1. www.fs.gov.za 1 PRESENTATION TO THE NCOP FINANCE COMMITTEE MEETING 27 AUGUST 2008

2. www.fs.gov.za 2 CONTENTS First quarter performance on conditional grants Devolution of property rate fund Infrastructure grant for provinces Trends in allocations, transfers & actual expenditure Monitoring capacity 08/09 Over / under spending Capacity constraints

3. www.fs.gov.za INFRA GRANT TO PROVINCES 3 10% 17% 0%

4. www.fs.gov.za DEVOLUTION OF PROPERTY RATES GRANT 4 10% 0%

5. www.fs.gov.za DEVOLUTION OF RATES EXPENDITURE The Province budget = R125,066 m No expenditure to date National Works did all payments till July 08 New Payments only after receipt of new invoices after August 08 5

6. www.fs.gov.za 6 CONCERNS IN RATE GRANT The R125m was for 2700 properties; The asset register has about 7500 properties. Site visits confirmed the following: –Municipal records are incorrect (site nr, owner details) –Municipalities are not invoicing us on all our properties. –Maluti A Phufong NPW has only paid for 158 properties while the inspection revealed 470 properties.

7. www.fs.gov.za 7 CONCERNS IN RATE GRANT Municipalities indicated that they will implement the market related rates and taxes from next year. (Improvements included.) Payment of rates & taxes on farms was excluded till now Physical verification and reconciliations with municipalities to be done before accurate estimates are possible. Agreements on tariffs, valuations, ownership, occupation

8. www.fs.gov.za 8 Row LabelsBudget Exp till June % Spent CALEDON BRIDGE WEPENER21,00012,29359% HARRISMITH - VERKYKERSK78,80028,66236% MAINTENANCE CONTRACTS1,168 100% QWAQWA-ROUTE 462,0006,00210% N1-SASOLBURG P10/181,60637,04245% REITZ-PETRUS STEYN P9/274,75234,13446% SPRINGFNT-BETHULIEP45/275,88629,91239% Grand Total395,212159,06640% INFRA GRANT EXP 1 st QUARTER

9. www.fs.gov.za CONTRACT PRICE ADJUSTMENT 9

10. www.fs.gov.za EXAMPLE OF RISE IN BITUMEN PRICE 10

11. www.fs.gov.za CALEDON BRIDGE AT WEPENER 11 The new and the old Project Value: R110 million

12. www.fs.gov.za 12 Springfontein – Bethulie Project Value: R195 million

13. www.fs.gov.za Rehabilitation of SS18, Harrismith to Verkykerskop. Project value: R172 million 13

14. www.fs.gov.za Route 4 (Swartwater Dam) Project Value: R163 million 14 Before Brick making

15. www.fs.gov.za 15 Rehabilitation N1 –Sasol Value: R255 million During Construction Before Construction Project still under construction

16. www.fs.gov.za 16 CAPACITY CONSTRAINTS Funding –For continuing projects –For NYS and contractor development –For backlogs –For remaining flood damages –overspending Experience in engineering and technical field Training capacity for contractor development Support for NYS Established contractors at CIDB Levels

17. www.fs.gov.za Challenges 17 EPWP Gravel roads Overloading Maintenance backlog Rail revitalisation Freight / HIV and AIDS / roads congestion Rising cost of construction

18. www.fs.gov.za 18 THANK YOU