Western Cape only province to receive full infrastructure grant

2011-04-07 12:53

Western Cape is the only province to receive its full, 100% provincial infrastructure grant from the National Treasury for 2010/11.

It was deeply significant that Finance Minister Pravin Gordhan had allocated Western Cape its full grant allotment under the Division of Revenue Act (DORA), Democratic Alliance (DA) federal executive chairperson James Selfe told a media briefing at Parliament today.

At the same time, Gordhan terminated allocations to all eight ANC-run provinces, penalising them for their failure to plan for and spend their infrastructure grants properly.

The decision was gazetted earlier this week.

“The move constitutes yet further evidence that, where the DA governs, it delivers for all and to a better standard than the ANC,” Selfe said.

“In particular, it shows that the DA delivers to the poor, because the infrastructure grants in question are dedicated for education, health, roads and agriculture.”

While this bore testimony to the DA’s good stewardship of public funds and its ability to deliver infrastructure-led economic growth, it was a tragedy for residents of other provinces who were desperate for infrastructure development, maintenance and service delivery.

“Their governments have let them down, and there is no excuse for it,” Selfe said.

While Western Cape would receive 100% of its R795-million allocation for infrastructure spending, provinces like Free State and Mpumalanga would only receive 55%, Northern Cape 54% and Gauteng 70%.

Eastern Cape, which was supposed to receive a much-needed R2 billion, was denied a massive R500 million.

In total, ANC-run provinces would be denied R2.47 billion in infrastructure grants during this financial year because of maladministration, financial mismanagement and poor planning.

This was 22% of the R11.3 billion overall allocation from the treasury, and was the equivalent of the funds needed to build about 30 000 RDP houses. he said.

National Treasury allocated provincial infrastructure grants to finance construction, maintenance, upgrading and rehabilitation of new and existing infrastructure in education, health, roads and agriculture.

At R11.3 billion in 2010/11, it was by far the largest of the six types of treasury grants allocated to supplement programmes funded from provincial budgets.

Gordhan blocked funding to the eight ANC-run provinces in terms of section 17 of the DORA.

This provision of the act could only be invoked in two conditions: either on the grounds of persistent and material non-compliance with national legislation and the conditions under which allocations were made, or on the basis that the treasury anticipated that an administration would substantially under-spend on that programme or allocation in the financial year.

Selfe said proper spending of infrastructure funds was crucial because infrastructure development and maintenance created jobs, provided the platform for people to start businesses and created the confidence that companies needed to invest.

“The rollout and maintenance of infrastructure provides the foundation upon which provincial and local government service delivery can take place.

“It also provides the means by which young people can travel to school, entrepreneurs can start businesses, companies can transport goods and residents can enjoy high standards of living.”

Last year, DA-run municipalities also far outperformed non-DA run municipalities in spending their municipal infrastructure grants (MIGs).

During the 2009/10 financial year, 272 municipalities were given MIGs totalling R8.739 billion.

Of this, only R6.575 billion (75%), was spent, leaving a massive R2.164 billion unspent.

These leftover billions could have provided more than 25 000 RDP houses to shelter more than 125 000 people.

“The 13 DA-run municipalities, along with the Cape Town metro, were allocated a total of R452 million, of which we spent R446 million, a 99% rate of expenditure.

“Indeed, 12 of our 13 municipalities (93%) spent 100% of their MIGs, while only 34% of non-DA municipalities spent their full allotment,” Selfe said. 

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