1. 1 Public hearing on conditional grants and capital expenditure: 3rd quarter Presentation to Select Committee on Finance Northern Cape’s Department of Agriculture and Land Reform 19 February 2007

2. 2 Overview Equitable share versus Conditional Grant allocation 3rd quarter expenditure on conditional grants Conditional grant spending vs. cash allocation Conditional Grant expenditure Jan 2007 Expenditure trends per month Situation analysis on conditional grants Monitoring and Evaluation Challenges for conditional grants Plans to improve delivery on conditional grants

3. 3 Trends: equitable share versus conditional grant allocation SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS 05/0606/07Increase% increase Equitable Share97,002103,6646,6627% Conditional Grants18,32024,7826,46235% 115,322128,44613,12411%

4. 4 3rd quarter expenditure – Conditional Grants Conditional Grant2006/2007 allocation BudgetActual% CASP22,49612,46055% LAND CARE8,0236,01975% PIG4,8082,63255% TOTAL35,32721,11160%

5. 5 Conditional Grant spending versus cash allocation Conditional Grant3rd quarter allocation Cash receivedActual spent% CASP12,62212,46099% LAND CARE4,6296,019130% PIG 1,6112,632 163% TOTAL18,86221,111112%

6. 6 End January 2007 expenditure – Conditional Grants Conditional Grant2006/2007 allocation BudgetActual% CASP22,49615,55969% LAND CARE8,0236,62683% PIG4808279758% TOTAL35,32724,98271%

7. 7 Expenditure trends per month Conditional GrantAprilMayJuneJulyAugSepOctNovDecJanTotal CASP8201826320280977316607373632269310015559 LAND CARE12732381080344536958104213766076626 PIG0063111848873720212481652797 TOTAL9472,1504,0751,6241,0013,0841,7321,6074,8933,87224,982

8. 8 Situation Analysis - CASP Situation analysis  28 projects implemented during 2005/6 with a budget of R 13,148m Struggled to complete all projects and thus requested R6,719 m rollover  Only 12 new projects approved for 2006/7 with budget of R15,777 m  Officials concentrated on completing projects remaining from 2005/6 and implementing new projects for 2006/7 Expenditure 3rd quarter  The total transfer received from National to Province by the third quarter is R 12,622 million and R12,460m actual expenditure as at end December ’06.  99% of the transfer received was spent

9. 9 Situation Analysis – Land Care Situation analysis  15 projects implemented during 2005/6 with a budget of R2,000 m Requested rollover of R1,873 m  15 projects approved for 2006/7 with a budget of R5,785 m Expenditure  R 4,629 m transferred from National to Province by the 3rd quarter and R 6,019 m actual expenditure as at end Dec ’06. 130% of transfer received was spent Issues requiring on-going attention  Monitoring of the implementation phase  Conflict management within communities/project beneficiaries  All projects tenders already advertised  Project schedule still on track

10. 10 Situation Analysis - PIG Situation analysis  8 projects implemented during 2005/6 with a budget of R3,172  R1,588 requested for roll over  5 projects approved for 2006/7 Expenditure  Transfer from National to Province by 3rd quarter is R1,611  R2,632 m actual expenditure as at end December ’06.  163% of the transfer received was spent Issues requiring on-going attention  PIG projects in tendering phase during 1st quarter  Implementation only in 2nd and 3rd quarter

11. 11 Monitoring and Evaluation Senior management evaluates expenditure monthly Project Coordinating Committee established and meetings held quarterly  Assesses project proposals  Recommends for approval  Assesses and evaluates progress

12. 12 Challenges for conditional grants Same officials have to implement new projects and provide after-care at the same time More demands by other land reform beneficiaries especially the more they see implementation and changes in the neighbouring approved projects or communities Credit facilities for BEE contractors problematic thus a delay in delivery of material and other services Some of the suppliers do not deliver material on the agreed timeframes and that delays payment Some of the companies experience cash flow problems during the course of completing a project

13. 13 Plans to improve delivery on conditional grants Conditional Grant Spent by February 15th Projection February 28 th Projection March 15th Projection March 27 th Total Projections CASP7562,5002,7449376,181 LAND CARE267700 430 1,130 PIG235889887 1,776 TOTAL1,2584,0894,0619379,087  2006/7 projects  Ensure that 2006/7 projects are implemented according to plans  Not to allow any roll-overs from 2006/7  Monitor and assess implementation through

14. 14 Plans to improve delivery on conditional grants Monthly review of expenditure Holding quarterly reviews with project leaders Senior managers visiting projects regularly to monitor progress 2007/8 projects  Completed business plans for 2007/8 projects by end of September 2006  Advertise tenders between Jan-March 2007  Start implementing as of April 2007

15. 15 Trends in capital expenditure Programmes for 2006/2007 Main Appropriation R'000 3rd quarter spending R'000% spent Administration260664255% Sustainable Resource Management8053249431% Equitable301757% Conditional Grants8,0232477 31% Farmer Support and Development28,4191232743% Equitable1,1151,406126% Conditional Grants27,3041092140% Veterinary Services111286258% Technological Research and Development190203107% Agricultural Economics3100.00% Total37,0641597443%

16. 16 Solar Power for Stock Watering

17. 17

18. 18 Sub surface Drainage Installation

19. 19 Sub surface Drainage Installation

20. 20 Soil Conservation

21. 21 THANK YOU