Gauteng Government’s under-expenditure on infrastructure budget puts service delivery at risk
18 November 2022
The Gauteng Provincial Government’s (GPG) under-expenditure on its infrastructure budget by various departments is having a severe impact on the growth of the province’s economy which is meant to help to uplift the livelihoods of the residents.
Slow spending on the department’s infrastructure budgets and constant poor performance records will hinder the progress of the GPG towards its action plan of Growing Gauteng Together (GGT2030) which is meant to improve the lives of the residents.
This information was revealed in the Gauteng Provincial legislature’s (GPL) Finance portfolio committee meeting during the deliberations of the Gauteng Provincial Treasury second quarter report for the 2022/23 financial year.
According to the report, the following departments are the worst offenders in terms of underspending in their infrastructure budgets:
- Health – they underspent on the construction of new clinics, citing the following reasons as an excuse for under expenditure; statutory planning approvals not obtained before commencement of developments that includes site issues, incorrect zoning, land too small or not suitable and poor performance of contractors who received the contract.
- Social Development – this department also cited the sluggish performance of contractors, and the slow spending suggests that the budget be adjusted downwards.
- Human Settlements – misalignment between planned and delivered units could be due to a lack of bulk infrastructure (bulk electricity and sewer). Rama, Westonaria BORWA and Montrose are typical examples.
- Roads and Transport – the main reason for low infrastructure spending is due to procurement processes for example upgrades of road K56 (William Nicol) between K46 + P79/1 and K54 (Tsamaya road in Mamelodi). This slow spending resulted in the department considering adjusting its main infrastructure budget downwards by R337 million (main budget R2,095 billion).
- Agriculture and Rural Development – this department is also considering adjusting the budget downwards with R2,5 million.
- Sports, Arts, Culture and Recreation – this department only managed to spend 3% of its infrastructure budget halfway through the financial year. This poor performance also suggests that the infrastructure budget be reduced from R40,4 million to R26,5 million.
- Infrastructure Development and Property Development - a review suggests a budget adjustment downwards by R26 million (main budget R139 million). Challenges with Occupational Health and Safety and refurbishment on buildings where contracts have been awarded (Thusanong/SA Perm).
This trend of under-expenditure on the infrastructure budget is unacceptable considering the current economic crisis and the increasing unemployment rates. Infrastructure delivery is one of the most significant contributors to provincial economic growth, by boosting investment and stimulating job creation, productivity, and competitiveness.
The DA proposes that Gauteng departments must start investing in the preparation of infrastructure projects so that they have a pipeline of shovel-ready projects. This might easily be the single most important reason why departments fail to spend their infrastructure budgets.
The DA has already engaged the Gauteng MEC for Gauteng Provincial Treasury, Jacob Mamabolo, to closely monitor the spending patterns of departments, especially infrastructure spending. This will ensure that departments avoid underspending which would consequently lead to the departments surrendering unspent funds which will negatively impact service delivery.
Issued by Adriana Randall, DA Gauteng Shadow MEC for Finance, 18 November 2022
