Water and Sanitation Minister Gugile Nkwinti says an urgent intervention is required to re-align project management and planning with the department’s available budget.
The Minister said this when he tabled the department’s Budget Vote speech in the National Assembly on Tuesday.
“Urgent intervention is required in our project management as well as contract management to ensure that the project planning is aligned with the available budget and to prevent our projects from being ahead of the available budget,” he said.
Nkwinti’s words come amid concerns that the department was faced with historical contractual commitments that were not budgeted for.
He said the preliminary commitments for which contracts have been signed and service providers are currently rendering services amounting to R7.5 billion, of which R6.3 billion is for infrastructure projects and R1.1 billion has been set aside for operational goods and services.
“Of this figure, R2 billion is expected to be paid to the service providers in the current financial year.
“We have also noted with concern that in certain instances, contracts without a value have been entered into, and these pose difficulty in accurately budgeting for them, which leaves the department vulnerable.”
Nkwinti also said the department’s bucket eradication programme falls into this category, and this has historically caused unauthorised expenditure caused by overspending in the bucket eradication programme.
“Poor project management within the department has created a situation whereby service providers are accelerating the work at a much faster pace than what the department had budgeted for.
“A typical example is our project in Giyani which was initially planned to be completed over 5 years; and, was budgeted for accordingly.
“However, the work was accelerated and completed within a two and a half year period.
“There is poor alignment between the budget and the project milestones; and, in certain instances, the project milestones are much ahead of the budget,” he said.
Nkwinti said that there were also crucial projects like the War on Leaks, which have not been budgeted for by the department.
Plans to close the tap, achieve more with less
Nkwinti said the department would, in the coming year, implement several interventions to bring stability to the department.
- Reprioritising and streamlining the department’s spend to align it with annual performance plans, with a view of reducing unauthorised, irregular, fruitless and wasteful expenditure;
- Reviewing the department’s delegation of powers with a view of reactivating and rebuilding the construction unit towards the formation of a State-controlled Construction Company;
- Hastening the establishment of the transformation of the Water Trading Entity, into a Water Trading Agency to be located in the Financial Management Services Branch;
- Fast-tracking the establishment of Catchment Management Agencies in the remaining seven regions as well as enforcing the polluter pays principle; and;
- Identifying all open-ended deals and contracts with a view to approaching the courts to have them declared null and void in order to arrest the uncontrolled growth of accruals.
The Minister also said that the department will engage National Treasury and the Department of Cooperative Governance and Traditional Affairs (COGTA) to address the perennial problem of billions of municipal grant funds that are either unspent or irregularly spent, for which the department must account.
“The department is committing to working closer with COGTA to ensure that bulk water projects that were completed in municipalities without reticulation services, are provided with such reticulation in the current financial year,” he said.
Nkwinti also said that all outstanding bulk and reticulation projects from 2007/08 will be prioritised for completion this financial year. He said the department would take disciplinary and other consequence management measures and also engage law enforcement state agencies where such actions are necessary.
He also said that the department would approach Cabinet for condonation of accruals that remain after every measure has been taken to reduce and, ultimately, eliminate them.