Limpopo Province Department of Roads & Transport

1. Limpopo ProvinceDepartment of Roads&Transport Conditional Grants, Capital and Transfer Expenditure Presenter: Makibelo M M HOD

2. Road Agency Limpopo • Why and how it was established. • The nature of road tender specifications led to serious delay in the awarding of tenders in the department because it was not easy for the Province to find members who have specific skills. • Road tender recommendations were in many cases sent back by the Provincial Tender Board due to lack of understanding by board members. • The premier of the Limpopo Province on two occasions dismissed the tender board and appointed a new board, because of problems. • The problems led the Province to resolve that Road Agency be established.

3. Road Agency Limpopo, cont…… • The department has been battling to get engineers and other technical personnel, because of the remuneration packages of the state that aren’t competitive. • The Road Agency were able to raise the salaries of professional and technical personnel to a level slightly above that of the department, which enabled them to acquire more personnel. • While the Roads function was still in the department bids for roads were not enjoying the priority they deserve as there were other pressures in other functions (Buildings / Property / GITO, etc.) that caused further delay and funds to had to be surrendered.

4. Road Agency Limpopo, cont…… • It enables RAL to generate revenue from accesses to provincial roads by businesses (petrol garages, etc.) and also from tourism and other advertisements. • RAL is developing emerging contractors to take over some of the tasks staring with the routine maintenance, which will be latter be extended to the construction and upgrading of roads.

5. Road Agency Limpopo, cont…… • Why should the department Conditional Grant Funds to Road Agency. • RAL is the delivery arm of the department which implement and manage road project efficiently. Regular site visit s and inspections on the projects by Road Agency staff is done in conjunction with those funded by the Grant. • This is done to avoid duplication of functions: blading ,pothole, repair edge breaks, crack sealing, bush and clearing grass,cutling replacing damaged signs and cleaning drainage. • The department concentrate on routine maintenance and RAL is doing preventative maintenance, (Resealing ,rehabilitating and apply log spraying and upgrading

7. Allocation of Capital ,Infrastructure and Grant • Capital: • The budget for equipment has been R 26,9m during 2004/05 which constituted of R16,8 m for buildings and R7,6 m for vehicles. • The allocation was based on the assumption the traffic vehicles are going to be outsourced. • The department had to discontinue with the outsource and needed additional funds for purchase of traffic vehicles. • The 2005/06 budget was the purchase of vehicle to address shortage of traffic vehicles. The current vehicle currently usage is that one vehicle is shared to five instead of two officers. • When Roads was amalgamated with transport there was also a major shortage of road maintenance equipments. • This will need the capital equipments to be increased by R 70m par annum for the MTEF.

8. Transfers • Transfers budget is for the subsidization of 19 bus operators which are administer through three contract systems, the tender, negotiated and the interim contract system. • In terms of the National Land Transitional Act (NLTTA), the department is expected to move from interim to either negotiated or tender contract system. • The conversion need additional R100 million which the department do not have . • The increase was the following: -Transfers to the Airport (R20m & R44 for 2004/05m for 2005/06) - Increase on Bus operators.

9. Transfers, cont…. • The challenges : • The Airport need to be developed to be economically viable for bigger aircraft to land which need additional R200million. • This will give farmers opportunities to export their products and to improve economically. • Other investors has shown interest in investing at the Airport.

10. Conditional Grants • Projects for the grants are executed by the Road Agency which is responsible for the construction and upgrading of roads • The transfer from the department to the Road Agency is done on monthly bases in terms of their cash flow plan. • 25 roads projects have started during the previous year and more or less 50% complete. • 27 projects have just started this year (12 at a tender/planning stage) and are expected to run over a year or two. • Of the R146 million Transferred, the total amount paid is R121,4million. • Major projects (25) undertake are as per the next three slides:

14. The additional allocation will fund the following ongoing projects. • Makonde -Masisi R 21 million • Donald Fraser- Phiphidi R20 million • Gakgabudi – Mapela R 18,5 million • FlagBoshielo-Veeplaas R 26million • Chuenespoort-Boyne R19,9 million • Maseremole –Mamphogo R 32,6 • Schiermonniksoog-Kroonhoek R 14,2 million • 2007/08, plans are ready for implementation.

15. Conditional Grants, cont…. Challenges: • Projects do not move as expected during summer because of heavy rains in the Provice.

16. Infrastructure spending • The actual half year expenditure on infrastructure for the department is R264 million (excluding Conditional Grant). • 128 kms was completed during the first half of the year. • 26 projects started during the previous financial year and are more than 50% complete. • 31 projects are at the initial stage and are going to be completed in a year or two years to come.

17. Infrastructure spending, cont…. 2007/08 Infrastructure plan. • The department has completed the plan July and has been submitted to National Treasury and the Provincial Infrastructure Unit. • The plan has been aligned with the MTEF budget • Tenders shall be advertised towards the end of the financial year to be ready at the begging of the new financial year.

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