Report on conditional grants and capital expenditure 2 st quarter 2007 2008 financial year
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Report on Conditional Grants and Capital Expenditure 2 st Quarter 2007/2008 Financial Year. NCOP PRESENTATION 07 NOVEMBER 2007. Province of the EASTERN CAPE. Department of Roads & Transport Quality service delivery through transportation excellence. 1. Presentation outline.

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Report on conditional grants and capital expenditure 2 st quarter 2007 2008 financial year l.jpg

Report on Conditional Grants and Capital Expenditure 2st Quarter2007/2008 Financial Year

NCOP PRESENTATION

07 NOVEMBER 2007


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Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

1. Presentation outline

  • Purpose of the Conditional Grant and Capital Expenditure managed by the department in terms of the DORA

  • Expenditure trends on Conditional Grants and Capital Expenditure for the MTEF period 2005/06 – 2007/08

  • Explanation of expenditure variances.

    4. Management & monitoring of Conditional Grants and Capital Expenditure

  • Social & EPWP indicators for new roads 2007/2008

  • Results in 07/08

    7. Challenges faced in management of grants and Capital Expenditure.

    8 Future budget trends: MTEF

Eastern Cape Department of Roads & Transport


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EASTERN CAPE TRANSPORT LINKAGES IMPORTANT FOR 2010

National Roads/Routes

Very Important Links

Rail Network

Other roads in the DRT 2010 plan

Road being resealed

Alternative & Strategic Links

N6

Tiffendell &

Sterkspruit

LEGEND

Aliwal North

N10

Mkambati /

Mtentu

Mbotyi

Port St Johns

Queenstown

Hluleka Nature Reserve

Coffee Bay

Hole-in-the-wall

Dwesa / Cwebe

  • King Sabatha Dalindyebo

  • Municipality (KSD)

  • Potential non-hosting or base camps in the Province

Mazepa Bay

Hogsback

Qolora

Alice

Fort Beaufort

KWTown &

Bhisho

  • Buffalo City Municipality (BCM)

  • Potential non-hosting or base camps in the Province

Grahamstown

N9

N2

  • Nelson Mandela Bay Metropolitan Municipality (NMBMM)

  • One of the Host Cities in South Africa

Eastern Cape Department of Roads & Transport


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Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

2. Purpose of this Conditional Grant and Capital Expenditure

  • To accelerate construction and rehabilitation of new and existing Eastern Cape Provincial road infrastructure and Transport Services.

  • Accelerate implementation of the Provincial Growth Development Plan.

  • The grant requires us to focus on the application of labour intensive methods in order to maximise job creation and skills development.

  • Enhance capacity to deliver Road Infrastructure and Transport facilities.

  • Create the necessary Transport Services facilities in Municipal Areas as supported by ITP and MTABs.

Eastern Cape Department of Roads & Transport


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3. Expenditure Trends CG

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Provincial Infrastructure Grant

Eastern Cape Department of Roads & Transport


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4. Explanation for expenditure variation

  • The variance (R18 501 000.00) or 2.2% over expenditure was due to:

    • The accelerated programme of the contractor on the Maclear to Mount Fletcher project which will be completed three months before scheduled completion time.

    • Early start on the Mthatha Quarry Road.

    • However, the programme is expected to break even, come the 31 March 07.

Eastern Cape Department of Roads & Transport


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5. Expenditure Trends – PIG and (Total) Capital Expenditure

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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7. Non transfer/ Late transfer of Funds to Municipalities/DM

  • Municipalities have not as yet submitted ITP and Audited Statements.

  • Due to Non-compliance in terms of ITP under Public Transport and Traffic Management, transfers to Municipalities had been de-committed.

  • The funding to Municipalities will now be allocated to Capital Projects.

  • However, the Department has appointed consultants to assist Municipalities with their ITP’s.

Eastern Cape Department of Roads & Transport


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PROJECT BREAKDOWN

Eastern Cape Department of Roads & Transport


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8. Expenditure Trends 2007/2008 SECOND Quarter

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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9. Management & Monitoring mechanism

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

  • Departmental officials attend monthly site progress meetings

  • In addition the CFO and programme manager conduct random site visits on the progress of the contracts.

  • District Roads Engineers visit and inspect projects in their particular areas.

  • Professional Engineering Consultants on site monitor the projects.

  • The Department submits a detailed quarterly report to Provincial and National Treasuries, which captures the full details of the projects including the allocation for the year, the expenditure for the period in question and outputs achieved.

  • Specific reports are submitted on progress with respect to social indicators such as employment, BEE, local resources etc.

  • Monthly In-Year Monitoring reports are also submitted to the provincial treasury to monitor the expenditure.

  • SANRAL(SA National Roads Agency) implements 6 projects on behalf of the department in terms of a Service Level Agreement monitored by Departmental staff.

Eastern Cape Department of Roads & Transport


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Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

10. EPWP SOCIAL INDICATORS

Eastern Cape Department of Roads & Transport


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12. CHALLENGES

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

  • Reduction of PIG allocation by R242 million from 1 April 07 and R918 million over the MTEF.

  • Acute shortage of road building materials .

  • Capex outweighs maintenance allocation. Currently Capex 56 % of total roads budget (R1,515 bill).

  • Lack of adequate funding for roads impacts negatively on delivery of a good Road Network and Transport Services.

  • Lack of Internal technical capacity due to scarce skills.

Eastern Cape Department of Roads & Transport


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CHALLENGES CONT

  • The departments budget increased by 11.71 % (R225m) from 06/07 (adjusted R2,0bn) to 07/08 (R2,2bn) in nominal terms.

  • The construction industry CPIX is however 24%.

  • Construction is the key cost driver in the department and therefore its budget has decreased in real terms as the increase of 11.71 % is below the industry CPIX of 24%.

  • The nominal increase should therefore have been R398m to compensate for the industry CPIX increase vs. the actual increase of R225m.

  • The department has therefore started the 2007/08 financial year with a deficit of R173m to fulfill its contractual obligations and has reduced the implementation of new projects.

Eastern Cape Department of Roads & Transport


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13. Challenges (Cont)

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

  • Long procurement cycle.

  • Many of the Access Roads are still impassable and inaccessible.

  • High Ratio of Gravel to Surfaced Roads (85:15).

  • Long Rainy Season.

Eastern Cape Department of Roads & Transport


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14. Future budget trends: MTEF before reduction CG allocation

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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15. Future budget trends: MTEF before reduction CG allocation

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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16. Future budget trends:MTEF after reduction of CG allocation

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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17. Future budget trends: MTEF after reduction CG allocation

Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

Eastern Cape Department of Roads & Transport


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18. BUDGET SUMMARY

Eastern Cape Department of Roads & Transport


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19. Effect of PIG reduction

Eastern Cape Department of Roads & Transport


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21. Impact of Infrastructure backlogs on MTEF

Eastern Cape Department of Roads & Transport


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23. Estimated Cost of backlog

Eastern Cape Department of Roads & Transport


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Province of the

EASTERN CAPE

Department of Roads & Transport

Quality service delivery through transportation excellence

I

thank you…

“The Moving Link”

Eastern Cape Department of Roads & Transport


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