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Infrastructure: getting the spending right

24 February 2012

The South African government is looking at spending R3.2-trillion in the next three years on over 40 major infrastructure projects. In his Budget speech on Wednesday, Finance Minister Pravin Gordhan outlined a range of measures to ensure that this money is effectively spent.

The measures are aimed at boosting planning and monitoring capacity in government departments and municipalities to ensure that they carry out major projects and allocate the necessary spending on them in an efficient way.

Cracking down on poor spending

Addressing journalists in Cape Town on Wednesday, Gordhan said that only about 68% of the R178-billion made available to departments and municipalities to spend on infrastructure in 2010/11 was actually spent.

He said that departments and municipalities that did not spend, underspent or misspent their allocated infrastructure funds would risk losing their allocations, while officials would also be held liable in such cases.

The National Treasury would be monitoring the spending of grants to ensure there was value for money and that departments and municipalities stuck to Expanded Public Works Programme (EPWP) targets and implemented operational and maintenance programmes.

Measures outlined

The measures Gordhan outlined to improve the implementation of infrastructure projects include:

• Boosting planning and project-management capacity in state-owned entities, development finance institutions and in the private sector.
• Assistance from the Infrastructure Development Improvement Programme to assist provincial and national departments - largely in education and health projects and support for provincial public works departments.
• The Cities Support Programme, which will improve spatial planning, public transport and management of infrastructure utilities in cities - initially targeting the country's eight metropolitan areas.
• The launch this year of the Municipal Infrastructure Support Agency by Co-operative Governance Minister Richard Baloyi to assist rural municipalities that lack planning capacity.
• Technical assistance to municipalities through the neighbourhood development programme, which is aimed at helping townships to source business investment. Currently 220 projects are being supported.
• The extension of the infrastructure skills development grant to a further 43 municipalities. The grant this financial year supported 150 graduate interns in engineering and spatial planning.
• Improving procurement processes for major infrastructure projects to develop local suppliers and improve delivery and value for money.

At a media briefing ahead of Gordhan's Budget speech, the National Treasury's director-general, Lungisa Fuzile, attributed the under-spending problems to a lack of specified skills at certain municipalities and departments, which contributed to poor planning and monitoring.

Source: BuaNews