Govt turns to ConCourt over e-tolling

Pretoria - Finance Minister Pravin Gordhan has, on behalf of the South African Government, applied to the Constitutional Court for leave to appeal against the court interdict stopping e-tolling on Gauteng's roads.

In a statement, Government Communication and Information System (GCIS) said that Gordhan was being supported by the Minister of Transport, the Minister of Water and Environmental Affairs, the Gauteng MEC of Roads and Transport and South African National Roads Agency Limited (SANRAL) in the court bid.

Government was of the view that Justice Prinsloo's judgement was an unprecedented intervention in public finance matters and was a fundamental breach of the division of powers as stipulated in the Constitution, GCIS said.

"At the heart of the dispute in this case, lies a fundamental issue regarding separation of powers and whether or not a Court can exercise discretionary judgement over a governmental policy decision on appropriate funding mechanisms, revenue sources and the allocation of nationally raised revenue," Gordhan says in court papers. 

Government decided in 2007, in terms of provisions of the SANRAL Act and after extensive planning and consultation, to finance the construction and maintenance of an improved Gauteng freeway system through raising debt, to be repaid through open road tolling revenue.

Government contends that it, and not the Opposition to Urban Tolling Alliance or the courts, can decide how to finance the Gauteng Freeway Improvement Project (GFIP). 

Cabinet chose the user pay principle - whereby those who are getting the benefits of the improved road network contribute to meeting its costs - as an equitable way to repay the cost of GFIP, Gordhan points out.

"Citizens who enjoy higher-than-standard infrastructure ought not, as a matter of policy, to be subsidised by others who do not," he says. 

As such, the equitable division of nationally collected revenue between provinces, which is governed by Constitutional principles, would be compromised by a replacement of toll revenue with general government support. 

"Due to uncertainty about the implementation of the toll system, ratings agency Moody's has downgraded SANRAL's rating by two notches, raising the risk of a default and leading some investors to consider selling their SANRAL bonds. 

"SANRAL's cash reserves which include the R5.75 billion received from Treasury, will be depleted by the first quarter of 2013 should e-tolling not go ahead, unless additional transfers are made from the fiscus through higher taxes for road infrastructure." 

Failure to collect tolls raises the risk of SANRAL defaulting on its loans, which would trigger an immediate repayment of the entire loan book of R37.1 billion. 

In such an event, government will be obliged to support SANRAL by repaying the rest of the unguaranteed debt of R14.1 billion, Gordhan adds. 

"Should the guarantee be called, there is a considerable risk of negative consequences for the South African government's capacity to raise funds from capital markets. The credit rating of South Africa would also be impacted on negatively, since SANRAL is a wholly government owned entity," Gordhan says in his affidavit.

SANRAL will also need to show, in its financial statements for year-end 31 March 2012 that its existence over the next 12 months is assured to avoid a qualified audit report. But the Auditor General has indicated he may issue a disclaimer on 31 July 2012 given the uncertainty on when tolling may commence. 

"This could prompt another ratings downgrade," Gordhan adds. 

This uncertainty could hurt the ability of other state-owned enterprises such as Eskom and Transnet to access capital markets jeopardising the implementation of government's wide-scale infrastructure projects. 

To prevent further harm to SANRAL's rating and the company's existence, government has asked the Constitutional Court to hear the matter urgently, in the second half of July 2012. - BuaNews

SA will look to Nigeria for secure oil supply - Motlanthe

Cape Town - With the uncertainty over supply of oil from Iran, South Africa is looking to Nigeria to purchase its oil, the Deputy President Kgalema Motlanthe said, following the signing of a Memorandum of Agreement with the Vice President of Nigeria, Namadi Sambo, on Wednesday.

South Africa may be forced to comply with a US order to cease buying oil from Iran - from which it sources about a quarter of its oil - or risk economic penalties from America. The Minister of Energy Dipuo Peters last week said government would decide on its response to proposed sanctions by the end of this month.

Motlanthe said PetroSA and private traders were expected to look at supply agreements for oil from Nigeria.

"We would guarantee going forward to our Nigerian brothers (that there will be) demand for their liquid fuel, because we don't want to source our fuel in areas that are likely to be unstable," he said.

"Indeed, we are quite confident that Nigeria will become one of our trusted suppliers of liquid fuel going forward," he said.

Sambo said Nigeria was ready to offer any economic support - be it energy or otherwise.

Motlanthe said the agreement he signed with Sambo today would help prepare the way for a more enabling business environment between two of the continent's biggest economies.

He said the agreement enabled both countries to rope in business people from both countries that had an idea for investment opportunities in both countries.

Nigerian companies with the wherewithal to supply infrastructure projects - including the supply of cement - would be invited to participate in South Africa's massive infrastructure programme.

Sambo arrived in South Africa on Monday at the invitation of Motlanthe to attend the 8th South Africa-Nigeria Bi-National Commission. He is expected to depart the country today.

The two discussed several issues and reviewed the progress made since the 7th Bi-National Commission was held in Abuja in 2008. 

They also discussed the progress made on the seven working groups of the Bi-National Commission. These workings groups are: foreign affairs and co-operation; trade, industry and finance; security and defence; agriculture, water resources and environment; minerals and energy; public enterprises and infrastructure; and the social and technical working group.

Today, a Memorandum of Understanding on economic and technical co-operation was signed between Minister of Trade and Industry Rob Davies and Nigeria's Finance Minister Olusegan Aganga.

Another Memorandum of Understanding was also signed between Aganga and the Minister of Finance Pravin Gordhan, to offer mutual assistance with customs administration between the two countries.

Sambo said Nigeria had put the incident that took place at OR Tambo International Airport in Johannesburg in March - when several Nigerians were deported after a dispute over yellow fever vaccinations - behind it.

"Nigerians are happy about the way they are treated in South Africa," he said, adding that there was a plan to expand the number of years for which travel visas can be used for, while doing away completely with diplomatic passports. - BuaNews

Govt making progress in filling vacant posts

Pretoria - President Jacob Zuma says government is making progress in reviewing its disciplinary code and procedures that address the slow pace of filling funded vacancies.

Answering questions from MPs in the National Assembly on Tuesday, Zuma said the guidelines have been drafted to help deal with such cases. 

According to a report done last year by the Performance Monitoring and Evaluation Department - which looked at the analysis of the expenditure of personnel budgets, together with general personnel information on PERSAL - the employee database indicated that on average, less than 3% of funded posts were vacant at any time. 

Zuma said this meant that, in general, national and provincial departments were doing well in terms of filling funded vacant posts. 

The report also found that some departments had captured unfunded vacant posts on the database, which contributed to the impression that there were large numbers of vacant positions.

The President said there was also a tendency to fill more administrative posts than technical posts, which were required to improve service delivery. 

Zuma made an example of the health sector, where there had been a 71% growth in administrative appointments and only a 39% growth in health professionals between 2003 and 2010. 

He said only a few national departments such as Water Affairs, Public Works as well as Justice and Constitutional Development, have had high vacancy rates. 

"This is linked to the difficulty in attracting skilled personnel to government. Some departments, such as the Department of Rural Development and Land Affairs, were undergoing restructuring and had relatively high vacancy levels for that reason," Zuma told MPs.

Zuma said they were working around the clock to address these issues.

The Department of Public Service and Administration had issued an instruction to all departments to fill the funded vacancies and remove unfunded ones from their personnel systems. 

"Secondly, the Forum of South African Directors-General has been directed to ensure that vacancies are filled within four months instead of the average of six to nine months, which had become a norm in the public service," said Zuma, adding that progress reports would be provided to Cabinet and the President's Coordinating Council periodically. 

These progress reports, he added, would determine whether or not any action needed to be taken against a particular department for not filling vacancies timeously. - BuaNews

Limpopo, EC stabilising - Zuma

Pretoria - President Jacob Zuma says governance is beginning to stabilse in both the Eastern Cape and Limpopo after national government intervention in the administration of the two provinces. 

Last year, Cabinet decided to intervene in the Eastern Cape Education Department in terms of section 100(1)(b) of the Constitution of the Republic. The department was placed under administration after it emerged that the department was facing major challenges.

Zuma said a team of deputy ministers visited the Eastern Cape to conduct a comprehensive monitoring and evaluation exercise on the implementation of the intervention, and a report was tabled at Cabinet. 

"Cabinet directed a full implementation of the intervention as intended by the Constitution. There is now a clear understanding and acceptance of the intervention in the Eastern Cape," Zuma said during a reply to parliamentary questions on Tuesday. 

He said task teams, focusing on the main areas of the intervention to the extent necessary, had been established, and these teams were about to finalise their work plans.

"We are confident that this time around, we will be able to stabilise and normalise the Eastern Cape Education Department, while ensuring that the right of the children of the Eastern Cape to quality basic education is upheld at all times," Zuma said.

As of 31 March, Limpopo's cash position had improved with a positive year-end balance of R231.4 million. 

"This positive cash position is due to cash management controls that were put in place since December 2011," he said. 

At the time of the Limpopo intervention, there was an estimated R2 billion shortfall as a result of a combination of factors, including an accumulation of unauthorised expenditure and poor cash flow management practices. Five departments were placed under administration.

Zuma said while the cash position had improved and payment and procurement systems in departments stabilised, further work still needed to be done. 

"The Provincial Treasury intervention team has instructed all departments to develop a fiscal recovery plan that must include strengthening departmental budget formulation processes and supply chain management."

Law enforcement agencies were looking into allegations of fraud, maladministration and corruption in a number of departments. - BuaNews

R6m for N Cape Victim Empowerment Programme

Pretoria - The Northern Cape Social Development Department has allocated R6.9 million to the provincial Victim Empowerment Programme for the 2012/13 financial year.

Presenting the department's Budget Vote on Tuesday, Social Development MEC Alvin Botes announced that the department will this year roll out the Court Support Programme in Namakwa, as the last outstanding district for this service, to cover the whole province. 

Botes said sexual crimes and child abuse remained a priority concern that deserved the attention not only of government, but also other sectors of society. 

"The department plays an important role in the post traumatic interventions and psycho-social support services aimed at lessening the long-term impact of crime by tending to the needs of victims. 

"We will intensify our efforts to provide and facilitate access to suitable, supportive services for victims of abuse and violence because of their particular vulnerability and specialised needs, especially those services rendered through the four Victim Empowerment Centres and Court Support Programme funded by the department," Botes said.

In addressing the abuse of alcohol and illicit drugs in the province, Botes announced that a provincial Integrated Substance Abuse Prevention Strategy would be launched next month. 

The strategy would be launched on 26 June (Freedom Charter Day) as part of Youth Month celebrations and would coincide with the observance of the UN International Day against Drug Abuse and Illicit Trafficking. 

The "KeMoja - I'm fine without drugs" project will be implemented in 132 high schools in the province in conjunction with the Department of Education.

Botes said the Foetal Alcohol Syndrome (FAS) Prevention Project, in partnership with the Foundation for Alcohol Related Research (FARR), was gaining momentum, with the final research findings of this intervention indicating that there had been a 30% decrease in the Fetal Alcohol Spectrum Disorder (FASD) rate in De Aar. 

"For the past three years, the main focus has been to assist pregnant women in De Aar to have healthy, substance abuse-free pregnancies so as to ensure that they give birth to healthier and FAS-free babies. 

"Having established the FAS prevalence rate in Upington, we can announce that the department has indeed contracted FARR to establish the prevalence rates for Galeshewe and Roodepan. Work has already commenced in that regard," Botes said.

Botes announced that Kumba Iron Ore had also made a commitment to support the project in the province and the department was following up on the commitment so as to guide the work of FARR in the province. 

"FAS is the only disability that is 100 percent preventable through the responsible behaviour of mothers to abstain from alcohol during pregnancy since there are no safe alcohol limits established during pregnancy. 

"While our focus is on pro-active preventative interventions, the department is aware of its responsibility towards people who are already caught in the vicious cycle of substance abuse and therefore continues to prioritise rehabilitation, treatment and care programmes and interventions." - BuaNews