VAT increase sets Public Works back
THURSDAY MARCH 15 2018 THE one percentage point increase in VAT has set the Western Cape Transport and Public Works Department back by R51 million, further straining fiscal resources to maintain and build new schools and government facilities. Passenger rail services, which have fallen flat in recent months, have also added to the department’s woes.
Provincial Transport and Public Works MEC Donald Grant said the VAT increase would negatively affect the procurement of construction contracts.
“This VAT has affected us so badly. Added to that the water crisis has further compounded our problems. Municipalities across the province have increased their rates and levies to make up for the loss of water sales and reduced water consumption. We are responsible for provincial buildings (schools and hospitals) in municipal areas and pay the rates, while water and electricity are covered by schools.”
Jacqueline Gooch, head of the department, said the drought made matters difficult as the department could not plan ahead.
“We are going through a process of the new normal, but we don’t know what the future holds. We are trying our best to maintain the infrastructure we have now. We are looking at alternatives, but something that is cheap won’t necessarily last as long,” she said.
ANC MPL Nomi Nkondlo said the in-migration of learners had added additional learners to the education system.
“There surely has been an increase in learners at schools. There has also been the issue of school maintenance and the upgrades of existing schools.”
Gooch said there was an international benchmark where 2% of the property’s current replacement value was allocated for maintenance.
“We have a system that assesses the infrastructure every five years. Now this could go down to a burglar bar being replaced or even the replacement of the roof structures. In terms of new infrastructure, we present the plan for health and education to the Treasury for approval. Our budgets as you are aware don’t stretch enough for maintenance and refurbishments. There are for example more than 1 000 schools. The province simply can’t get to everything because the money is not there,” Gooch said.
DA MPL Masizole Mnqasela welcomed the department’s allocation for upgrades and refurbishments, but emphasised that it was not enough.
The department has budgeted R2.1 billion for refurbishments, just more than R382m for upgrades and close to R987m for maintenance and repairs. The amount applies to existing infrastructure assets.
ANC MPL Cameron Dugmore raised concerns about the sale of the Tafelberg Site in Sea Point and the construction of a housing development on the old Conradie Hospital site in Pinelands.
Gooch said the legal matter involving the Tafelberg site is ongoing, while the department plans to have a sod-turning for the Pinelands development before the end of the year.