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Tabling of the Adjustment's Appropriation Bill
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Speeches and Media Release
 Provincial Treasury, Economic Affairs, Environment & Tourism

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EASTERN CAPE PROVINCIAL GOVERNMENT
 SPEECH BY  MEC GODONGWANA
 AT THE TABLING OF THE ADJUSTMENT'S APPROPRIATION BILL
ON 12 FEBRUARY 2001


Since the problems were experienced before and including 97/98, our focus and priority as treasury has been to stop excessive over 
expenditure. When one looks back, it is clear that we have achieved that. Of necessity we have got to define new priorities. In this 
current financial year, we have concentrated on efficient and cost effective service delivery. The ring fenced amounts must be seen as part 
of that strategy. Another part of that strategy is to correct the distorted baseline of the economic cluster departments.

Honourable members will recall that towards the end of 1997, we made huge and substantial cuts from the economic cluster departments to 
fund social services, that in turn distorted the baseline. In the budget speech we set aside an amount of R249 million as ring fenced and 
targeted expenditure to achieve certain policy priorities. This was an important starting point in ensuring a planned, efficient and cost 
effective way of service delivery. Without doubt, there have been problems in the development of plans, which were a prerequisite for 
disbursement of funds. We have learnt important lessons and in the next financial year we will continue to have targeted expenditure in 
line with policy priorities. We will not use the same methodology of ring fencing as we believe that Section 43 of the Public Finance 
Management Act provides us with the guarantee that funds will only be used for the intended purposes.

The proposed additional adjustment estimate we present today amounts to R728 million. The major sources of funding are coming from national 
Treasury and national departments. It includes amounts of R80 million, R112 million and R104 million for improvement of conditions of 
service, 13th cheque for a the period January to March and other spending pressures. There has also been a grant of R90 million to meet the 
disaster related expenses. The province has also made a roll over R151 million coming from unspent funds of the previous year.

We also budgeted R300 million for social security class action, and we expect to spend about R10,4 million by the end of this financial 
year. The R35 million ring fenced amount for the outsourcing of social security payments will not be utilized during this current financial 
year.

All these amounts became available for use during this financial year, we have focused on the following areas:

(1) Addressing the cost pressures

An additional amount of R100 million was made available for hospital stores during the course of the year to assist the department. In 
addition, an amount of R33 million to meet the department in its fight against HIV/Aids. There may be other cost pressures such as the 
recent outbreak of cholera which the department may have to deal with in the not too distant future. The province still has to grapple with 
debt trap of the previous years. Although there has been a savings from the amounts that were set aside for outstanding pension amounting 
to more that R170 million only R46 million has actually been claimed by the National Pension Fund. The savings from these allocated 
expenses were shifted towards other cost pressures of the province such as in Health, Public Works pressure. We nonetheless, as the 
province, still have to continually fund debts that come out as owing from time to time.

The exercise ( Get the record straight ), which is amongst others to establish the personnel cost of the province in order to know the 
excess personnel. This is a cost pressure to be managed and will have to be funded.

THERE WILL BE NO ROLL OVERS

(2) The second issue that is being dealt with in the Adjustments is improvement in conditions of service.

Honourable members will recall that the budget we tabled at the beginning of the financial year included a 5,5 percent increase in 
conditions of service. The actual settlement at the bargaining chamber was between 6 to 6,5 percent.

(3) Addressing the distorted baseline of economic cluster departments

Within the economic cluster, we have made funds, R19,25 million available to the Department of Transport to build vehicle testing stations 
particularly in Transkei. We have also made funds available to them for the Arrive Alive campaign.

In the Department of Agriculture, we have made provision for them to meet cost pressures as well as to acquire equipment and stores to ease 
pressure on their budget in the next financial year. In this regard, an amount of R64 million was allocated.

The Department of Public Works has been given R22 million to assist them towards infrastructural support. In addition to this R55 million 
has been made available for the Western and Drakensberg District Councils.

By the very nature of the department, it would not be easy to give them money they can use before March 31. This should not be construed 
that government is not serious about roads. This matter is one of the priorities of the government. The Premier will deal with this in 
detail in opening speech on Friday.

The Dwesa-Cwebe community has won a land claim which has transferred the ownership of the Dwesa-Cwebe Reserve to the community. It is 
governments view that this must remain a nature conservation area. In this regard, we have entered into an agreement with the community 
that government will lease the area for 21 years at R100 000 per year, an amount paid to the community trust. We will also be required to 
come up with a conservation management plan and capacity building for the community. The whole amount is paid up front i.e. R2,1 million.

Coega

Mr Speaker, the government has through the President re-affirmed its commitment in a deep water port and a world class Industrial 
Development Zone at Coega.

Portnet will be responsible for the construction of the Port, construction is going to start at the end of this month with the road to be 
used as a haulage. It is their intention that the tender for the marine site and dredging will be out by March and hopefully tenders will 
be awarded in June. Construction will begin immediately thereafter. At the back of the Port, Coega Development Corporation has acquired 
some land and will continue to do so. CDC will also issue tenders for construction of the bridge on the N2, some minor roads in the IDZ, 
reticulation infrastructure, this tender will be out in April, hopefully awarded in May and construction to start soon thereafter. CDC will 
get R40 million in these adjustments in order to continue with this ernomous task.

Honourable Speaker, we hope that these efforts, the national initiatives announced by the President last Friday and the budget we are going 
to table on March 2, will stimulate the economy of the Eastern Cape and begin to make an impact on the lives of our people in particular 
the rural poor.

In conclusion Mr Speaker, it is important to state that any virements made from programme to programme after today will not be legal as all 
the virements of the year have been covered in these estimates.

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