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Thousands of jobs are on the line due to continued rolling blackouts and investor uncertainty

Thousands of jobs are currently at risk in Gauteng due to the continued implementation of rolling blackouts by State Owned Entity (SOE) Eskom. This is having a negative impact on the economy and possible investment opportunities by the private sector, particularly from international investors.

The Gauteng Infrastructure Agency (GIFA) which is tasked with seeking investment opportunities from the private sector will have an even more difficult time doing so because of the unstable electricity grid.

Projects like the Sedibeng Fresh Produce Market has the potential of creating at least 4000 jobs, while the Merafong Bio-Energy Project has the potential of creating at least 8000 jobs with the help of private investors.

Given the current unemployment rate in the province which currently stands at 36.7%, the unstable power grid will only add to the number of people who find themselves unemployed because businesses are unable to trade for between six and eight hours a day.

The Democratic Alliance (DA) will continue to demand that the Gauteng Provincial Government, under the leadership of Premier David Makhura, assists municipalities to procure additional electricity from Independent Power Producers (IPPs).

This is the only way in which the wheels of the economy can continue to turn with minimal interruption. Should this trend of rolling blackouts continue, it means that our economy will not be able to grow, and employment opportunities will become non-existent causing our unemployment rate in the province to soar.

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Residents denied their service delivery with GIFA just another cash cow for Gauteng Government

The Democratic Alliance (DA) is deeply concerned that the Gauteng Infrastructure Financing Agency (GIFA) is not capable of assisting municipalities in sourcing funding needed to complete important projects that will improve service delivery, such as water and electricity stability, and create job opportunities for the residents of Gauteng.

During a recent presentation to the Gauteng Finance Portfolio Committee, it was revealed that the affordability in municipalities where these projects are to be undertaken, where GIFA is only able to provide technical advice to municipalities and assist with feasibility studies, while funding such projects remains a very problematic issue.

According to the presentation, two projects that are supposed to be completed include the Tshwane Alternative Waste Treatment Technology project which was initiated in 2016, and the Sedibeng Government Accommodation, which was initiated in 2014. However, these municipalities have indicated that funding remains a challenge. It is clear that projects undertaken by GIFA take a long time to get off the ground and be completed.

A prime example of this is the Ekurhuleni Waste to Energy project. The project was initiated in 2015 when the Waste Management Department wrote a letter to GIFA, requesting financial assistance for a feasibility study into Alternative Waste Treatment Technologies. In 2018 it appears as if GIFA stopped communicating with the municipality on this and only picked up on it again in 2021.

It is clear that GIFA is just another entity created by the Gauteng Provincial Government to waste taxpayers’ money as it is unable to provide value for money and takes close to seven years before any project gets off the ground. These projects should be directly administered by the municipalities, and not through GIFA.

Furthermore, the DA believes that this entity should be integrated into the Gauteng Department of Infrastructure Development and Property Management, as this department already provides the infrastructure needed to government departments. These are the same sentiments held by all the members of the Finance Portfolio Committee, yet the MEC for Finance, Nomantu-Nkomo-Ralehoko indicated that this will not happen.

A DA provincial government would ensure that municipalities across the province would be equipped to manage and complete these projects on their own, so that residents do not have to suffer, waiting on bureaucratic red tape to get the services they deserve.

Local Government Elections are coming up in 2021! Visit check.da.org.za to check your voter registration status.

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GIFA withdraws from controversial Lesedi Aerodrome Project

The Democratic Alliance (DA) has learnt that the Gauteng Infrastructure Financing Agency (GIFA) has now withdrawn from the Lesedi Aerodrome Project, although they have signed a MOU with Lesedi for this project in 2019.

The information was revealed during a recent Finance Portfolio Committee meeting by the CEO of GIFA, Oupa Seabe.

According to the CEO, GIFA was dealing with the Lesedi Aerodrome Project but when the Lesedi Local Municipality advertised the project with flimsy terms of references, the GIFA withdrew. Further to this, the CEO also indicated that this was irregular and the GIFA did not want to be part of it because they knew it would result in a bad product.

Listen to the clip here: https://press-admin.voteda.org/wp-content/uploads/2021/02/OUPA-SEABE.mp3

This is a concerning revelation as it means that the entire Aerodrome project is illegal, considering the Lesedi Local Municipality decided to defy the council resolution on the Memorandum of Understanding with the GIFA.

In addition, the municipality did not follow the Public Private Partnership regulations as set out by National Treasury. No transaction advisor was appointed nor registered for the project with National Treasury. The views of National Treasury were also not solicited for this project.

No feasibility studies as required have been conducted for this project, but a 60-year lease has already been awarded to MTP Aviation Solutions who received a letter via WhatsApp to inform them that they have been successful in tendering for this project.

If the project was “disposed of” via the Municipal Transfer Regulation process, then the process is just as flawed, since only seven of the eight requirements of these regulations’ requirements have been met thus far, yet the project was already handed over to MTP during a function on Friday 12 February 2021.

For any Municipal property transfer contract exceeding 10-years, and Notarial Contract is required, and the Council must approve of such draft agreement. To date no such draft agreement has served before Council either.

I have already tabled written questions in the Gauteng Provincial Legislature to the MEC for Finance regarding the Lesedi Aerodrome Project. It is unacceptable that a R7 billion project will not benefit the Lesedi Local Municipality but only some politically-connected individuals.

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Lesedi Municipality advertises for bidders for aerodrome project despite project being handed over to GIFA

The Democratic Alliance (DA) in Gauteng notes with concern, that despite the Heidelberg Aerodrome Project being handed over to the Gauteng Infrastructure Finance Agency (GIFA), the Lesedi Municipality has gone ahead and put out a tender for the project.

In an advertisement placed in the City Press Newspaper on 11 October 2020, the municipality put out a tender calling for proposals for the design, planning, development and management of the Aerodrome to the value of R80 million.

In a reply to written questions tabled in the Gauteng Provincial Legislature (GPL), the MEC for Finance and e-Government, Nomantu Nkomo-Ralehoko indicated that GIFA was not involved in the issuing of the tender and referred the question as to why this tender was issued back to the municipality.

It is concerning that the municipality has gone ahead and advertised for proposals for the Aerodrome when the process for the procurement for this project was legally handed over to GIFA through a resolution of Council.

It would appear that despite this being done, this government entity and the municipality does not know what the other is doing when it comes to this project.

Furthermore, no budget has been set aside for this project as a feasibility study must still be completed according to the MEC.

This parallel process of obtaining proposals for the development of the Aerodrome by the municipality is wrong and is a waste of taxpayers’ money, considering that another entity has been given the mandate to run the project.

In addition, the DA has always maintained that municipalities should not rely on GIFA to run their projects as this entity has a history of not completing projects on time. Projects like this should be run by the municipality.

However, we cannot have a situation where a project has been handed over to GIFA but is still being advertised by the municipality for possible bidders as this is a duplication of services.

I will be tabling further questions through the municipality to ascertain what informed this process, who has paid for the placement of the advert and why there is a parallel process being run.

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DA opposes bloated GP budget

The DA notes that the Gauteng Legislature portfolio committee on Finance is unanimous in its criticism of the Gauteng Infrastructure Funding Agency (GIFA) .
We have criticised GIFA in the past and nothing has changed to change our standpoint that, as an agency, it is expensive and provides no meaningful value-add when compared to say, going to the DBSA and getting a loan.

In the last quarterly report, the agency gloated about achieving its targets, but in truth it achieved targets that had been missed in the quarter before.
The report of the Portfolio Committee says:
“Since 2017/18 FY GIFA planned to release 2 projects to the market, on the contrary no project has ever been released to the market to date”

What are they doing? In that same period, we paid this agency about R200m! In the same report the committee said that it was concerned about the lengthy process for GIFA projects to reach the implementation stage and wondered if GIFA’s feasibility studies were credible, hence they do not elicit interest from investors.

The committee report says further:
“The Portfolio Committee further noted with concern that despite funding of projects through alternative funding being one of GIFA’s mandates, such funding has not been forthcoming”
I would point out that your provincial government has paid out over R600m to this agency since its original inception. In that time, what was the value of infrastructure projects financed through the efforts of this agency? A billion? 2 billion?

When you measure the cost of this agency’s work relative to the financing of the projects it should be no greater than 0,5%. What has been the cost of this agency? 10%? Probably more than 30%!
This agency costs too much! The Committee says shut it down! Yet we are budgeting another R68.8 million for its existence.

The Treasury is responsible for addressing billions of rands worth of accruals. But the lack of consequence management from the Premier and his Executive Council regarding failure to do simple paperwork to get people paid, especially in the Department of Health means that these costs will continue to inflate the cost of service delivery by the Gauteng provincial government.

It is safe to say that the cost of government in Gauteng is bloated beyond what it could be and should be. GIFA and accruals are evidence of this.

The residents of Gauteng are paying for the costs of this bloated government. Hence, we cannot support this budget.

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DA Gauteng Debates 2016/17 Treasury Budget

Speech by: Adriana Randall

“Realistic plans needed to reduce fiscal drain in Gauteng”

  • We need real spending cuts, rather than cost containment measures. The emphasis is on the appropriate management of fiscal risk, strengthening fiscal consolidation and to enable government to be responsive in dealing with unforeseen and unaffordable expenditure.
  • New appointments must be subject to clear human resource plans with lower budgets.
  • Provincial entities with duplicate functions must be rationalized as far as possible as many of these agencies duplicate functions and services at national level.
  • Let’s agree that realistic plans, and the effective execution is now of great importance and that this budget must be all about growth – sustainable growth, inclusive growth and smart growth

The full speech can be obtained here.

 

Speech by: Mike Moriarty

“Treasury’s pedestrian approach to project implementation” 

  • The Treasury describes itself as an “activist” treasury, that may be true, but one area that remains arguably “pedestrian” rather than activist is in the matter of Public Private Partnerships.
  • The greater number of projects financed off balance sheet is undertaken by GIFA, so perhaps it will be argued that the outcomes will be found there, but there ought to be some measurable objective of this “specialised PPP capacity”.
  • It is not as if there are no infrastructural backlogs: 4 hospitals are overdue for delivery and an undefined number of clinics need to be built; there are about 100 schools that need to be built to meet the demand; and of course there is the long-awaited Kopanong Precinct.
  • The World Bank maintains a Private Participation in Infrastructure database. This showcases over 6400 public infrastructure projects, mostly in 139 low and middle income countries. These include Kenya, Tanzania, India and Vietnam.

The full speech can be obtained here.

 

Media Enquiries:

Adriana Randall MPL

DA Gauteng Shadow MEC on Finance

060 556 4342

 

Mike Moriarty, MPL

DA Gauteng Spokesperson on Finance

082 492 4410

[Image source]

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Budget Vote Speeches: Gauteng Provincial Treasury

Note to editors: The following speeches were delivered in the Gauteng Provincial Legislature today by the DA’s Spokesperson for Treasury, Adrianna Randall MPL and DA Gauteng Shadow MEC for Finance, Mike Moriarty  MPL, during the 2015/16 Annual Budget Debate on the Gauteng Provincial Treasury.

 

Gauteng Treasury has much to do to implement government programmes

Speech by: Adrianna Randall MPL – DA Gauteng Spokesperson for Finance

Speech highlights:

  • The budget for the Provincial Treasury should reflect government programmes and project resource allocation priorities to serve the needs of the people.
  • Treasury should proactively plan and implement these programmes, to circumvent the surrender of funds to the Provincial Revenue Fund.
  • However, the province’s economic growth is slowing down and unemployment is at the highest level in 12 years.
  • Treasury must ensure that municipalities follow sound financial management practices, and support and build capacity.

The full speech can be obtained here

 

 

Build more opportunities through partnerships

Speech by: Mike Moriarty MPL – DA Gauteng Shadow MEC for Finance

Speech highlights:

  • In the past 6 years I have been a committed critic of the predecessors of GIFA and the ineffective work of the Treasury itself in respect of Public Private Partnerships to fund infrastructure development projects
  • However, if managed properly, PPPs will improve public infrastructure, service delivery and projects will be delivered with greater efficiency and save taxpayers money.
  • Currently there exist greater impediments in the form of National Treasury regulations, which became necessary to avoid corruption
  • We really need alternative ways to stop corruption in public projects.
  • This will require political will, and as a consequence the people of Gauteng will reap the rewards of delivery, jobs and dignity.
  • The signs so far have been positive but there is still some way to go.

The full speech can be obtained here

 

 

Media enquiries:

Adriana Randall MPL

DA Gauteng Spokesperson on Treasury

060 556 4342

 

Mike Moriarty MPL

DA Gauteng Shadow MEC for Finance

082 492 4410

[Image source]