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18 June 2004

INTRODUCTION

Speaker of the House
Honourable Premier
Fellow MECs
Members of the House
Esteemed Guests and People of the Province.

I am humbled to present my first budget speech at the dawn of our second decade of democracy. Let me first of all thank the people of Limpopo for overwhelmingly reaffirming our democratic mandate. I would like to take this opportunity to congratulate The Honourable Premier Moloto on his appointment as the second Premier of the Province. Let me further congratulate all members of the Legislature on their election to this house, in this period of new challenges in consolidating our hard won democracy. I would also like to extend sincere congratulations to my colleagues in the Executive Council on their appointments. I am further humbled that I have been deployed to the Executive Council, enabling me to carry out the important mandate of a better life for all.

As the economic, political, and social development framework of NEPAD and the AU takes shape with the birth of the Pan African Parliament, there are exciting economic opportunities and developments for Africa. The peace efforts in the continent and the sub-continent in particular, presents possibilities for a stable environment in which investment in social and economic infrastructure, poverty alleviation and job creation can take place. If realised and sustained, these will be beneficial to all of us on the continent by advancing socio-economic development. South Africa and Limpopo, as a gateway, are strategically located to benefit from this potential.

Honourable Speaker, I am proud to be able to stand here today and say that we have been through challenging times over the past ten years, and have emerged leaner, stronger and fitter. Building on the foundation of the experience we have gained, we have been able to improve our staff morale, bring our personnel expenditure under control, improve our service delivery standards, and arrest the deterioration of provincial roads and government buildings.

REVIEW OF THE 2003-2004 FINANCIAL YEAR

Financial Review

The initial Departmental vote for the 2003-04 financial year amounted to R1, 243,639,000 which was later adjusted to R1, 319,090,000 due to the allocation of a rural infrastructure grant and an outstanding amount on improvement of conditions of service. The Departments' activities resulted in an over-expenditure of R1, 704,000,00 due to payment of insurance premiums for subsidised vehicles for the current financial year. An additional overspending of R161, 879,000 resulted from a directive to expense the Financial Control Systems (FCS) net off balance, which was in use from 1995-1999. This overspending is a result of a book entry and not activities carried out by the Department in the 2003-04 financial year.

The initial revenue budget for 2003-04 was R12, 303,000. This was subsequently adjusted to R21, 020,000. The reason for the adjustment was the over collection from the sale of redundant state houses and the recovery of outstanding rentals from various tenants in government properties. The actual total revenue collected for the year amounted to R28, 314,000 due to the reasons mentioned above.

As part of the Resolution 7 restructuring process, the Department absorbed excess personnel from the Department of Education and from the Department of Transport without an accompanying personnel budget.

Outputs and Outcomes

Roads

During 2003/4, we allocated R539 million to the Roads Agency Limpopo. This budget included the last trance of the conditional grant from National Treasury of R91 million, which was allocated for flood damage repairs of 224 km of roads. The rest of the budget was spent on tarring 124 km of roads; repairing, resealing, and rehabilitating 225km. Four (4) bridges were constructed and three (3) were upgraded and repaired. A total of 225km of roads were re-gravelled. All of these projects were successfully completed on time and within budget.

The strategy of the Roads Agency is to support the Provincial Growth and Development Strategy (PGDS); tarring roads that link districts to one another; connect communities to government services and economic opportunities; whilst maintaining surfaced roads to prevent deterioration.

We also allocated R285 181 million to our internal road maintenance teams. These funds were used to do the following:

* 39915.66 square metres repairs on surfacing (Bitumen surface)
* 2466.25 cubic metres of potholes repaired (layer work)
* 1409.57 cubic metres of edge-break repairs
* 26249.48 metres of linear-crack-sealing on tar roads
* 15609.24 square metres of "crocodile" crack-sealing on tar roads
* 218.51 km of re-gravelling on gravel roads;
* 523326.46 km. of blading on gravel roads;
* 399.05 km shaping of gravel roads
* 848.15 km reshaping of shoulders
* Installation of 361 barrels of 600-900 mm diameter drainage pipes;
* Cleaning of 23897 drainage pipes;
* Replacement of 16112 damaged road signs;
* 88519493.5 square metres of bush-clearing; and
* 13732671.1 square metres of grass cutting in the road reserve.

In our efforts to support the Tourism Industry, the Department of Public Works has put in place programmes to develop resting places along major routes and clean road reserves; install rubbish bins and no "littering signs". We are also engaged in the process of improving road signage. This includes replacing faded signs; erecting signs that reflect new place names and comply with the new specifications. The estimated cost of this project is R40 million. This excludes new signage for dirt roads and un-designed gravel roads.

The Gundo Lashu Labour Intensive Roads Programme was consolidated as a premier programme for the promotion of poverty alleviation, job creation, skills development and infrastructure provision with special conditions of employment. The programme is not aimed at attracting already employed persons in the formal sector. Labour intensive methods under Gundo Lashu are creating more employment opportunities as compared to roads built using machine-intensive methods. For example, in machine-intensive construction, labour content is 5% of the project, whilst in labour-intensive methods; labour content comprises 40% of the project cost. At the same time, there is far greater employment creation, with 100 jobs being created per million Rand spent under Gundo Lashu, as opposed to approximately 5 jobs being created per million Rand spent with machine-intensive construction. On average, each of the 24-learner contractors was allocated projects worth R2.3 million. This programme targets impoverished households with no income nor a government grant.

The programme is also aimed at developing the technical and life skills of individuals, giving participants the necessary experience that will enable them to access employment opportunities.

The Department has committed resources to this project. In total, we spent R55m in the Gundo Lashu Programme in 2003/04, building 200 km of gravel roads and low-cost sealing. This created 652118 worker days with each employee earning an average of between R600.00 - R900.00 per month.

This program has also made a vital contribution towards the conceptualisation of the Expanded Public Works Programme (EPWP) nationally.

In our speech to the Legislature last year, we announced that we had drawn up a plan for the redefining of national, provincial and municipal roads in the province. This has been approved by the Executive Council and accepted by Municipalities. We indicated that the National Roads Agency has agreed with our definition and want to take 3000 km of roads. We can now announce that the first two roads, Polokwane-Burgersfort and Dendron-Vivo-Alldays have been taken.

We also indicated that we were in the process of transferring some roads to district municipalities. The legal transfer to Municipalities will be completed this financial year. The speed at which this process is concluded will depend on the municipality's readiness and capacity.

Roads Agency Limpopo (RAL) has completed a study on revenue raising possibilities. Among other things, the study revealed that none of the identified opportunities have the capacity to raise a significant amount of revenue. For example, it is not yet viable to toll any of our provincial roads due to lower traffic volumes. The management of the Agency is determining the commercial viability of all other possible sources of income. However, Members should note that the revenue raising possibilities are limited, and that we will remain dependent on the fiscus for the funding of Provincial roads for the foreseeable future.

Building

Last year we indicated that we would focus on improving the capacity of our Building Capital Works management. Today, we can report that we have put the necessary institutional frameworks in place that have enabled us to facilitate the spending of capital works budgets qualitatively and quantitatively. For instance, we have acquired the necessary professional personnel, optimised expenditure and introduced processes for the effective management of projects. We have also operationalised the Service Level Agreements with client departments for the effective management of projects.

We have also implemented a Service Delivery Improvement Programme (SDIP) that focused on enhancing and improving business processes relating to maintenance activities in the Districts.

During 2003/4, we managed 819 projects worth R277 million for the Department of Education. These projects were allocated to private sector construction companies through the preferential procurement process. This resulted in the construction of 2108 new classrooms; renovations to 61 schools; repairs to 10 flood-damaged schools; repairs to 4 storm-damaged schools; maintenance of kitchen equipment, electrical connections and other repairs to colleges of education in all six districts; repairs to 11 marking centres; upgrading of a special school; upgraded two technical education colleges; upgraded one teacher's training college and constructed additional offices for the Department of Education Head Office.

We also managed 20 school upgrading projects funded by the Netherlands Government. The Department also facilitated the conversion of the Mokopane College of Education into the Mokgalakwena i-Community Multi-purpose Community Centre.

We managed projects worth R187 million for the Department of Health and Welfare. 5 hospitals were revitalised and 21 clinics were completed and 26 welfare offices were also completed. A new head office building was completed at a cost of R22 million. We also completed six K53 testing stations for the Department of Transport at a cost of R5.4 million.

During the last financial year, we allocated R263 million to the internal building programme in. We carried out further refurbishments of the three major government complexes, and completed refurbishments of various smaller Provincial Government offices in the districts, including the installation of air conditioners. A major focus of our internal building teams was to upgrade the facilities in the permanent road camps that house our internal road maintenance teams. Most of these camps have very rudimentary infrastructure. 384 houses were built. These teams also carry out maintenance on request by the other Departments, who budget for the cost of the maintenance materials. The building teams were also used to carry out maintenance on residential houses. New offices were built at the Public Works Head Office Complex, and the first phase was completed. Construction of recreational facilities at the Parliamentary Village was started.

The internal building team also constructed a school building at a cost of R2 million comprising eight additional classrooms, a library, an administration block, a dining hall and a caretaker's house funded by Eskom at Seroka as part of the donor-funded programme. Twelve classrooms were built at other schools using community funds.

40 learner contractors have completed the theoretical phase and are currently engaged in the second phase of on-site training as part of the Emerging Contractor Development Programme (ECDP). Forty blocks of 4-classrooms each were completed as part of the first phase of on-site training.

Property and Facilities Management

During 2003/4, an amount of R94, 3 million was allocated to the Property and Facilities Management programme. The department made good progress in terms of developing and maintaining an improved Provincial property asset register. The major portion of the register is now complete with all known properties listed. As part of our disposal of redundant properties, 117 residential properties valued at R12.7 million were sold. All the properties were sold to previously disadvantaged individuals, and 51% of these individuals were women.

In the past financial year, we continued with our programme of vesting government properties in the name of the Province. This resulted in 147 applications being approved by the Provincial State Land Disposal Committee (PSLDC) all of which have been lodged with the National Department of Land Affairs. So far, 126 properties have been vested.

There are a number of properties which are owned by the Provincial government, but which need to be transferred to municipalities. During the last financial year 159 Deeds of donation have been approved by the Department for transfer to municipalities. We are awaiting acceptance by the municipality.

The Department is responsible for providing the provincial government with its property requirements. This involves renting of private properties, construction and maintenance of government-owned properties. The provincial property portfolio consists of about 900 residential houses, 12 blocks of flats, three large former homeland office complexes with 21 office blocks, 34 other office blocks and 44 smaller regional office complexes, health and education buildings, museums, cultural centres and buildings in game parks and youth camps.

The Department has improved on its revenue collection from state owned properties. All national government departments occupying Provincial properties have now entered into lease agreements and have started paying rentals. The rental collection improved from R340 000.00 in 2002-2003 to R1, 880,000.00 in 2003-2004.

There has been a remarkable improvement with the collection of rentals from residential tenants, which amounted to R10, 227,000 for 2003-2004. This improvement came after the Department adopted new methods in dealing with defaulters, for example, using private attorneys to recover outstanding rentals.

Following recommendations of our Service Delivery Improvement programme, the department has managed to improve its processes in the management of the Provincial properties and facilities, and in particular, further improvements were made to the security, cleaning, landscaping and gardening services.

The department was able to implement an Executive Council resolution on rationalisation of office space for provincial departments around Polokwane.

The National Department of Local Government and Provincial Affairs coordinated with all local municipalities regarding arrear rates and taxes that were owed by various spheres of government in the 2002-03 financial year, for submission to ensure payments of these bills. In the preceding financial year, all of these bills were paid. Subsequently, other municipalities came forward with claims of unpaid bills - some of which have since been paid. Others are still being verified before payment can be effected.

Community-based Public Works Programme (CBPWP)

We allocated R5 million Rand from our budget last financial year for CBPWP projects. These funds were allocated to all six-district municipalities to complete all community-based projects that were carried over from previous financial years. The department also continued to assist in the implementation of the nationally funded Community Based Public Works Programme (CBPWP). The national CBPWP will continue to finalise all outstanding programmes directly with the district municipalities. The Department will no longer be involved with this programme.

Service Delivery Improvement Programme (Re a Shoma)

All the outsourced activities of the service delivery improvement programme were completed in the previous financial year. A lot of areas identified for service delivery improvement were documented and benchmarked. Honourable Speaker, we were able in this process to start attending to several minor issues that were previously overlooked.

Strategic Management and Corporate Governance

In our view, our department has been conforming to the regulatory requirements with regard to Corporate Governance and aspects of the PFMA, which are mandatory, according to the given deadlines.

A key focus area has been the management and recording of assets belonging to the state. The Asset Management System has been rolled-out to all districts and there has been an upgrading of the IT infrastructure and training of personnel for effective management of assets.

Procedures for effective stores management have been put in place and the rationalisation of stores was started in order to optimise both personnel and financial resources. As part of this process, an optimal stock-level procedure was developed as part of our service delivery improvement programme. This exercise enabled us to dispose of most of the obsolete and redundant stock that was previously lying in our stores.

The Department has developed a Risk Management Strategy and a Fraud Prevention Plan that identifies risk areas and measures to prevent and manage exposure respectively. All our activities and decisions are guided by these plans. This has resulted in a significant decline in fraud and corruption complaints, and the assessment carried out by Internal Audit and the Provincial Tender Board indicated that the department is in a better position to handle more responsibilities with regard to procurement.

During the last financial year, we set in motion the process of linking skills development to performance management. We have gradually made headway in improving the way we implement the system of performance management. During this financial year we will begin with the process of introducing National Qualification Framework (NQF) unit standards to measure performance and link this to training and skills development.

As part of the risk survey, HIV/AIDS was identified as a one of the areas in which the Department did not have a comprehensive strategy in place. In addressing this challenge, the Department has now adopted and approved a strategy designed by the National Department of Public Works to deal with the pandemic within the construction industry. This includes training of counsellors and the establishment of a Voluntary Counselling and Testing (VCT) programme for staff. In the last financial year, 347 counsellors in districts and 17 in head office were trained as peer educators. Workshops were held with all staff to brief them on the code of good practice on managing HIV/AIDS in the workplace.

As we approach the deadline to report on our Employment Equity planning, I am glad to announce that the Department has met the targets that were set in 2000 and a full report was presented to the Department of Labour.

As with previous years, the Department continued to maintain a policy of zero tolerance towards fraud and corruption. The number of misconduct cases decreased during last financial year, compared to previous financial years.

With regard to the PFMA, our Department has been meeting the regulatory requirements within the given deadlines. The Department improved its procurement system and is meeting the PFMA requirement for a procurement system, which is "fair, equitable, transparent, competitive and cost-effective". Our procurement processes are fully compliant with the Preferential Procurement Policy Framework Act. We have improved our revenue management systems to meet the PFMA requirement that "effective and appropriate steps be taken to collect all monies due to the department." We have also focused on improving our stores management, to meet the PFMA requirement of efficient and effective use of resources. Our payments to creditors have improved, but we still need to further improve to consistently meet the PFMA requirement of payment within 30 days. We believe that our efforts to be compliant with the PFMA have borne fruit, as illustrated by our improved Auditor General report for last financial year, as compared to previous financial years.

The Department has completed a risk assessment, which is another requirement of the PFMA. The identified high-risk areas include procurement, contracts management, revenue management, and exposure to legal action. Control measures have been identified to manage these risks. During the current financial year we will be focusing on implementing these control measures.

During the last financial year, the department focussed on the roll-out of IT infrastructure to our district offices and cost centres. We also commissioned SITA to develop a Master Systems Plan (MSP), which will assist us in aligning our IT infrastructure to support the business needs of the Department.

In addition, we have strengthened our Information Management and Communication Services function in the department, and during this current financial year we will be focusing on implementing our Communication strategy. This will enable us to become more proactive in our interactions with our stakeholders and members of the public.

The challenge of improving IT literacy in the department remains a high priority.

Last year we reported our intention to streamline our processes in the Corporate Services function. Let me indicate to the house that we have successfully assimilated the decentralised transport functions from the Provincial Department of Transport. This has enabled us to manage our fleet more effectively. Furthermore, we paid particular attention to the training and building of our procurement capacity with particular emphasis on the training of personnel at our district offices. Contractors and service providers were provided with information and introduced to the provisions contained in the Preferential Procurement Policy Framework Act (PPPFA).

The Department of Public Works was chosen as a pilot site for the launch of the Construction Industry Development Board (CIDB) Register. The Construction Industry Development Board Act (Act 38 of 2000) requires the Board to establish a national register of contractors. This legislation prohibits contractors who are not registered with the Board from undertaking any public sector engineering and construction works contracts. Since this will be a requirement from August 2004, for all public sector bodies undertaking any engineering or construction works, lessons from the pilot project will assist in improving the implementation of Government-funded construction projects.

In terms of the Promotion of Access to Information Act of 2000, we are engaged in a process of improving accessibility, security and safeguarding the integrity of our records management function.

As a responsible department for the Roads Agency Limpopo we continue to strive for effective corporate governance. We have in place clear definitions of roles and responsibilities of the Roads Agency Limpopo Board and its committees. We have outlined areas of compliance with laws, regulations and policies. We have also developed risk management and fraud prevention plans. There is a clear delegation of authority between the MEC, the Board and Management.

The Roads Agency Limpopo Board continues to function effectively, and is making decisions in accordance with legislation and policies. The unqualified audit reports and the successful court cases we have had, bear testimony to this assertion. Unsuccessful tenders challenged our objectivity and fairness in the awarding process. We have been vindicated by the High Court of the Republic, and our processes have been deemed to be fair, transparent and objective.

The Departmental Tender Committee decisions have faced even more court challenges. In all instances, including labour matters, we have been vindicated by the courts, thus reaffirming the integrity of our personnel and processes. Honourable speaker, we may very well be the only department in the country, not to have lost a single court challenge.

Awards

In honour of the ingenuity and hard work of the Department, we are once more humbled to be the proud recipient of the highest accolade of the Impumelelo Platinum and Excellence Awards, in recognition of our efforts in the Gundo Lashu labour intensive programme. We also received the Silver Award in the Premier Excellence Service Awards. Officials in the Department also received awards. We were also nominated for the International Public Sector Best Practice Award in Mexico in 2003. This year, we have been nominated again for the same award to be held in Dubai in October.

Honourable Speaker, although it was a great honour for us to receive these awards, we need to ensure that they do not make us complacent. The awards are only a form of recognition of our efforts to improve our service delivery - they are not an indication that we have reached our full potential. There are still many challenges we face in the management of our department, and these awards are a motivation to us to continuously improve on our service delivery.

Inter-governmental Relations

The Department has engaged in a number of exchange programmes with other inter-provincial and national departments. Most departments have expressed a need for us to assist them in developing plans and programmes in line with the Expanded Public Works Programme (EPWP). We have also been assisting various departments from other provinces in the areas of project management and labour relation matters.

Strategic Focus Areas for 2004-2005

Infrastructure Plan

One of the key responsibilities that the Department is tasked with in the coming financial year is that of developing a comprehensive Provincial Infrastructure Plan, which will assist the province in prioritising infrastructure investment. The first phase of the plan has been completed in conjunction with the Department of Finance, Economic Affairs and Tourism. This plan essentially focuses on economic infrastructure in support of the Provincial Growth and Development Strategy (PGDS).

The second phase of the plan will focus on social infrastructure and it will include infrastructure, which is not part of the Provincial mandate. The first draft of this plan will be completed by December 2004.

EPWP

The Provincial Government has adopted the concept of Expanded Public Works Programme (EPWP) as approved by the national Cabinet. The Provincial Executive Council mandated all Departments and Municipalities to draw up business plans to facilitate implementation of the programme. The Department of Public Works was requested to coordinate the implementation of the programme.

In the current financial year, we will continue to utilise our expenditure to achieve government's goals of Expanded Public Works Programme as the premier programme of job creation and skill development. Black Economic Empowerment will still be pursued as a strategic area where our efforts will be expanded. The department will be managing R1 billion worth of projects, which will be allocated to the private sector. We estimate that this expenditure will result in approximately 25 000 jobs being created in the province.

According to the Provincial plan, provincial departments were expected to commence with implementation by 1 April 2004, and the municipalities should commence by June 2004. Provincial departments have compiled business plans according to the principles of the EPWP to meet the deadlines. Consultation with municipalities have started to assist them in the compilation of the business plans to meet their deadlines.

The EPWP involves creating temporary work opportunities for the unemployed, using public sector expenditure. It builds on existing best practice government infrastructure and social programmes that are known to be successful, by either deepening their labour absorption or by extending them. The programme also targets the Provincial State Owned Enterprises who are being encouraged to design programmes in line with the directives. In this regard a programme of action will be put in place to encourage the private sector to adopt principles that subscribe to the objectives of EPWP.

In addition to the Gundo Lashu and Sakhasonke programmes, the Department has identified the following as potential projects for implementation under the EPWP:

Electromechanical Contractor Development Programme

To provide technical skills to individuals through learnerships and internships to increase skills and personnel for this market and to train electrical and mechanical entrepreneurs.

A final business plan will be completed by August 2004.

Mechanical Maintenance Mobile Units

* To develop the preventative maintenance skills of SMME contractors. A feasibility will be finalised by December 2004

Labour Intensive Road Maintenance Programme

* To strengthen the capacity of industry to create employment and rehabilitate the road network. This programme will commence in August 2004.

Alternative Building Materials

* To address the shortage of building materials and to create employment and local growth opportunities through the manufacture of alternative building materials. Research will be completed by March 2005.

Carpentry and Plumbing Contractor Development

* To enhance the technical skills of artisans and to assist plumbing and carpentry emerging contractors to develop into sustainable businesses. Potential trainees will be identified by December 2004.

In light of what we have raised in our strategic management and governance report, one of the issues that becomes critical is exploring the possibility of establishing a training facility for the EPWP. A feasibility study will be finalised by March 2005.

Learnerships

During this period, we will be implementing Learnerships that fall outside the EPWP and ECDP. This programme is important to enhance skills of serving personnel and required skills in order for the Department to carry out its mandate. Three learnership programmes are currently under implementation: one focussing on electrical and mechanical unit standards, and two on roads maintenance unit standards.

Partnership with municipalities

There is insufficient coordination between the activities of the Department and Municipalities. We have initiated a programme of strategic partnerships with municipalities. This programme is aimed at strengthening the relationship between the Department and the municipalities on matters of mutual interest and around integrated development planning and proper spatial development.

Communication

The Department has often been faced with a poor level of understanding of its roles, responsibilities and mandates by both public institutions and members of the public.

We have therefore adopted a communication strategy to address inaccurate perceptions that have been raised in general, and in particular, the customer satisfaction survey, which was conducted in the Province. In terms of our mandate, our responsibilities are limited to the management of Provincial government buildings, facilities management and provincial roads.

World Cup bid

South Africa's successful World Cup bid has presented the Department with the unique challenge of ensuring that we develop the necessary infrastructure together with municipalities and our sister departments to successfully host this event.

Government Accommodation

We are aware that one of the long outstanding issues is the proposed relocation of the Provincial Legislature to Polokwane. In this regard, the Department is exploring various options and evaluating the cost effectiveness of such relocation, in line with the previous Legislature decision on the building of the government complex. As we indicated earlier, space rationalisation for government departments has been embarked upon and all departments now have permanent accommodation. In light of these developments, we have advised the Legislature to limit improvements in this complex (Lebowakgomo), because we anticipate that relocation will happen in the near future.

Black economic empowerment

Whilst we have succeeded in ensuring that 90% of our contracts go to historically disadvantaged individuals (HDIs), the impact of this success is being undermined by secondary procurement. Broad based Black economic empowerment remains a central element of government policy. This framework, like all developmental programmes will specifically target HDIs. This will be linked to the supply chain management framework in line with the provisions of the Preferential Procurement Policy Framework Act. The Department will explore ways of addressing the limitations of second-tier procurement in the current financial year.

One of the problems in the construction industry is the exploitation of workers. We are aware that many of our contractors are paying their workers wages which are far below the gazetted minimum wage for the construction industry in Limpopo. Some contractors disappear without paying their workers and occupational health and safety regulations are frequently being flouted on our construction sites. We will be taking appropriate action to address this issue in consultation with the Department of Labour to ensure that such practises do not persist in future.

The challenge of managing informal trading in the road reserves is continuing and we are engaging with the Department of Finance, Economic Affairs and Trade & Industry to find a solution. In the light of high levels of unemployment and poverty, many people are forced to engage in informal trading on the road reserves. Government needs to intervene on their behalf to assist in poverty alleviation.

Service Delivery Improvement

In this financial year we are concentrating on improving quality and increasing productivity of the workforce. There are still sections of the department that require re-engineering of their business processes and restructuring of others. In this regard we will also be targeting the improvement of the management of the service level agreements with our client departments. This will be accomplished by redefining the roles and responsibilities of all parties. The process mapping for all sections will be completed by March 2005.

PLANS FOR THE 2004/5 FINANCIAL YEAR

Roads

In this financial year (2004/5), we are transferring R500, 250 million to Roads Agency Limpopo. This includes R166.15 million for preventative maintenance (rehabilitation, repair, reseal and fog spray). There is also R105 million for re-gravelling, under the Gundo Lashu programme. R203.6 million has been allocated for the tarring of 102 km of roads. In the tarring programme, we are continuing to focus on the roads that support the Provincial Growth & Development Strategy (PGDS), and areas which have been previously disadvantaged. Work on these projects have already commenced and will be completed at the end of the financial year.

We have also budgeted R302 million for routine road maintenance. These funds will be used to pay for personnel costs, stores and equipment for our internal roads maintenance teams to carry out maintenance work such as repair of pot-holes, crack-sealing, cutting of grass in the road reserves, blading of gravel roads, repair of road signs, and cleaning of culverts and side-drains. The programme is ongoing.

We have made good progress in repairing the massive damage to the road network resulting from the 2000 floods. There are, however still roads and bridges that have not been repaired. Sadly, the grants have been stopped, and out of the estimated R1, 3 billion worth of damage an amount of R634, 5m is still needed.

The challenge is to maintain our roads in a relatively good condition and to continue to connect isolated areas to the mainstream road network of the Province. Tarring of 1200 km of priority roads in terms of the PGDS will require R2.3 billion. This figure excludes R500 million required for the extension and rehabilitation of the Polokwane-Burgersfort and the Polokwane-Alldays-Musina roads. This means spending R460 million per year over five years. We are spending R203 million in this financial year. This translates into a shortfall of R260 million. Optimal maintenance would require R400 million annually. We are currently spending R186 million thereby creating a shortfall of R214 million. We therefore have a total shortfall for both maintenance and tarring of R474 million per year.

Building

This financial year the department is managing projects worth R314 million for the Department of Education, which will include the construction of two new offices for the Department and the continuation of existing works at their head office. A total of 1176 new classrooms will be constructed and renovations to 167 schools will be done, 159 of which are storm-damage repairs. We will also upgrade two technical colleges, two special schools and one community college. The Department will also construct toilet blocks at 160 schools, upgrade and repair 13 Multi-purpose Community Centres and erect fencing around 24 Japanese-funded schools. All this work is expected to be completed by the end of the financial year.

We are also going to manage R68 million worth of projects for the Department of Health and Welfare, which will include the upgrading of five major hospitals and the electrification of 225 clinics. In terms of this programme, the focus is on completion of a full hospital plan before embarking on a new one. All projects on site are expected to be completed by financial year end.

This financial year we have allocated R252 million to our internal building operations. As mentioned earlier, we are planning to continue with the upgrading of our road camps, the construction of facilities at the Parliamentary Village, and the upgrading of government complexes and other government offices. We will also construct additional houses to accommodate MPLs and MECs. The programmes are expected to be completed by September 2005.

The second phase of the Emerging Contractor Development will continue with the enrolment of 80 contractor learners. This programme includes 20 learners sponsored by the Department of Local Government and Housing.

Property and Facilities Management

The department has been allocated R105 million in this financial year to oversee the programme of state property and facilities. Last financial year we reported that we would have disposed all non-core properties, however progress has been slow due to logistical problems and financial constraints. This included the speed at which the national department of Land Affairs was able to process applications.

This financial year we plan to set ourselves a new target of disposing of 220 non-core properties.

In terms of space rationalisation and utilisation, we will be concentrating on assisting departments to acquire buildings that are of strategic importance for their requirements and cancelling leases that are not required.

I now proceed to present the budget for vote 9 for fiscal year 2004/5:

1. Administration: R 173,767,000
2. Public Works: R 357,527,000
3. Roads Infrastructure: R 802,449,000
TOTAL: R 1,333,743,000

The economic classifications of the budget is as follows:

1. Compensation: R 35,625,000
2. Goods & Services: R 222,668,000
3. Transfers (Dept. Agencies): R 500,250,000
4. Transfers (Household): R 5,500,000
5. Capital (Buildings & Fixed Structures): R 43,500,000
6. Capital (Machinery & Equipment): R 26,200,000

TOTAL: R1, 333,743,000

The projected revenue budget for the 2004-05 financial year is R10, 781,000. The reason for the anticipated decline in revenue is that the Department is disposing of a major source of revenue in the form of houses and flats.

Let me take this opportunity to thank the office of the Auditor General, Audit Committee on Infrastructure, Provincial Internal Audit and the Standing Committee on Public Accounts (SCOPA) for raising areas of weakness that need improvement. This assisted us in improving our management systems.

I would also like to thank the Portfolio Committee on Public Works for the oversight and advisory role they play in relation to our Department.

Lastly, I must acknowledge the contributions made by members of our staff in the Limpopo Department of Public Works. We thank them for their hard work and resilience in the face of tremendous challenges.

In conclusion, I commit our department to a people's contract for a better life for all.

I thank you.

Issued by: Department of Public Works, Limpopo Provincial Government
18 June 2004