Departments of Health, Ppublic Works and Land Affairs Budget briefings

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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

23 May 2005

Mr B Mkhaliphi (ANC)

Documents handed out:
Department of Health briefing: The Hospital Revitalisation Grant
Department of Public Works briefing: Building of Classrooms and the Hospital Revitalisation Programme
Department of Land Affairs budget briefing

The Director-General of Health presented on the Hospital Revitalisation Grant to provide strategic funding to enable provinces to bring hospitals in line with national policy objectives. The Medium-term Expenditure Framework (MTEF) allocation was R1 billion for 2005/2006. Six hospitals had been completed in the last financial year. The programme was facing many challenges, notably problems with the provincial Departments of Public Works and contractors. Issues discussed by the Committee included hospitals in rural areas, and the aforementioned problems.

The Director-General of Public Works then presented that that his Department had no funding role in the building of classrooms and the Hospital Revitalisation Programme. Planning for classrooms had been complicated by the migration of learners between provinces and schools within provinces. The Infrastructure Delivery Improvement Programme (IDIP) had been created to improve provincial education infrastructure delivery. Issues discussed by the Committee included the complex constitutional arrangement of the Department of Public Works, the migration of learners and relationships between departments.

The Department of Land Affairs’ Chief Financial Officer went on to describe their strategy and budget for 2005/2006. The bulk of their budget would go land restitution. More than 20 million hectares of land had to still be ‘delivered’ to meet the government’s target for land reform for 2014. The Chief Land Claims Commissioner then described the progress made in land restitution, measures to speed up the process and challenges. Issues discussed by the Committee included the land occupied by the SA National Defence Force (SANDF), mechanisms to protect farm-dwellers, high land prices, and ensuring that communities were not exploited by housing developers.


Department of Health briefing
Mr Thamsanqu Mseleku, Department Director-General, presented the Hospital Revitalisation Grant to the Committee. The purpose of the grant was to provide strategic funding to enable provinces to bring hospitals in line with national policy objectives. The grant did not only focus on infrastructure, but also health technology, organisational management and development, and the monitoring and evaluation of hospitals.

Their Medium-term Expenditure Framework (MTEF) allocation was R1 billion for 2005/2006, and this would rise to R1.2 billion for 2006/2007.

Provinces should have submitted business cases for their projects to be included in the hospital revitalisation programme. The National Department had appraised all business plans to ensure the strategic plans of provinces and the National Guidelines were adhered to. The methodology of allocation was based on needs and the capacity of provinces to spend their allocations. The allocations were heavily dependent on the quality of information and prioritisation received from provinces.

Three hospitals had been finished, six were to be completed in 2005/2006, and four in 2006/2007. Regarding the expenditure on the grant, Mr Mseleku said that KwaZulu-Natal requested that their allocation be taken back due to a problem with the provincial departments of Public Works. The problem has now been corrected. Extensive rollovers had affected the allocation for the next year.

Challenges included delays in the appointment of contractors and various problems with the provincial departments of Public Works, provincial capacity in revitalisation,and ineffective and unreliable communication.

The Department of Health had created extended capacity through the new Project Management Unit to deal with the Hospital Revitalisation Project. Mr Mseleku thought the full Hospital Revitalisation Project would take ten to twenty years.

Mr T Ralane (ANC) was concerned that the Committee was only dealing with one conditional grant topic. It was costly and the ‘culprits of spending’, the provinces, were not present. He was not sure what they wanted to achieve with the public hearing. They should put their own house in order and improve their planning. The Chairperson had said they dovetail this hearing with the forthcoming hearings. The issue should be dealt with in-house.

Ms L Chikunga (ANC) asked if there was a bias towards urban hospitals, and if they had some guidelines to deal with the matter. Mr Mseleku said the grant was project based. Business cases were then presented by the provinces. It was not envisaged that they would expand the number of hospitals in the Hospital Revitalisation Programme. They considered project by project. It depended on what business case the provinces had made for the hospitals. It was a difficult challenge because they did not have mechanisms to move funds between provinces. Thus the urban richer provinces would be more advantaged and have greater capacity than the rural provinces.

Mr Mseleku was not able to answer why provinces selected particular hospitals. The National Department just gave provinces guidance on how to select projects. The Hospital Revitalisation Programme did not entail the building of new hospitals, but instead revitalising existing ones. The provinces also had to build new hospitals.

Mr M Stephens (UDM) noted the Department’s challenges with concern. He said the culprits were the provincial departments of Public Works. The National Departments were the financiers and the problems could be solved with special measures, but these were not in place. Since the National Department had given the money, they should properly check that the work was done before they paid out. The Committee should be given assurances that there were budgetary control rules. She also asked what mechanisms the Department had to overcome problems such as the shortage of technical staff.

Mr Y Bhamjee asked how ruthless the Department would be to ensure that there would be enough money. He recognised that emerging contractors needed support. Mr Mnguni endorsed Mr Bhamjee’s concerns that at provincial level, funds were not utilised properly, and National Department should take more responsibility.

Mr Mseleku said the National Department could withhold payments to provinces, but they did not want a situation where the provinces could not fulfil their functions because the National Department had withheld funds. It did not mean that the National Department would have to get teams of engineers to oversee projects, but their task was to intervene and support. The mechanism for helping project managers required that institutions appointed an overseer. If the institutions could not do this, the National Department could help.

Mr Bhamjee (ANC) referred to the Estimates of National Expenditure that stated that 30 hospitals were part of the programme in 2004/2005, and this would rise to 59 in 2005/2006. He asked why the figures in the presentation were not the same. Mr Mseleku noted that there was a disjuncture between the nominated projects intended for the financial year, and the actual projects that related to the business cases made. The number of business cases approved was less than the intended thirty cases, as they depended on capacity.

A Member asked the number of outstanding projects. Some in rural areas were not going ahead so these projects had been removed. The Member also asked which hospitals had funding constraints and if the problems in KwaZulu-Natal had been addressed. Mr Mseleku said the problems had been resolved. KwaZulu-Natal had a rollover of R78 million for this year and R100 million for the next year. They had moved away from the Department of Public Works and built capacity internally. The problem had been solved, and the province was comfortable with it.

Department of Public Works briefing
Mr James Maseko, Department Director-General, emphasised that they had no funding role. Provincial Departments of Education and Health budgeted and planned infrastructure expenditure. Provincial Departments of Public Works implemented these plans.

Funding between the provincial Departments of Education, Health and Public Works had arranged cost recovery or the transfer of budgets. The Accounting Officer of the National Department was not responsible for this expenditure. The National Treasury still had to release the final provincial infrastructure expenditure figures for 2004/2005.

The past two financial years had seen 40%of the budget for education infrastructure being spent in the fourth quarter. Most other expenditure happened in April. Similar trends existed in Health. Expenditure was taking off very slowly. There were major issues that had to be resolved. Their data reflected that underspending had not been the most important problem in the previous two financial years.

Planning for classrooms had been complicated by the migration of learners between provinces and schools within in provinces, which meant that some schools were under-utilised and others overpopulated. Problems with the delivery of classrooms had led to the late submission of plans by the provincial Departments of Education to provincial Departments of Public Works, delays in tendering processes, late payment of contractors and inadequate management of contractors.

A joint task team of national Departments of Education and Public Works had been established to improve provincial education infrastructure delivery. This had led to the establishment of the Infrastructure Delivery Improvement Programme (IDIP). This involved the deployment of technical teams to provinces to introduce improved delivery processes and train staff.

In conclusion, Mr Maseko said the IDIP would address both health and educational infrastructure planning and delivery problems. The national Department of Public Works would be working with the national Department of Education to address delivery problems at provincial level, through the Joint Task Team. A similar approach with the national Department of Health was envisaged.

Ms B Dambuza was worried about the complex institutional arrangement of the Department of Public Works. She said the Department was considered one of the ‘engines of service delivery’, but the National Department ‘had no tools’. The Director-General had elaborated about the relationship of the Department of Public Works with the Department of Education; but she was also interested in relations with other departments.

Mr Maseko said the current constitutional arrangements had caused confusion, particularly with the distinction between the roles of the National Department and the Provincial Departments. Ms Dambuza had wanted more information about KwaZulu-Natal, but that Provincial Department could not help her. Mr Maseko said the National Department had a regional office in KwaZulu-Natal where she would be able to get the required information.

Mr Mnguni asked what reports were awaited from Treasury and where they had got the information to plan projects properly. He also asked if the Department had been supposed to set standards for other departments. Why had it taken so long to set up a task team, as the late payments and late plans had been going on for some time?

Mr Maseko said projects were submitted to the provincial departments. The National Department played a role in ensuring that national plans were implemented a provincial level. The payment of contractors was a national problem, as all departments used contractors. The IDIP programme would be looking to solve this problem. Mr Mnguni said they would have to work as a team. He knew there were constitutional arrangements.

Mr Ralane raised the problem of schoolchildren who had to travel far to their schools, and asked how the Department was assisting them. Mr Maseko added that the National Department took an interest in schools and hospitals. The image of the National Department would be tarnished if schools were not built.

The Chairperson said he looked forward to see how the Department would deal with the matter of expenditure towards the end of the financial year.

Department of Land Affairs briefing
Ms C Choane, Department Chief Financial Officer, expanded on their strategies for 2005/2006 within the framework for implementing land and agrarian reform. The bulk of their budget would go land restitution, and the land reform budget had increased substantially.

The government had set itself the target of delivering 30% of commercial agricultural land (about 22 million hectares) by 2014 to black citizens. About 20.6 million hectares should still be delivered at 1.87 million hectares per year to meet the target. The total amount of land delivered since 1994 was 3.5 million hectares. More than a million people had benefited from land reform.

Mr Gwanaya, Chief Land Claims Commissioner, continued that 59 345 restitution claims has been settled from 1999 to 31 March 2005, benefiting 172 769 households and delivering 887 093 hectares. A total of 28 087 claims still had to be settled by 2008/2009. The Land Claims Commission had developed an implementation plan that indicated how the process was to be finalised. The Minister of Finance announced a R6 billion increase in the budget for restitution over the next three years, and 280 posts were created to increase capacity for the processing of claims.

New strategies have been developed to fast-track the processing of claims, such as the grouping of claims, standard settlement offers, outsourcing and the use of interns and seconded officials. The Belgian government had approved 6 million Euros for fast tracking the settlement of claims and a further 6 million Euros for post-settlement support.

The Commission had spent their total budget of R1.18 million during the past year. The original allocation had been depleted in October 2004and an additional allocation of R200 million had been advanced by the National Treasury in January 2005. For the new financial year, the Commission had been allocated a total budget of R2.7 billion. The challenges faced by the Commission include high land prices, unco-operative sellers, and the shortage of state land for redistribution or restitution.

Mr Gwanaya continued that organised agriculture should preferably demonstrate more concrete commitment to land reform, and the culture of respect for the land rights of vulnerable groups should be increased. Technical support and skills development for land reform beneficiaries were critical for sustainable land reform.

In conclusion, Mr Gwanaya said additional resources were required to meet the 30% target for 2014. The Land Summit would help identify areas for policy review, such as the "willing buyer, willing seller" principle.

Mr Ralane asked if the matter of land occupied by the SANDF has been resolved. Mr Gwanaya said that they had had a meeting with the SANDF about Lohatla military base, and agreed that the SANDF would make some land available. The people of Lohatla were ‘up in arms’ because only 30 000 hectares of the required 62 000 hectares would be provided. The Commission was still consulting the SANDF, in whose favour the court had ruled. The Commission was trying to find alternative land outside Lohatla. Madimbo was an example of where the SANDF had made land available. He advised the Commission not to follow the community route when dealing with land reform.

Mr Ralane said there was a big problem in Coffee Bay, Eastern Cape, where developers had set communities against each other. Absentee landlords were not developing these communities and only visited the area in the festive season. Mr Stephens also felt there was a great need to protect communities from developers. Developers took bizarre business plans to communities who did not have the skills to evaluate them properly and convinced them to accept deals from which they would not really benefit.

Mr Gwanaya said the Department had discussed the issue of beach cottage owners with the provincial Departments of Finance. They had a committee to deal this issue. When a community wanted to sell their land, they should consult the Department first that had the right of first refusal. It would be an ‘insult to the land reform programme’ if developers benefited at the cost of the communities.

The Chairperson of the Agriculture and Land Affairs Committee, Mr N Masithela (ANC), asked why the Department preferred acquiring privately owned land, as owners were not co-operating and prices were skyrocketing. He also asked what the Department was doing concerning private land lying fallow.

Mr Gwanaya said high land prices was a serious problem. They insisted that land subsidies received from government were subtracted from the historical cost of land and the improvements made. Some farmers were demanding prices higher than market value. The Commission would insist on the market price and refuse to pay higher as they had the right to expropriate. The problem was that they could end up with a higher price as the Expropriation Act required all the costs of the farmer to be included. Land owned by absentee landlords was also a big challenge. The Commission had given a report to the Minister on the issue. They needed to get a register of land ownership, indicating the race and nationality of the owners, but this plan has met with resistance in the media, who said that it would bring back apartheid’s racial classification. Mr Gwanaya said this would not be the case, as such data was needed for transformation.

Ms Dambuza asked how Department acted when there was not proper consultation with communities regarding land prices, and conflict within communities. She also enquired about the verification of claims and boundaries.

Mr Gwanaya said the issue of boundaries did not affect people’s right of ownership of land. For example in Kokstad, conflict would be resolved through consultation with communities and municipalities.

Ms R Mashigo asked what mechanisms were in place to assist farm-dwellers who increasingly being evicted from farms. Mr Gwanaya said the problem was very dramatic in Limpopo and Mpumalanga. The Labour Tenants Act should have been tied to the Restitution Act. The legislation protected the rights of farm-dwellers and farm-workers. They had 20 000 tenancy claims on KwaZulu-Natal. There were problems between farm-owners, labour tenants and farm-workers, especially when farmers ‘loaded’ payslips for commodities like water and electricity. The SA Police Service (SAPS) had not responded adequately to complaints from communities.

The Chairperson asked how the Department saw the way forward in implementing their budget. Ms Choane said they had a strategy and implementation plan that went into the details of the projects. They were looking at milestones aligned with the claims they were settling. They would provide this information to the Committee as soon as possible.

The meeting was adjourned.


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