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2015-2020 STRATEGIC PLAN 2015-2020 STRATEGIC PLAN AND ANNUAL PERFORMANCE AND ANNUAL PERFORMANCE PLAN PLAN
PRESENTATION TO SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT14 MAY 2015
TABLE OF CONTENT
No. Item Slide
1. Part A: Strategic Overview 3
2. Part B: Programme and Sub Programme Plans 19
3. Part C: Links to Long Term Infrastructure Plan 27
4
1. MISSION & VISIONMissionThe pre-eminent accommodation and real-estate management service provider for National Government
VisionTo optimize the State’s immovable asset portfolio through innovative and best practice approaches to ensure competent, proficient and sustainable service delivery by :i.Reducing the cost to Government on leased-in accommodation and maximising returns on leased-out accommodation;ii.partnering the private sector for property financing and delivery options / strategies;iii.streamlining the value chain business improvement policy approaches and strategic alignments; andiv.utilising alternative energy solutions and green management technology for enhanced efficiency cost savings.
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
5
2. VALUES
The PMTE’s core values are underpinned by the Batho Pele principles, and are augmented by the following values:
i.Integrity: by consistently honouring our commitments, upholding ethical, honest behaviour and transparent communication;
ii.Professionalism: by treating our stakeholders with respect and reliably delivering against expectations;
iii.Teamwork: by respecting diversity while sharing a common purpose and working together in cooperation with each other; and
iv.Innovation: by tirelessly seeking opportunities for service delivery improvement by thinking freely and not bound by old, non-functional, or limiting structures, rules, or practices.
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
6
3. STRATEGIC GOALS
i. To effectively and efficiently manage the life cycle of immovable assets under the custodianship of Public Works.
ii. To promote economic growth through integrated infrastructure development in urban and rural areas.
iii. To create employment opportunities and develop skills in the provision of construction, property and facilities management services to the State
iv. To leverage the State’s property portfolio to contribute towards Government’s broader transformation, empowerment and economic development goals.
v. Good corporate governance to support effectual service delivery
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
7
4. PMTE PRIORITY AREASi. To improve service delivery in the context of Government’s priorities
and to save costs to the Department and the fiscus by:o Maintaining the value of Government’s assetso Improving access to and quality of Government’s assetso Optimal utilisation of State stock and move away from leasing-ino Utilise State’s vacant properties productively to create a funding
stream for capital maintenance and improvements to extend the life-cycle of existing state properties;
ii. To reclaim mandate of Public Works ii. develop small proclaimed and unproclaimed harboursiii. develop Government precincts in small towns and rural areasiv. safeguarding the State’s assets from vandalism, theft and invasionv. reclaiming all misappropriated State landvi. preserve Government assets, structures, building, land parcels
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
8
4. PMTE PRIORITY AREAS (cont…)iii. Leverage the State’s property portfolio to contribute towards skills
development – FM Service Centres (Workshops)
iv. Leverage the State’s property portfolio to create employment (FM Service Centres, Cooperatives, Turnkey Solutions procurement);
v. Leverage the State’s property portfolio to empower emerging black business (REMS & FM divisions - targeting SMMEs for unutilised state owned properties and/or maintenance/refurbishment projects)
vi. Ensure water & electricity supply security through sound investment decisions that meets conservation and renewable energy targets
iii. Smart Meter Installations, iv. Renewable energy (e.g. solar geysers) v. Energy audits, monitoring, reporting and verificationvi. Capacity Building and Training – Energy Efficiency Basicsvii.Retrofitting
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
9
5. ALIGNMENT TO NDP AND MTSF
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
NDP/ MTSF PRIORITY MTEF Budget
Outcome 6: An efficient, competitive and responsive economic infrastructure network (NDP Chapter 3, 4 and 5):
The PMTE in collaboration with the Department of Environmental Affairs, the Department of Economic Development, the Department of Agriculture, Forestry and Fisheries and the South African Maritime Safety Authority (SAMSA) will develop identified harbours and State properties for economic development and revenue generation.
The PMTE, mainly through its Construction Project Management and Facilities Management Divisions will focus on electricity savings by meeting its renewable energy targets and ensuring that all future construction and refurbishment projects are in line with DPWs Green Building Policy
R1 818 631 000
Outcome 11: Protected and enhanced environmental assets and natural resources (NDP Chapter 4 and 5):
The PMTE, mainly through its Construction Project Management and Facilities Management Divisions will focus on water savings by meeting its water saving targets and ensuring that tender specifications include water saving equipment for all future construction, refurbishment and facilities management projects including unscheduled maintenance.
R 4 050 800
10
5. ALIGNMENT TO NDP AND MTSF (cont…)
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
NDP/ MTSF PRIORITY MTEF Budget
Outcome 7: Comprehensive rural development (NDP Chapter 6 : Inclusive rural economy)
The Department will be collaborating with sector departments and rural municipalities to coordinate infrastructure planning and ensure maximum positive impact in rural areas by making public services more accessible. The role of the Department is to unlock the potential of its collective asset base to stimulate the local economy in meeting the accommodation requirements of its user departments.
R6 Million
Outcome 8: Sustainable human settlements and improved quality of household life (NDP Chapter 8 : Transforming Human Settlements)
The Planning and Precinct Development Services of the Department ensures integrated planning of infrastructure and urban efficiencies by aligning and consolidating Government services to reduce costs associated with accessing public services, particularly by those who live in remote areas.
In addition, the Department will release well located land and properties for developmental purposes to the Department of Human Settlements
-
11
5. ALIGNMENT TO NDP AND MTSF (cont…)
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
NDP/ MTSF PRIORITY MTEF Budget
Outcome 12 : An efficient and effective development-oriented Public Service (NDP Chapter 13 : Building a capable and developmental State)
The PMTE provides office, functional and official residential accommodation and ensures optimal utilisation of immovable assets that contribute to improved service delivery.
Through the development of the Custodian Asset Management Plan and the User Asset Management Plan as principle strategic planning instruments, the PMTE will ensure that accommodation provided to user departments that promotes integration, accessibility, sustainability, environmental sensitivity, economic growth and social empowerment.
The medium term budget allocation for new, replacement, upgrading and additional infrastructure is R2.7 billion.
The PMTE medium term budget allocation is R33 billion (Clients capital budget, repair and maintenance, cleaning and gardening, private leases, rates and taxes)
12
6. EXTERNAL ENVIRONMENT
i. The expected performance of the South African economy and the need to expedite economic growth through the implementation of the NDP.
ii. An overall view of the South African Property Sector and the implications for the PMTE.
iii. The Construction sector, the challenges in infrastructure development and the PMTE’s role in addressing these issues.
iv. Trends in the formal and informal employment sector.
v. Current electrical and water supply challenges in South Africa and possible water and energy saving initiatives.
vi. Trends in the political environment and emerging drivers of politics for the next five years.
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
13
7. ORGANISATIONAL ENVIRONMENTi. The PMTE has a total staff establishment of 5 776 and a vacancy rate of
±23%. ii. A revised functional organisational structure has been developed, which is
aligned to the mandate of Public Works, depicting the following distinctive focal areas: i. Core Business - consisting of Real Estate Investment, Real Estate
Management, Facilities ii. Management, Real Estate Information & Registry Services, and
Construction Management. iii. Enabling and Support services - consisting of Management, Financial
Management and iv. Accounting, Operations Support Services, and Supply Chain Management. v. Direct Reports - consisting Internal Audit.
iii. The revised structure has been developed in line with the new business requirements benchmarked from the property management industry. i. The PMTE remains as a Trading Entity under the Accounting Officer of the
Department (i.e. the Director-General) until such time as a Government Component is established (as per Chapter 19 of the Treasury Regulations)
STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE
14
8. BUDGET ALLOCATION SUMMARY PER PROGRAMME
Programmes
Adjusted appropriatio
n
Medium-term expenditure estimate
2014/15 2015/16 2016/17 2017/18
(R’000) (R’000) (R’000) (R’000)
Administration 9 150 1 009 137 1 058 668 1 108 073
Real Estate Investment Management - 107 021 112 007 126 080
Construction Project Services 35 583 465 962 485 693 523 864
Real Estate Management Services 5 121 173 5 720 352 6 152 426 6 633 046
Real Estate Information and Registry Services
720 000 1 662 469 1 664 749 1 670 325
Facilities Management Services - 2 803 656 2 812 980 2 919 291
*Total 8 596 421 11 768 59712 286
52312 980
679
*Excluding infrastructure budget
15
9. BUDGET ALLOCATION SUMMARY PER ECONOMIC CLASSIFICATION (including Infrastructure Budget)
Economic classification
Adjusted appropriation
Medium-term expenditure estimate
2014/15 2015/16 2016/17 2017/18(R’000) (R’000) (R’000) (R’000)
Current payments 6 577 362 8 724 577 9 112 479 9 664 874Compensation of employees - 1 288 773 1 369 234 1 474 350Goods and services 6 541 656 7 398 875 7 705 008 8 150 877Damages and losses 20 000 20 000 20 000 20 000
Interest, dividends and rent on land
15 716 16 929 18 237 19 647
Transfers and subsidies 960 162 1 056 178 1 161 796 1 277 976Provinces and municipalities 960 162 1 056 178 1 161 796 1 277 976
Payments for capital assets 3 495 864 4 932 916 5 415 670 5 770 304Buildings and other fixed structures 3 495 864 4 902 223 5 378 256 5 731 995Machinery and equipment - 30 693 37 414 38 309Software and other intangible assets
- - - -
*Total 11 033 388 14 713 671 15 689 945 16 713 154
*Including infrastructure budget
16
10. EXPENDITURE ANALYSIS
i. The total budget allocation for PMTE for the 2015/16 financial year is R14,7 billion.
ii. In operationalising the PMTE, the focus over the medium term will be on the implementation functions of providing office accommodation to client departments at national government level, as well as the planning, acquiring, managing and disposing of immovable assets under the custody of DPW.
iii. Further focus areas include rebuilding the PMTE’s technical and professional capacity to support greater efficiency in national infrastructure investment, reducing costs to the State, and becoming self- sustainable.
iv. The PMTE’s revenue is generated mainly from rental income for private and state owned properties leased out to clients, client infrastructure projects and management fees earned through administrative services provided on behalf of client departments, as well as through transfers from DPW.
v. The administrative services provided include the payment of municipal charges on behalf of client departments at a management fee of 5 per cent, and the collection of rental income on both Government owned buildings rented to client departments and privately owned buildings rented on behalf of government departments from private landlords.
SP & APP - PMTE
17
10. EXPENDITURE ANALYSIS (cont…)
vi. Revenue is expected to increase from R10.7 billion in 2014/15 to R12.7 billion in 2017/18 at an average annual rate of 5.8 per cent due to additional transfers of R9.2 billion from DPW for the operationalisation of the PMTE.
vii. Cabinet approved budget reductions of R252.2 million will be effected over the medium term, mainly due to the under-spending on infrastructure projects. These budget reductions are moved to the PMTE as the implementation functions now reside with the PMTE.
viii. Previously, the PMTE did not have a budget for compensation of employees as the personnel costs were the responsibility of DPW. However, as a result of the operationalisation, DPW will, starting from 2015/16, transfer personnel and its associated costs to the PMTE in building its technical and professional capacity to achieve its objectives.
ix. Expenditure on goods and services is also expected to increase by 24.6 per cent, from R6.9 billion in 2014/15 to R8.6 billion in 2017/18.
x. 70.1 per cent of total expenditure over the medium term is expected to be on goods and services, especially in the Real Estate Management Services programme, which accounts for 51.1 per cent of the PMTE’s total spending.
SP & APP - PMTE
18
11. SUMMARY OF REVENUE SOURCES (including Infrastructure Budget)
Revenue
Adjusted appropriation
Medium-term estimate
2014/15 2015/16 2016/17 2017/18(R’000) (R’000) (R’000) (R’000)
Sales by market establishment 6 662 550 7 138 968 7 641 665 8 174 875Accommodation charges leasehold – intergovernmental
3 727 724 4 025 942 4 348 018 4 695 859
Management fees – Municipal services
190 000 209 000 229 900 252 890
Construction Revenue 2 744 826 2 904 026 3 063 747 3 226 126Other Sales 4 006 567 3 940 223 4 208 428 4 475 041
Accommodation charges – freehold 4 006 567 3 940 223 4 208 428 4 475 041Other Non-Tax Revenue 50 354 49 830 49 680 49 890
Fines, Penalties, Interest, Rent on Land
50 354 49 830 49 680 49 890
Transfers received 673 372 3 584 652 3 790 172 4 013 347Augmentation from DPW 673 372 3 584 652 3 790 172 4 013 347
*Total 11 392 843 14 713 673 15 689 945 16 713 153
*Including infrastructure budget
19
PART B: PART B: PROGRAMME AND SUB PROGRAMME AND SUB PROGRAMME PLANSPROGRAMME PLANS
Strategic Plan (Pages 79-128)Annual Performance Plan (Pages 23-86)
25
PROGRAMME 5: REAL ESTATE INFORMATION & REGISTRY SERVICESStrategic Objectives and Strategic Plan Targets
27
PART C: PART C: LINKS TO LONG-TERM LINKS TO LONG-TERM INFRASTRUCTURE PLANINFRASTRUCTURE PLAN
Strategic Plan (Pages 129-148)
28
1. NEW, REPLACEMENT, UPGRADE AND ADDITIONS
STRATEGIC PLAN - PMTE
No of pro-jects
Programme Outcome Main appro-priation
Adjusted appro-priation
Revised Estimate
Medium Term Estimates
2011/12 2012/13 2013/14 2014/15 2014/15 2014/15 2015/16 2016/17 2017/18
(R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000)
77 Departmental 285 294 228 106 255 513 207 100 -
207 100 111 194 168 808 182 613
165 Accessibility 11 386 4 992 7 098 11 369 -
11 369 9 005 9 482 9 956
31Dolomite Risk Management
32 167 32 355 24 717 73 000 -
73 000 141 000 148 473 155 896
114Land Ports of Entry
274 626 233 892 191 684 142 000 -
142 000 261 137 261 159 276 663
32Inner City Regeneration
42 059 94 838 36 199 6 900 -
6 900 101 000 106 353 111 670
46 Prestige 365 876 118 820 57 626 70 000 -
70 000 150 000 139 540 146 517
TOTAL1 011 408
713 003 572 837 510 369 510 369 773 336 833 815 883 317
29
NEW, REPLACEMENT, UPGRADE AND ADDITIONS: SIGNIFICANT PROJECTS
No Project Details Province Project cost
R`000
1. Pretoria, Salvokop, construction of bulk services for the STATS SA head office
Gauteng 73 405
Development of Government precinct
2. Cape Town, acquisition of Parliament Towers Western Cape
66 000
Acquisition of property
3. Pretoria, Bryntirion, Eastwood street entrance roads, refurbishment of existing roads on western side of Bryntirion estate
Gauteng 34 530
Refurbishment of existing roads
4. Research station, Antartica Island: Sanae IV research base: refurbishment of the existing base
Western Cape
31 509
Refurbishment of the existing research base
5. Pretoria, Thaba Tshwane, Swartkop Air Force Base, upgrading of wet services
Gauteng 30 928
Upgrading of civil infrastructure
30
NEW, REPLACEMENT, UPGRADE AND ADDITIONS: SIGNIFICANT PROJECTS
No Project Details Province Project costR`000
6. Cape Town, Rondebosch, Rygersdal complex - upgrading of the facility Western Cape
22 750
Upgrading of facility
7. Pretoria, DOD & SAAF 68 Air School north and south: bulk water connection and secondary engineering services: replacement and upgrade
Gauteng 21 910
Upgrading of civil infrastructure
8. Pretoria, Civitas Building, replacement of lifts Gauteng 18 727
Replacement of lifts
9. Cape Town, Parliamentary Villages, upgrading of access control at the three parliamentary villages by means of using electronic software
Western Cape
18 500
Upgrading of access to facilities
31
NEW, REPLACEMENT, UPGRADE AND ADDITIONS: SIGNIFICANT PROJECTS
STRATEGIC PLAN - PMTE
No Project Details Province Project costR`000
10. Johannesburg, Service Products, Dept of Labour, upgrading of infrastructure (buildings, roads, pavement and storm water drainage system) at Village Main & Springfields
Gauteng 18 300
Upgrading of facilities
11. Port Elizabeth, Eben Donges building, alterations and refurbishment including air conditioning and mechanical installation
Eastern Cape
17 506
Repairs, maintenance and upgrading of existing building
12. Lenasia, Lenz Military Base, dolomite risk management: upgrading of civil engineering services
Gauteng 15 920
Upgrading of civil infrastructure
13. Pretoria, Thaba Tshwane emergency dolomite call-out services Gauteng 14 167
Upgrading of civil infrastructure
32
2. REHABILITATION, RENOVATIONS AND REFURBISHMENT (PMTE CAPITAL)
32
Major renovations and refurbishment of state accommodation funded by PMTE through accommodation charges received from user departments and augmentation received from National Treasury
33
PLANNED MAINTENANCE (PMTE CAPITAL) : SIGNIFICANT PROJECTS
No Project Details Province Project cost
R`000
1. Pretoria: Agrivaal Building: Upgrade, additions and Refurbishment Gauteng 159 277
New office accommodation for Government Department
2. Pretoria: Magistrates Office Gauteng 48 914
Restoration of old Magistrate’s Court
3. George: Police ComplexWestern
Cape27 930
Repair to Masimanyani Police Complex
4. Cape Town: Parliamentary ComlexWestern
Cape24 720
Tuynhuis: Various refurbishments to stores, access for people with disabilities and security installations
34
PLANNED MAINTENANCE (PMTE CAPITAL) : SIGNIFICANT PROJECTSNo Project Details Province Project
costR`000
5. Bisho: Training College Eastern Cape 20 861
Repairs and Renovations to Training College
6.Caledon: Helderstroom Prison
Western Cape
19 390
Repair of Housing, Buildings and Related Services
7. Eshowe: Defence KZN 19 250
Rehabilitation of John Ross Highway
8. Worcester: Magistrate’s OfficeWestern
Cape17 150
Internal and External Repairs
35
3. MAINTENANCE AND REPAIRS (PMTE - CURRENT)
The maintenance and repair of existing state accommodation as funded by the PMTE through accommodation charges received from user departments
36
PLANNED MAINTENANCE (PMTE CURRENT) : SIGNIFICANT PROJECTS
No Project Details Province Project cost
R`000
1 Cape Town: Parliamentary VillagesWestern
Cape63 000
Integrated Facilities Management Services (5 Years)
2 Zonderwater Prison Gauteng 55 113
Maintenance of Electrical and Mechanical Installations
3 Cape Town: Parliamentary ComplexWestern
Cape40 900
Integrated Facilities Management Services (5 Years)
4 Pretoria: Government Printing Works Gauteng 29 850
Repair of leaking roof and structural work
37
PLANNED MAINTENANCE (PMTE CURRENT) : SIGNIFICANT PROJECTS
No Project Details Province Project cost
R`000
5. Cape Town: HarboursWestern
Cape26 463
Rehabilitation of 8 Fishing Harbours
6. Graaff-Reinet: Official Quarters and Police CollegeWestern
Cape25 918
Maintenance of leaking roof and drainage system
7. Klerksdorp: PC Pelser Building North West 21 262
Repair of electrical reticulation and mechanical installation
8. Paarl: Drakenstein PrisonWestern
Cape18 000
Repair and Maintenance of Prison Buildings and related services