PROVINCIAL INFRASTRUCTURE GRANT - PowerPoint PPT Presentation

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PROVINCIAL INFRASTRUCTURE GRANT

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New construction, rehabilitation targeting health, education and roads ... budgeting not based on prioritised projects, and performance ... – PowerPoint PPT presentation

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Title: PROVINCIAL INFRASTRUCTURE GRANT


1
PROVINCIAL INFRASTRUCTURE GRANT
  • NCOP
  • 06 March 2006

2
OVERVIEW
  • Background
  • Trends in the allocation of infrastructure grant
  • Grant framework
  • Schedule 4 grant
  • Allocation criteria
  • Conditions
  • Administration of the grant
  • Performance/Impact of the grant
  • Growth in budgets and expenditure trends
  • Intervention to improve planning and spending
    capacity

3
Background
  • Decline in capex between 1995/96 and 1998/99
    from R6 billion to R3,9 billion 2000/01 due to
    rising social services budgets and personnel
    costs
  • Provincial Infrastructure Grant was introduced in
    2000/01 with the allocation of R300 million
  • The 2000/01 allocation was allocated to four
    provinces that had major damage of their
    infrastructure due to floods
  • In 2001/02 the grant was allocated R1,4bn rising
    to R 3,3 b in 2004/05, increase averaging 33,7
  • Allocation further rises from R3,7 billion in
    2005/6 to R5,7 billion 2008/09

4
BACKGROUND
  • To facilitate turnaround in the budgets for
    education, health roads infrastructure
  • Grant allocated to prov. treasuries to prioritise
    infrastructure within these guidelines
  • 40 each education and roads
  • 13 health
  • 7 rural/agricuture infrastructure
  • Grant allocation criteria
  • Initially it was an average of equitable share
    and infrastructure backlogs (education and
    Health)
  • Formula revised to include road network as the
    component each component has equal shares
    (33.3)

5
Allocation of Provincial Infrastructure Grant
6
Type of the grant Schedule 4
  • Allocation supplements infrastructure budgets
  • Not a sector or project specific grant its
    allocated to provincial treasuries
  • Conditions of the grant allow for monitoring of
    the budgets of sectors targeted by the grant
  • Enables a single reporting on infrastructure,
    with the exception of health which has to report
    on hospital revitalization programme
  • Assessment of performance of the grant focuses on
    the entire budget of the targeted sectors
  • Facilitate better infrastructure planning for the
    sectors
  • Enables implementation of good practises to
    improve overall performance in the delivery of
    infrastructure

7
Grant frameworkPurpose of the Grant
  • Help accelerate infrastructure delivery
  • New construction, rehabilitation targeting
    health, education and roads
  • Enhance capacity to delivery infrastructure
  • Improve planning and management
  • Improve institutional arrangements for
    infrastructure delivery
  • Increase labor intensity for specific types of
    projects in line with EPWP guidelines

8
Grant FrameworkConditions of the Grant
  • Submission of infrastructure plans, including
    list of prioritised projects
  • List of projects should be completed by and
    submitted to implementing agents by 31 Oct 06,
    for the next FY
  • Compliance with EPWP guidelines
  • Submission of quarterly reports on spending and
    physical progress with projects
  • Monthly IYM and quarterly reports must show that
    good progress in spending of budget

9
Administration of the grant
  • DOR Act provides for withholding and stopping of
    the grant when
  • Underspending on the allocation is evident
  • Failure to comply with the requirements persists
  • Unlike schedule 5 grants, withholding of this
    grant is based on the assessment of the
    performance of the targeted sector
  • Sector allocation guidelines would be used to
    determine how much to withhold in cases of non
    compliance

10
Why Underspending?
  • Underspending of capex persists
  • R1,8bn in 2004/05
  • R700m projected as per the 3rd quarter S32 report
  • Problems relating to
  • planning (no long term, and forward project
    planning)
  • budgeting not based on prioritised projects,
    and performance
  • Weakness in institutional arrangements for
    delivery (client/agency relationship)
  • Delays in procurement processes
  • Capacity in departments and public works
  • Weaknesses in reporting and monitoring

11
INTERVENTIONS
  • Infrastructure Delivery Improvement Programme to
    support
  • Development of appropriate capacity for
    infrastructure delivery (people, skills, systems)
  • Infrastructure plans that provide a clear measure
    of needs, supply, backlogs prioritisation
  • Development enforcement of contracts, or
    service level agreements
  • Improve quality of information reported
  • DOR Act aims to fast-track improvement in
    infrastructure delivery
  • Increasing funding for infrastructure delivery
  • Addressing delivery capacity gaps in departments
  • Improving forward planning for projects
  • Managing implementing agents thru SDAs
  • Enforce reporting and monitoring
  • Threats of loosing the funds where spending is
    slow

12
ROLLOUT STRATEGY FOR IDIP
  • Phased approach started with all education,
    selected 2 health and roads
  • Partnering with Construction Industry Development
    Board and DBSA
  • National departments key stakeholders (members of
    steering committee)
  • Provincial Treasury oversee
  • coordinate and monitor provincially

13
COMPONENTS OF IDIP
  • Capacity Building strategy
  • Technical assistants recruited and placed in
    participating departments
  • Identify gaps in systems and capacity
  • Develop capacitation plan with the department
    indicating skills required, costs and timeframes
    for turnaround
  • Facilitate implementation of toolkit to correct
    identified deficiencies in delivery systems
  • Mentoring and coaching staff counterpart
    assigned to work with TA and delivery team
  • Provides tools to guide the development of
    appropriate procedures and systems include
  • Delivery Management Process
  • Infrastructure Planning
  • Infrastructure Programme management and Project
    Delivery
  • Construction Procurement

14
CHALLENGES PILOT PHASE
  • Weakness in planning project prioritisation
  • Demographic and socio-economic trends analysis
  • Identification of needs from the institutions ie
    schools
  • Inadequate asset management systems
  • Deficiencies in forward planning
  • budgets not based on prioritised projects,
    performance,
  • Delays in project planning and design failure to
    make effective use of MTEF process
  • Weaknesses in institutional arrangement (for own
    notes poor relationships, blame shifting )
  • Deficiencies in skills in both departments and
    dpw challange attracting and retaining skills

15
Strengthening the interventionsIDIP Phase II
Roll Out
  • IDIP to support, DOR Act enforced to
    progressively improve planning budget
  • Infrastructure plans are reviewed prioritised
    projects to be firmed up by end October
  • Capacity gaps are addressed
  • Alignment of infrastructure planning and
    budgeting with MTEF budget cycle
  • Capital budgets provide for forward planning
  • Strengthen the infrastructure monitoring system
    to enforce forward planning
  • Institutional arrangement - bridge the gap in the
    relationships and strengthen contractual
    arrangements
  • A process to improve information system and
    analysis ie asset registers needs analysis

16
THANK YOU
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