The treasury has ordered the government of South Africa’s wealthiest province, Gauteng, to revisit a range of prestigious mega-projects.
The treasury is not only concerned about the administration of the province’s malfunctioning health department but also about a number of major projects, including the inefficient Gauteng Shared Services Centre, the escalating costs of the Gautrain and the Kopanong precinct project, which was supposed to create a provincial government building district within the Johannesburg central business district.
A memo prepared by the treasury for the Cabinet, obtained by the Mail & Guardian, shows that Gauteng Premier Nomvula Mokonyane has been ordered to reconsider the Kopanong project, among others, as part of cost-cutting measures to bring the province’s finances under control.
The long-term project, aimed at providing a consolidated space and economic hub for provincial government legislative and executive activities, was the brainchild of the former head of the public works department, S’bu Buthelezi.
The project has been stalled for the past two years, since Mokonyane decided to do away with most of the projects initiated by former finance MEC Paul Mashatile and his close allies. Buthelezi was later fired by Mokonyane as head of transport and given a golden handshake.
The decision to re-examine the project was made by the Cabinet this week after the national government intervened to address the financial problems faced by Gauteng. The revisiting of the project is part of an agreement entered into between Mokonyane, Finance Minister Pravin Gordhan and Gauteng health MEC Ntombi Mekgwe.
The agreement also calls for the premier to overhaul the Gauteng Shared Services Centre because, as a central clearing house, it has often caused bottlenecks in authorising invoices and payments.
Treasury also wants a deal between the province, Absa and Gautrain operator, Bombela, to control escalating costs.
In September the Gauteng provincial government secured a R1-billion loan from Absa to cover cost escalations related to the Gautrain Rapid Link. “It is important to state that the resources that have been raised through Absa are within the budget of the Gauteng provincial government towards construction of the Gautrain Rapid Link,” said Finance MEC Mandla Nkompfe.
The intervention by national government comes after Mokonyane requested assistance from the treasury to address financial problems in the health department.
The department, which has been described by the treasury as one of the worst health department in the country, is unable to pay service providers and has accumulated unÂauthorised expenditure of a staggering R4.7-billion over the past three years.
“This is in spite of the provincial treasury adding R4-billion to the health budget to stabilise it over the 2011 medium-term expenditure framework period. At R4.7-billion, accumulated unauthorised expenditure makes up 21% of the total health budget,” said the Cabinet memorandum.
National government also drew attention to key vacancies in the department, which health department spokesperson Simon Zwane said had since been filled.