Cash Needed for Transport Infrastructure

Andrew Louw MPL

Democratic Alliance Northern Cape Spokesperson for Roads & Public Works

Honourable Speaker, Honourable Premier, Honourable Members of the House, guests in the gallery, members of the media

Yes, it is commendable that Roads and Public Works improved from a disclaimer to a financially unqualified audit opinion with findings in the 2010/2011 financial year but the bottom line is that this department is still faced with problems – major problems!

We acknowledge that the share of funding provided to the Northern Cape Department of Roads and Public Works remains inadequate to address our deteriorating road and other infrastructure. But at the same time, it is hard to motivate for additional funds when the department doesn’t spend the money already allocated to it – a case in point being the 2010/2011underexpenditure of R137 million on construction and maintenance projects by the department, which ultimately resulted in backlogs in the construction and maintenance of roads.

The Hon. Block during his provincial budget speech inferred that under-spending largely related to the province’s lack of capacity to plan and implement the infrastructure budget. He said that National Treasury had been requested to assist the department with additional engineering capacity. This is good but it is not enough.

Good roads are the veins that will ensure that the heart of the Northern Cape’s economic growth keeps beating. At the same time, shoddy infrastructure may be the biggest threat to the Northern Cape’s long-term health. Allow me to sketch a disturbing provincial portrait for you:

The cost of road maintenance and road re-gravelling is increasing year on year at a rapid pace. It is thus essential that maintenance be prioritised. It becomes far more expensive to rehabilitate infrastructure than if maintenance is done on a scheduled and ongoing basis. At the same time, the condition of the province’s gravel and surfaced roads is rapidly deteriorating on a year on year basis. Already 54% of our unpaved roads are in urgent need of re-gravelling and it is estimated that within five years, 40% of our surfaced roads will be in a poor to very poor conditions. This is dire, considering that ideally it should never be more than 10%. Meanwhile, the cost of catching up on the backlog is said to be R5,8 billion. To put this into perspective, Hon. Speaker, this is about half of total allocation for the entire province for the 2012/2013 financial year.

But wait, that’s not all…

The province has at least 600 kilometres of roads in the greater Kuruman area that are contaminated with asbestos. It goes without saying that these roads are a health hazard to our communities. While the total cost of upgrading these roads is set at R642 million, the province has only allocated R5 million towards this end. The DA is aware that business plans have been tabled to national, and that hopefully soon, the province will be getting additional funding from national. However, the fact remains that the department is still the custodian of provincial roads in terms of design and planning.

On top of this, we also have the matter of our bridge infrastructure. According to the department, most of our bridges are in need of immediate routine maintenance repairs and R15 million has been allocated towards this end. However, you don’t have to be an engineer to realize that this is hopelessly too little to effectively repair and maintain all the bridges in the Northern Cape.

Hon. Speaker, I could go on and on, but the above provides enough detail in order for you to see the bigger picture – this is a picture which is bleak, and far, far, more disturbing than the one in which we are exposed to the naked spear of our national president. On a more serious note, this is a picture that clearly indicates that the Northern Cape is losing the infrastructure battle!

This said, the Democratic Alliance is disappointed that the Hon. Rooi gave no direction in terms of how the department intends catching up on the ever growing backlog in road and other infrastructure maintenance. We concede that it is not necessarily fair that the Northern Cape has 21% of the country’s total road network, and receives only 3,5% of the entire roads budget. But still, where is provincial administration’s fighting spirit? Or is this department content just to shrug its shoulders with a no-can-do attitude and simply blame the past seventeen years of mismanagement of our provincial infrastructure on underfunding.

Let’s face it – a massive cash injection is needed if the Northern Cape government wants to drastically maintain and improve its transport infrastructure. And sadly, the annual increase in the equitable share or the infrastructure grant, simply won’t cut it! That, however, does not mean that there is nothing that can be done to solve this burgeoning problem. So just what is the current administration going to do about it?

On a national level, the DA is proposing a R55,4 billion sell-off of state-owned enterprises to accelerate the government’s infrastructure investment programme and to boost growth without raising the budget deficit to unsustainable levels. Included in the basket of assets which the DA believes should be sold off are SAA-SA Express, 30% of Eskom’s power generation capacity, SABC, Denel, South African Forestry Corporation, Broadband Infraco, 30% of Portnet’s assets and assets held by the Industrial Development Corporation.

The DA is convinced that such innovative thinking should not just be limited to a national level. Perhaps infrastructure should be prioritised in much the same way as the debt redemption strategy, with all departments taking cuts in order to further prioritise our transport infrastructure, which undoubtedly impacts on every sector.

Or perhaps the provincial administration should embark on some intense fund raising initiatives. In this regard, of the 289 properties being leased out by the department, from which revenue is collected on a monthly basis, there may be leases that need to be brought in line with market orientated rates, or lease agreements that are not being honoured – dealing with effectively with these leases could see revenue grow considerably from the current target of R3,5 million for the 2012/2013 financial year. At the same time, there may even be assets that can be sold off. In this regard, it may be wise to consider the 200 buildings currently said to be in a poor state.

This in turn brings me to another point, namely the asset register. To a large extent, this department still doesn’t know what properties it possesses, where these properties are situated, what the quality of these properties is, who is residing on these properties and whether lease agreements have been undertaken. This is because the department didn’t have a reliable asset register since 1994.

While the DA acknowledges that there has been an improvement regarding the departments immovable assets register, the department still has a long way to go in this regard. According to the budget presentation, while there are currently 1 993 properties registered in the asset register, only 109 of these properties has to date been vested. While we understand that additional staff has been appointed to resolve the capacity problem in this regard, more care must be taken to get this process finalised. This, as delaying the process will have negative financial implications for the department. Already, there is an indication that there are properties where the land still belongs to the municipality, while the buildings belong to government. Once these properties are vested, the arrears and the recurrent cost for rates and taxes will have to be paid. This might result in financial liabilities.

Hon. Speaker, this department must act speedily in order to become fully compliant with the Government Immovable Asset Management Act.

Last but not least, if the department is indeed serious about taking back its mandate and regaining confidence from client departments, who have in the past run away from this department because they didn’t get the service they deserved, then this department will have to secure the required technical capacity in the form of architects, engineers, quantity surveyors and so forth.

According to the department, it is very difficult to attract such professional and technical personnel to the department due to numerous factors, including salary scales not being competitive with the private sector and the long distances that must be travelled in order to attend to projects. In response, the department has implemented a strategy to address the matter by way of offering full time bursaries to students. This is being done with the aim of attracting competent staff to the building environment after the completion of their academic career. This is good and well, but once again it is not enough.

The DA proposes that in order to attract and retain professionals to the Northern Cape, the department must offer market related salaries and come up with innovative incentives, possibly by way of offering relocation costs, attractive housing subsidies and school fee benefits. At the same time, contractual obligations with skilled professionals must be drawn up and monitored, to ensure that they pump back into the province in order to prevent the department running such an initiative at a loss. If this is what it will take to get qualified captains on board the department, then this is what must be done. After all, you can’t expect an airplane to take off, fly through the clouds and land safely, if you don’t have qualified pilots in the cockpit. Thank you.

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