Nkwinti budget aimed at curbing overspending, achieving more with less

● This week, the Minister of Water and Sanitation, Gugile Nkwinti, tabled a R15billion budget, despite its inadequacy in the face of historical contractual commitments amounting to billions of rands.

Tabling the department’s 2018-19 budget in parliament, Nkwinti told MPs that the bulk of this year’s budget — some R12.5billion of it — would go towards water infrastructure development, for the building and maintenance of the country’s ageing water infrastructure.

He said that R5.4-billion of this would be transferred directly to municipalities under schedule 5B of the Division of Revenue Act, for the Water Services Infrastructure Grant.

“At the same time, R3.5-billion will go to municipalities that are in distress and that don’t have the necessary resources and capacity to implement water infrastructure projects on their own.”

Almost R500-million has also been put aside for water regulation — funding which will allow the department and its stakeholders to enforce water restrictions and bring to book those responsible for wasting or hoarding the nation’s precious resource. Some R900-million will be used for water planning and information management.

Nkwinti said the department would, during this financial year, reprioritise and streamline its spending to align it with its annual performance plans, with a view to reducing unauthorised, irregular, fruitless and wasteful expenditure.

“The department has a preliminary figure of R1.8-billion of accruals from the previous financial year, which could not be paid in the previous year due to insufficient funds. This will have a carry-through effect in the current year as it will require the current year’s budget to be used to pay the accruals instead of utilising it for all the activities that are outlined in our annual performance plan,” Nkwinti said.

A matter of concern to the minister was “that, in certain instances, contracts without a value have been entered into, and these pose difficulties in accurately budgeting for them, which leaves the department vulnerable”.

One such contract, Nkwinti said, was the bucket-toilet-eradication programme that “has historically caused unauthorised expenditure by overspending”.

The programme, in part, contributed to some of the R292-million overspending reported in the sanitation programme in the 2016-17 financial year.

In a move aimed at saving the department millions of rands annually, “the formation of a state-controlled construction company will be fast-tracked”.

Nkwinti said the state would own 51% of this company while historically disadvantaged individuals would have a 30% shareholding.

The remaining 19% would follow a share equity regime.

“We have decided to reduce construction costs by prioritising the department’s own construction unit for all infrastructure build projects,” the minister said.

Nkwinti emphasised that the department would identify all open-ended contracts with a view to approaching a court of lawto have those contracts declared null and void and to arrest the uncontrolled growth of overspending.

The minister committed the department to working with the National Treasury and the Department of Co-operative Governance and Traditional Affairs to address the problem of billions in municipal grant funding that is irregularly spent by municipalities.

The department will then be required to account for the municipal grant funding that is allocated.