The following is a speech extract of the address delivered in Western Cape Provincial Parliament on Wednesday 3 December, by Premier Helen Zille.
Mr Deputy Speaker
This year the Department of the Premier will receive substantially more funds than is usually the case. This is because there is a shift of approximately R300 million from the Provincial Treasury in the Adjusted Estimates.
This R300 million for Broadband presents a significant challenge for the Department of the Premier. I draw the Members’ attention to the fact that the majority of these funds will not be spent in the current financial year. This is likely to result in underspending of approximately 20 per cent of the adjusted budget of the Department at the end of the 2014/15 financial year.
The reasons for this anticipated underspending are the following: Firstly, the Broadband tender process was delayed by almost a year when SITA allowed the tender to lapse and we were forced to start the process from scratch.
Secondly, as part of the contract negotiations we secured agreement from our partners that an up-front — or mobilisation payment — would not be required. This means that the Department will only be paying for services that have been rendered, which constitutes a significant advantage to the WCG in terms of risk management, but it means that this amount, which had been budgeted for, will not be spent during this financial year.
In the private sector, such savings are good news, in the public sector savings are criticised as “bad planning” or “underspending”, but it is one of those “no-win” situations in which I am happy to find myself.
For the benefit of those members who are not in the Standing Committee, the Department of the Premier presented a progress report on Broadband to the Standing Committee on 26 August 2014. Mr Joemat and Mr Williams reported that SITA’s Board made a recommendation on the tender only on 26 March 2014, on the eve of the new financial year. Shortly after that the Minister of Finance in the Province gave the necessary approval to allow for a long-term budget for Broadband which extended beyond the 3-year Medium Term Expenditure Framework period. Budget has been secured for the next ten years.
Contract negotiations proceeded in mid-April and the Master Services Agreement – between SITA and Neotel – was signed on 20 June while the Back to Back Agreement – between SITA and the Western Cape Government – was signed on 31 July. These contracts have been made available to the Standing Committee.
In terms of these contracts, Neotel has commenced with site surveys and the first set of sites (including 350 schools) will be connected by June 2015 if all goes according to plan. Half of all the required sites we hope to have connected by September 2015 and all sites will be connected by December 2016. A total of 1 997 sites will be connected, which includes 1 286 schools, 298 healthcare facilities and 413 other government offices.
So, although Broadband is on track (the plans for Broadband have been agreed to, the budget and the contracts are in place and implementation is underway), I am making Members aware of the fact that the majority of the R300 million that will be transferred to the Department in the adjustments process is likely to be rolled over to the next financial year.
The remaining shifts have a cumulative effect of a R20 million shift towards the Department of the Premier. Most of these shifts relate to the work of Centre for e-Innovation, in its role as IT service provider to all the provincial departments.
A shift of R10 million is being made from the Department of Cultural Affairs and Sport for CeI to procure storage space for the MyContent electronic document management system. Funds will also be received from the Department of Transport and Public Works for network cabling and ICT infrastructure. R2 million is being transferred to Education for the acquisition of tablets for the MOD Centres.
The Behavioural Economics Project in the Department will receive R414 000 from the Department of Community Safety for a pilot project. Funding is being made available to the Department of Community Safety to pilot the Community Safety Stabilisation Unit, which provides work opportunities for youth at risk; and for training for Law Enforcement Auxiliary Officers to prepare them to participate in the School Safety Programme.
R900 000 is being transferred to the Department of Economic Development and Tourism as the Department of the Premier’s contribution towards the “Lab” process on the province’s economic strategy. The “Lab” process was pioneered in Malaysia, and is used to identify key interventions to unblock a challenging policy area. The Department of the Premier is lending its support to this strategic exercise.
I thank you.