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Tue Sep 30 20:20:10 SAST 2014

Gauteng asks National Treasury for bailout

AMUKELANI CHAUKE | 05 December, 2011 23:5521 Comments
Gauteng Premier Nomvula Mokonyane. File photo.
Image by: THYS DULLAART

Gauteng, South Africa's economic hub, is sinking into debt and its bid to get a R627-million bailout from the National Treasury has resulted in the province being put under a financial microscope.

It took a decision to ask for a bailout to pay for "higher than budgeted for" salary increases brought about by wage negotiations with unions and infrastructure maintenance as a result of floods, among others.

Gauteng p remier Nomvula Mokonyane will sign an agreement with Finance Minister Pravin Gordhan and Health Minister Aaron Motsoaledi, who will manage the "chronic" problems relating to the provincial health department.

While Mokonyane has tried to rid the province of dodgy tenders ever since she took over, including cancelling the R8-billion motorsport and broadcasting contracts, and reviewing Gauteng Shared Services Centre - which has been accused of not paying suppliers on time - financial affairs have not improved.

Mike Moriarty, the DA Gauteng's spokesman for finance, said he suspected the real problem with the GSSC was a lack of authority over officials.

Last week, Mokonyane and all members of the Gauteng legislature, including opposition parties, voted to approach the National Treasury for a bailout, and this includes:

  • R539.1-million to fund "higher-than-budgeted-for" salaries brought about by the wage negotiations with the unions, to cover the 1.5% difference to meet the 6.8% wage demand from teachers and nurses;
  • A conditional grant of R87.7-million for infrastructure repairs following the floods in January and February; and
  • R19.1-million to the Gauteng department of health and social development to pay for stipends to caregivers.

Gauteng also approved a R553-million rollover from funds it failed to spend in the 2010/11 financial year.

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