1. Province of the EASTERN CAPE Department of Roads & Transport “Quality Service Delivery through Transportation Excellence” Report on Conditional Grants and Capital Expenditure 3 rd Quarter 2007/2008 Financial Year NCOP PRESENTATION 05 FEBRUARY 2008

2. “Quality Service Delivery through Transportation Excellence” 2 Eastern Cape Department of Roads & Transport Presentation outline 1.Purpose of the Conditional Grant and Capital Expenditure managed by the department in terms of the DORA 2.Expenditure trends on Conditional Grants and Capital Expenditure for the MTEF period 2005/06 – 2007/08 3.Explanation of expenditure variances. 4. Management & monitoring of Conditional Grants and Capital Expenditure 5.Social & EPWP indicators for new roads 2007/2008 6.Results in 07/08 7. Challenges faced in management of grants and Capital Expenditure. 8Future budget trends: MTEF

3. “Quality Service Delivery through Transportation Excellence” 3 Eastern Cape Department of Roads & Transport 1. 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.

4. “Quality Service Delivery through Transportation Excellence” 4 Eastern Cape Department of Roads & Transport DEPARTMENTAL EXPENDITURE ►Expenditure as at 31/12/07

5. “Quality Service Delivery through Transportation Excellence” 5 Eastern Cape Department of Roads & Transport 3. 3. 2. Expenditure Trends CG Provincial Infrastructure Grant 2005/06 R’000 2006/07 R’000 2007/08 R’000 Budget675,330742,057838,937 Expenditure to 31 December 2007 675,330742,139682,580 % Expenditure to 31 December 2007 100% 81,36%

6. “Quality Service Delivery through Transportation Excellence” 6 Eastern Cape Department of Roads & Transport 3. Explanation for expenditure variances ►The variance (R53,337 000.00) or 6.36% over expenditure was due to: ◘The accelerated programme of the contractor on the Maclear to Mount Fletcher and Middledrift to Alice projects which will be completed three and two months before scheduled completion time, respectively. ◘Early start on the Mthatha Quarry Road. ◘However, the programme is expected to break even, come the 31 March 08.

7. “Quality Service Delivery through Transportation Excellence” 7 Eastern Cape Department of Roads & Transport Sub-programme2005/06 R’000 2006/07 R’000 2007/08 2ND Q R’000 Prov. Infr Grant (PIG)675,330742,139682,580 Transfers to Municipalities (from Equitable Share) 25,47852,2480 Current Projects521,399 Capital Payments223,675137,393137,998 Total Capital Expend924,483931,7801,341,977 % PIG738050.9% Expenditure Trends – PIG and (Total) Capital Expenditure

8. “Quality Service Delivery through Transportation Excellence” 8 Eastern Cape Department of Roads & Transport PROJECT BREAKDOWN Project Information 2007/08 Budget Expenditure up to date % Exp. Number of projects Capital Projects 1,103,210 820,57874.4%75 Current Projects 781,833 521,39966.7%56 Total 1,885,0431,341,97771.2%131 EPWP Projects Total Available this Financial Year Expenditure up to date % Exp. Number of projects Capital Projects 903,575 695,91477.0%66 Current Projects 619,234 415,62167.1%50 Total 1,522,809 1,111,53573.0%116

9. “Quality Service Delivery through Transportation Excellence” 9 Eastern Cape Department of Roads & Transport ►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. 9. Management & Monitoring mechanism

10. “Quality Service Delivery through Transportation Excellence” 10 10. EPWP SOCIAL INDICATORS Project Name Total local Labour Employed for 1st, 2nd and 3rd Q 07/08MaleFemaleYouthDisabled Local Labour Value for 1st, 2nd and 3rd Q 07/08 Local Resource Value for 1st, 2nd and 3rd Q 07/08 Rands 1. Ugie to Langeni Phase 145516240996,3425,797,698 2. Ugie to Langeni Phase 266126113126727,242,31213,214,324 3. Ugie to Langeni Phase 369124515628918,708,43215,142,421 4. Middledrift to Alice66723916426229,131,23412,984,534 5. MaClear: Halycon Drift to Ketekete3211097713324,342,4259,425,323 6. Motherwell Intersection45159210985,6431,926,453 7. N10 to Alicedale12037216111,060,0001,264,231 8. Graaff Reinet to Jansenville381162101,123,2455,174,640 9.. Xuka Bridge7726153601,320,043953,429 10. Klipplaat to Jansenville14537426602,154,3243,699,359 11. Sulenkamma Hospital Road97434524138629,142,65713,245,324 12. Mt Frere to R56 Ph 112342196112,126,74712,574,325 13. Peddie to Bira River22688 365,93798,453 13. Chintsa Bridge12228 55,678 14. Routine Maintenance Programmes325665148820843315,985,64336,954,654 Community Based Transport Programmes19713895839771911,345,2614,323,546 91682420197847046376,085,923136,778,714

11. “Quality Service Delivery through Transportation Excellence” 11 Eastern Cape Department of Roads & Transport RESULTS ►Launched train service between Queenstown and Molteno in October 07. ►Received Testing License from Rail Safety Regulator. ►Linked MaClear with Mount Fletcher with surfaced road. ►Renovated Bhisho airport such that aircrafts are able to land. ►Handed over to contractors the Greenville Hospital Road, Madwaleni Hospital Road and Zithulele Hospital Road.

12. “Quality Service Delivery through Transportation Excellence” 12 Eastern Cape Department of Roads & Transport ►Acute shortage of road building materials. ►Lack of adequate funding for roads impacts negatively on delivery of a good Road Network and Transport Services. ►Ever increasing road construction costs ►The construction industry CPIX is currently 24%. ►Many of the Access Roads are still impassable and inaccessible. ► High Ratio of Gravel to Surfaced Roads (85:15). 12. CHALLENGES

13. “Quality Service Delivery through Transportation Excellence” 13 Eastern Cape Department of Roads & Transport 14. Future budget trends: MTEF before reduction CG allocation Budget2005/06 R’000 2006/07 R’000 2007/08 R’000 2008/09 R’000 Conditional Grant (PIG) 675,330742,139984,9431,055,321 Total Capital Exp budget 924,483931,7801,247,7781,263,163 % Conditional grant of Total Capital budget 73807984

14. “Quality Service Delivery through Transportation Excellence” 14 Eastern Cape Department of Roads & Transport 16. Future budget trends:MTEF after reduction of CG allocation Budget2005/06 R’000 2006/07 R’000 2007/08 R’000 2008/09 R’000 PIG675,330742,139838,657838,937 Capital Exp Portion 249,153189,641263,721279,106 Total Capital budget 924,483931,7801,102,3781,118,043 % PIG of Capex budget 73807675

15. “Quality Service Delivery through Transportation Excellence” 15 Eastern Cape Department of Roads & Transport 17. Future budget trends: MTEF after reduction CG allocation

16. “Quality Service Delivery through Transportation Excellence” 16 Eastern Cape Department of Roads & Transport 18. BUDGET SUMMARY 2005/06 2006/07 2007/08 Nominal Growth % of total budget 2008/09 2009/10 Administration107,123151,867144,030( 5.2 % )6 %152,386158,695 Roads Infrastructure1,368,9651,494,4371,615,1051.38 %69 %1,566,2481,605,001 Public Transport129,181162,261191,88418.26 %8 %212,696221,784 Traffic Management113,346123,792146,47218.32 %7 %160,835167,530 Community Based Transportation54,39282,056241,574194.4 %10 %354,053510,686 Total 1,773,007 2,014,413 2,339,065 11.15 % 100 % 2,446,218 2,663,696

17. “Quality Service Delivery through Transportation Excellence” 17 Eastern Cape Department of Roads & Transport 19. Effect of PIG reduction

18. “Quality Service Delivery through Transportation Excellence” 18 Eastern Cape Department of Roads & Transport 21. Impact of Infrastructure backlogs on MTEF Financial Years (R '000 000) 2005/062006/072007/082008/09 Maintenance allocation424561629701 Maintenance needs1,991 Backlogs1,5671,4301,3621,290 Accumulative backlog8,0679,50810,87012,160

19. “Quality Service Delivery through Transportation Excellence” 19 Eastern Cape Department of Roads & Transport 23. Estimated Cost of backlog ItemRand x '000 Gravel roads to surfaced roads4,479,000 Rehabilitation of surfaced roads2,520,000 Bridges89,500 Hospital accesses1,251,350 Total Provincial backlog8,339,850 Access roads3,500,000 Total Backlog11,839,850

20. “Quality Service Delivery through Transportation Excellence” 20 Eastern Cape Department of Roads & Transport I thank you… Province of the EASTERN CAPE Department of Roads & Transport Quality service delivery through transportation excellence