. National Treasury reported that the Limpopo intervention had worked from a financial point of view, and that the provincial treasury now had a new head of department. There were some new staff members appointed in key positions, but some staff still needed to be appointed, to ensure proper cash management and budgeting. The Minister offered to give the Committee, together with the National Council of Provinces (NCOP) Committee, a more comprehensive report in due course. . National Treasury indicated that it would not withdraw from Limpopo, because current situation was not sustainable. There were about 30 cases with the South African Police Service (SAPS), where charges had been laid. There were another 30 cases where disciplinary action needed to be taken. . Over the past three years National Treasury had gone quite far in introducing the concept of savings, of reprioritisation within departments, and of contributing to a pool from which other programmes could actually be serviced. Work was being done by the National Treasury and the Presidency: Department of Performance Monitoring and Evaluation to establish which would indicate what programmes in Government could be slowed down, which programmes could be cut, and which programmes could be deferred. . National Treasury indicated that the 2.6 per cent of GDP for the debt service cost was in line with projections. As the debt levels rose, as projected, then the debt service cost would increase. Foreign investors provided support; currently they took up about 32 per cent of the bond portfolio, and this had helped to drive down the cost of borrowing. When Moody's Investors Services downgraded South Africa's credit rating, the interest rate increased by about 20 basis points. This pushed up the cost of debt. Fluctuations or weaknesses of the exchange rate increased the cost of servicing foreign debt. There was also a floating rate portfolio which was linked to inflation. . In terms of the procurement office, National Treasury indicated it had done an internal reorganisation. The central procurement office was not being created from the very beginning, but it was required to serve a very different purpose from what National Treasury had for some time. . National Treasury reported that the Infrastructure Delivery Improvement Programme (IDIP) was part of the Public Private Partnership (PPP) that provided support and financial management programmes. . In terms of the capital assets, National Treasury had not taken money from capital assets, but it was a shift. Money had been taken from Programme 1 - Administration and moved to Programme 8. It was purely a matter of reprioritisation within the National Treasury. . In terms of training of councillors, National Treasury indicated that it would give councillors a file on the Municipal Finance Management Act (MFMA), and a guide on what to do and what not to do. National Treasury recognised the need for an intense programme of training and induction. In terms of follow-up, the National Treasury had a MFMA Coordinators Forum, which was placed in each of the treasuries. . National Treasury indicated that it took the issues raised by the Auditor-General very seriously. National Treasury had responded to each of the issues raised, in terms of ensuring that they were addressed going forward. . National Treasury reported that it was not a big capital-spending department, and that the bulk would be transfers. The greater part of the under spending related to what were small project. . In terms of Eskom, National Treasury indicated that the R20 billion allocated last year was part of the R60 billion allocation. The loan was drawn down in three phases of R10 billion, and a further R30 billion in 2010/11; and then the final R20 billion in 2011/12. These loans could be described as a R60 billion subordinated loan, which meant that it would rank behind Eskom's other debt that it had issued. In the event that Eskom was liquidated, the other bond issuers would be paid out first, and only thereafter the subordinated loan. . In terms of the R15 billion in respect of the DBSA, this referred to an increase in the callable capital. This was done to improve the DBSA's capacity to lend. . The R119 million for Alexkor was a contingent liability, not a guarantee. It had arisen because there was a land claim on Alexkor's assets. A deed of settlement had been agreed between the community, Alexkor, and Government. In respect of that there was a settlement that had to be made. In the 2012/13 budget National Treasury had made allocations to Alexkor to settle this outstanding liability as well as other outstanding amounts owed by Alexkor or Government. . In terms of credit ratings, South Africa did not extend borrowing frivolously, it did so to ensure that the country did not suffer the worst when the recession hit. South Africa would not have borrowed this money as it had a 5 per cent growth rate, revenue was flowing in, and Government could not spend all the money that it had in 2008 before the recession hit. . In terms of the Youth Wage Subsidy, National Treasury indicated there were political processes under way. It would compromise both business and labour simply to go ahead and implement the Youth Wage Subsidy. Government preferred the route of consensus. . National Treasury indicated it would be useful for the Committee to receive a briefing on the matrices and methodologies of the credit rating agencies.