April 8 2011 
Finance Minister Pravin Gordhan has stopped the  payment of nearly R2,5-billion to the eight ANC-run provinces because  they failed to spend properly money intended for roads, schools and  other vital infrastructure. 
The DA-governed Western Cape is the only exception - it has received 100 percent of its provincial infrastructure grant.   
The DA said this was testimony to  the way the party managed public funds, but the withholding of funds was  “a tragedy” for residents of the other provinces, whose governments had  “let them down”. 
The Treasury’s announcement,  gazetted this week, comes just weeks before the crucial local government  elections are held across the country on May 18. 
Gordhan announced that R2,47bn in payments had been stopped in line with Section 17 of the Division of Revenue Act. 
This section allows the minister  to block transfers to provinces and municipalities if he anticipates  that they “will substantially underspend on that programme or allocation  in the financial year”. 
By the  end of the 2010/11 financial year on March 31, the Northern Cape had  failed to spend R275,4 million, or 46 percent, of its grant, Mpumalanga  (R439,3m) and Free State (R391,2m) 45 percent, Eastern Cape (R502,7m) 25  percent, North West (R194,6m) 20 percent, Limpopo (R261,5m) 15 percent,  and KwaZulu-Natal (R119,8m) 5 percent. The Western Cape alone spent its  entire allocation, of R794,8m. 
The DA’s federal executive  chairman, James Selfe, said yesterday that “the failure of ANC-run  provinces to spend this money” would affect service delivery to the  “poorest of the poor in those provinces”. 
“While this bears testimony to the  DA’s good stewardship of public funds and its ability to deliver  infrastructure-led economic growth, it is a tragedy for residents of  other provinces who are desperate for infrastructure development,  maintenance and service delivery,” Selfe said. 
“Their governments have let them down, and there is no excuse for it.” 
The provincial infrastructure  grants, according to the Treasury, are intended to “help accelerate  construction, maintenance, upgrading and rehabilitation of new and  existing infrastructure in education, roads, health and agriculture...  to maximise job creation” and “enhance capacity to deliver  infrastructure”. 
Treasury spokeswoman Lindani  Mbunyuza said that all provinces had been warned about the looming  problem of underspending, but “only one, the Western Cape, implemented  the corrective measures such that the transfer was released”. 
“The  most critical issues that must be addressed (by the other provinces) are  the obstacles to spending that lead to delays in infrastructure  projects,” Mbunyuza said. 
“The obstacles include poor supply  chain management, poor contract management, ineffective financial  controls and low skills capacity in implementing departments.” 
The Western Cape also  received and spent its full hospital revitalisation community library  services grants, while six provinces lost a combined R452,6m from their  allocations for hospitals and five have to return R50,2m left from their  libraries grants to the Treasury. 
In the Western Cape, former  premier Lynne Brown (ANC) said instead of showing only that the  allocation was being spent, the DA had to show where this money was  being used. 
Cope Western Cape chairman Mbulelo  Ncedana said although financial management in the province had improved  under the DA administration, this was no proof that it was delivering  to poorer communities. 
http://www.iol.co.za/news/south-africa/western-cape/anc-run-provinces-lose-r2-5bn-grant-1.1054163
 


 
 






































 
 



