The government’s unfunded wage deal and the costs associated with SA’s energy crisis are set to blow the Western Cape’s health budget, with officials projecting an overspend of close to R1bn on the R28.8bn set aside for the current financial year.
State-owned power utility Eskom’s inability to meet electricity demand has forced the provincial health department to make diesel purchases that were not budgeted for, with the costs for the first quarter of the 2023/2024 fiscal year topping R12m, according to head of health Keith Cloete.
At the same time, it has been forced to honour the higher-than-anticipated wage settlement between government and unions, which was concluded after Treasury had finalised the February budget. Treasury has previously said the wage deal would cost the government an extra R37.4bn above the allocation set aside for compensation in the budget.
“We have less money than we had before and during Covid-19, and now we have unplanned expenditure on salaries and diesel. Accounting officers in health departments across all the provinces are in a very precarious position, because no additional sources are being made available,” said Cloete.
The Western Cape’s current health budget is a nominal 1% lower than the R29.1bn set aside for 2022/2023.
The provincial health department has sought to manage the risks created by Eskom’s rolling blackouts by installing diesel-operated generators, inverters, batteries and solar panels, but was constrained by costs and security issues, said Cloete.
So far, 10 of the Western Cape’s largest public hospitals are completely protected from load-shedding up to level 6, and talks are underway with Eskom to provide a dedicated line to the Khayelitsha Hospital, so it too can be exempted from planned power cuts, he said.
Generators are operating in 193 public hospitals and clinics, but the department could not afford to install and run standby generators in 278 other facilities, most of which are clinics, said Cloete. Inverters and batteries are to be installed in 51 clinics by the end of March, at a cost of R37m, and the province plans to install solar-powered generators at 15 hospitals, with the first three due to come online in 2023/2024.
Western Cape premier Alan Winde said he was deeply concerned about delays in refurbishing Eskom’s nuclear power station, Koeberg, as it is the province’s primary source of electricity. Koeberg has two units, each capable of generating 920MW of power. Unit 1 is currently out of service, with a serially delayed steam generator project expected to keep it out of action until at least mid-August, while unit 2 is due begin its own statutory steam generator replacement project in mid-September.
Should both units be out of service at the same time, the Western Cape can expect to face more intense load-shedding than the rest of the country, said Winde’s special advisor on energy, Alwie Lester. Each level of load-shedding imposed by Eskom is 1000MW, so unless the power utility brings in additional electricity generating capacity, the province is likely to be one stage of load-shedding higher than the rest of SA, he said.
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