www.fs.gov.za

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PRESENTATION TO THE NCOP FINANCE COMMITTEE MEETING

27 AUGUST 2008

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CONTENTSFirst 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

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INFRA GRANT TO PROVINCES

3

10%17% 0%

www.fs.gov.za

DEVOLUTION OF PROPERTY RATES GRANT

4

0

50

100

150

200

08/09 09/10 10/11 11/12

125140 154 154

R’ m

illio

n

Prop Grant

12%10%

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

www.fs.gov.za

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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.

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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

www.fs.gov.za

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Row Labels Budget Exp till June % Spent

CALEDON BRIDGE WEPENER 21,000 12,293 59%HARRISMITH - VERKYKERSK 78,800 28,662 36%MAINTENANCE CONTRACTS 1,168 1,168 100%QWAQWA-ROUTE 4 62,000 6,002 10%N1-SASOLBURG P10/1 81,606 37,042 45%REITZ-PETRUS STEYN P9/2 74,752 34,134 46%SPRINGFNT-BETHULIEP45/2 75,886 29,912 39%

Grand Total 395,212 159,066 40%

INFRA GRANT EXP 1st QUARTER

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CONTRACT PRICE ADJUSTMENT

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0

50

100

150

200

250

300

350

400

450

Jan-

00A

pr-0

0Ju

l-00

Oct

-00

Jan-

01A

pr-0

1Ju

l-01

Oct

-01

Jan-

02A

pr-0

2Ju

l-02

Oct

-02

Jan-

03A

pr-0

3Ju

l-03

Oct

-03

Jan-

04A

pr-0

4Ju

l-04

Oct

-04

Jan-

05A

pr-0

5Ju

l-05

Oct

-05

Jan-

06A

pr-0

6Ju

l-06

Oct

-06

Jan-

07A

pr-0

7Ju

l-07

Oct

-07

Jan-

08A

pr-0

8

Varia

ble

Valu

e

Increase in CPA Variables

Labour Material Fuel Plant

www.fs.gov.za

EXAMPLE OF RISE IN BITUMEN PRICE

10

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Oct

-06

Nov

-06

Dec

-06

Jan-

07Fe

b-07

Mar

-07

Apr-

07M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8Ap

r-08

May

-08

Jun-

08Ju

l-08

Aug-

08Se

p-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09Fe

b-09

Mar

-09

Rand

/ to

n

Bituminous Materials - Rise & Fall

MSP 1 Pen bitumen AE-2 Binder

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CALEDON BRIDGE AT WEPENER

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The new

and

the old

Project Value: R110

million

www.fs.gov.za

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Springfontein – Bethulie Project Value: R195 million

www.fs.gov.za

Rehabilitation of SS18, Harrismith to Verkykerskop.Project value: R172 million

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www.fs.gov.za

Route 4 (Swartwater Dam)Project Value: R163 million

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Before

Brick making

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Rehabilitation N1 –SasolValue: R255 million

During Construction

Before Construction

Project still under construction

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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

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Challenges

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• EPWP• Gravel roads• Overloading• Maintenance backlog • Rail revitalisation• Freight / HIV and AIDS / roads congestion• Rising cost of construction

www.fs.gov.za

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THANK YOU