Cape Town – Government is developing a capital budget framework with the aim of improving its project management skills, planning and capacity shortfalls within the public sector, the National Treasury said on Wednesday.
This comes after concerns that the roll-out of capital projects was often delayed or that government departments found themselves spending more than what was initially budgeted for.
“A capital budgeting framework that addresses the planning, skills and capacity shortfalls across the public sector is being developed.
“Over the medium term, the emphasis will be on improving spending efficiency within existing budgets, with a greater share of funds directed to improving asset management and maintenance.
“The development of a strong capital project planning and appraisal system will also enable government to adjust expenditure plans where financially viable projects with clear social or economic benefits have been identified,” the National Treasury said.
The National Treasury said the framework, in the main, was to improve government’s project management spending with an aim of curbing wastage and to ensure that projects are completed with the amount it was initially budgeted for.
“By entrenching the principle of intergenerational equity, government ensures that current social programmes can be sustained over several decades without a large build-up of debt and the higher tax burden this would impose on future generations.”
The development of the capital budget framework will help government improve its capacity to appraise, select, plan and build capital projects.
The National Treasury said in principle, borrowing to fund investments that generate high returns for national development should not be unduly constrained by the fiscal framework.
This would include borrowing to fund the rehabilitation and the construction of roads, rail networks, schools and hospitals.
It said that there was a room for improvement as far as project management was concerned.
“While coordination and oversight has improved, further work is required to develop institutions that can deliver technically sound cost-benefit analyses, enabling government to choose projects and assess their returns.”
The announcement by the National Treasury comes after government’s recent move to provide municipalities with technical support to manage major infrastructure projects.
The Governance and Administration Cluster announced last month that Municipal Infrastructure Support Agency (MISA) continued to provide technical support to municipalities, with approximately 50 engineers and town planners providing support to 120 municipalities.
The cluster said the personnel have been providing technical support to municipalities with infrastructure planning, implementation, operation and/or maintenance of municipal infrastructure.
This also included about 600 young graduates, apprentices and experiential learners, who were all dispatched to various municipalities.
In 2013, government introduced a new incentive system for provincial health and education infrastructure grants, leading to an improvement in asset management.
The National Treasury said incentives will be expanded to reward performance in project implementation and in the appointment of suitably qualified personnel to key infrastructure posts. Infrastructure grants to local government have been reviewed and will be adjusted to encourage asset management over the full design life of facilities.
“Similarly, greater emphasis will be placed on managing municipal infrastructure over its entire life cycle, with grant funds made available for refurbishment.
“New Treasury Regulations that come into effect in April 2016 include a compulsory standard for infrastructure procurement and delivery management,” the National Treasury said. – SAnews.gov.za
