GOVERNMENT departments and municipalities not spending their allocated infrastructure funding will risk losing the allocations, and the relevant officials will be held liable, Finance Minister Pravin Gordhan warned on Thursday.

"We are aware of several weaknesses in the state's infrastructure capacity," he told MPs in the National Assembly while tabling the 2012-13 budget.

In the past, spending had lagged behind plans, Mr Gordhan said.

"Our estimate is that in 2010-11, R178bn was spent out of a planned R260bn, or just 68%," he said. "We have to do better than that - state enterprises, municipalities and government departments all need to improve their planning and management of capital projects."

In addition to long delays, significant cost overruns in infrastructure projects had also been experienced.

"So we shall step up the quality of planning, costing and project management, so that infrastructure is delivered on time and on budget," Mr Gordhan said.

This means that government departments and municipalities that underspend or misspend their allocated funding will risk losing the allocations.

The relevant officials will also be held liable for such misdemeanours. The Treasury will monitor the spending of grants to ensure value for money, adherence to expanded public works programme targets and implementation of operational and maintenance programmes.

Several measures were also put in place to improve infrastructure project implementation and build management capacity, Mr Gordhan said.

Among other things, within state-owned entities, development finance institutions and the private sector, considerable capacity had already been mobilised in project planning and management, the minister said.

The Infrastructure Development Improvement Programme assists national and provincial departments, focused largely on education and health projects and support for provincial public works departments.

The Construction Industry Development Board has played a key role in developing standards and procedures for government tenders, and a new Cities Support Programme will get under way this year, initially in eight metropolitan authorities, to improve spatial planning, public transport and management of infrastructure utilities.

The Municipal Infrastructure Support Agency will also be established this year, with a focus on rural municipalities that lack planning capacity.

Technical assistance to municipalities is provided through the neighbourhood development programme, which supports more than 220 projects aimed at raising business investment in township partnership projects.

Special attention will be given to the procurement processes for major infrastructure projects to ensure both value for money and the development of local suppliers and support industries.

Mr Gordhan said training and mentoring programmes had a critical role to play in addressing capacity constraints of departments and municipalities.

"But professionalism, hard work and commitment to value for money are preconditions for successful project delivery," he said. "There can be no compromise on the basic principles of sound financial management in ensuring that resources are mobilised efficiently to serve our people.

"A capable state focused on delivery requires a passionate and patriotic public service - without those few individuals whose only desire is to profit from the state."

SAPA