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Municipal Service Delivery

What is in this guide

  1. Why should organisations understand municipal services?
  2. Important things to know about municipal services
  • What is a municipal service?
  • Who is responsible for providing services?
  • Factors to considered before deciding on service delivery options?
  • Municipal service partnerships [MSPs]
  • Types of MSPs
  1. How does a municipality implement a MSP?

  1. Why should organisations understand municipal services?

    The South African Constitution states that municipalities have the responsibility to make sure that all citizens are provided with services to satisfy their basic needs. In this guide we will look at what those services are and the various ways in which municipalities can provide them in an affordable manner. We will also look at what role ordinary citizens can play to help municipalities decide what services to provide and how they will be provided.

Organisations can participate in many consultation and decision-making processes at local level - for example ward committees, budget consultations, ward meetings, Integrated Development Planning Forums, and so on. If you want to represent people and fight for their interests, it is very important to understand the level of services that are available, the ways services can be delivered and the choices for how to deliver services that your municipality faces.

  1. Important things to know about municipal services

    What is a municipal service?

Municipalities must make sure that people in their areas have at least the basic services they need. There are a large number of services that they provide, the most important of which are:

  1. Water supply
  2. Sewage collection and disposal
  3. Refuse removal
  4. Electricity and gas supply
  5. Municipal health services
  6. Municipal roads and storm water drainage
  7. Street lighting
  8. Municipal parks and recreation

These services have a direct and immediate effect on the quality of the lives of the people in that community. For example, if the water that is provided is of a poor quality or refuse is not collected regularly, it will contribute to the creation of unhealthy and unsafe living environments. Poor services can also make it difficult to attract business or industry to an area and will limit job opportunities for residents.

Basic services needed in rural areas may be different from those that urban communities need.

Who is responsible for providing services?

Local government [municipality] is the sphere of government closest to the people, they are elected by citizens to represent them and are responsible to ensure that services are delivered to the community. One way in which municipalities can do this is to provide the service themselves through the use of their own resources - finance, equipment and employees. A municipality may also outsource the provision of a service. In other words, it may choose to hire someone else to deliver the service but it remains the responsibility of the municipality to choose the service provider and to make sure that they deliver the service properly.

Many municipalities, however, are unable to deliver services to residents. This might be because of lack of finances or lack of capacity to provide a good service at an affordable price. Such municipalities should find other ways to ensure that the services are improved and reach the people most in need of them. Some options that they could consider are explained below:

Capacity building

It is possible for a municipality to improve and expand the delivery of services by improving their own ability to do so. By improving a number of skills municipalities may be better able to deliver services effectively and efficiently from inside. Better communication between the municipality and citizens will help council determine the needs of the community and whether they are being met. Improved financial planning will help find the best possible ways to use available funds. Better technical skills will improve delivery of a particular municipal service.


In some cases a municipality can improve the delivery of a service by corporatising it -that is by creating a municipal company that will provide the service. The company belongs to council and is accountable for its performance. Council usually appoints a board to oversee the work of the company management. The company is able to function more independently than a municipal department whilst acting under the overall control and supervision of council. Municipalities have to deliver so many different services that it is not possible to focus on the best way to deliver certain specialised services. By allowing the company some independence they are free to experiment with new techniques and technology and able to provide better services at lower costs.

Municipal service partnerships [MSPs]

There are instances where a municipality might feel that instead of providing the service directly they would rather hire someone else (service provider) to do it. Reasons why a municipality would choose this route are that other municipalities, organisations (NGOs or CBOs) or private companies may have better resources and management skills to provide the service.

Whatever method a municipality chooses it must always be in line with the overall goals of improving the quality of services, extending services to residents who do not have them and providing services at an affordable cost. We will look at the MSPs in more detail later on as there are a number of factors that municipalities need to consider before deciding on one of these options. It is important to provide services that are affordable but municipalities must do so without compromising on its ability to operate and maintain existing services.

Factors to be considered before deciding on service delivery options

Service levels

The most important factor to consider is the level [or standard] at which the service is provided. The choice of the level of a particular service is influenced by affordability as well as community needs. When municipalities make decisions about the level of services they should seriously consider the long-term viability of providing a service at that level. If a municipality provides a service at a higher level the costs to provide the service increases and so does the price that the municipality will have to charge its customers. Since municipalities rely heavily on income received from users, if the costs are too high and people are unable to pay, the municipality will lose money and as will not be able to continue to provide the service. The following table lists the different service levels for the most important services:

Table 1: Service Levels

Service Type
Level 1 Basic
Level 2 Intermediate
Level 3 Full
WaterCommunal standpipesYard taps, yard tanksIn house water
Sanitation(Sewage collection/disposalVIP Latrine Septic tanksFull water borne
Electricity5-8 Amp or non-grid electricity20 Amps60 Amps
RoadsGradedGravelPaved/tarred & kerbs
Stormwater drainageEarth lined open channelOpen channel linedPiped systems
Solid Waste disposalCommunal (Residents)Communal (Contractors)Kerbside

Provision of free basic municipal services

As part of its overall strategy to alleviate poverty in South Africa the government has put in place a policy for the provision of a free basic level of municipal services. In his address at the inauguration of the Executive Mayor of Tshwane on 10 February 2001, President Mbeki said: "The provision of free basic amounts of electricity and water to our people will alleviate the plight of the poorest among us while plans for the stimulation of the local economy should lead to the creation of new jobs and the reduction of poverty."

From this statement it is clear that water and electricity has been prioritised as a free basic service for the poor. However, in their recent submission the Financial and Fiscal Commission (FFC) argues that other services certainly also fit the definition of "basic services".

For example, low-income residents in rural areas generally do not see electricity as critical as they can access other sources of energy such as wood or paraffin. Roads, or rather the lack of accessible roads negatively affects their daily/economic activity, mobility and safety. This implies that some flexibility should be allowed for municipalities to determine which services they will define as "basic service".

Options for free basic service

By far the most complex issue to consider when discussing the provision of free basic services is the funding of such services. Municipalities receive their part of the equitable share, they can apply for infrastructure grants and they raise their own revenue through service charges. [See guide on municipal budgeting and financial management]

Municipalities need to analyse what their costs for free basic service provision is, what allocations they receive and what their internal resource base is. This should then form the basis of what would be affordable and therefore what the most suitable options for implementation would be.

Municipal service partnerships

What is a municipal service partnership?

A municipal service partnership (MSP) is an agreement between a municipality and a service provider. A service provider may be another public authority (such as a water board or a district municipality), a private company, a non-governmental organisation (NGO) or a community-based organisation (CBO).

In terms of the agreement, a service provider undertakes to provide a particular municipal service on behalf of a municipality within specific timeframes, budget and targets. The service provider will either be responsible for delivering a service to the entire community or only a section thereof. It may also be responsible to provide an entire or only a particular aspect of the service - for example, a community based organisation can make an agreement to collect rubbish from households and streets, and stack it in places where council trucks will collect it.
Planning for service delivery and improvement

One of a municipality's most important tasks is to find out the needs of its citizens and how best to provide for these needs.

Once it has been established which services are to be expanded or improved clear timeframes and targets must be developed for that the municipality can decide the best ways to reach its goals. It must also decide what resources - financial, equipment, and skills - it will require to meet its goals.

It may happen that a municipality discovers that it does not have sufficient resources and may decide that it will phase the provision of services or only provide it to a section of the community. It will also need to rethink how it will implement the provision of services. In other words, will it provide the service directly or with a MSP or a combination of methods. There are a number of MSP's to choose from they are explained below.

Types of MSPs

Service contracts

A service contract is an agreement between a municipality and a service provider to provide a particular aspect of a municipal service on a short-term basis (only one or two years). The municipality provides the budget and monitors the performance of the service provider to ensure that the service provided is of a good quality and within the allocated budget.

An example of a service contract is repairs and maintenance of municipal equipment.
Management contracts

A management contract is an agreement between a municipality and a service provider in terms of which the service provider is responsible for all aspects of a particular service. This type of agreement typically lasts between three and five years. An example of a management contract is refuse removal where the service provider is responsible for managing the collection of refuse, while using the municipality's staff and equipment.


A lease is an agreement between the municipality and the service provider where the service provider is responsible for the overall management and delivery of a municipal service. The operating assets of the council are hired by the contractor to enable it to perform the service. The contractor is also responsible for operating, repairs and maintenance costs for the service it provides. The contractor may also take responsibility for collecting tariffs.


A concession is an agreement between a municipality and service provider where the service provider is responsible for the management, operation, repair and maintenance of a particular service. The service provider is required to invest large sums of money to expand and improve the service. For example, the service provider may be required to build a new water supply system for the area. The contract period is often between twenty and thirty years to allow the service provider enough opportunity to recover the costs on its investment. At the end of the contract the ownership of the new plant and equipment belongs to municipality. Concessions are often called BOTs - Build, Operate and Transfer.

  1. How does a municipality implement a MSP?

When a municipality has decided to provide a service through a MSP it must then decide on an appropriate service provider, meaning a provider that can meet the municipality's delivery goals at an affordable price and by means of affirmative procurement procedures. This means that the municipality must as far as possible ensure the participation of local residents and small companies which are owned and operated by previously disadvantaged individuals.

Sometimes the appropriate service provider is a NGO or CBO, sometimes a private company or at other times it could even be another public body such as another municipality or a water board, etc.

Usually the best way to find the right service provider is to get a number of them to compete against each other in a bidding process. This helps the municipality to decide on the provider, which will provide it with the best quality of service at the best possible price. It also protects the interests of citizens as it reduces the opportunity for corruption.

The various bids are then evaluated, a preferred bidder chosen and a contract negotiated. Once the contract is signed the MSP can begin to operate.

How does a MSP operate?

The contract between the two parties will describe each side's rights and responsibilities. For example, for a refuse collection contract in a particular part of the community the service provider may be required to provide refuse tips in designated areas and empty them a certain number of times a week.

The contract will also specify how often the service provider will receive payment. The fee may be fixed or vary based on the provider's performance

The contract must also state that the municipality has the right to inspect the operations of the service provider to make sure that they are doing what they are supposed to. If the service is not provided at a satisfactory level the municipality has the right to take certain actions. For example, the municipality could withhold payment until the service provider acts in terms of the contract and in more serious cases the municipality could also end the contract.

The municipality's most important job during implementation of the MSP contract is to monitor performance to ensure that all the requirements are being met and that citizens receive the correct amount and quality of services.

Role of citizens in MSP's

Citizens and their organisations also have very important roles to play in the planning an implementation of MSP's. Some of these are:

This kind of involvement from citizens will ensure that municipal planning and decision-making process will reflect their needs and priorities and will lead to the types of decisions that will make for an open, fair and democratic local government.


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