An Overview of the City of Newcastle and the

Challenges facing the Achievement of

Intermediary City Status

United Cities and Local Governments(UCLG)

Intermediary Cities Learning Exchange Programme

Zimbali, Fairmont Hotel - KwaDukuzaPRESENTER : Mr Kebone Masange

Municipal Manager

18 March 2013

Who are we?• Newcastle municipality is located in the Northern part of Kwa Zulu Natal

falls within Amajuba District alongside Dannhauser and Utrecht

municipalities

• It lies at the at the intersection of Kwa Zulu Natal, Mpumalanga and Free

State Provinces

• Newcastle is the main growth node/centre in Northern KwaZulu Natal

• Municipal Area : 1 854.6 km2 or 716 square miles

• Population Newcastle : 2001 – 332 981- 2011 - 363 236

• Population Density

Accessibility by Road– National, Regional and District

Road Transportation

• Newcastle has local, district, regional and national road transportation

linkages via the N11 Road which traverses the city linking it south

wards down to Durban and northwards up to Gauteng Province and

beyond.

• The R34 provides crucial links eastwards within KwaZulu Natal and

westwards towards the Free State and Gauteng Province

• Road network in neighboring provinces is poor

National connectivity

• 300 km from Johannesburg (via R34 Road-N3 freeway)

• 480 km from Bloemfontein (via N11 Road – N5 Road)

Accessibility cont’d

Regional Connectivity

• 340 km from Durban (via N11 Road- N3 freeway)

• 250 km from Pietermaritzburg

• 329 km from Richards Bay (via R34 Road)

• 96 km north of Ladysmith (via N11 Road)

• 57 km from Volksrust (via N11 Road)

• 115 km from Vryheid (via R34 Road)

• 70 km from Dundee (via N11 – R68 Road)

• 380 km from Ballito – venue of conference

District Connectivity

• 50 km from Utrecht (via R34 Road)

• 34 km from Dannhauser (via N11 Road)

Other Connectivity

Rail Transportation

• Durban - Johannesburg Railway Line passes through Newcastle

Air Transportation

• Newcastle has an Airport for private small aircraft

• No passenger air transportation link with other centres

• Currently plans for upgrade of airport

Population

Population Population Growth (%per annum)1996-2001

Population Growth (%per annum)2001- 2011

Unemployment Rate Dependency Ratio

2001 2011 2001 2011 2001 2011

Ethekwini(Durban)

3 090 122 3 442 361 2.34 1.08 43,0 30,2 46.7 42.8

Msunduzi(Pietermaritzburg

552 837 618 536 1,06 1.12 48,2 33,0 51.5 46.2

Newcastle 332 981 363 236 2.93 0.87 54,1 37,4 60.7 50.0

Emadlangeni(Utrecht)

32 277 34 442 2.81 0.65 39,3 37,6 69.3 131.3

Dannhauser 102 779 102 161 0.71 - 0.06 67,4 47,6 76.3 89.9

Ladysmith 225 459 237 437 4,67 0.52 49.2 34.0 62,4 60,7

Abaqulusi(Vryheid)

191 091 211 060 2.58 1.00 59,4 35,4 73.9 70.5

Endumeni(Dundee)

51 101 64 862 2.81 2.38 46,0 26,4 57.0 56.8

Pixley Ka Seme (Volkrust)

80 737 83 235 2,80 0.30 50,6 36,1 77.7 68.3

Demographic Profile

Demographic profile cont’d

• Newcastle has a dominant population in Amajuba District and over

neighbouring provincial towns in the Free State and Mpumalanga

• The rate of urbanisation from smaller towns in the hinterland

remains high as economic hardships persist

• Population growth declined from 2.93 to 0.87 % between 2001 and

2011 – High mortality rate due to HIV-AIDS is a huge threat to

population growth and development

• Multi-sectoral interventions required to slow down the rate of

increase in HIV infections. Besides health services, Town Planning

designates spaces for health and learning facilities

• There is pressure to deliver services for residents and inevitably

migrant residents from neighbouring towns

• Newcastle has the population threshold for development to take

place

Population growth

Age Structure versus Dependency Ratio

DependencyRecall: In economics and geography the dependency ratio is an age-population

ratio of those typically not in the labour force (0- 14 and 65 and above : the

dependent part) and those typically in the labour force (15 – 64 : the productive

part).

Population cont’d

Population cont’d

• The current dependency ratio for Newcastle is 58%. That means for

every 10 working adults, there are 5.8 people that need to be

supported, be it through social security or childcare or healthcare.

• A high dependency ratio for Newcastle causes problems for the

town. As the largest proportion of a government's expenditure is on

health, social security & education which are mostly used by old and

young population. Also the increasing expenditure on pension is a

problem as well.

• A high unemployment rate (37%) complicates the dependency ratio

in that many of those of 'working age' are actually not working.

What do we offer?• Newcastle commands a strategic location in Northern Kwa-Zulu Natal

• It is located at the intersection of Kwa-Zulu Natal, Free State and

Mpumalanga provinces

• Newcastle is a regional hub

• It is located reasonably far away from the Durban metro and Gauteng

metros hence an opportunity for further development

• The city is the 3rd largest town in KZN and has the population threshold

(363 236) to support development

• It has good road network connectivity via the N11 Road and R34 with good

linkages with the main economic hubs in KZN and Gauteng

• The Durban – Johannesburg railway line traverses the city

What do we offer cont’d

• The city offers higher order commercial services

• Although currently depressed, the industrial infrastructure for clothing

manufacturing exists

• Land is abundant although farms in the fringes present land availability

challenges for development

• Coal resources are abundant

• The city has planned housing projects for decent living conditions in

sustainable settlements

• The city is striving to develop and maintain service infrastructure

• Strategic city planning is dynamic, pro-development and less prohibitive

• The city has qualified professionals to facilitate and manage growth and

development

• Electricity infrastructure is good

Newcastle Alliance

• Newcastles of the World

• Japan ; Germany; UK; Switzerland; Canada; Australia; USA; Austria

• South Africa

• Chinese Investments

• Alliances with Chinese Cities – Zibo and Nanchang

What are the key developmental challenges that prevent us from achieving

intermediary status?

• Bulk Water Services

– Bulk Water Infrastructure

– Water sources inadequate

– Water purification plant needs upgrade

– Waste water treatment plant need upgrade

– Ageing Infrastructure

Developmental challenges Cont’d

• Funding –

• High urbanisation

• Undiversified economic base

• High mortality and long term unsustainable development

• Poor road infrastructure in neighbouring provinces – poor condition of the

R34 and N11 Road

• Underdeveloped airport for air transportation linkages

• Inadequate threshold to support air transportation

• Lack of higher order community facilities – eg education facilities. The

contradiction of long distances to metros, lack of higher order facilities and

continuing dependency on distant metros

• The unstable economic environment/economic depression

• Internal Capacity problems

Public participation in planning

and budgeting : key challenges

• Lack of understanding of budget process

• Need for improved communication strategy

• Community needs exceed available resources

Financial planning and viability: Some key challenges

Financial models used to fund projects and Funding sources

• Internal funds and resources

• External Loans

• Grants - (Municipal Infrastructure Grant (MIG);

- Department of Energy,

- National Treasury (Neighbourhood Development Programme)

- COGTA - Corridor funding

- Department of Water Affairs

- Etc

Financial matters cont’d

• Sources of income

- Property Rates

- Electricity Revenue

- Water and Sanitation charges

- Interest on Investments

- Rental of facilities and equipment

- Fines

- Grants – eg. Equitable share

• Investment

- Investments in banks

• Challenges

- 25% Grant dependent

- Inefficient debt collection

- High rates of indigency (24 000) due to high rates of poverty and unemployment

- Inadequate funding from national purse

Key Institutional Challenges

• Capacity problems – difficulty attracting skilled

personnel

• Organisational Structure 65% filled

• Inertia of past political instability

Strategic Governance Challenges

• Organisational Structure– Organisational structure in place and only 65% of positions are

filled

– Capacity problems due to inadequate skills

Municipal Vision

Status quo

• Current Status quo• Municipality characterised by high levels of poverty and

unemployment (37%)

• High backlogs in service delivery (housing, water and

sanitation)

• High rate of HIV prevalence

• Decline in manufacturing sector

• Municipality strives to create an environment for investment

• Envisaged Growth

• Current growth patterns and trends– Challenges in dismantling apartheid spatial patterns

– Commercial nodes competing for across the city

• Choices made• Facilitation of investment into the Town (malls, mining, residential )

• Efforts to attract higher order education facilities

• Urban Restructuring and nodal/corridor development – JBC Urban

Node

• Restructuring zones for residential integration (Siyahlalala developing

in formerly exclusive area)

• Developing alternative road linkages with townships

• Township regeneration

Thank you/ Ndiyabulela

NEWCASTLE MUNICIPALITY