

Video Conferencing for

Productive Operational and

Strategic Performance

Meetings Productivity

Salaries and Wages

R 115 000 R 38 000 R 0 3 09/2011 2

7

Improving Revenue

generation within R&SW Revenue

Increase in Revenue Generation

through the proactive identification

of debtors

Revenue increase

R 22 000 000 R 250 000 R 450 000 6 01/2012 2

R 684 900 000 R 24 790 000 R 9 222 000

R&SW Benefit Framework

It is often astounding what funding can generated from performance

improvement programmes that will reduce costs of financing

Mobility / Transportation 30 year Financial Projection

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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Roads

New road links and

intersections R 730 166 R 778 357 R 829 729 R 884 491 R 942 867 R 1 005 096 R 1 071 433 R 1 142 147 R 1 217 529 R 1 297 886 R 1 383 546 R 1 474 860 R 1 572 201 R 1 675 966 R 1 786 580

Stormwater

Commercial

industrial R 75 240 R 75 240 R 75 240 R 75 240 R 75 240 R 80 206 R 85 499 R 91 142 R 97 158 R 103 570 R 110 406 R 117 693 R 125 460 R 133 741 R 142 568

Med to high income

mixed R 52 080 R 52 080 R 52 080 R 52 080 R 52 080 R 55 517 R 59 181 R 63 087 R 67 251 R 71 690 R 76 421 R 81 465 R 86 842 R 92 573 R 98 683

Low income

residential R 72 000 R 72 000 R 72 000 R 72 000 R 72 000 R 76 752 R 81 818 R 87 218 R 92 974 R 99 110 R 105 652 R 112 625 R 120 058 R 127 982 R 136 428

Roads

Asset Renewal R 366 164 R 390 331 R 416 093 R 443 555 R 472 829 R 504 036 R 537 303 R 572 764 R 610 567 R 650 864 R 95 926 R 102 257 R 109 006 R 116 201 R 123 870

Stormwater

Asset Renewal R 21 286 R 22 691 R 24 188 R 25 785 R 27 487 R 29 301 R 31 235 R 33 296 R 35 494 R 37 836 R 40 334 R 42 996 R 45 833 R 48 858 R 52 083

Non- infrastructure

Assets R 8 000 R 8 528 R 9 091 R 9 691 R 10 330 R 11 012 R 11 739 R 12 514 R 13 340 R 14 220 R 15 159 R 16 159 R 17 226 R 18 363 R 19 575

Total R 1 324 936 R 1 399 227 R 1 478 420 R 1 562 841 R 1 652 834 R 1 761 921 R 1 878 207 R 2 002 169 R 2 134 312 R 2 275 177 R 1 827 443 R 1 948 054 R 2 076 626 R 2 213 683 R 2 359 786

2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041

Roads

New road links and

intersections R 1 904 494 R 2 030 191 R 2 164 184 R 2 307 020 R 2 459 283 R 2 621 596 R 2 794 621 R 2 979 066 R 3 175 684 R 3 385 279 R 3 608 708 R 3 846 883 R 4 100 777 R 4 371 428 R 4 659 942

Stormwater

Commercial

industrial R 151 977 R 162 008 R 172 700 R 184 098 R 196 249 R 209 201 R 223 008 R 237 727 R 253 417 R 270 142 R 287 972 R 306 978 R 327 239 R 348 836 R 371 860

Med to high income

mixed R 105 196 R 112 139 R 119 540 R 127 430 R 135 840 R 144 806 R 154 363 R 164 551 R 175 411 R 186 989 R 199 330 R 212 486 R 226 510 R 241 459 R 257 396

Low income

residential R 145 433 R 155 031 R 165 263 R 176 171 R 187 798 R 200 192 R 213 405 R 227 490 R 242 504 R 258 510 R 275 571 R 293 759 R 313 147 R 333 815 R 355 846

Roads

Asset Renewal R 132 045 R 140 760 R 150 051 R 159 954 R 170 511 R 181 765 R 193 761 R 206 549 R 220 181 R 234 713 R 250 205 R 266 718 R 284 321 R 303 087 R 323 090

Stormwater

Asset Renewal R 55 520 R 59 185 R 63 091 R 67 255 R 71 694 R 76 425 R 81 470 R 86 847 R 92 578 R 98 689 R 105 202 R 112 145 R 119 547 R 127 437 R 135 848

Non- infrastructure

Assets R 20 866 R 22 244 R 23 712 R 25 277 R 26 945 R 28 723 R 30 619 R 32 640 R 34 794 R 37 091 R 39 538 R 42 148 R 44 930 R 47 895 R 51 056

Total R 2 621 184 R 2 794 182 R 2 978 598 R 3 175 185 R 3 384 748 R 3 608 141 R 3 846 278 R 4 100 133 R 4 370 741 R 4 659 210 R 4 766 526 R 5 081 116 R 5 416 470 R 5 773 957 R 6 155 038

Capital Expenditure 2012-2041 R '000

From a 3 year MTEF

planning cycle to a 30 year

cycle due to the nature of the

mobility infrastructure assets

The value of a 30 year projection for mobility assets enables the financial

implication of the vision to be translated to financial requirements

Conclusions and Lessons Learnt

• Plan from National Strategy, to Provincial, to City / Town and Village

• Define the Mobility and the Operations Improvement Projects

• Financially model the requirement of funding and finance

• Analyse the sources of revenue and develop a funding and financing plan selecting the most

appropriate instruments

• Lobby and secure the resources needed – human and financial

All that is required to Implements – Good Luck with you Mobility Plan!

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