Chairperson, the Select Committee on Appropriations convened hearings on the hospital revitalisation grant, HRG, for the first quarter of the 2010-11 financial year on 4 May 2010, with the focus on the over- and underspending of the grant allocation.
During the deliberations the provincial department of health raised a number of challenges that contributed to the underspending of the HRG allocation, among other things, the appointment, by the provincial departments of public works, of underperforming contractors, poor construction work by contractors and late payment of contractors.
The committee resolved that the national and provincial Departments of Health and Public Works should be invited when the committee conducts hearings on the HRG. The national Department of Health and the nine provincial health departments were in attendance.
However, the national Department of Public Works could not honour the invitation. The National Treasury presented expenditure figures as at 30 June 2010.
Key findings of the committee were as follows: As at 30 June 2010, the National Treasury reported that only 20,8% or R835,9 million was spent of the total main budgeted amount of R4 billion for the 2010-11 financial year; actual expenditure trends within some provinces remain below quarterly target benchmarks; and there are already indications in the second quarter that the HRG budget will be underspent by R1,6 billion at the end of the 2010-11 financial year.
The committee has observed little improvement by provinces in alleviating the expenditure challenges. The same challenges reported in previous hearings continue to persist in some provinces.
The committee came to the following conclusions: Some service providers provide poor quality work and perform poorly because they do not have the necessary competencies for managing projects of this nature; the termination of underperforming contractors results in project delays; inadequate norms and standards or enforcement thereof also result in poor quality work, and this also fosters a negative perception about government's commitment to improving health infrastructure. [Interjections.]