Regulating Municipal Development Charges

South African municipalities face a funding crisis. Their revenues from water and electricity consumers are dropping as citizens curtail their consumption. National fiscal constraints mean that there is less money available to allocate to local government for capital investment.  The World Bank has estimated that municipalities need to be investing in the region of an extra R15 billion annually in infrastructure, of which roughly half should be obtained from developers, via development charges. To date the legal framework through which municipalities get contributions to infrastructure from developers has been fragmented and inconsistent. The National Treasury supported a process to develop new legislation to create a uniform standard across the country for calculating, spending and reporting on development charges from developers. Draft legislation and policy needed to be finalised and readied for inclusion in the parliamentary programme.

We worked closely with legal, engineering and municipal finance experts to update the draft legislation. We aligned it with other, new national legislation and made it consistent with an evolving view on the extent of local government’s powers and functions. We communicated complex legal and financial concepts to the client as well as key stakeholders to smooth the way for a successful passage through the parliamentary process. We also supported the development of implementation guidelines for municipalities and an implementation strategy.