Concerns raised over Gauteng infrastructure agency’s underspending

17th June 2021

By: Marleny Arnoldi

Deputy Editor Online

     

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The Gauteng Provincial Treasury (GPT) has announced an increase in the transfer of funds to the Gauteng Infrastructure Financing Agency (Gifa) from R64-million in the 2021/22 financial year to R65.4-million in the 2023/24 financial year.

The increase in allocation is aimed at ensuring a sustainable pipeline of strategic infrastructure projects that are catalysts for socioeconomic development in the province.

The Finance Portfolio Committee noted the allocation but says it is concerned about the continued funding of Gifa in view of the latter struggling to perform on its core mandates, with most projects struggling to reach their logical conclusion and not yielding positive socioeconomic spin-offs.

The Portfolio Committee is concerned that Gifa seems to perform on administration, but not its core mandates of project development and compliance and structured finance.

Gifa is required to submit a detailed business value proposition highlighting the value it adds in terms of service delivery to the province, and how it intends improving performance relating to its core mandates, to justify its continued funding, by July 15.

As at the end of the fourth quarter of the 2021 financial year, Gifa spent 92% of its total appropriation for the quarter. The provincial treasury reports that the Gifa organisational structure will be finalised during the 2021/22 financial year, which should help in this regard.

Gifa’s project pipeline has increased to at least 35 projects.

“We will continue to develop these projects to a bankable stage to attract private sector funding over the medium-term period,” Gauteng finance and e-government MEC Nomantu Nkomo-Ralehoko said on June 17.

In terms of Gifa’s Kopanong Precinct project, the agency is at an advanced stage of selecting contractors and will finalise this process by end-September, while the agency continues working with national government to obtain approval for the feasibility study of the Sedibeng fresh produce market.

Meanwhile, the Gauteng provincial departments managed to spend R137-billion in the 2020/21 financial year, or 96% of the adjusted budget, to deliver services to citizens.

The provincial government has been able to procure goods and services from 4 478 township suppliers in the financial year, which amounted to more than R3-billion.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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