1. Provincial CAPEX and PIG
NCOP
10 May 2006

2. A bit of history Provincial infrastructure grant was introduced to:
Step up spending on CAPEX in provinces
Education, health, roads and later rural and agricultural infrastructure
Spending recovered
Below R3bn in mid 90s to R6bn in 2001/02 and R11,9bn in 2005/06
Spending problem
Underspending and spike in March
Evidence of capacity constraints
Changes in objectives

3. The changes Conditions to address capacity
Introduction of support (IDIP)
Mixed reaction
Withholding and reallocation conditions
Allowing use of a portion of the grant to fund capacity

4. Delays and withholding in 05/06
A total of R746 was withheld
Affected provinces
Limpopo
Gauteng
Mpumalanga
Free State
Northern Cape

5. Process to withhold and reasons
The due process prescribed in DOR Act was followed to the letter
Reasons for delays and withholding
Failure to submit reports
Anticipated underspending
Key point to note
Provincial projections
Timing of withholding

6. PIG allocations, transfers and withholdings: 05/06

7. MIG allocations, transfers expenditure: GP 05/06