Department of

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DEPARTMENT OF CORRECTIONAL SERVICES
Department of
Correctional
Services
NEW GENERATION CORRECTIONAL CENTRES BRIEFIENG
SYNOPSIS
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Scope

• Developments since 2000 to Bidding Stage
• Bid adjudication and IQS report
• Current developments
• Second Group of New Generation Correctional
  Centres

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A Developments since 2000 to Bidding Stage

• Blue Print model developed by Private consultant.
• Through NDPW Consultant teams were appointed to
  develop the Blue Print further.
• Original Blue Print costs was estimated at R150
  million
• Short comings were identified and resulted in
  Baseline 1 at a cost of R230 million.
• This followed by Baseline 2 and later Baseline 3
  at R282 million.
• With escalation Baseline 3 increased to R350
  million.
• Still further developments resulted in Baseline 4
  which was 18 over Baseline 3s cost of R350
  million.
• Tender documentation was completed early in 2004.

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B. Bid Adjudication and IQS Report

• Three of the projects, Kimberley, Leeuwkop and
  Nigel were split into phases.
• Phase I Bulk Earth Works
• Phase II Main Contractor with Incubator
  program sub-contractors
• Phase I Was fully completed on July 2005 at
  all three Centres with a total cost of R80.8
  million
• Phase II Bids were called for Klerksdorp
  5/11/2004 Nigel 25/02/2005 and Kimberley
  04/03/2005 and received for all three.
• Kimberley Bid adjudicated in April 2005 and
  came to R571.7 million
• Klerksdorp Only one Bid was received and
  rejected.
• Nigel Bids received but not adjudicated.
  (Waiting for appointment of Private
  Project Manager)

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Bid Adjudication and IQS Report Continue

• Outcome of Bid Adjudication show that cost of
  centres is substantial higher than the budgeted
  amount..
• In July 2005 DCS decided to appoint with the
  assistance of NDPW an IQS to evaluate the bids
  documentation and to provide both Departments
  with an assessment of the price escalation and
  compare it with market trends.
• The IQS report highlighted the following
• The incubator procurement model.
• Increase in building costs.
• Timing of the tenders in respect of market
  conditions
• This negatively influenced the bidding process.

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C. Current Developments

• The following aspects were taken into
  consideration to continue with the bidding
  programme
• Report of the IQS
• Repot from the Transactional Advisor on the
  refinancing of the existing PPP correctional
  centres.
• Interim report on the feasibility studies for the
  second group of Correctional Centres.
• Recent developments at Kuthama Sinthumule
  Correctional Centre.
• State of the Nation Addres.

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Current Developments Continue

• This lead to the following decisions
• Decided to continue with Kimberley with the
  following difference
• Abandon the Incubator programme (Premium DCS is
  paying for this route is 14 of the cost)
• Adjust Bidding documentation to allow for main
  contractor and own choice of sub-contractors.
• Call for open re-bidding system to allow a larger
  sector of the contraction market to submit bids.
• Will be more competitive and to the advantage of
  DCS.
• Tender documentation will be published on 5 May
  2006 with the target date to handover the site to
  the successful bidder in September 2006

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• On Klerksdorp and Nigel the following
• The current bids received have lapsed.
• DCS will go a new direction of PFM (Public
  Finance Model) with these projects.
• PFM called for Public to design by concept
  construct finance and maintain the project while
  the Management is vested in DCS
• Terms of reference for the Transaction Advisor to
  manage this process was drafted with the
  assistance of NDPW and National Treasury.
• Tenders were called for a Transactional Advisor
  to do a feasibility study on this route.

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• Leeuwkop is subjected to a viability study for
  the following
• Long term feasibility of the complex.
• Direction to follow in regards to the
  Agricultural concerns currently established on
  the premises.
• Viability study on the whole asset management of
  the complex.

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D. Second Group of New Generation Correctional
Centres

• Feasibility studies in process for the following
  East London, Paarl, Port Shepstone and Polokwane
  Areas.
• Sites earmarked for three of the four complexes.
• Polokwane still in a negotiating stage.
• DCS to follow the Project Finance Model on all
  these projects.
• The current Transaction Advisor agreed in
  principle to complete the process within the
  parameters of the project finance model.

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Correctional Services values your role in
breaking the cycle of crime in making
rehabilitation work. Thank you Together
we can strengthen the social compact against
crime, for a better life.