Public institutions spent R284 billion on capital projects in 2015/16

31-07-2017
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SABC News
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Figures released by Stats SA show that 722 major public institutions spent R284 billion on capital projects in 2015/16 financial year. These institutions ranged from local municipalities, national departments and State Owned Enterprises like Eskom.

Capital expenditure (Capex) is spending, which results in the assets like power stations, roads and buildings being created or maintained. The total Capex by the public sector is massive and amounts to about 7% of South Africa's total Gross Domestic product (GDP).

The sector that contributed most to total Capex was the 45 Public Corporations (R138-billion). The next largest sectors were municipalities (R66-billion), Provincial Government (R36-billion) and National Government (R18-billion).

Almost half of public sector capital expenditure was by Public Corporations like Transnet, Eskom and water boards. Between them Transnet and Eskom dominate Capex among Public Corporations. These two companies accounted for over three quarters of public corporation Capex.

Almost all (96%) of Eskom's Capex was on new construction. Eskom's Capex thus exceeds that of national, provincial or even municipal government.

Unfortunately neither Transnet nor Eskom received clean audits for their financial management in 2015/16. Both have been called to appear before a parliamentary ad-hoc committee regarding their financial conduct.

Johannesburg Metropolitan Municipality was the largest contributor of Capex by municipalities. Between them the eight metropolitan municipalities dominate Capex in the sector. Collectively they account for 67 percent of all expenditure by municipalities.

The biggest spender among provinces was KwaZulu-Natal. By spending almost R9 billion KwaZulu-Natal accounted for almost one-quarter of total provincial Capex. Half of that expenditure was by the KwaZulu-Natal Department of Transport. Almost of all of this was on new roads in the province.

Nineteen billion rand was spent on capital projects by the National Department of Water Affairs. The department thus accounted for 40% of Capex by national government.

The next largest Capex amount was spent by the South African Police Service (Saps) (R3-billion). In that year none of the Saps capital expenditure was on new construction. This means that almost all of the Capex was on vehicles, equipment and maintenance of existing assets.

Seven billion rand in Capex was by higher education institutions. The single largest expenditure in this sector was by the University of Mpumalanga. That university accounted for a Capex of R771 million. This amounts to 11% of the total Capex in the sector.

Slightly less (R736 million) was spent by the University of Stellenbosch. Of this R575 million was on new construction at US. Although Mpumalanga University is new a greater amount more spent on new construction by Stellenbosch, Witwatersrand, Pretoria and Sol Plaatjie Universities.

Image: The graphic shows capital expenditure by sector and type for the 2016/16 financial year