Northern Cape: DA Budget Debate on Roads and Public Works

Harold McGluwa, MPL

DA Provincial Chairperson

Note: The following is an extract from the speech delivered in the Northern Cape Provincial Legislature by the DA’s Provincial Chairperson, Harold McGluwa, during the Budget Debate of the Department of Roads and Public Works.

Allow me to congratulate the Honourable MEC Rooi in retaining his position as political head of the department. As the DA, we look forward to continuing working with him for the betterment of the lives of our people in the province.

Good roads and bridges are the veins that keep the heart of the Northern Cape economy beating. Financial constraints can make it more difficult to keep the road and rail infrastructure healthy. Despite the fact that the Northern Cape has 21% of the national road infrastructure, we still receive the smallest portion of the national allocation.

When funding is limited, it is particularly important to allocate and spend funds wisely. The DA therefore congratulates the department for its improved spending on conditional grants, as well as significantly decreasing unauthorized expenditure in the 2012/13 financial year. Good financial management is the first step to run an institution efficiently.

Unfortunately, there remains some areas of concern. In the last financial year, the department underspent on its budget by close to R21 million, yet still had accruals of R183 million. Mismanagement of available funds can make it more difficult for the department to deliver its projects on time, on budget and according to specifications. The truth of this statement is shown in the fact that the department has failed to meet 53% of its targets in the last financial year. Poor past performance does not harm the department alone – when the department acts as implementing agent and does not complete a mental health hospital or school on time, it hampers service delivery to the entire province.

Let us take the example of the mental health hospital. The facts surrounding the ongoing construction of the mental health hospital shows how poor management by the department denies services to the community: Construction first started in September 2005. Originally, the mental health hospital was set to open on December 14 2007 at a contract price of R290.5 million. The opening date was extended to March 2008 and then to December 2009. When the venture with the first contractor was terminated in 2009, R354 million had been spent. In January 2012, the National Council of Provinces was told that an additional R650 million will have to be spent. In October 2012, the Honourable MEC indicated that construction was 71% complete and that the mental health hospital would be completed in January 2014.

To cover the ever escalating costs of the mental health hospital, funds have been diverted from other necessary construction projects. This includes the Williston and De Aar hospitals. It should not take nine years and more than R1 billion to complete one hospital. In 2013, the Western Cape opened a psychiatry unit for adolescent patients at the Tygerburg hospital for a unit cost of R9.7 million. In other words, the Northern Cape could have opened 100 such facilities – more than one for every hospital in the province.

The DA recommends that the department focuses on three areas to ensure better performance:

Firstly, contract management needs to be improved. This includes the necessity of appointing those with the required expertise to handle projects. For example, only contractors with the correct grading from the Construction Industry Development Board should be appointed to construction projects.

During the 2013/14 budget presentation, the Committee recommended that to the Department that the poor quality of road construction can be addressed through sourcing the services of contractors with a proven road construction record and continuous monitoring. There is no indication in the 2014/15 APP that this recommendation has been adapted into the strategy of the department. This omission is especially worrying, considering that 80% of gravel roads in the province have serious drivability problems.

At the same time, most of the bridges in the province are in need of immediate routine maintenance repairs. As things stand, it will take the department 10 years to address the backlog on the bridge infrastructure of the province. To date, however, this project still remains at tender phase.

Secondly, the DA recommends that there must be better communication and coordination with other departments. Where this department is the implementing agent for projects, it should liaise closely with the departments liable for payment. Poor performance by Public Works with regards to the building of libraries in the previous financial year, resulted in under-expenditure by the Department of Sport, Arts and Culture. This has since motivated them to institutionalize their own infrastructure unit, which means that functions are being duplicated in the provincial government. A duplication of functions brings about a duplication of costs, which is something we cannot afford.

Thirdly, projects should be properly planned, budgeted for and then implemented. The DA cautions the provincial government against making promises it cannot keep and raising hopes which will ultimately be dashed.

Promises are especially made when it comes to the creation of jobs. During the budget presentation, the department showed a provincial job creation target in the Expanded Public Works Programme of 113 697 jobs created between 2014 and 2019. If one divides this number by five, it means that the provincial government is planning to create 22 739 jobs each year.

On the face of it, this number looks impressive. But look at the Quarterly Labour Force Survey of May 2014, which indicates that the Northern Cape has an expanded unemployment rate of 39.5%. Taking into consideration the data from Census 2011, this means more than 289 000 people are unemployed. The department’s target shows that the provincial government only plans to create opportunities for 8% of the unemployed people in the province. This project is the Northern Cape’s main vehicle for job creation; for the sake of alleviating poverty and improving social conditions in the province, we need to set higher job creation targets.

It is also a concern to note that the Department of Economic Development indicated during its budget presentation that the department has set an annual job creation target of 16 000. Surely the job creation targets of these two departments must be reconciled?

The DA is happy to note that the budget will be spent on interventions in the infrastructure sector by increasing the labour intensity of projects. We urge the department to rework its current EPWP strategy to ensure that there is a proper transfer of skills. Beneficiaries of the EPWP must be assisted to remain economically active. Otherwise, the EPWP is nothing but a three month grant. EPWP must be the equivalent of a worthy economic indicator and not merely another handout.

The department is facing serious challenges with meeting its targets. We trust that, if the department takes our suggestions on board, these challenges can be mitigated and the lives of our people can be improved.