5 May 2006 1

SELECT COMMITTEE ON FINANCE:Public Hearings on Conditional Grants and Capital Expenditure

Presentation by:Sibusiso Buthelezi

HOD

5 May 2006 2

CONTENTS• Strategic Context• Budget trends• Roads infrastructure

– Provincial Infrastructure Grant– Departmental Infrastruture budget

• Public Works infrastructure– Departmental Infrastruture budget– Client Department budgets

5 May 2006 3

VISION AND MISSIONVision

• Socio-economic growth, development, and an enhanced quality of life for all people in Gauteng

Mission• To develop an integrated, sustainable infrastructure,

which promotes a people-centred, innovative, developmental public works and an accessible, safe and affordable movement of people, goods and services

5 May 2006 4

SIX (6) STRATEGIC OBJECTIVES

• Provision of accessible, affordable, reliable, safe, integrated and environmentally sustainable public transport system

• Effective management and transformation of transport and socio-economic infrastructure related institutions, systems and processes

• Support economic growth and investments through the provision of appropriate transport systems and socio-economic infrastructure

• Integrate transport systems and socio-economic infrastructure systems in the Gauteng Growth and Development Strategy and development plans of other spheres of government

• Implement the Expanded Public Works Programmes in a manner that optimizes employment and addresses economic and social needs of the poor

• Efficient and effective management of the Department

5 May 2006 5

Budget Spending trendsSUMMARY OF RECEIPTS

Audited Audited AuditedAdjusted budget Appropriated MTEF MTEF

R'000 R'000 R'000 R'000 R'000 R'000 R'0002002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Exp. trends MTEF allocations A+B 1,398,198 1,568,337 1,751,532 1,488,007 6,225,193 5,380,786 5,223,218

CAPEX related alloactions - Capital 426,749 317,775 380,854 407,179 297,397 411,834 547,131 - Maintenance 311,412 311,105 266,337 322,424 287,332 232,070 246,816 Provincial Infrastructure Grant 64,020 94,321 132,916 147,911 163,098 162,451 172,964 - GPG Precinct 36,413 54,508 270,000 - Gautrain Rapid Rail Link 4,641,000 3,651,000 3,236,000 Total A 838,594 777,709 1,050,107 877,514 5,388,827 4,457,355 4,202,911 As % of total budget 60.0% 49.6% 60.0% 59.0% 86.6% 82.8% 80.5%

Other B 559,604 790,628 701,425 610,493 836,366 923,431 1,020,307 As % of total budget 40.0% 50.4% 40.0% 41.0% 13.4% 17.2% 19.5%

Outcome

5 May 2006 6

Conditional Grant

• The department is a recipient of the Provincial Infrastructure Grant from National Treasury

• The grant is used for maintenance and rehabilitation of roads

• A business plan was submitted as required by Division of Revenue Act

5 May 2006 7

Conditional Grant Expenditure Trends

Details2001/02 R'000

2002/03 R'000

2003/04 R'000

2004/05 R'000

2005/06 R'000

Budget 32,344 62,918 94,321 132,916 147,911 Add: Rollover - - - - - Actual 33,344 64,020 93,366 150,924 122,117 Under(Over) (1,000) (1,102) 955 (18,008) 25,794

Percentage Spent 103% 102% 99% 114% 83%

5 May 2006 8

Reason for under spend

• The under spend was caused by heavy rains received in the last quarter of the year. The rainfall exceeded the amount normally catered for in project planning.

5 May 2006 9

2005/06 Quarterly Expenditure

Name of Grant Amount received R’000

Q1 Actual R’000

Q2 Actual R’000

Q3 Actual R’000

Q4 Estimate R’000

Total R’000

Infrastructure Grant

147,911 19,227 30,963 43,569 28,358 122,117

Total 147,911 19,227 30,963 43,569 28,358 122,117

5 May 2006 10

Grant Expenditure per projectExpenditure

2004/05 2005/06 Project

Budget Actual Budget Actual

Status

P139-1 Rehab 17,361 10,413 Retention K69 - Rehab 13,196 1,127 Retention P119-1 - Reseal 598 0 Construction P91-1 - Reseal Phase 1 2,229 3,816 Construction P156-2/P202-1 - Reseal 33,798 12,454 Retention 83, 1321 - Reseal 26,800 436 Finished 795 - Rehab 1,232 0 Finished P66-1 Phase 2 - Reseal 27,460 28,032 Retention P66-1 Phase 3 - Rehab 1,572 0 Planning P167-1 - Reseal 844 15,286 Construction P175-1, 1113 - Reseal 2,026 0 Planning 1132 - Reseal 7,735 916 Retention P174-1 - Reseal 12,633 0 Retention P58-1 - Reseal 663 19,997 Construction D51 Phase 1 - Reseal 2,257 16,703 Construction P159-1, 2516 - Reseal 453 104 Planning 434, 1931 & 1932 67 12,042 Construction P71-1 Phase 2 - Rehab P123-1 - Rehab

0 0

164 283

Planning Planning

P95-2 - Rehab

132,

918

0

147,

911

344 Planning Total 132,918 150,925 147,911 122,117

5 May 2006 11

Infrastructure Expenditure Trends

Details2001/02 R'000

2002/03 R'000

2003/04 R'000

2004/05 R'000

2005/06 R'000

Budget 300,825 411,066 298,223 381,038 339,597 Routine/Unplanned maintenance 61,050 79,995 95,009 113,770 136,416

Programmable Maintenance and Construction 239,775 329,204 203,214 222,618 203,181 Add: Rollover/Veriment - 1,867 44,650

Actual 300,441 426,749 317,775 380,854 288,841 Under(Over) 384 (15,683) (19,552) 184 50,756

Percentage Spent 100% 104% 107% 100% 85%

5 May 2006 12

Reason for under spend

• The under spend was caused by heavy rains received in the last quarter of the year. The rainfall exceeded the amount normally catered for in project planning.

• The funds were re-prioritized to start other approved capital projects (ITSS & PROS).

5 May 2006 13

Quarterly Expenditure Trends2005/06

Details Amount received R’000

Q1 Actual R’000

Q2 Actual R’000

Q3 Actual R’000

Q4 Estimate R’000

Total R’000

Infrastructure Exp: Routine Maintenance

145,698

17,109 45,141 24,011 14,994 101,255

Capital Expenditure: Programmable Maintenance Construction

206,399 102,430 103,969

43,901 31,159 12,742

76,558 32,334 44,224

56,374 37,318 19,056

10,753 5,060 5,693

187,586 105,871 81,715

Total 352,097 61,010 121,699 80,385 25,747 288,841

5 May 2006 14

Key projects in Roads Infrastructure

• Construction of the dual carriageway and two intersections for Cosmo City

• Construction of K60 in Sunninghill• Construction of a dual carriageway from Dalpark

to Heidelberg - K109 Old Heidelberg road• Rehabilitation of the Cullinan road in the

Dinokeng area

5 May 2006 15

Departmental Public Works Capital Budget

Details Budget Actual Under(Over) % SpentR'000 R'000 R'000

DPTRW 71,474 70,124 1,350 98%DACE 21,736 19,710 2,026 91%DSD 7,248 6,949 299 96%Total 100,458 96,783 3,675 96%

LEGENDDPTRW = Department of Public Transport, Roads and WorksDACE = Department of Agriculture, Conservation and EnvironmentDSD = Department of Social Development

5 May 2006 16

Reasons for under spend

• Under spend in DPTRW and DSD is due to price variances.

• Under spend for DACE was due to Capital Works assignment which had to be completed before the maintenance work could be done

5 May 2006 17

Monitoring capacity and planning

• Monthly Expenditure Report meetings are held between programme managers and the Finance branch.

• Senior quarterly management meetings are used to discuss performance of the various programmes.

• The Executive Management committee also receives monthly expenditure report from the CFO.

• The HOD holds one-on-one meetings with individual managers from time to time to ensure accountability for service delivery.

5 May 2006 18

Monitoring capacity and planning

• At unit level performance is monitored against operational plans.

• Monthly and quarterly infrastructure reports are send to Treasury.

• Project Management Resource Groups assist in ensuring performance happens at site level.

5 May 2006 19

Service Level Agreements

• The department is in a process of finalizing SLA’s with client departments.

• DACE was signed in the last financial year

• SLA’s with Blue IQ are in place for the Cradle of Humankind and Dinokeng projects.

5 May 2006 20

Conclusion• The report send to Treasury indicated that

the department will over spend in CAPEX by R348 million. The report was prepared at time when we were busy with journals to correct the chart of account classification problem.

• The next slide shows the corrected version of the accounts.

5 May 2006 21

Capital Expenditure 2005-06

Description

130050-0506-basAdjBdg-20060330-0746

130050-0506-basAct-20060502-

0903 Balance Variance

PAYMENTS 407,178,999 405,975,140 1,203,859 0.3%

PAYMENTS FOR CAPITAL ASSETS 407,178,999 405,975,140 1,203,859 0.3%

BUILDINGS & OTHER FIX STRUCT 370,739,999 377,638,956 (6,898,957) (1.9%)

MACHINERY & EQUIPMENT 15,885,000 10,891,214 4,993,786 31.4%

SOFTWARE & OTHER INTANGIBLE ASS - 158,065 (158,065)

LAND&SUBSOIL ASSETS 20,554,000 17,286,905 3,267,095 15.9%

5 May 2006 22

THANK YOU