CAPE TOWN, May 22 – South Africa’s minister of water and sanitation Gugile Nkwinti on Tuesday told MPs that his department has prepared and had committed billions of rands to fast-track service delivery in the current financial year.
“The preliminary commitments for which contracts have been signed and service providers are currently rendering services amount to R7.5 billion, of which R6.3 billion is for our infrastructure projects and R1.1 billion is for our operational goods and services,” Nkwinti told MP’s during his 2018/19 financial year budget policy speech in Parliament.
“We have also noted with concern that in certain instances, contracts without a value have been entered into, and these pose difficulty in accurately budgeting for them, which leaves the department vulnerable,” he said. “Our bucket eradication program falls into this category, and this has historically caused unauthorized expenditure caused by overspending in the bucket eradication program.”
Nkwinti also pointed out poor project management within the department which has crippled the department’s service delivery and which had also led to millions of rands being overspent. He said that an amount of R292 million overspending was reported in the sanitation program in 2016/17, “and additional overspending will be reported for the 2017/18 financial year”.
“Poor project management within the department has created a situation whereby service providers were accelerating the work at a much faster pace than what the department had budgeted for. A typical example is our project in Giyani which was initially planned to be completed over five years, and, was budgeted for accordingly.
“However, the work was accelerated and completed within a two and a half year period. There is poor alignment between the budget and the project milestones, and, in certain instances, the project milestones are much ahead of the budget,” he said.
There are also crucial projects like the War on Leaks which have not been budgeted for by the department. Urgent intervention is required in our project management, as well as contract management, to ensure that the project planning is aligned with the available budget and to prevent our projects from being ahead of the available budget, Nkwinti added.
Furthermore, the department has a preliminary figure of R1.8billion of accruals from the previous financial year, which could not be paid in the previous year due to insufficient funds.
“This will have a carry through effect in the current year as it will require the current year’s budget to be used to pay the accruals instead of utilizing it for the activities as outlined in our Annual Performance Plan.
“The department has been allocated a budget of R15.5 billion for the 2018/19 financial year. I have, however, noted that R5.4billion of this budget is for direct transfers to municipalities under schedule 5B of the division of revenue act (Dora) for our water services infrastructure grant (WSIG), as well as regional bulk infrastructure grant (RBIG),” the minister said, adding that this allocation was meant for fully functional municipalities who can run on their own with the least degree of oversight from the department.
He said the funds were locked and cannot be used towards anything else except transfers to the municipalities, regardless of whether the municipalities were spending or not. “We also have indirect transfers under schedule 6B of Dora of only R3.5 billion under the water services infrastructure grant and regional bulk infrastructure grant. This is meant for municipalities that are in distress and don’t have the necessary resources and capacity to implement projects on their own, and, need a higher level of oversight from the department,” Nkwinti said.
The department has a peculiar budgeting challenge wherein budget constraints exist under schedule 6B where “we’ve allocated only R3.5billion, yet where we have allocated more money, R5.4billion under schedule 5B, the municipalities are unable to spend the money”.
“This indicates that there is a mismatch somewhere in our allocation of funds between schedule 5B and schedule 6B of Dora.
– African News Agency (ANA)