Provincial Budgets and Expenditure Review

October 2005

Contents

• Overview• Free State centrally placed• History• Spending capacity• Development• Pressures• Traffic• Transport

Overview

• Transport underpins development and is a catalyst for unlocking economical growth and social development potential.

• Transport should be geared toward eradicating structural and social imbalances that yielded two economies and under development in our country.

• It should provide access and improvement of mobility thus ensuring that people have access to social services, job creation and skills development and ensuring that the cost doing business is reduced and that the economy of the country is transformed.

Overview

• Centrality of the Free State

• Infrastructure as an enabler to the economy

• Agricultural Dominance

• Budget Pressures

• EPWP

Allocation on roads since 1990-2005

Sec. 100

Flood Funds

R40m Decrease in Grant

Relationship between accidents and roads condition

% Poor and very poor paved roads

0

10

20

30

40

50

91 93 95 97 99 2001

Year

%

Poor

Very poor

Very Poor-Trend

•The kilometers of poor and very poor The kilometers of poor and very poor roads are going to increase dramatically;roads are going to increase dramatically;•Because of the lack proactive Because of the lack proactive maintenance, the cost of repairing a road maintenance, the cost of repairing a road will increase with approximately150%; will increase with approximately150%; •The gravel road system is on verge of The gravel road system is on verge of total collapse.total collapse.•A drastic increase of claims is immanent A drastic increase of claims is immanent considering the conditions of roads. considering the conditions of roads.

Amount Claimed

-1020304050607080

99/20 20/01 01/02 02/03 03/04 04/05 05/06

Year

Cla

im *

R m

illio

n

Composition of the Department

EXPENDITURE 2004/05CBPWP,

R12m2%

Traffic, R115m

15%

Works, R214m

26%

Admin-istration, R117m

15%

Roads, R322m

40%

Transport, R13m

2%

Required new links in the Free State

Vrede

Reitz

Warden

Boshof Clarens

Senekal

Winburg

Wepener

Zastron

Villiers

Heilbron

Hoopstad

Frankfort

Ficksburg

Ladybrand

Rouxville

Bothaville

Thaba Nchu

Petrusburg

Dewetsdorp

Smithfield

Fauresmith

Gariep Dam

Bultfontein

Koffiefontein

Welkom

Sasolburg

Bethlehem

Kroonstad

Harrismith

Trompsburg

Bloemfontein

Aliwal North

Phuthaditjhaba

Comparisons Free State with rest of Provinces

Free State % of Total

TOTAL for Provinces

Length of Road 49,116 km 14% 343,942 km

Registered Vehicles 387 815 6% 6 798 696

Roads Budget R322m 5% R6 353m

Budget per km road R6 555 / km R18 471 / km

% of budget spent 99.3% 98,9%

Roads MaintenanceFree State % of

TotalTOTAL for Provinces

Length of Road 49 116 km 14% 343 942 km

Length maintained

28 455 km 15% 193 178 km

Maintenance Expenditure

R192m 7% R2 794m

Cost per km of road maintained

R6 731/ km R14 465 / km

The estimated expenditure by SANRAL on capital improvement on National roads in FS (excluding N1 & N3) is: R330/vehicle*km traveled. The budget available to be spend on provincial roads in the Free State by the Department is R33/vehicle*km

Revenue CollectedFree State % of

TotalTOTAL for Provinces

Registered Vehicles

387 815 5.7% 6 798 696

Motor vehicle licenses

R150m 5.6% R2 689m

Collection Cost (Own Staff)

R42m 28% ???

114

145

161

176

190

215

240

260

100

120

140

160

180

200

220

240

260

280

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07

R m

illi

on

Total Revenue Collected

Interest, R0.5m

Capital Sales, R1m

Fines, R13m

Fin Trans-actionsR 9 m

Vehicle Lisences, R168 m

Sales, R48m

Revenue classifications

Vehicle License Tariffs

• Free State Tariffs are on average right in the middle of the 9 provinces.

• On average the 3rd most expensive for light vehicles

• On average 6th most expensive on trucks and busses.

• The Free State has to stimulate industry and agriculture.

Traffic ManagementFree State % of

TotalTOTAL for Provinces

Length of Road 49 116 km 14% 343 942 km

Registered Vehicles

387 815 6% 6 798 696

Traffic Expenditure

R70m

10% R1 139mRevenue Collection

R43m

Cost for traffic control per km of road

R2 300 / km R3 311 / km

Traffic Achievements

• Lowest fatalities in Arrive Alive

• Overloading control at Kroonstad, Bothaville and Senekal

• Traffic officials patrolling 183 km of road. Impossible to do every day. Appointed another 160 officers.

Weigh Bridge SuccessFree State % of

TotalTOTAL for Provinces

No of Weigh Bridges

3 3% 90

Vehicles Weighed

77 348 7% 1 055 438

Number found Overloaded

13 517 4% 303 489

Free State 17%

SA Average 29%

Effectiveness of Scanning process needs attention

Economic classificationFree State % of

TotalTOTAL

for Provinces

% of Total

Compensation R349 m 44% R3 584 m 28%

Goods& Serv R289 m 36% R3 719 m 29%

Transfers R5 m 1% R1 606 m 12%

Capital R149 m 19% R3 952 m 31%

Non compens R443 m 56% R9 278 m 72%

Non Comp Non Cap

R294 m 37% R5 325 m 41%

Budget Distribution 2005/06

Capital, R184m,

21%

Transfer, R3m, 0%

Goods & Services, R304m,

35%

Personnel, R367m,

44%

FS PWR&T BUDGET• MTEF Period: (Medium Term Expenditure

Framework)

Year-1 Year 0 Year 1 Year 2 Year 3

2004/05 2005/06 2006/07 2007/08 2008/09

R792 m R840 m R890 m R1023 m R1094 m• Baseline

• Reprioritized Baseline

R840 m R2071 m R2168 m R2319 m

Allocations vs. Actuals

654

803

761

809

647

792

847

735

767

600

650

700

750

800

850

900

2001/02 2002/03 2003/04 2004/05 2005/06Financial Year

R m

illio

n

Adjusted

Utilised

-3

-16

-38-49

35

0.3 2

26

17

-50

-40

-30

-20

-10

0

10

20

30

40

Am

ou

nt

(R m

illio

n)

1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

FINANCIAL YEAR

(OVERSPENDING) / UNDERSPENDING Amount (R million)

Personnel vs. Total Expenditure

55.7%

51.6%

40.0%

36.5%39.0%

41.9%

45.5%

0.3

0.35

0.4

0.45

0.5

0.55

0.6

% P

ers

exp

/ B

ud

get

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

Financial Year

RATIO: PERSONNEL EXP / TOTAL EXP

Second quarter expenditure and projections

Grant Allocation

19.3

37.546.0

86.0 87.2 90.8

184.0

0

50

100

150

200

R m

illio

n

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Financial Year

PROVINCIAL CONDITIONAL GRANT: TRENDS

Free State Own Roads Grant

85.095.0

111.2 106.8

120.0130.0

136.5

0

50

100

150

R m

illio

n

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Financial Year

FREE STATE OWN GRANT: TRENDS

Grants 2004/05: Roads Projects

Provincial Conditional

Grant Budget (DORA & Roll

over)

R 39,978 mil

Utilised:

R39,978 mil•Remainder:

R 0 mil

Completed projects:– Meqheleng access road

• 87 local construction jobs created

• 13,600 man days & 3,766 female days

Projects still continuing:– Oppermansgronde link road

• 101 local construction job opportunities

• 13,310 man days & 5,434 female days

Grant 2004/05: Roads Projects

Provincial own

conditional grant

additional to National Grant

R 91,207 mil

Utilised:R91,207 mil

•Remainder:R 0 mil

Completed projects:– Road planning and design

• 8 Planning, design and systems related projects

– Road contracts• 11 rehabilitation and

maintenance projects through contractors

– Gravel Road rehabilitation• 18 rehabilitation of gravel

road projects with own personnel

Roads Projects Continue

Roll over Flood Funds Plus

Provincial Own grant

R 25,190 mil

Utilised:

R24,280 mil•Remainder:

R 0,91 mil

Completed 55 projects of between R0,15 mil and R0,50 mil each.

Projects still continuing:– Road signs contractor did

not supply on time.

Development of SMME’s

16 SMME’s trained in 2003 in Smithfield to build bridge and kerbing

TRAINING

On site survey training

Classroom training

Practical training

Successful SMME’s continued in 2004 in Oppermansgronde to build streets.

Development of SMME’s