NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
Alignment of the
Infrastructure Delivery Cycle
with the
Budget Cycle
and
Strategic Planning Cycle
Prepared by the
Infrastructure Delivery Improvement Programme
(IDIP)
1
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
The Infrastructure Delivery
Improvement Programme
(IDIP)
• IDIP is a continuous improvement programme which
guides & capacitates to improve infrastructure delivery
• IDIP is coordinated by National Treasury in partnership
with DBSA, DPW & CIDB
• IDIP provides flexible tools that can be adapted to the
province & sector
• IDIP is a key strategy of government to address
inadequate capacity and skills in the infrastructure sector
2
State of the Nation Address
2005
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
“Certainly it is a reflection of weaknesses in the
governance system that the plans to build school
infrastructure are unfolding at a much slower pace than
envisaged.”
“We need massively to improve the management,
organisational, technical and other capacities of
government so that it meets its objectives.”
President Thabo Mbeki – State of the Nation
Address 2005
3
State of the Nation Address
2006
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
“We cannot allow that government departments become
an obstacle to the achievement of the goal of a better life
for all because of insufficient attention to the critical issue
of effective and speedy delivery of services.”
“Integration of planning and implementation across the
government spheres is therefore one of the prime areas of
focus in our programme…”
President Thabo Mbeki – State of the Nation
Address 2006
4
Problem Statement
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
• Continuing under expenditure of infrastructure budgets.
• Inappropriate expenditure patterns characterized by the 4th
Quarter expenditure spike.
• Currently there appears to be very little alignment between
the Infrastructure Delivery Cycle and either the Budget
Cycle or the Strategic Planning Cycle.
• Currently the budget for large multi-year projects is
committed to 1 financial year instead apportioning the
budget across the MTEF.
5
Overview of Presentation
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
• This presentation covers the following topics:
–
–
–
–
–
–
The Strategic Planning Cycle
The Budget Cycle
The current Infrastructure Delivery Cycle
The improvements to the Infrastructure Delivery Cycle
The alignment and interdependence between these 3 cycles
An overview of the Infrastructure Plan,
Infrastructure Programme Management Plan (IPMP), &
Infrastructure Programme Implementation Plan (IPIP)
– Budget allocation for Infrastructure Delivery Programmes
– Managing cashflows across years to ensure 100% effective
expenditure
– Benefits & Challenges
6
Fiscal Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Election
Electoral Cycle
Election
5 Year Election Mandate
Election
5 Year Election Mandate
5 Year Electio
Planning & Budgeting
• Five-year Strategic
and Performance
Plans
• Annual Performance
Plans and Budgets
(with 3 Year MTEF)
LEGEND:
5 year Strategic & Performance
Plan detailing Targets & priorities
5 year Strategic & Performance
Plan detailing Targets & priorities
5 year Strat
Plan detailing
MTEF (3
years)(3 years)
MTEF
MTEF (3
years)(3 years)
MTEF
MTEF (3MTEF
years)(3 years)
MTEF (3
years)
MTEF
(3MTEF
years)(3 years)
Year 1 Year 2 Year 3
MTEF (3
years)(3 years
Year 1 Year 2 Year 3
MTEF
Year 1 Year 2 Year 3
Budget Budget Budget
MTEF
Year 1 Year 2 Year 3
Budget Budget Budget
Budget Budget
Budget
APP
APP
APP
APP
APP
APP
APP
APP
For
For
For
APP
For
For
For
For
For
Year 1 Year 2 Year 3
For3
Year 1 Year 2 Year
Year 1 Year 2
Year 1
APP – Annual Performance Plan
Year 1 Year 2 Year 3
Budget
Year 1 Year 2
Budget Budget
Year 1
Budget Budget Budget
Budget Budget
Budget
APP
APP
APP
APP
APP
APP
For
APP
APP
For
For
APP
For
For
For
Year 3
For3
For
Year 2 Year
For
Year 1 Year 2 Year
3
Year 1 Year 2
Year 1
Year 3
Year 2
Year 1
Budget
Budget
Budget
Year 3
Year 2 Year 3
Year 1 Year 2
Budget
Year 1
Budget Budget
Budget Budget
Budget
APP
APP
APP
APP
APP
APP
For
APP
APP
For
For
APP
For 3
For
For
Year
For
For
Year 2 Year 3
For
Year 1 Year 2 Year
3
Year 1 Year 2
Year 1
Year 3
Year 2
Year 1
Budget
Budget
Budget
Year 3
Year 2
Year 1
Budget
Budget
Budget
APP
APP
APP
APP
APP
For
APP
For
For
For
For
Year 3
For 3
Year 2 Year
Year 1 Year 2
Year 1
7
3 Year MTEF Period
MTEF Budget Cycle
31
Aug
Year 0
17 Feb
Mid
Dec
31
Mar
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Draft Update Final
Budget Budget Budget
LEGEND:
Final
APP
Budget Day (15 Feb)
Budget Allocation Letter (Nov)
Draft 2
APP
MTEC Hearings (Sept)
Draft
APP
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
AR
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Final
APP
Financial Reports
(Section 32 PFMA)
& Non-Financial
Data Reporting
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
AR
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Final
APP
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Planning Processes
AR
Q4
PR
Implementation Processes
Closure Processes
APP – Annual Performance Plan
AFS – Annual Financial Statements
AR – Annual Report
PR – Performance Report
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Final
APP
Imple
Q1
Q
Rep
R
8
Q
P
3 Year MTEF Period
MTEF Budget Cycle
Year 0
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J These
J A S Oare
N DallJ the
F M A M J J
concurrent budget
AFS
Draft Update Final
Implement Budget
AR
activities that need to be
Budget Budget Budget
undertaken in any 1 year
Final
APP
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Budget Day
Budget Allocation Letter
Draft 2
APP
MTEC Hearings
Draft
APP
Final
APP
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
AR
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
LEGEND:
AFS
Implement Budget
Draft 2
APP
Final
APP
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Planning Processes
AR
Q4
PR
Implementation Processes
Closure Processes
APP – Annual Performance Plan
AFS – Annual Financial Statements
AR – Annual Report
PR – Performance Report
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Final
APP
Imple
Q1
Q
Rep
R
9
Q
P
3 Year MTEF
Periodinformation is used as input to
The following
MTEF Budget Cycle
Year 0
prepare the budget:
Draft Budget due 31 August
•Annual Financial Statements from last year due 31 May
mid July Year 4
Year 1
Year
•1st2Quarter Report from thisYear
year 3due
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A SUpdated
O N D J Budget
F M A M
J mid
J A December
S O N D J F M A M J J
due
•2nd Quarter Report from this year due mid October
Draft Update Final
Budget Budget Budget
Final
APP
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Budget Day
Draft 2
APP
Final
APP
Final Budget due 17 February
•Budget Allocation Letter
•3rd Quarter Report from this year due mid January
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
AR
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Draft Update Final
Budget
Draft Budget
Update Budget
Final
Draft
Draft 2 Budget
Final
Budget
Budget
APP
APP
APP
AR
Q4
PR
Implementation Processes
Closure Processes
APP – Annual Performance Plan
AFS – Annual Financial Statements
AR – Annual Report
PR – Performance Report
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Q1
PR
Q2
PR
Q3
PR
Planning Processes
Budget Allocation
Letter
LEGEND:
Budget Allocation Letter
Draft 2
APP
MTEC Hearings
Draft
APP
AFS
Q4
PR
Draft Update Final
Budget Budget Budget
Draft
APP
Draft 2
APP
Final
APP
AR
Imple
Q1
Q
Rep
R
10
Q
P
Fiscal Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Election
Electoral Cycle
Election
5 Year Election Mandate
5 Year Election Mandate
Planning & Budgeting
• Five-year Strategic
and Performance
Plans
• Annual Performance
Plans and Budgets
(with 3 Year MTEF)
LEGEND:
5 year Strategic & Performance
Plan detailing Targets & priorities
5 year Strategic & Performance
Plan detailing Targets & priorities
MTEF (3
years)(3 years)
MTEF
MTEF (3
years)(3 years)
MTEF
MTEF (3MTEF
years)(3 years)
MTEF (3
years)
MTEF
(3 years)
Year 1 Year 2 Year 3
Year 1 Year 2
Year 1
Budget Budget Budget
Budget Budget
Budget
Year 3
Year 2
Year 1
Budget
Budget
Budget
Year 3
Year 2
Year 1
Budget
Budget
Budget
Year 3
Year 2 Year 3
Year 1 Year 2
Budget
Year 1
Budget Budget
Budget Budget
APP
APP
APP
Budget
APP
APP
APP
APP
APP
APP
For
For
For
APP
APP
APP
For
For
For
APP
APP
APP
For3
For
For
Year 1 Year 2 Year
APP
APP
For3
For
For
Year 1 Year 2 Year
APP
For
For
For
Year 1 Year 2 Year 3
For3
For
Year 1 Year 2 Year
For
Year 1 Year 2 Year
3
Year 1 Year 2
Year 1
Year 3
Year 2
Year 1
Budget
Budget
Budget
Year 3
Year 2 Year 3
Budget
Budget Budget
APP
APP
APP
APP
APP
APP
For
For
For
For 3
For
For
Year
Year 2 Year 3
Year 1 Year 2 Year 3
Infrastructure Plan Update (10 Year Plan)
Infrastructure Plan Update (10 Year Plan)
Infrastructure Plan Update (10 Year Plan
Infrastructure Plan Update (10 Year Plan)
Infrastructure Plan Update (10 Year Plan)
Infrastructure Plan Update (10 Year Plan)
APP – Annual Performance Plan
11
Etc, etc, etc
Infrastructure
Delivery Cycle
Year 0
3 Year MTEF Period
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current Infrastructure Delivery Cycle
Infr. Plan
update
Project
Design
Project
Tender
Project
Implementation
Rolled Over
Unspent Budget
100%
Cumulative Cashflow
Budget
Rollover
Time
With the current Infrastructure Delivery Cycle,
expenditure during the 1st half of the year is virtually
impossible since most projects are still in the tender
phase. The result is the 4th quarter expenditure spike
and overall under-expenditure.
Better supervision of
infrastructure projects
undertaken by government
will be introduced, to ensure
that capital budgets are spent
without roll-overs - President
Thabo Mbeki - State of the Nation
Address 2006
12
Infrastructure
Delivery Cycle
3 Year MTEF Period
Year 0
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current Infrastructure Delivery Cycle
Infr. Plan
update
Project
Design
Project
Tender
Infr. Plan
update
Project
Implementation
Project
Design
Rolled Over
Unspent Budget
Project
Tender
Each Infrastructure Delivery Cycle is
characterized by under-expenditure
and rolled over unspent budgets
Project
Implementation
Infr. Plan
update
Project
Design
Rolled Over
Unspent Budget
Project
Tender
Project
Implementation
Rolled
Unspent
Improved Infrastructure Delivery Cycle
IPMP
IPIP
O&S Plan
O&S
O&S
Budget Speech
Infr. Plan
update
LEGEND: O&S Plan – Organisation & Support Plan
IPMP – Infrastructure Programme Management Plan
IPIP – Infrastructure Programme Implementation Plan
13
Infrastructure Programme Management &
Implementation Plans (IPMP & IPIP)
Client Department (CD)
FUNCTIONS OF CD:
1. Planning
2. Procurement
3. Programme
Management
4. Monitoring &
Reporting
Infrastructure
Plan Update
IPMP
Update
IPMP
issued to
IAs
Implementing Agent
IA 1
1.
2.
3.
IPIP
for IA 1
IPIPs
respond to
IPMP
IPIP
for IA 2
Implementing Agent
IA 2
FUNCTIONS of IAs:
Programme Management
4. Project Implementation
Project Initiation
5. Project Completion
Procurement
6. Monitoring & Reporting
14
Infrastructure
Delivery Cycle
3 Year MTEF Period
Year 0
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current Infrastructure Delivery Cycle
Infr. Plan
update
Project
Design
Project
Tender
Infr. Plan
update
Project
Implementation
Project
Design
Rolled Over
Unspent Budget
Project
Tender
Project
Implementation
Infr. Plan
update
Project
Design
Rolled Over
Unspent Budget
Project
Tender
Project
Implementation
Rolled
Unspent
Improved Infrastructure Delivery Cycle
IPMP
IPIP
O&S Plan
O&SPlan
O&SPlan
Project
Design
Project
Tender
Project Implementation
Planned Multi-year
Commitments
Monitoring & Evaluation
Budget Speech
Infr. Plan
update
LEGEND: O&S Plan – Organisation & Support Plan
IPMP – Infrastructure Programme Management Plan
IPIP – Infrastructure Programme Implementation Plan
15
3 Year MTEF Period
Year 0
Year 1
Year 2
Year 3
Year 4
AM J J A S O N D J F M AM J J A S O N D J F M AM J J A S O N D J F M AM J J A S O N D J F M AM J J
Current Project Budgeting
Infr. Plan
update
Project
Design
Project
Tender
Cumulative Cashflow
Budget
100%
Project
Implementation
Implementation of Roll-Over
Whole project budget is
committed to Yr 1
Rollover
Implementation of
Roll-Over
Retention
Period
Rollover
Time
Best Practice Project Budgeting
Infr. Plan
update
IPMP
IPIP
Project
Design
Project
Tender
Project Implementation
Monthly Projected
Cashflow
Budget
Commit from Yr 2
Commit from Yr 1
Commit from Yr 3
Retention
Period
Commit
from Yr
4
Cumulative Cashflow
Budget
100%
16
Example of a Programme Budget to
commit the entire Annual Budget
Department's Annual Budget =
( ,000)
PROJECT
TOTAL PROJECT
BUDGET
R 50,000
BUDGET FOR
YEAR 1
R 60,000
BUDGET FOR
YEAR 2
R 70,000
BUDGET FOR
YEAR 3
Project 1
R 30,000
R 10,000
R 10,000
R 10,000
Project 2
R 20,000
R 5,000
R 10,000
R 5,000
Project 3
R 25,000
R 7,000
R 8,000
R 10,000
Project 4
R 15,000
R 12,000
R 3,000
R0
Project 5
R 10,000
R 5,000
R 5,000
R0
Project 6
R 20,000
R 11,000
R 4,000
R 5,000
R 120,000
R 50,000
R 40,000
R 30,000
R0
R 20,000
17
R 40,000
Amount Committed
Amount remaining for new projects
( = Annual Budget less Amount Committed)
Infrastructure
Delivery Cycle
3 Year MTEF Period
Year 0
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current Infrastructure Delivery Cycle
Infr. Plan
update
Project
Design
Project
Tender
Infr. Plan
update
Project
Implementation
Project
Design
These are all the concurrent
infrastructure delivery
activities that need to be
undertaken in any 1 year
Rolled Over
Unspent Budget
Project
Tender
Project
Implementation
Infr. Plan
update
Rolled Over
Unspent Budget
Departments therefore
need to have
the capacity
Project
Project
Rolled
Tenderto undertake
Implementation
Unspent
all these
concurrent activities.
Project
Design
Improved Infrastructure Delivery Cycle
IPMP
IPIP
O&S Plan
O&SPlan
O&SPlan
Budget Speech
Infr. Plan
update
Project
Design
Project
Tender
Project Implementation
Planned Multi-year
Commitments
Monitoring & Evaluation
Infr. Plan
update
IPMP
O&S Plan
O&S
IPIP
Project
Design
Project
Tender
Project Implementation
Planned
Comm
Monitoring & Evaluation
O&S
Infr. Plan
update
IPMP
O&S Plan
O&S
LEGEND: O&S Plan – Organisation & Support Plan
IPMP – Infrastructure Programme Management Plan
IPIP – Infrastructure Programme Implementation Plan
IPIP
Project
Design
Project
Tender
Projec
Monitorin
O&S
Infr. Plan
update
IPMP
O&S Plan
O&S
IPIP
O&S
18
Proje
Desig
Year 0
Year 1
Year 2
Yearall3 the concurrent
Year 4
These are
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M activities
J J A S Othat
N Dneed
J F MtoAbe
M J J
undertaken in any 1 year by a
department
AFS
Draft Update Final
Implement Budget
AR
MTEF Budget cycle
Budget Budget Budget
Final
Draft
Draft 2
APP
APP
APP
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Draft Update Final
Budget Budget Budget
Final
Draft
Draft 2
APP
APP
APP
LEGEND:
AFS
Implement Budget
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Draft Update Final
Budget Budget Budget
APP – Annual Performance Plan
Draft
APP
AFS – Annual Financial Statements
Draft 2
APP
Final
APP
AR – Annual Report
IPIP
Project
Design
Q1
Q2
Q3
Q4
Rep
Rep
Rep
Rep
Draft
APP
Infrastructure Delivery Cycle
IPMP
AFS
Implement Budget
AR
Draft Update Final
Budget Budget Budget
PR – Performance Report
Infr. Plan
update
AR
Project
Tender
Project Implementation
Final
APP
Draft 2
APP
Imple
Q1
Q
Rep
R
Planned Multi-year
Commitments
Monitoring & Evaluation
O&S Plan
Infr. Plan
update
IPMP
IPIP
Project
Design
Project
Tender
Project Implementation
Planned
Comm
Monitoring & Evaluation
O&S Plan
Infr. Plan
update
IPMP
IPIP
Project
Design
Project
Tender
Monitoring
O&S Plan
LEGEND: O&S Plan – Organisation & Support Plan
IPMP – Infrastructure Programme Management Plan
IPIP – Infrastructure Programme Implementation Plan
Projec
Infr. Plan
update
IPMP
IPIP
19
Projec
Design
Alignment of the Infrastructure Delivery Cycle
& the Budget Cycle
Year -2
Year -1
Year 0
Year 1
Year 2
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
The improved Infrastructure
Delivery Cycle now facilitates the
alignment of the Infrastructure
Delivery Cycle with the Budget
Cycle.
MTEF Budget Cycle
Budget Preparation
Process
Draft
APP
The budget preparation process
can now be strengthened by
actual projects identified during
Infrastructure Planning.
Implement Budget
Closure
Processes
Currently Infrastructure Planning is
undertaken too late to facilitate
effective alignment of the
Infrastructure Delivery Cycle with the
Budget Cycle.
Current Infrastructure Delivery Cycle
Infrastructure
Planning
And the final budget submission
is further informed by accurate
cashflows prepared during the
Project Design Phase.
Project
Design
Project
Tender
Project
Implementation
Rolled O
Unspent B
And the project tendering &
implementation feed into the
implementation of the budget, quarterly
reporting & budget closure processes.
Improved Infrastructure Delivery Cycle
Infrastructure
Planning
IPMP
The Draft APP in turn becomes an input
into the current year’s infrastructure
planning & IPMP update.
IPIP
Project
Design
Infr. Plan
update
Project
Tender
IPMP
IPIP
Planned
Comm
Project Implementation
Project
Design
Project
Tender
20
Project
Monitoring
3 Year MTEF Period
Year 0
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current year’s infrastructure delivery activities
Planned Multi-year
Commitments
Monitoring & Evaluation
Project Implementation
Monitoring & Evaluation
Project
Design
Project
Tender
Monitoring & Evaluation
Infr. Plan
update
IPMP
IPIP
Budget Speech
O&S Plan
The Infrastructure Plan sets out the infrastructure priorities for the next 10 years.
It is updated annually on the basis of the:
• Targets and priorities set out in the Strategic Plan & Annual Performance Plan
• The anticipated MTEF Budget, and
• The progress of the current projects.
21
Infrastructure Programme
Management Plan (IPMP)
Year 0
3 Year MTEF Period
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Current year’s infrastructure delivery activities
The IPMP sets out in detail the work for the next 3 years.
It is based on the updated Infrastructure Plan as
well as the Draft Annual Performance Plan (APP).
Planned Multi-year
Commitments
In Year 1
Monitoring & Evaluation
(Very detailed)
Project Implementation
Planned Multi-year
Commitments
In Year 2
Monitoring & Evaluation
Monitoring & Evaluation
(Less detailed)
Project
Design
Project
Tender
Monitoring & Evaluation
IPMP
IPIP
O&S Plan
O&S
O&S
Budget Speech
Infr. Plan
update
Project Implementation
Planned Multi-year
Commitments
Monitoring & Evaluation
Monitoring & Evaluation
Project
Design
Project
Tender
Monitoring & Evaluation
Infr. Plan
update
IPMP
IPIP
O&S Plan
O&S
O&S
In Year 3
(even less detailed)
Project Implementation
Planned Multi-year
Commitments
Monitoring & Evaluation
Monitoring & Evaluation
Project
Design
Project
Tender
Monitoring & Evaluation
Infr. Plan
update
IPMP
IPIP
O&S Plan
O&S
O&S
Project Implementation
Monitoring & Evaluation
Project
Design
Project
Tender
Monitoring & Evaluation
Infr. Plan
update
IPMP
NB: The total value of the work in each year must
O&Sequal
Plan theO&S
Annual Budget for each year
IPIP
22
Infrastructure Budget
Allocation
Year 0
3 Year MTEF Period
Year 1
Year 2
Year 3
Year 4
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J
Project Implementation Budget = TOTAL INFRASTRUCTURE BUDGET
– Planned Multi-year Commitments
– Project Design & Tender (10%)
– Infrastructure Planning (1%)
Planned Multi-year
Commitments
– Funding of O&S Plan
Project Implementation
Project
Design
Project
Tender
IPMP
IPIP
O&S Plan
O&S
O&S
Budget Speech
Infr. Plan
update
Planned Multi-year
Commitments
Project Implementation
Project
Design
Project
Tender
Infr. Plan
update
IPMP
IPIP
O&S Plan
O&S
O&S
Planned Multi-year
Commitments
Project Implementation
Project
Design
Project
Tender
Infr. Plan
update
IPMP
IPIP
O&S Plan
O&S
O&S
Planned Multi-year
Commitments
Project Implementation
Project
Design
Project
Tender
Infr. Plan
update
IPMP
O&S Plan
O&S
IPIP
23
Managing Cashflows Across Years
In reality the neat chunks of work shown
Some projectsYear
or clusters
of projects
Year
0
Year
1
2
on the earlier slides are actually individual
in the
D J projects
F M or
A clusters
M J ofJ projects
A S with
O N D J F M A
M Jcurrent
J A year
S O can
N be
D delayed
J F M
causing potential under expenditure
different start & end dates
plementation
gn & Tender
Planned Multi-year Commitments
Project Implementation
Planned Multi-year Commitments
Project Design & Tender
Project Implementation
IPIP
But here we have clusters of
Infr. been
Plan update
projects that have
designed
and are ready to go to tender
IPMP
IPIP
NB: The total value of the work in this year
equals the Annual Budget for this year
24
Managing Cashflows Across Years
Year 0
D J
Year 1
F M A M J
plementation
gn & Tender
J A S O N D J
Year 2
F M A M J
J A S O N D J
F M
Planned Multi-year Commitments
Project Implementation
Planned Multi-year Commitments
Project Design & Tender
Project Implementation
IPIP
We need to tender these projects earlier
Infr. Plan update
IPMP
and start implementation
in Year
1 to
offset the potential under expenditure
caused by the delayed projects
IPIP
25
Identified Benefits
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
• Better linkage with Strategic Planning is achieved
• Better alignment of the budget with the targets set out
in the Strategic Plan
• Project planning & design is properly done resulting in
achievable & realistic cashflows
• Multi-Year commitments are planned and budgeted for
thereby reducing rollovers
• Improved clarity of roles & responsibilities between
client departments and implementing agents
26
Possible Challenges
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
• Programme Manager with required skills is required
– Planning for built environment
– Quality Control
– Contract Procurement
• Commitment by political heads to only implement what is
on the Infrastructure Plan
• Understanding that if a project is entered as a new priority
onto an Infrastructure Plan in Year 0 it must follow due
process before implementation can begin
Year 0
Year 1
Year 2
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
Infr. Plan
update
IPMP
IPIP
Project
Design
Project
Tender
Project Implementation
27
Recommendations accepted &
approved by Joint DoE/DPW MINMEC
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
1. That the Infrastructure Delivery Cycle be amended to
include the Infrastructure Programme Management
Plan (IPMP), the Infrastructure Programme
Implementation Plan (IPIP), and the Service Delivery
Agreement (SDA), and that these plans be made
mandatory for all departments.
2. That the timeframes of the Infrastructure Delivery Cycle
be amended to allow for the alignment of the
Infrastructure Delivery Cycle with the Budget Cycle
so that departmental budgets are informed by actual
projects.
3. That best practice budgeting processes be adopted so
that budgets for large projects are appropriately
committed across the duration of the project.
28
NATIONAL TREASURY
REPUBLIC OF SOUTH AFRICA
Thank You
29