Provincial CAPEX and PIG

1
Provincial CAPEX and PIG

• NCOP
• 10 May 2006

2
A bit of history

• Provincial infrastructure grant was introduced
  to
• Step up spending on CAPEX in provinces
• Education, health, roads and later rural and
  agricultural infrastructure
• Spending recovered
• Below R3bn in mid 90s to R6bn in 2001/02 and
  R11,9bn in 2005/06
• Spending problem
• Underspending and spike in March
• Evidence of capacity constraints
• Changes in objectives

3
The changes

• Conditions to address capacity
• Introduction of support (IDIP)
• Mixed reaction
• Withholding and reallocation conditions
• Allowing use of a portion of the grant to fund
  capacity

4
Delays and withholding in 05/06

• A total of R746 was withheld
• Affected provinces
• Limpopo
• Gauteng
• Mpumalanga
• Free State
• Northern Cape

5
Process to withhold and reasons

• The due process prescribed in DOR Act was
  followed to the letter
• Reasons for delays and withholding
• Failure to submit reports
• Anticipated underspending
• Key point to note
• Provincial projections
• Timing of withholding

6
PIG allocations, transfers and withholdings 05/06
7
MIG allocations, transfers expenditure GP 05/06