DEPARTMENT OF PUBLIC WORKS P RESENTATION TO PORTFOLIO COMMITTEE ON PUBLIC WORKS 07 SEPTEMBER 2010

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DEPARTMENT OF PUBLIC WORKSDEPARTMENT OF PUBLIC WORKS

PPRESENTATION TO PORTFOLIO COMMITTEERESENTATION TO PORTFOLIO COMMITTEEON PUBLIC WORKSON PUBLIC WORKS

07 SEPTEMBER 201007 SEPTEMBER 2010

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TABLE OF CONTENTSTABLE OF CONTENTS

• Strategic Context• Implementation of the Strategic Plan in relation to the

Budget of the Department• Under-spending on Provision of Land & Buildings;• EPWP Incentive grants update;• Re Kgabisa Tshwane and the Inner City

Regeneration Programme;• Legislative Plan;• Profile of Vacancies;• Progress report on the Asset Register; and• Implementation of GIAMA.

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Strategic Context

• MTSF

• Sector outcomes

• DPW’s strategic priorities

• Performance Agreement of Minister with the President

• Risk Management

Implementation of the Strategic Plan in relation to the Budget of the Department

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PROGRESS/ ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME

• Programme 1: Finance & SCM

Key deliverable Target Progress/Achievements

Implemented action plan for GAAP compliance on PMTE

70% Business case and terms of reference for the system developed

Improved revenue & debtors management on the PMTE

50% reduction

80% collection

Debtors book has increased

Collection has decreased

Improved internal controls 90% implementation (7 policies)

Four policies developed (debtors management, movable asset management, entertainment, revenue and suspense account)

Improved management of movable assets

90% compliance Asset count is progressing as planned. Appointment of Sekela Consulting is underway. The project will be rolled out to the remaining regional offices

Payment of invoices 80% A significant improvement on the management of invoices noted.

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• Programme 1: Finance & SCM


Improved supply chain management

80% compliance

10% SLA achieved

PROQUOTE – monthly meeting to address regional challenges after system implementation. TRAINED OFFICIALS – 2 Bid Admin officials attended PFMA course. Processed application (accredited) 406

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Business unit Key deliverable Progress/Achievements

Information Services Enabling IT systems to support core operational areas (IE works)

The integration of IE works is at 85% completion, the process is progressing as planned

Human Resource Management

Human Resource Management Plan

Reduced vacancy rate

The structure is been reviewed and updated

453 critical posts were identified and approved, the process of filling these positions is underway

Gender Implementation of the disability strategy

Against the target of 2%, total number of Persons with Disability is 56 = 1.15% against the total staff complement of 5039

International Relations Transfer critical skills courtesy of international bilaterals and agreements

12 draft MoUs on infrastructure development currently under discussion and consideration by counterparts

• Programme 1: Corporate Services

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Accurate and complete information on immovable asset register

90% populated

97 705 properties

The asset register is 80% of target complete.

78 164 properties

National vesting plan 55%

19 660 land parcels

The plan has been completed and circulated for implementation – 52 contract workers will resume duty mid September 2010

Approved amnesty call strategy 100% completed strategy The strategy is 85% complete

Condition assessments Uniform template finalized, circulated to regions and provinces for inputs

Service level agreements with client departments

Signed SLA for all client departments

SLAs submitted to 41 client departments, Human Rights Council & SARS has signed the SLA’s. The process to have client departments signing off will be fastracked

Implemented AIM programs (Energy and water efficiency, accessibility and rehabilitation)

Accessibility – 64 buildings

Rehabilitation – 64 buildings

193 buildings identified for the accessibility program, while 67 are been rehabilitated

• Programme 2: Immovable Asset Investment Management

PROGRESS/ ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME (cont…)

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Key deliverables Target Progress/Achievements

User Asset Management templates 1-12 90% UAMP templates completed and submitted to 40 clients

Implementation of GIAMA

Well managed immovable assets in line with property portfolio strategies

70% 33% of portfolio strategies developed

Effective CAMPS 70% 22% of CAMPS completed

Developed strategies to increase revenue on superfluous but not redundant state assets

10% 0.25% of revenue increased

Disposal program Foreign properties – 20

Properties for commercial purposes - 30

13 Foreign properties approved for disposal, while 14 are disposed for commercial purposes.


PROGRESS/ ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME (cont….)

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Key deliverables Target Progress/Achievements

Effective release of land for reform purposes

55 properties 34 properties disposed

Effective release of land for housing and agricultural purposes

1 000 hectares of Land parcels

1067.47 hectares of land disposed for human settlement purposes



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• Programme 2: Inner-City Regeneration

Key deliverables Progress/Achievements

Revitalization and development of rural towns to serve as centres for rural economies

Focus will be on Tshwane (Salvokop) as there is no budget allocation to extend the programme

Maximize utilization of state properties within major cities

Spatial research is been conducted for Matatiele and Mthatha with the view of developing Government Precincts

Construction of capital projects 19 client capital projects and 37 DPW capital projects are underway, including 3 BCOCC Capital Projects that are under construction stage – (rolled over projects)

Construction of maintenance projects 28 planned maintenance projects are underway

PROGRESS/ ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME (cont….)

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• Programme 2: Special Projects

Key deliverables Progress/AchievementsBuilt and upgrade 2010 stadia The projects were 100% completed

and handed over

GOLELA (Swaziland) 90% complete

Vioolsdrift ( Namibia) 100% complete

SKILPADHEK (Botswana) 85% complete

LEBOMBO (Mozambique) 100% complete


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• Programme 2: Regional Operations


Total number of capital projects = 3447

80% completion of capital projects

Client Capital = 1472

DPW Capital = 552

Planned maintenance = 1423

117 projects (status 6A:Practical completion-278 projects (Status 7-Final delivery)-33 projects (status 8)

Procured leased accommodation

3028

Property and facilities management and maintenance projects

cleaning services (557), day-to-day maintenance (± 4950) , municipal services (state) (7480) and municipal services (leased) (1743)


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• Programme 4: Construction & Property Policy

Key deliverables Progress/Achievements

Contribution to the review of the Ministerial handbook

The review of Chapter 4 is currently underway

Review and development of DPW White Paper

ToRs has been developed

Construction and Property Charter implementation

The Construction Charter Constitution amended as per DPW requirements. The process of launching the Charter Council is underway. Property Charter Council continued with engagements with DTI on Section 9 application.


FINANCIAL PERFORMANCEFINANCIAL PERFORMANCE

UNDER-SPENDING ON PROVISION OF LAND & BUILDINGS

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Financial Performance per ProgrammeFinancial Performance per Programme

Programme Adjusted budget allocation 2009/10

R’000

Expenditure as at 31 March 2010

R’000

% Exp

Prog 1

Administration 774 228 773 431 100%

Prog 2

Provision of Land and Buildings 4 390 594 4 170 356 95%

Prog 3

National Public Works Programme 837 177 697 223 83%

Prog 4

Auxiliary and Associated Services 47 131 46 207 98%

Total 6 049 130 *5 687 217 94%

*Amounts reported here differ from those reported to National Treasury as the Departments’ accounts were still open when reporting to National Treasury. The amounts reported here takes the Audit journals into account

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Expenditure Report 2009/10- Programme TwoExpenditure Report 2009/10- Programme Two

Subprogrammes Final Appropriation

Expenditure Exp

%

Infrastructure 1 462 325 1 253 581 86%

Property Management 2 200 264 2 194 225 100%

Asset Management 139 594 138 835 100%

Augmentation of PMTE 588 411 588 411 100%

Total 4 390 594 4 175 052 95%

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Expenditure Report 2009/10- Programme ThreeExpenditure Report 2009/10- Programme Three

Economic classification Final Appropriation

Expenditure Exp

%

Compensation of employees 72 716 60 670 83%

Goods and services 121 817 118 055 97%

Transfers and subsidies 641 091 513 184 80%

Capital assets 1 553 1 553 100%

Total 837 177 693 462 83%

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Breakdown of Capital Budget - InfrastructureBreakdown of Capital Budget - Infrastructure

Item

Allocation

R’000

Adjustment/Roll-over

R’000

Final Allocation

R’000

Expenditure

R’000

% Exp

Departmental 58 260 6 187 64 447 58 178 90%

Accessibility for disabled people 20 000 20 000 14 614 73%

Dolomite Risk Management 25 376 25 376 21 168 83%

Land Ports of Entry 668 284 17 101 685 385 643 306 94%

Prestige 415 569 34 113 449 682 390 342 87%

RKTP / ICR 33 150 54 285 87 435 80 117 92%

Macro Re-organisation of the State 130 000 130 000 45 859 35%

TOTAL 1 220 639 241 686 1 462 325 1 253 584 86%

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Reasons for under spending on the infrastructure Reasons for under spending on the infrastructure budgetbudget

• Departmental– Delay in payment as part of DPW’s contribution to the

replacement of the research base on Marion Island

• Accessibility for people with disabilities– Non responsiveness of the bidders delayed the appointment

of service providers– Cancellation of SAPS facilities as part of the programme due

to devolution process– Change in the initial scope of works– Funds were spent against 126 of the 137 allocated projects

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• Dolomite Risk Management– Delay in procurement of specialist consultants and

contractors required to implement programme successfully

• Land Ports of Entry– Skilpadhek: The project was delayed due to negotiations for

the acquisition of a portion of a property in the middle of Border Post footprint. This is a National Key Point and the property had to be acquired

– Lebombo: The One Stop Border Post project initially planned for Lebombo had to be restructured into phases due to financial constraints. Legal implications relating to operations and construction required on foreign territory further hampered the execution of the project

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• Prestige– Under-expenditure due to delays experienced in the

acquisition of Prestige house. This was caused by:• Suitability and availability of houses( challenge)• Price negotiation process (challenge)

• Inner City Regeneration – Delay in obtaining approval for additional work at the

Government Garage (accommodation for Government Printer)

– Delay in the procurement process to appoint consultants for the joint DPW and Tshwane Inner City Precinct Plan

• Procurement process has been finalised and the consultants consortium will be appointed shortly

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• Macro Re-organisation of the State– Funding to the amount of R 150 million was made available– R 130 million of this amount was allocated to the provision of

accommodation while the balance of R 20 million was allocated to the procurement of furniture for houses and offices

– The amount allocated was to be used for residential and office accommodation

– Accommodation to be acquired or leased depending on the need of the Client and the availability of accommodation

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Infrastructure Expenditure

-

500,000

1,000,000

1,500,000

2,000,000

2007/08 2008/09 2009/10

Budget

Expenditure

57%

87%

86%

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Funding of the IDTFunding of the IDT

• A request amounting to R800m over the MTEF period was included in the Department’s Policy Options submitted to National Treasury

• This amount is made up of R200m, R300m & R300m for the 2011/12, 2012/13 and 2013/14 financial years respectively

• The Department presented to MTEC on 26 August 2010 where this was once again emphasized as one of the Department’s priorities in terms of request for additional funding

• The Department now has to await the final MTEC outcome.

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EPWP INCENTIVE GRANTS EPWP INCENTIVE GRANTS UPDATEUPDATE

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Introduction

• The EPWP incentive has now been introduced to all sectors of the EPWP from the 10/11 financial year.

• The Infrastructure sector incentive is applicable to Provincial Departments and Municipalities.

• The Environmental sector incentive is applicable to National Departments through their appropriations from National Treasury.

• The Non-state sector grant is paid to Non-Government Organisations ( NGOs) and Non-Profit Organisations through the Independent Development Trust ( IDT) which was appointed as the intermediary.

• The Social sector grant is paid as a schedule 5 grant to Provincial DSD and DoE

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- Develop and review of policy framework for incentive

- Determine targets, thresholds and incentive allocations

- Provide technical support- Verify and report data for incentive payments- Audit public bodies – compliance to incentive

requirements

Role of eligible Public bodiesRole of DPW

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- Prepare EPWP project plans i.r.o. targets

- Register and implement EPWP projects

- Update project information monthly

- Maintain project documentation and records for audit purposes

Role of Public bodies

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Role of Provincial Treasury

- Disburse incentive to Provincial Departments

- Monitor incentive spending and compliance to the

Division of Revenue Act (DORA)

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Role of National Treasury

- Monitor compliance of DPW and Public Bodies to DORA i.t.o. the incentive

- Monitor spending by DPW and Public Bodies on the incentive

- Support DPW in the development of the incentive policy framework

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Province Incentive allocation for the 09-10 financial year

(R’000)

Incentive payment for 3rd quarter 09-10

( R’000)

Cumulative Incentive payment after 3rd quarter 09-10

(R’000)

Percentage of the 09/10 incentive allocation paid (%)

Eastern Cape ‘29,992 15,381 17,457 58%

Free State 23,008 0 0 0%

Gauteng 500 0 0 0%

KwaZulu-Natal 84,180 35,100 84,854 101%

Limpopo 500 0 0 0%

Mpumalanga 5,047 0 0 0%

Northern Cape 500 0 0 0%

North West 7,192 0 0 0%

Western Cape 500 3,152 14,269 2,854%

Total 151,419 53,633 116,581 77%

Performance on the EPWP incentive grant by Provinces after 3rd Quarter 09/10 financial year ( paid in 4th quarter 09/10)

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Province Incentive allocation for the 09-10 financial year

(R’000)

Incentive payment for 3rd quarter 09-10

(R’000)

Cumulative Incentive payment after 3rd quarter 09-10

(R’000)

Percentage of the 09/10 incentive allocation paid (%)

Eastern Cape 53,559 3,905 7,818 15%

Free State 9,073 1,047 1,956 22%

Gauteng 34,881 51,038 59,875 172%

KwaZulu-Natal 39,974 15,038 26,102 65%

Limpopo 18,328 2,626 6,140 34%

Mpumalanga 13,454 1,468 2,453 18%

Northern Cape 15,496 960 5,769 37%

North West 9,694 1,493 2,787 29%

Western Cape 7,289 708 1,271 17%

Total 201,748 78,644 114,170 57%

Performance on the EPWP incentive grant by municipalities after 3rd Quarter 09/10 financial year ( Paid in the 4th quarter of the 09/10 financial year).

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Performance on the EPWP infrastructure incentive by Provinces after the 1st Quarter of the 10/11

financial year reporting

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

1st Quarter incentive payment for the 10-11 financial year

(R’000)

Total incentive disbursed

In the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed (%)

Eastern Cape 60,354 5,640 19,011 3%

Free State 13,767 817 817 6%

Gauteng 38,821 0 2,498 6%

Kwa-Zulu Natal 169,470 28,896 59,300 35%

Limpopo 2,903 0 2,617 90%

Mpumalanga 18,074 0 0 0%

Northern Cape 1,167 0 0 0%

North West 2,897 0 0 0%

Western Cape 23,218 0 1,700 7%

Total 330,671 35,352 85,943 26%

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Performance on the EPWP infrastructure incentive by Municipalities after 1st quarter 10-11

reporting

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

1st Quarter incentive payment for the 10-11 financial year

(R’000)

Total incentive disbursed

In the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed

Eastern Cape 97,806 6,844 16,182 17%

Free State 34,400 1,402 1,539 4%

Gauteng 165,048 69,984 110,476 67%

Kwa-Zulu Natal 123,613 18,056 42,526 34%

Limpopo 55,355 4,955 16,195 29%

Mpumalanga 37,288 568 602 2%

Northern Cape 50,399 1,889 1,931 4%

North West 36,049 1,887 9,400 26%

Western Cape 26,038 823 1,408 5%

Total 622,996 106,119 200,259 32%

Inner-City Regeneration ProgrammeInner-City Regeneration Programme

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Inner-City Regeneration ProgrammeInner-City Regeneration Programme(Overview)(Overview)

• As per cabinet memorandum of 2005, objective is to improve the physical work environments of the headquarters of National Government departments in the Inner City of Tshwane.

• Inner City regeneration of Tshwane & metropolitan Cities is the core responsibilities of Municipalities & DPW’s role in contributing to this is to upgrade its buildings in line with the spatial development planning framework (SDF).

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Inner City Regeneration Programme (Over Inner City Regeneration Programme (Over view cont’d)view cont’d)

• Memorandum of Understanding for the RKTP signed in November 2005 between the DPW and the CTMM, as well as the involvement of the Gauteng Province

• MOU for the RKTP signed in February 2006 between the DPW and National Treasury

• Participate in other Cities using the same principle, i.e. Upgrading of State buildings for use by National Government department’s in line with SDF of respective local authority

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• Improve office accommodation to an acceptable norm;

• Jointly develop solutions with departments

• Improve urban environment, including urban security, public spaces, and accessibility

• Attract private sector investment

• Contribute to Inner City renewal and rejuvenation

• Develop the image of Tshwane as an important capital city in Africa

• Contribute to BEE

OBJECTIVES of RKTPOBJECTIVES of RKTP

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LEGISLATIVE PLAN FOR DPWLEGISLATIVE PLAN FOR DPW

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Agrément South Africa (ASA)Agrément South Africa (ASA)

1. Agrément SA was established through a delegated authority by the then Minister of Public Works in 1969;

2. The Department has began a process of reviewing the governance of ASA as well as its performance and effectiveness;

3. After approval by the Public Works Minister, the Business Case will be submitted to the Joint Committee of the Ministries of Public Service and Administration and Finance (the JEC) for establishment of Agrément as a Schedule 3 entity;

4. The draft Bill will then be submitted to Parliament

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Expropriation BillExpropriation Bill The Expropriation Bill [B16-2008], was withdrawn from

Parliament in September 2008 • The Department is currently finalising a discussion

document on the review of the Expropriation Act• This will be distributed for comments to identified

government role-players and state-owned enterprises• Comments received will be considered on the discussion

document and Bill be drafted• Normal legislation consultation process will be followed

including submission of the Bill to NEDLAC • The certified draft Bill will thereafter be submitted to

Parliament

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PROFILE OF THE VACANCIESPROFILE OF THE VACANCIES

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Vacancy Profile : April – August 2010Vacancy Profile : April – August 2010

Establishment (Total) 6283

Filled 4986

Vacant 960 Core

1297

337 Support

Vacancy % 20,64%

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Vacant Core Positions Per Salary Level

Salary level Number of vacant positions

15 1

14 4

13 24

11 157

9 127

8 68

7 AND BELOW 579

TOTAL VACANT CORE POSITIONS 960

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Filled Vacant Posts per Regions-August 2010

REGION FILLED VACANT TOTAL VACANCY %

Bloemfontein 315 92 407 22.60

Cape Town 854 163 1017 16.03

Durban 611 52 663 7.84

Head Office 819 320 1139 28.09

Johannesburg 407 107 514 20.82

Kimberley 177 61 238 25.63

Mafikeng 211 88 299 29.43

Mthatha 140 59 199 29.65

Nelspruit 203 71 274 25.91

Polokwane 289 75 364 20.60

Grand Total 4986 1297 6283 20.64

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Possible Reasons For The High Vacancy RatePossible Reasons For The High Vacancy Rate

• Staff attrition (e.g. resignations and retirement)

• Shortage of scarce skills & funds

• Changes in the strategic focus

• Ongoing organisational development.

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Current Interventions To MitigateCurrent Interventions To Mitigate

• Recruit graduates and young professionals

• Advertisement of Scarce Skills on a higher notch

• Corporate Social Investments – Bursaries, Outreach Programmes/Social Mobilization Campaigns, etc. (members of Portfolio Committee can also assist)

• Retention Strategy – e.g. Counter offers

• Assessment to abolish and/or refocus certain posts

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Status ReportStatus Report

• 360 posts advertised since April 2010

• 101 appointments made (96 permanent/ 5 contract)

• HCI Initiatives

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IMMOVABLE ASSET REGISTERIMMOVABLE ASSET REGISTER

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Audit qualifications: 2009/10Audit qualifications: 2009/10

• No record of physical condition of assets

• Incomplete information on the register

• FNB Stadium not on the register

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Action Plan and ProgressAction Plan and Progress

Activities Progress

Condition Assessment of assets.

•Asset Register Management has finalized the draft template on condition assessment which has been circulated to internal DPW units and regions for comments• Formal engagements with all Provincial Public Works departments will continue to ensure uniformity between the two spheres of government •Funding for 2010/11 MTEF will be requested from National Treasury to conduct condition assessments

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Activities Progress

Some of the required fields in line with the National Treasury guide. Not all the cells in a column have been completed

•Asset/Property Management Information System has various modules which contains the information fields as indicated on the national treasury guide, for example Asset Register, Debtors, Municipal rates & services charges, Day to day maintenance and Leasing modules. Auditor- General refers to the fields on the Debtors and Lease modules. The information provided to the Auditor-General was on the Asset Register Module as requested. An analysis conducted on completion of fields on land parcels by Auditor-General reflects improvements on erf/farm number 99%, user departments 99%, extent/hectares 94%, title deeds 91%, portions 100%, registered owner 98% and responsible department 66%

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Activities Progress

The FNB stadium is not reflected on the asset register

The FNB stadium is reflected on the asset register as property code 145852 on the land parcels

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PROGRESS REPORT ON THE PROGRESS REPORT ON THE IMPLEMENTATION OF GIAMAIMPLEMENTATION OF GIAMA

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Progress made towards implementation

In April 2009, the President signed a proclamation to bring GIAMA into operation as follows:

National departments 30 April 2009

Provincial departments 01 April 2010

National and Provincial stakeholders finalized key policies and guidelines to be put in place for the strategic management of immovable assets. These policies and guidelines are the –

a) compilation of a user asset management plan (U-AMP) as well as the custodian asset management plan (C-AMP);

b) compilation and maintenance of immovable asset registers;

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Progress made towards implementation (Cont…)

c) the updating of the vesting guidelines to be applicable to both national and provincial departments;

d) the alignment of asset & property management policies such as the state official residential accommodation policy;

Compilation of Asset Management Plans (Provinces)

a) all provinces have started developing the user asset management plans for submission to relevant treasury for funding purposes in terms of section 6 of the Act.

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Compilation of Asset Management Plans (National)

a) DPW has finalized all UAMP templates for FY’s 2011-2012, supported by High Level Options Analysis for 27 National Departments and 6 Entities.

b) DPW is also providing commitment information to 3 Departments that have opted to appoint private service providers to assist in the compilation of their UAMP’s;

c) DPW is interacting with the newly created, split and merged departments regarding the acquisition of new or split of immovable assets per client portfolio;

d) Newly created departments may require exemption

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Compilation of Immovable Asset Registers

a) The guideline for the compilation of immovable asset registers has been completed with inputs from provinces;

b) The “ideal end state” information fields have been incorporated into the GIAMA Asset Register (GAR) module of the iE-Works system;

c) DPW has developed a proposal for a valuation model to assist custodians in determining the book value of state-owned immovable assets. The model consists of three (3) valuation methodologies that could be utilised depending on the nature of properties and the availability of comparative information;

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Confirmation of ownership “vesting” of state-owned properties

a) National Vesting Master Plan incorporating national and provincial land has been developed and requires custodians to finalise the vesting of state land by latest 2014;

b) Although the bulk of applications are still with the Provincial State Land Disposal Committees (PSLDC) for finalisation, a significant progress has been made;

c) It is important to note that the delay in the finalisation of the vesting programme does not preclude departments from populating their asset registers and preparing U-AMPs and C-AMPs;

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THANK YOU!THANK YOU!

Documents

DEPARTMENT OF PUBLIC WORKS P RESENTATION TO PORTFOLIO COMMITTEE ON PUBLIC WORKS 07 SEPTEMBER 2010