February 21, 2006
By Anish Abraham
JOBURG is to get a large slice of the R34,3-billion Gauteng budget pie announced by the MEC for finance and economic affairs, Paul Mashatile, on 21 February at the provincial legislature.
"On 1 March, as we go and vote in the local government elections, we will also mark the end of the first decade of building democratic local government," he said. "As part of our effort to make Gauteng a globally competitive city region, we will continue to strengthen our municipalities to be able to deliver quality services to our people."
In total about R8,7-billion will be allocated to infrastructure spending in municipal areas. Of that, about R6,2-billion, or 71,3 percent, will be set aside to spend in Johannesburg in the 2006-07 financial year.
This amount will decrease to R5,02-billion (60,2 percent) in the 2007-08 financial year and R4,6-billion (54,1 percent) in 2008-09.
Gauteng remains the powerhouse of the country, accounting for over 33 percent of gross domestic product, and continues to sustain a higher economic growth rate than the national average.
"We estimate that in 2006 Gauteng could see a real gross geographic product of well above 5,5 percent, taking us within reach of our target of growing the provincial economy at a rate of 8 percent by 2014," Mashatile said.
This would help in positioning the province as a gateway to the southern African region as well as in becoming a major economic hub on the continent.
Official figures also show that unemployment in the province has declined from 30,4 percent in September 2001 to 22,8 percent in September 2005.
Revenues
Provincial revenues for the 2006-07 financial year are projected at R33,8-billion, with R23,3-billion coming from equitable share transfers, R8,7-billion in conditional grants from the national government and R1,7-billion from its own revenue.
Provincial revenue is derived from driving licences, vehicle licences, gambling and betting taxes, patient fees and other sources.
To increase its own revenue, the province has adjusted motor vehicle licence fees. Miscellaneous fees will rise by an average of 6,6 percent, registration and licence fees of different categories of motor vehicles by an average of 8,5 percent and permits for abnormal motor vehicles and transportation of abnormal loads by between 4,1 percent and 12,5 percent.
Infrastructure spending
In line with the spending trends announced by national Finance Minister Trevor Manuel, the province will also focus much of its spending on improving capital infrastructure.
The provincial government will contribute R172-million to the Alexandra Renewal Project, which aims to improve infrastructure and quality of life of residents in one of the most densely populated parts of the city.
Mashatile reaffirmed Premier Mbhazima Shilowa's comments that the province would spend R3-billion over a three-year period to improve infrastructure in 20 of the province's townships.
In line with this, R20-million will be used in the current financial year to appoint project managers to those developments.
"These programmes are part of the comprehensive plan for the development of sustainable human settlements and will ensure improved living conditions of the residents of those areas," Mashatile said.
To fund its efforts to create a new home within the heart of the inner city, the province will spend R71-million in the current financial year on its Kopanong Precinct.
"Some media have published several estimates as to the cost of the precinct. It is obviously a big project, but one also has to take into account that there will be private sector contributions," he said.
The Gauteng Shared Services Centre is also entering into a partnership with the Gauteng Economic Development Agency to promote the call centre industry in the province.
"We have already partnered with Vodacom to assist the company to locate its call centre of more than 1 000 seats in the CBD of Johannesburg," Mashatile added.
Gautrain
The most radical change in the city by far will be the construction of the
Gautrain Rapid Rail link, which will connect the inner city with Pretoria and Johannesburg International Airport.
The provincial department of public transport, roads and works will be allocated an additional R4,6-billion for the construction of the Gautrain over the current financial year.
Of that, R1,4-billion will come from provincial coffers while R3,2-billion is in the form of a conditional grant from the national government. An amount of R11,5-billion has been allocated over the three-year Medium Term Expenditure Framework budget for the mega project.
Allaying concerns regarding the rise in the cost of the Gautrain, Mashatile said the amount of R20-billion announced by Manuel was a spending cap set by the minister.
The province was in discussions with the national Treasury regarding public sector borrowing, he added. "We estimate we would need to borrow about R4-billion. I say estimate as we are still busy with the financial closure."
The start of construction of the rail link, together with work on the provincial government precinct and stadiums in preparation for the 2010 World Cup, should turn South Africa's number one city into a vastly different place over the next three to four years.
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