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NCOP PRESENTATION 07 NOVEMBER 2007

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Presentation on theme: "NCOP PRESENTATION 07 NOVEMBER 2007"— Presentation transcript:

1 NCOP PRESENTATION 07 NOVEMBER 2007
Report on Conditional Grants and Capital Expenditure 2st Quarter 2007/2008 Financial Year NCOP PRESENTATION 07 NOVEMBER 2007

2 Eastern Cape Department of Roads & Transport
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 Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

3 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 LEGEND Tiffendell & Sterkspruit 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 Hgsekjsk ohi h u isg os 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 3

4 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. Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

5 Eastern Cape Department of Roads & Transport
3. Expenditure Trends CG Provincial Infrastructure Grant Provincial Infrastructure Grant 2005/06 R’000 2006/07 2007/08 Budget 675,330 742,057 838,937 Expenditure to 30 Sept 2007 742,139 437,969 % Expenditure to 30 Sept 2007 100% 52.2% Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

6 4. Explanation for expenditure variation
The variance (R ) 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

7 Eastern Cape Department of Roads & Transport
5. Expenditure Trends – PIG and (Total) Capital Expenditure Sub-programme 2005/06 R’000 2006/07 2007/08 2ND Q Prov. Infr Grant (PIG) 675,330 742,139 437,969 Transfers to Municipalities (from Equitable Share) 25,478 52,248 Current Projects 321,820 Capital Payments 223,675 137,393 71,027 Total Capital Expend 924,483 931,780 830,816 % PIG 73 80 52.7% Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

8 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

9 PROJECT BREAKDOWN Project Information 2007/08 Budget
Expenditure up to date % Exp. Number of projects Capital Projects 1,083,210 508,996 47.0% 74 Current Projects 751,419 321,820 42.8% 56 Total 1,834,629 830,816 45% 130 EPWP Projects Total Available this Financial Year 944,055 447,065 47.4% 66 582,151 272,658 46.8% 50 1,526,206 719,723 47.2% 116 Eastern Cape Department of Roads & Transport

10 Eastern Cape Department of Roads & Transport
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

11 Eastern Cape Department of Roads & Transport
9. Management & Monitoring mechanism 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. Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

12 10. EPWP SOCIAL INDICATORS
Project Name Total local Labour Employed for 1st and 2nd Q 07/08 Male Female Youth Disabled Local Labour Value for 1st and 2nd Q 07/08 Local Resource Value for 1st and 2nd Q 07/08 Rands 1. Ugie to Langeni Phase 1 45 5 16 24 996,342 5,797,698 2. Ugie to Langeni Phase 2 661 261 131 267 2 6,742,312 11,854,324 3. Ugie to Langeni Phase 3 691 245 156 289 1 7,908,432 11,032,421 4. Middledrift to Alice 667 239 164 262 8,876,234 6,984,534 5. MaClear: Halycon Drift to Ketekete 321 109 77 133 4,342,425 8,745,323 6. Motherwell Intersection 15 9 21 985,643 10,564,532 7. N10 to Alicedale 120 37 61 960,000 864,231 8. Graaff Reinet to Jansenville 38 11 6 1,023,245 3,564,640 9.. Xuka Bridge 26 36 1,100,043 453,429 10. Klipplaat to Jansenville 145 42 66 1,954,324 3,254,359 11. Sulenkamma Hospital Road 974 345 241 386 8,342,657 9,645,324 12. Mt Frere to R56 Ph 1 123 19 1,526,747 8,674,325 13. Peddie to Bira River 22 8 184,937 56,453 13. Chintsa Bridge 12 45,311 14. Routine Maintenance Programmes 3256 651 488 2084 33 10,765,643 29,354,654 Community Based Transport Programmes 1943 389 583 952 7,345,261 3,423,546 9140 2,420 1,978 4,679 63 63,099,556 114,269,793 Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

13 Eastern Cape Department of Roads & Transport
12. CHALLENGES 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. Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

14 Eastern Cape Department of Roads & Transport
CHALLENGES CONT The departments budget increased by % (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 % 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

15 Eastern Cape Department of Roads & Transport
13. Challenges (Cont) 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. Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

16 Eastern Cape Department of Roads & Transport
14. Future budget trends: MTEF before reduction CG allocation Budget 2005/06 R’000 2006/07 2007/08 2008/09 Conditional Grant (PIG) 675,330 742,139 984,943 1,055,321 Total Capital Exp budget 924,483 931,780 1,247,778 1,263,163 % Conditional grant of Total Capital budget 73 80 79 84 Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

17 Eastern Cape Department of Roads & Transport
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

18 Eastern Cape Department of Roads & Transport
16. Future budget trends:MTEF after reduction of CG allocation Budget 2005/06 R’000 2006/07 2007/08 2008/09 PIG 675,330 742,139 838,657 838,937 Capital Exp Portion 249,153 189,641 263,721 279,106 Total Capital budget 924,483 931,780 1,102,378 1,118,043 % PIG of Capex budget 73 80 76 75 Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence Eastern Cape Department of Roads & Transport

19 Eastern Cape Department of Roads & Transport
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

20 Eastern Cape Department of Roads & Transport
18. BUDGET SUMMARY 2005/06   2006/07  2007/08  Nominal Growth % of total budget   2008/09  2009/10 Administration 107,123 151,867 144,030 ( 5.2 % ) 6 % 152,386 158,695 Roads Infrastructure 1,368,965 1,494,437 1,515,105 1.38 % 67 % 1,566,248 1,605,001 Public Transport 129,181 162,261 191,884 18.26 % 9 % 212,696 221,784 Traffic Management 113,346 123,792 146,472 18.32 % 7 % 160,835 167,530 Community Based Transportation 54,392 82,056 241,574 194.4 % 11 % 354,053 510,686 Total   1,773,007  2,014,413   2,239,065 11.15 %  100 %   2,446,218  2,663,696 Eastern Cape Department of Roads & Transport

21 19. Effect of PIG reduction
Eastern Cape Department of Roads & Transport

22 21. Impact of Infrastructure backlogs on MTEF
Financial Years (R ' ) 2005/06 2006/07 2007/08 2008/09 Maintenance allocation 424 561 629 701 Maintenance needs 1,991 Backlogs 1,567 1,430 1,362 1,290 Accumulative backlog 8,067 9,508 10,870 12,160 Eastern Cape Department of Roads & Transport

23 23. Estimated Cost of backlog
Item Rand x '000 Gravel roads to surfaced roads 4,479,000 Rehabilitation of surfaced roads 2,520,000 Bridges 89,500 Hospital accesses 1,251,350 Total Provincial backlog 8,339,850 Access roads 3,500,000 Total Backlog 11,839,850 Eastern Cape Department of Roads & Transport

24 Eastern Cape Department of Roads & Transport
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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