The Department of Transport and Roads
Report on Conditional Grants
BACKGROUND
The Department manages a total road network of 23 698 km comprising of 7 140 km surfaced and 16 558 km gravel roads. According to the 2004 Road Network Management System report, the provincial roads have deteriorated over the past four years. It indicated that 22% of the surfaced roads and 25% of the gravel roads are in a poor or ver poor condition. The reason for the deterioration can mainly be ascribed to a lack of sufficient funds for maintenance and rehabilitation.
According to the Road Network Management System report, the Department requires approximately R1.4 billion to maintain the current network. This excludes the funding for new development, which required another R1 billion.
The funds allocated to the Department for road maintenance and development, including the conditional grant is as follows:
2004/5 R 195, 836 million
2005/6 R 241, 747 million
TRENDS IN FUNDING AND EXPENDITURE
|
Financial year |
Conditional grant |
Budget ‘000 |
Allocated ‘000 |
Expenditure ‘000 |
Balance ‘000 |
% |
|
2003/4 |
Road maintenance |
100, 684 |
100, 684 |
98, 506 |
2, 178 |
97, 84% |
|
2004/5 |
Road maintenance |
140, 937 |
136, 661 |
124, 945 |
15, 992 |
91, 42% |
|
2005/6 |
Road maintenance |
140, 049 |
23, 000 |
16, 992 |
|
73, 8% |
The first allocation for this year was only received mid May 2005 resulting in the 73,8% expenditure.
MONITORING CAPACITY
- The following mechanisms exist to monitor delivery and the concomitant expenditure:
Each year the Executing Authority approves a priority list based on the budget available. As the budget is known in advance, tenders are awarded in advance so that work can start immediately when the financial year begins.
- Monthly meetings are conducted with the Capex Manager and all Consulting Engineers to discuss progress of projects.
- A Site Management System is also in place to ensure uniform project management and control by the Consulting Engineers.
- The Capex Manager produces monthly reports per project detailing the progress with regard to the project as well as the financial expenditure. In addition it also provides for job creation and human resource development statistics. This report is provided to the Executing Authority and the Head of Department.
- The Senior Management Committee also receives monthly variance reports with financial and non-financial analysis.
- Regular site visits are undertaken by the department, this includes joint site visits whereby the Provincial and National Treasuries are sometimes present.
- As the capital roads projects are part of the Provincial Project Register, the Department must also report monthly to the Office of the Premier on progress.
- Monthly reports are also submitted to the Provincial Treasury.
- The Department also reports quarterly to the Provincial Legislature.
- Quarterly reports are also submitted on EPWP interventions to the Provincial Department of Public Works which coordinates a Provincial EPWP report to the National Department of Public Works.
CONSTRAINTS IMPACTING ON DELIVERY
The following factors hamper service delivery:
- Capacity of contractors.
- Contractors' inexperience with cash flow management and project management.
- Contractor liquidation.
- Allocation of tenders by the Tender Board to contractors who do not necessarily comply with the proposed CIDB requirements which will come into effect in November 2005.
- In the 200415 financial year a forensic audit by the Provincial Tender Board caused a delay of almost 6 months and a monitoring value of R 100 million. Nothing was found to be irregular and tenders were eventually awarded as originally recommended by the Department.
MECHANISMS TO DEAL WITH ISSUES
The following wilt address some of the issues:
- Each tender is having an amount of R 95 000 built in to ensure technical and financial training to Contractors, which training has a necessary NQF value.
- The Provincial Tender Board was abolished as at 1 April 2005 and the Department manages now the procurement process internally.
BUSINESS PLANS
For a number of years now in the province all conditional grants and earmarked funds must be motivated with proper business plans. No funds are released by the Provincial Treasury if the business plans are not appraised and found viable and contributing to the development of the province, by means of the Project Appraisal Tool, as managed by the Office of the Premier. Similarly for 2005/6 plans are submitted and approved.