R900 million budget boost for Limpopo

Provincial Treasury MEC Rob Tooley is expected to table the Medium Term Budget Policy Statement in the Legislature today (Thursday) and in an exclusive interview with Polo­kwane Observer on Tuesday, he highlighted that the Department of Health would get a financial boost of over R300 million as it was reported that it had already overspent its budget due to the high demand of pharmaceuticals.
Although Tooley did not divulge much about the budget adjustments, he made it clear that money to be allocated to various departments and state entities will be managed by his department to ensure that it is used accordingly. He said the additional money they are allocating is from the Provincial Government’s savings and revenue collection and added that the only additional money they are getting from the National Treasury was to fight malaria in the province. The budget will be adjusted by over R900 million with most of the money going to Health.
“When allocating money, we looked at critical departments and entities being the economic sector and health. We have allocated about R300 million to Health to reduce the projection of overspending because our responsibility as Treasury is to prevent overspending. To try and mitigate the overspending the Department of Health is talking about, we are giving them additional money and we will be managing it,” said Tooley.
Great North Transport (GNT) will also get a financial boost as the entity is said to be in an endure state and the bad condition of its buses puts commuters lives at risk. Tooley said the management of GNT has been questionable but it is hoped that with the additional money they will recapitalise. GNT has an enormous responsibility in the province but the additional money comes with a number of terms and conditions. Limpopo Economic Development Agency (Leda) is also on the list to get financial assistance and Tooley emphasised that the money will be used for corridor mining.
“Leda has the mining rights for Dilokong Chrome Mine hence we believe this might be a good business opportunity. We want Leda to became self-funded institution in the next two to three years to allow the current transfers we are giving them to be put into other priorities within the government,” he explained and added that the Legislature will also get additional money.
Third quarter performance
Tooley indicated that so far the performance has been on the straight line basis because around this time departments are expected to have spent 25% to 75% of their budget. “Although we haven’t got the final figures yet, our performance in the first half of the year was around 50%. What is comforting is that our compensation of employees’ budget is in line and we don’t see a lot of pressure. There may be pressure at the Department of Health going forward because it is the only department that is projecting overspending at the moment. The Department of Education was requested to slow down with building projects because they were about to deplete their budget. We were anticipating that we would get more money, however there is none as we are in a tight fiscal space,” he said.
Purchasing of buildings
He said the Executive Council had taken a decision to purchase buildings to save money because in the current administration about R200 million is spent on rent a year hence buying buildings will reduce rent payments. Public Works, Roads and Infrastructure was given R60 million at the beginning of the new financial year to purchase buildings but with reasons known only to the department that has not been done, Tooley stated. He further said they would follow up with newly deployed MEC Nandi Ndalane as to the progress on the process.
Small Micro Enterprise Fund
The Provincial Treasury made a lucrative deal with a certain financial institution which aims to fund contractors who are appointed by the Provincial Government, said Tooley and added that it took two years to establish what is called the Small Micro Enterprise Fund which is driven by the institution to help contractors that are appointed by government with funding.
He said the fund has R300 million but thus far only R1,7 million has been accessed.
Tooley indicated that Limpopo was the only province having such an enterprise and urged contractors to take advantage of it to get the work done on time.
Limpopo Academic Hospital
About the Limpopo Academic Hospital, he indicated that they have done a lot of work to date and a meeting with the service providers, Health Department
and the World Bank was convened to try and understand the sustainable way to run the facility.
He added that they need around R1 billion a year to manage the hospital and highlighted that the Provincial Government does not have the money at this stage.
Tooley outlined that about R3 billion was needed to build the facility and reiterated that the funding was there but the challenge is the running costs of R1 billion for the facility not to become a white elephant in the long run.

Story & photo: ENDY SENYATSI
>>endy@observer.co.za