Public sector capital expenditure decreases
A pull back in spe ndi ng o n plants, machinery,new construction works and transport equipment saw capital expenditure in the public sector fall by 4.3 percent in 2017, according to Statistics South Africa’s latest Capital Expenditure by the Public Sector report. Capital expenditure is money that an institution spends to buy, maintain or upgrade fixed assets, such as build- ings, vehicles, land and equipment.
A decline in spending on fixed assets by 360 of the 751 public sector institutions saw total capital expenditure fall from R283.3 billion in 2016 to R271.2 billion in 2017.
Transnet, which operates the country’s fuel pipelines, trains and ports, was a major contributor to the 4.3 percent decrease. It spent R8.2 billion less on fixed assets, a decrease from R33.6 billion in 2016 to R25.4 billion in 2017.
The Department of Water and Sanitation and the Water Trading Entity were the second and third largest contributors to the decline in public sector capital expenditure. The department scaled back on the maintenance of conveyance systems while the Water Trading Entity spent less on the construction of dams, sewerage pumps and water generators. Together, both institutions reduced capital expenditure by R4.4 billion.
Eskom and Transnet were the two biggest public sector spenders on fixed assets, with Eskom responsible for 28 percent of total capital expenditure while Transnet was in second spot at nine percent. Eskom increased its capital expenditure to R75.7 billion in 2017 from R73 billion in 2016, mainly due to its work on the Kusile Power Station.
South Africa’s 257 municipalities were responsible for 23 percent of total public sector capital expenditure, with Johannesburg, Cape Town and eThekwini the largest contributors. New construction works represented the bulk (84 percent) of total municipal capital expenditure.
The KwaZulu-Natal Department of Transport was the largest contributor to provincial government capital expenditure. The department spent R3.5 billion on new construction, focusing on upgrading roads in areas such as Ulundi, Umzumbe, Maphumulo and AbaQulusi.
Higher education institutions, which comprise the country’s universities and universities of technology, contributed the least to total public sector capital expenditure. New construction works represented the biggest portion (69 percent) of total public sector capital expenditure in 2017.
Plant, machinery and equipment represented 17 percent of the R271.2 billion, followed by land and existing buildings (six percent), transport equipment (two percent), and leased assets and investment property (one percent).‘Other’ fixed assets contributed four percent.