About R37million has been transferred from underspending Western Cape government departments to relieve pressure on the beleaguered N2 Gateway Project.
About R24million will be shifted from various departments to local government and housing “to mitigate the pressures of the N2 Gateway Project” and a R13million lump sum will move from agriculture to education to “accelerate school building delivery in the N2 Gateway Project”, says the medium-term budget policy statement.
It also notes: “Expenditure trends in the first six months were slower than was anticipated. Only R9,57billion was spent out of an adjusted estimate of R21billion.”
But the main beneficiary of these extra millions, the department of local government and housing, is the worst culprit. It spent a mere 32% of its budget in the six months to September. While the R24million will go into the housing and local government coffers, it is ring-fenced for the N2 Gateway Project, a joint initiative between all spheres of government to which national government has allocated R2,3billion.
There is a dire housing need: about 350 000 units, 265 000 in Cape Town alone, are required to eradicate the provincial backlog.
Treasury officials admit this underspending is chronic in all but the provincial health and education departments, which had spent 45,2% and 47,1% by end of September respectively.
Among the worst spenders for the past financial year was the department of transport and public works. Almost R53million of its R113million allocation for public transport remained unspent. The department also failed to spend all the Expanded Public Works Programme funds. Its total underspending for 2004/05 amounted to R95,8million. This emerged from its annual report, tabled at the provincial legislature this week. The department blamed lack of management capacity and skills, as well as delays in tender processes, for the underspending.
Over the past two years, while the Western Cape has pursued its iKapa Elihlumayo (Growing, Sharing Cape) growth and development strategy, the budget figures clearly indicated a need to tighten up implementation.
Western Cape finance minister Lynne Brown, who tabled the medium-term budget policy statement on Tuesday, said the budget adjustments included rollovers of R268million. But slow spending on the hospital revitalisation programme, a national conditional grant, meant the province lost just more than R20million, directly affecting hospitals in Paarl and the rural hinterlands.
“Underspending is a very serious problem,” said Brown in a briefing. She added that she was looking for bang for buck.
The National Treasury has, in the past, said that provincial expenditure tended to increase signifi-cantly in the last quarter of the financial year.