PRESENTATION TO THE POTFOLIO COMMITTEE ON PUBLIC WORKS

STRATEGIC PLANNING AND BUDGET PRESENTATION

07 May 2008

Context of the Presentation

• The department’s strategic plan is premised on the Government’s pledge in SONA “to work together to realise the core aspiration of our people to attain a better life for all”

• Consequently, in response to the President’s call for “business unusual” the presentation attempts to sketch out the department’s response and role towards the achievement of the Government’s set out objectives.

Format of the Presentation

• The presentation will expose the Committee on the department’s role on the roll-out of the Apex Priorities

• A high level Government policy issues relating to the interventions towards the transformation of the sectors falling under the department’s responsibilities

• A high level discussion of the department’s programmes in general

Policy Unit

Objectives of the Policy Unit

“To provide strategic leadership for sustainable growth, development and transformation of the property and

construction industries”

Key Performance Areas 2008-2009

In pursuance of DPW’s mandate and broader government objectives, the Policy Unit will continue to -

• provide strategic leadership for the growth, development and transformation of the construction- & property industries;

• regulate the construction- & property industries and related professions;

• promote best practice in the management of state immovable assets through roll out of the implementation of Government Immovable Asset Management Act (GIAMA)

• contribute to the National Public Works Programmes and the Government’s Programme of Action; and

• undertake a series of research to determine points of policy intervention to promote growth, development and transformation of both sectors

Transformation of the Property and Industry

• As contribution to the transformation of the property sector, the department will establish a Property Incubator model to create an enabling environment to promote sustainable emerging enterprises in all the property activities of the department;

• Emerging enterprises, selected through a pre-approved criteria, to be in the Incubator Programme for a limited number of years;

• Work opportunities to be provided through selective procurement process as well as supply-side support such as access to finance, training, mentorship, enterprise development, etc.

• Targets to be set taking into account the baseline.

• These property activities include: Facilities Management, lease broking, leasing, disposals.

…Transformation of the Property and Industry contd

• Quick wins to be identified:- lease broking;- property services such as cleaning, garden services with specific focus to promote women- and youth-owned enterprises (ensuring job security and quality);- disposal of under and or unutilised buildings and small pieces

especially residential properties;- release of land for land reform and low cost housing; etc.

• Department will target high levels of participation of emerging enterprises and individuals in these areas to get close to Cabinet’s target of 85%.

Transformation of the Construction and Industry

• Together with provincial departments of Public Works, the department will roll out the implementation of the National Contractor Development Programme (NCDP) supported by CIDB: - targeting emerging enterprises at all levels of the CIDP Register,--support programmes to be structured in line with capacity requirements of the enterprises;

• Strategic co-operation to be established with different public and private entities.

• Department will also roll-out the implementation of its Skills Development Strategy focusing on improvements through out the skills pipeline.

Regulation of the property and construction industries

• Recognising the developments in the property and construction industries, the department will conduct extensive reviews in the following policies and legislation;- its White Papers and Public Works and Construction industry;- legislation establishing the State Enterprises reporting to Public Works;- Review of Expropriation Act and CBE and Professional Councils Legislation is underway.

• Conduct research on: - different pieces of legislation administered in different spheres of government that impact on property development;- different legislation administered in different spheres of government that

regulate to construction industry.Appropriate action to be taken depending on the outcome.

Best practice and uniformity in state immovable asset management

• In driving the implementation of GIAMA throughout national and provincial government departments, the department will:

- finalise development of and publicise comprehensive guidelines on GIAMA for users and custodians;

- assist provincial custodians to ensure state of readiness for implementation by ensuring that:

> asset registers are updated to meet the NT minimum requirements;

> vesting of state land;

> adequate capacity is developed to implement GIAMA;

> development of uniform policies for property and asset management.

Contribution to National Public Works Programme (NPWP) and job creation

• Department will conduct research to assess current government initiatives that contributed to the principles of NPWP with recommendations on appropriate interventions;

• Appoint at least 10 interns during this current year.

Research

• A Research Coordinating Committee will be established comprising all relevant units of the department to establish research agenda and coordinate all research.

• Based on this a series of research will be undertaken to determine areas of intervention by the department.

• Releasing of publications on critical economic information about the state of the industries

EPWP

Objectives of EPWP“Contribute towards the eradication of poverty

through the creation of temporal work opportunities, income generation, skills development and exit

opportunities where it is possible. ”

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Key performance areasStrategic Review - 2008

FOCUS AREA 1: ENHANCING EPWP INTERNAL CAPACITY AND PERFORMANCE1. Enhance internal EPWP capacity 2. Positive EPWP public profile 3. Improve EPWP reporting/verification/integrity 4. EPWP performance evaluation and action plan to improve qualitative performance FOCUS AREA 2: ENHANCING DELIVERY OF THE EPWP5. Enhance Municipal EPWP delivery capacity 6. Enhance Provincial EPWP delivery capacity 7. Enhance National DPW EPWP delivery capacity as implementer

FOCUS ARE 3: EXPANDING AND IMPROVING BENEFICIARY SELF SUFFICIENCY8. Expand and improve beneficiary training9. Facilitate the implementation of the exit strategy approach

FOCUS AREA 4: DEVELOPING A LONG TERM STRATEGY OF THE EPWP10. Develop and secure agreement for the long term strategy of the EPWP11. Identification of new areas for expansion [including Environmental Sector]

Outcome Outputs

An efficient and effective nationwide institutional capacity is established that mobilises, supports, monitors and reports on the implementation of the EPWP

Organisational development support provided to achieve reqd capacity:

-review and adjust current structureIntegrated management process established and maintained [roles & responsibilities at Provincial level resolved & targets and protocols set]

KPA 2: Positive EPWP Public Profile

Positive perceptions of the EPWP [potential beneficiaries and the general public]

Compliance against visibility requirements promotedCommunications Campaign to profile successes implemented [ongoing high quality documentation of beneficiaries]Constructive critical debate around the EPWP promotedBeneficiary awareness increased Information on progress of the EPWP against target communicated widely to the public [including the development of tools]

KPA 1: Enhance internal EPWP capacity

Outcome OutputsAccurate, timeous and comprehensive information on EPWP activities and outcomes are available to EPWP decision makers and managers and for packaging to the public.Implementers receive timeous and appropriate reports and feedback on their EPWP performance

Development and implementation of a web-based EPWP MIS Effective utilization of the EPWP MIS Ongoing verification programme

Efficiency, effectiveness and impact of the EPWP improved

Review and adjust evaluation framework Specific evaluations requested and undertakenAn analysis report produced into the duration of work opportunities, level of labour intensiveness and implications for training and person year targets.An analysis report produced on cost benefit of labour intensive approaches Sector and programme managers participate in a critical analysis of their data and establish strategic interventions to improve sector and provincial performance

KPA 3: . Improve EPWP reporting/ verification/ integrity

KPA 4: EPWP performance evaluation and action plan to improve qualitative performance

Focus Area 2 : Enhancing delivery of the EPWP

KPA 5 : Enhance Municipal EPWP delivery capacity

Outcomes Outputs

- EPWP Municipal targets are met and/or exceeded [specified target jobs, training, SME].

- EPWP contributes to improved service delivery at Municipal level.

- EPWP mainstreamed at Municipal level.

Infrastructure technical support provided to 130 prioritized Municipalities

Support provided to 30 Municipalities in addition to the 130 prioritized Municipalities

Excellence recognised and rewarded Support for effective social facilitation provided New Venture Learnership and Cooperatives developed and

supported Social Technical support provided to six metros and two district

municipalities based on investigation Large infrastructure projects implemented EPWP Waste Management Initiative implemented Vuk’uphile Programme implemented

KPA 6 : Enhance provincial EPWP delivery capacity

Outcomes Outputs

EPWP Provincial targets are met and/or exceeded [specified target jobs, training, SME].

EPWP contributes to improved service delivery at Provincial level.

EPWP mainstreamed at Provincial level.

Support provided to the Early Childhood Development (ECD) programme Support provided to the Home Community Based Care (HCBC) programme Technical support provided to the Large infrastructure project Technical support provided to the Access Roads programme Vuk’uphile Programme implemented Provinces supported to identify accommodation for social sector facilities in

DPW managed properties Support provided to Provinces on NYS roll out New Venture Learnership and cooperatives developed and supported Excellence recognized and rewarded Support for effective social facilitation provided Technical support to new provincial social programmes provided [subject to

provincial commitments]

Focus Area 2 : Enhancing delivery of the EPWP

KPA 7 : Enhance National DPW EPWP delivery capacity as implementer

Outcomes Outputs

DPW demonstrates its commitment to lead and contribute to the achievement of EPWP National targets [work opportunities, training, SME] and improves service delivery through the EPWP.

DPW mainstreams EPWP in targeted programmes

DPW Capital and Building Maintenance Projects are implemented as EPWP projects

National youth service [NYS] involved in DPW’s building activities

Social sector facilities accommodated in un-used DPW managed properties

Focus Area 3: Expanding and improving beneficiary self sufficiency

KPA: 8 Expand and improve beneficiary training

Ability and confidence of beneficiaries to access work opportunities is enhanced

DoL processes for accessing beneficiary training streamlined [all processes including role of public body]

Prior training prioritized and implementation motivated

SETA processes for accessing learnerships and skills programmes [accredited training] streamlined

Training content is adjusted to prioritize technical skills.

Training provider capacity is enhanced Capacity of public bodies to manage and facilitate

training is enhanced.

Focus Area 2 : Enhancing delivery of the EPWP

KPA 9 : Facilitate the implementation of the exit strategy approach

Outcomes Outputs

Broad based understanding obtained amongst stakeholders and implementers on the role of the EPWP in respect of beneficiaries accessing sustainable exit opportunities.

Specific exit plans are developed for EPWP supported SME’s/NYS

A practical, implementable and sustainable exit framework is developed by sector for the EPWP

Focus Area 4: Developing a long term strategy for EPWP

Long term EPWP programme design formulated and approved

Finalise Mid term Review Complete Strategic Review Formulate Concept report

Formulate detailed report

Focus Area 3: Expanding and improving beneficiary self sufficiency

KPA 10 : Develop and secure agreement for the long term strategy of the EPWP

KPA 11 : Identification of new areas for expansion

Outcomes Outputs

New areas identified and scoped

Environmental sector review and other inputs are analysed and converted into an expansion plan for the sector

Health Systems Trust social sector report and other inputs are analysed and converted into an expansion plan for the sector

Jobs for Growth programme reviewed and EPWP expansion plan formulated

An evaluation of Infrastructure services backlogs undertaken and EPWP expansion opportunities identified

An evaluation of the 2010 transport programme undertaken and EPWP expansion opportunities identified

Focus Area 4 : Expanding and developing a long term strategy of the EPWP

ASSET MANAGEMENT

Objectives of Asset Management“Unit’s specific purpose is to ensure that immovable asset owned and/or utilised for delivering various government

services yields functional, economic and social benefits to the State for improved service delivery”

Key Performance Areas2008 -2009

• Provide efficient and effective Asset Management• Implementing GIAMA-contribution to poverty alleviation and job

creation, improving service delivery, complying with corporate governance requirements

• Promoting BEE and contributing to the transformation of the construction and property industries

• Supporting Expanding Public Works Programme • Accelerated and Shared Growth Initiative and (ASGISA) Joint

Initiative for Priority Skills Acquisition (JIPSA)• Implementation plan for the Turnaround Strategy

National Infrastructure Maintenance Strategy

• Cabinet has recognized the importance of infrastructure maintenance within government and the role that effective maintenance will play in support of ASGISA.

• To this end cabinet has approved the National Infrastructure Maintenance Strategy (NIMS) and the Department of Public Works has been tasked with leading the implementation of the programme to deliver on the strategy.

• Implementation of the strategy requires significant coordination within government, in order to ensure that all the organs of state plan effectively for and implement maintenance of their strategic infrastructure.

• Infrastructure, in the form of public buildings, roads, water and sewerage systems, electricity and other services, supports quality of life and is the foundation of a healthy economy.

• NIMS is going to be formally launched before June 2008

Asset Management Plans and GIAMA Implementation

• Are assessed in relation to their performance, suitability, condition and the effect of the condition on service delivery ability; and

• Assets are decommissioned in line with assessment recommendations.

• Asset management has completed the first set of User Immovable Asset Management Plans (UAMPs) and embarked on the second phase.

• Guidelines for the Custodian Immovable Asset Management Plans (CAMPs) will be completed by 30 July 2008 and the actual CAMP will be in place during the 2008/09 fiscal year.

Access for People with Disabilities (AMs APEX Priority 1)

• Government has an obligation to make its buildings and facilities accessible to all its citizens, including people with disabilities.

• The following categories of people are affected, include but not limited to physically disabled (minor to quadriplegia), ambulatory problems (from temporary to problems due to age & infirmity), blind and partially sighted, hearing impaired, speech impaired, intellectually challenged and minors and the aged.

• Although an amount of R 63 million was to be prioritised from the maintenance budget, it has since been resolved that the operations branch make access for people with disabilities mandatory in all new buildings specifications.

• The old buildings will have to be prioritised from respective client departments’ capital budget.

Rehabilitation of Unutilised State Buildings (AMs APEX Priority 2)

• With a view of enhancing the value of State immovable assets and improving service delivery to clients, the department will embark on the rehabilitation of State-buildings primarily for use by government departments.

• Priority will be given to properties that are strategically located to support the functions of the client departments.

• Also, the properties that would stimulate economic development in all regions in the country will be given a priority.

• An amount of R 233 million is required for 2008/09, of which R 90 million from the Trading account augmentation has already been set aside.

Energy Efficiency Code

• The Energy Code of conduct will, in essence, stand as a commitment between the Department of Public Works and its users to support specific objectives of the National Energy Efficiency Strategy as far as they relate to the buildings and facilities which are used by the DPW itself as well as those that are under its custodianship.

• Hence, in January 2008, the National Electricity Response Team comprising relevant national government departments, metropolitan municipalities and their agencies, Eskom and relevant regulatory bodies in order to align themselves with the goals set for improving energy efficiency and conserving power.

• To this end, the department of Public Works has established short, medium and long term interventions to be implemented with a major element of this intervention as the commitment of the Government immovable assets users and DPW lessors to implement initiatives that improves energy efficiency.

Prioritisation of Capital and Maintenance

• The department annually embarks on prioritisation of maintenance and capital budgets with a view to compile an annual implementation programme.

• The department is currently developing policy and strategy for maintenance to facilitate development of maintenance planning for every fiscal year.

• Summarised below is the short-term prioritization criteria:• Statutory compliance with respect to the following legislation

OHSA, PFMA, PPPFA, other Land, Environmental and Safety Legislation; Security measures e.g. prevention of escapes and safe-keeping of firearms.

• MTEF Prioritisation has an added criteria viz. EPWP, Project consolidate, ASGISA, APEX

Border Control Operational Co-ordination Committee (BCOCC)

• The BCOCC portfolio aims to integrate, coordinate, plan and programme manage all physical infrastructure and ICT developments on land, air, sea and the rail ports of entry (the Border-line) on behalf of numerous departments (like SAPS, SARS, Home Affairs, Agriculture, Health and NIA).

• DPW has been mandated to chair the BCOCC Infrastructure Committee.

• Budget allocations for the 2008/2009 stand at R478 820 000. 2010 Infrastructure Projects (Ports of Entry) include; Lebombo Port of Entry: Redevelopment (RSA / Mozambique), Golela Port of Entry: Redevelopment (RSA / Swaziland) and Skilpadshek Port of Entry: Redevelopment (RSA / Botswana)

Asset Register Enhancement

• A more co-coordinated approach is implemented to accelerate improvement of the asset register.

• The asset register enhancement project in 2005/06, was put in place in order to improve data integrity of the department’s asset register, service delivery and to facilitate asset and property management in the department.

• Phases 1 and 2 entail the collection, research and verification of property information as well as the capturing of new and missing verified

• Continuous identification of assets yet to be accounted for. • The interoperability of Information Systems (PMIS and WCS)

Condition Surveys

• The unit has embarked on the Condition Audits of the State owned properties that would establish the status quo for each building and facility has to be as well as all those buildings that are found, (via the status quo reports) to be in need of upgrade.

• Funds and manpower are being procured for investment to effect the required improvements.

• The completion of this exercise is expected to be 31 March 2009.

Valuations

• The department is also researching affordable system for property valuations that comply with accounting standards, in particular GAAP in a Trading account environment.

• Valuation standards and methodology which encompasses three valuation templates, namely: depreciated replacement cost, income capitalisation and comparative sales method, have been submitted for approval by the National Treasury.

• This unit is on track with the completion of all residential portfolio and 30% remaining assets.

• For 2008/07, this is being done in-house as the budget allocation kicks off in the fiscal year 2009/10 with R 30 million.

Client Value Proposition (CVP)

• During 2007/08 DPW signed 90% of the MOUs with respective client departments

• Once the signing of all SLAs is complete, the Department will develop Client Value Propositions (CVPs) for all clients.

• CVPs will be constructed after finalisation of SLA where service delivery standards will be articulated and other products and services, that the department offers, will be clearly defined.

• It has to be noted however, that the capacity within KAM will need to be enhanced in order to handle the sophisticated expectations of the CVP.

Expenditure Item 2007/08 2008/09

Compensation of Employees (excluding EPWP) 731 567 781 482

Property Management - Accommodation Charge 276 965 286 180

Trading Entity transfer 476 000 528 000

Infrastructure (Capital Works) 863 044 1031 208

Municipal Rates 836 570 889 325

EPWP - Compensation of Employees 28 000 30 000

- Operating allocation 56 612 94 709

Transfer Payments to CIDB 49 891 41 891

Transfer payments to CBE 23 939 26 286

Transfer Payments to Agreement Board 7 613 8 070

Auxiliary Services 23 380 25 853

Administration (excluding EPWP) 385 883 398 398

Total 3 759 464 4 141 402

…Budget Allocation 2008/9

CAPITAL Allocation 2008/09 Total

Agriculture 20,942,896.00

Arts & Culture 187,582,787.00

Correctional Services 670,000,000.00

Defence 111,656,223.00

Home Affairs 37,628,846.00

Justice 513,311,811.00

Labour 46,000,000.00

Land Affairs 2,212,063.00

SAPS 650,000,000.00

  2,239,334,626.00

Other Departments

BUDGET ALLOCATION SUMMARY

Programme Adjusted Medium Term Expenditure Estimate

R thousand Appropriation      

  2007/08 2008/09 2009/10 2010/11

1. Administration 647 360 687 317 767 116 843 181

2. Provision of Land 2 898 280 3 195 491 3 698 985 3 968 982

and Accommodation        

3. National Public Works 189 444 232 741 276 586 319 952

Programme        

4. Auxilliary and Associated 24 380 25 853 27 306 28 944

Services        

TOTAL 3 759 464 4 141 402 4 769 993 5 161 059

PROGRAMME 1. ADMINISTRATION

• Over the MTEF period the budget of the Administration programme rises by an average of 9.2% mainly as a result of the department’s relocation costs as well as additional allocations for accommodation costs.

PROGRAMME 2. PROVISION OF LAND AND

ACCOMMODATION

• Over the MTEF period the budget of the programme rises by an average of 11% as a result of growth in the allocations for

-Provincial Property Rates

-Asset Management Projects

-Augmentation of the PMTE

PROGRAMME 3. NATIONAL PUBLIC WORKS PROGRAMME

• The budget of programme 3 grows by an average of 19.1% over the MTEF period owing mainly to sizeable increases in the budget of the Expanded Public Works Programme, which grows by

- R30 million 2008/09

- R 50 million 2009/10

- R 80 million 2010/11

PROGRAMME 4.AUXILIARY AND ASSOCIATED SERVICES

• This programme sees a modest increase of 5.9% mainly to cater for inflation. From

- R25.9 million in 2008/09 to

- R28.9 million in 2010/11

ECONOMIC CLASSIFICATION

Economic Classification Adjusted Medium Term Expenditure Estimate

R thousand Appropriation      

  2007/08 2008/09 2009/10 2010/11

Current Payments 1 467 180 1 580 315 1 840 049 2 004 403

Transfers and Subsidies 1 412 142 1 512 706 1 705 970 1 848 190

Payments to Capital Assets 880 142 1 048 381 1 223 974 1 308 466

TOTAL 3 759 464 4 141 402 4 769 993 5 161 059

ECONOMIC CLASSIFICATION

• In the 2008/09-2010/11 MTEF period the budget of the department sees the biggest growth in Capital expenditure in line with the broader government programme of the intensification of infrastructure development.

• Analysed by economic classification the budget grows as follows:- 11 % Current Payments- 9% Transfers and Subsidies- 14 % Payments for Capital Assets

MAJOR INFRASTRUCTURE ALLOCATIONS

• The following amounts have been allocated for both DPW and the Border Control Operational Co-ordinating Committee (BCOCC’s) infrastructure budgets over the MTEF period– R1 billion 2008/09– R1.2 billion 2009/10– R1.3 billion 2010/11

BCOCC funds are utilised to improve border post facilities in part to facilitate preparations for the 2009 FIFA Confederations Cup and the 2010 FIFA World Cup.

MAJOR INFRASTRUCTURE ALLOCATIONS

• A number of assets will be acquired/upgraded for the Re kgabisa Tshwane project which aims to keep national government head offices within the inner city of Pretoria. These assets include the – HG de Wit Building (R66 million)– Old TPA Building for DFA (R250 million)– Agrivaal Building for GCIS (R200 million)

Around R1 billion will be spent on the upgrading, maintenance and improvement of immovable assets of the state.

The End

Thank you