common focus, joint action

1
common focus, joint action

Infrastructure for South Africas economic and
social growth
Parliamentary Portfolio Committee on Public
Works Cape Town 19 October 2005
cidb 2005 Annual Report construction industry
development
Construction Industry Development Board
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Government policy legislation

• The Construction Industry Development Board is a
  statutory body appointed by the Minister of
  Public Works to provide leadership for industry
  growth, reform and improvement
• (CIDB Act 38 of 2000)

Represents a public/ private partnership for
delivery and developmentPMG note graphics not
included, please email info_at_pmg.org.za
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cidb team today

• Ebrahim Moola - Registers
• Gladness Moorosi Finance
• Nomophoso Mkhonza Roll-out
• Kotli Molise Communication
• Spencer Hodgson - CEO

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Construction - key to South Africas growth
strategy

• Rise in fixed investment is key to achieving
  economic growth of 6
• Investment and industry growth evident (45 000
  jobs Stats SA)
• Need to double construction output over next
  decade

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SA Backlogs - progress
Estimates in 1994 Progress by 2004
Housing 1.4 to 3 million units Houses built for the poor 1.6 million
Electricity 60 had no access 70 of households have been electrified
Clean water 16 million with no access Clean water 9 million people got access
Adequate sewerage 22 mil without access 63 of households now have sanitation
70 secondary school enrolment 85 enrolment by 2002
Construction
2004 State of the Nation Address by President
Thabo Mbeki
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cidb aim

• An enabling regulatory and development
  framework that builds
• A total industry delivery capability to achieve
  South Africas economic and social growth
• Empowerment of those historically marginalised
• Improved industry standards of performance
  (quality, employment, skills, safety, health)

sustainable industry development
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Construction Registers Service - Role and
Challenges
The Growth Challenge! SA Construction must
double its output over the next decade!
Sustainable industry development
Construction Industry Development Board
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Construction Industry Indicators
a call to leadership
progress
challenges
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Our Strategic Challenge
Empowerment
Growth
A key development constraint lies in the
dispersed nature of the industry and its clients
cidb has developed a range of instruments
programmes that will drive convergence in
development focus
Capability
Delivery
Status report executive conclusion
Performance
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Our Strategic Challenge
Double output 10 years
Empowerment
Growth
convergence
in
focus
Capability
Delivery
Performance
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THE MARKET
SOUTH AFRICAN CONSTRUCTION ECONOMY
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Our Strategic Challenge
Double output 10 years
Empowerment
Growth
Sustainable enterprises and emergence into
mainstream economy
convergence
in
focus
Capability
Delivery
Skills systems efficiency
Consistent procurement delivery environment
Performance
Quality, safety, health and environment,
employment
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Our Strategic Challenge
Empowerment
Growth
enabling
regulatory
Capability
Delivery
development
environment
impact
Performance
to drive improved value to clients and society!
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Meeting the challenge

• Effective and efficient delivery procurement
• Procurement best practice guidelines (CD and
  website)
• Standard for uniformity in construction
  procurement

Systems for sustainable industry development
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Meeting the challenge

• Effective and efficient delivery procurement
• Toolkit infrastructure delivery management
  system for the public sector (supporting tool)
• - a basis for IDIP (capacity building) PMG
  note graphics not included, please email
  info_at_pmg.org.za

Systems for sustainable industry development
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• A culture of respect for people
• Labour based best practice guidelines resource
  to stakeholders in job creation goals of Expanded
  Public Works Programme

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Meeting the challenge

• Empowerment
• Introduction to contracts
• Know your rights, responsibilities and risks
  (Supporting tool) empowering SME contractors
  PMG note graphics not included, please email
  info_at_pmg.org.za

Systems for sustainable industry development
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cidb

• All about a systems approach to industry
  development

Facilitate
Systematic approach to progressive improvement!
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Key role of the Registers
Sustainable delivery and empowerment
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Meeting the Challenge Construction Registers
Service

• National Register of Contractors
• To drive improving performance of contractors
• National Register of Projects
• Promote client practices that shape a
  transforming, healthy and sustainable industry
• Roll-out
• Through Standard for Procurement Uniformity in
  Construction

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Register of Contractors

• CIDB Act 38 of 2000mandates the CIDB to
  establish the National Register of Contractors
• Facilitates public sector procurement, delivery
  and risk
• Supports contractor development
• Promotes better performance - improved quality,
  safety, health and environment.
• to categorise contractors in accordance with
  their capability

Purpose
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2. Grading Criteria CLASS OF WORKS

• General Building
• Civil Engineering
• Electrical Engineering
• Mechanical Engineering
• Specialist Works

Background
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2. Grading CriteriaTender Value Ranges
Background
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What the register tells us so far?
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Distribution/Class of Works
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Distribution/Class of Works
Grade 8 and 9 Large nationals/ internationals
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Distribution/Class of Works
1147
Grades 2 6, largely provincial significant
black participation
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Distribution black owned
88
570
652
Medium sized contractors 88 black ownership
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Distribution youth owned
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Distribution women owned
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Average processing time
When documentation is complete
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Progress and dealing with unintended consequences
Regulatory Changes
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Proposed changed to CI Regulations

• Replacement of the current Register of Projects
  with electronic registration which incorporates
  the system

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- Register of Projects Linking demand and
supply

• Client tender adverts automatically alert
  tenders
• Logging award of tender (or cancellation) -
  automatically updates contractors record

Phase 2 will place best practice requirements on
clients
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Client Previous implementation date Revised implementation date
Limpopo DPW. 15 Oct 2004 15 Oct 2004
eThekwini 14 Jan 2004 14 Jan 2004
NDPW and all provinces 16 May 2005 15 Aug 2005 30 Aug 2005
Other national departments 15 Aug 2005 30 Sept 2005
Public entities 15 Aug 2005 30 Nov 2005
Metros 15 Aug 2005 15 Mar 2006
high capacity municipalities 14 Nov 2005 30 Apr 2006
Medium capacity municipalities 14 Nov 2005 30 Jul 2006
Low capacity municipalities 14 Nov 2005 30 Nov 2006
Private sector Reg of Projs 16 May 2005 30 Aug 2005
Revision of Implementation dates
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Changes to Regulations
200 000
500 000
1 500 000
Changed enabling greater access
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Changes to Regulations

• Distinguish at grade 1 those contractors that
  have track record from those that do not
• Improvement to the JV calculator
• Clarify labour-only contractors and those
  contractors who are issued with the bulk of
  construction materials are exempt from
  registration

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Changes to Regulations

• Extending time for the requirements for
  registered professionals
• Criteria for determining an applicants
  contractor grading designation
• Track record 2 5 years
• Financial capability modify annual turnover and
  employable capital

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Greater emphasis on development programmes

• Client use of the Register for both delivery
  development
• Target contracts at different grades
• Provide more work for Grade 1
• Put in place development programmes for different
  grades using PE status
• Use affirmative procurement smaller and larger
  contracts!

Proper use of the Registers by Clients!
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Registers and Development Programmes
Delivery
Demand side access
Supply side support
Targeted Procurement (APP) ACCESS TO WORK
OPPORTUNITIES
Emerging Contractor Development Programme
ACCESS TO SUPPORT

• Registers support development targeting
• information advice
• training mentoring
• finance credit

Registers support procurement targeting
Client targeting of procurement development!
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Registers and Development Programmes
Delivery
Demand side access
Supply side support
Affirmative Procurement (APP) ACCESS TO WORK
OPPORTUNITIES
Emerging Contractor Development Programme
ACCESS TO SUPPORT

• Registers support development targeting
• information advice
• training mentoring
• finance credit

Registers support procurement targeting

• Delivery
• Empowerment, transformation
• Consolidation, emergence

So that contractors emerge into the mainstream!
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Registers and Development Programmes

• EPWP Learnerships
• Public Works Incubator Programme
• Vukuzakhe, Sakhasonke
• Several provinces using Registers
• Nurcha finance to registered contractors
• DTI

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Challenges ahead
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Carry forwardSeven Strategic Projects

1. Registers Roll-out (Phase 1)
2. Toolkit/ IDIP Roll-out
3. Registers (Phase 2 Best Practice) - development
4. Procurement Roll-out development
5. CIIs Expand and Roll-out for impact
6. Contractor Development Empowerment
7. Stakeholder Engagement to support our aims,
   strategy and projects

Delivery
TO DRIVE
Growth, Delivery, Performance, Empowerment
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Organisational Challenges

• Outreach
• Revenue
• Compliance issues

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Joint leadership challenges

• Enable capacity building of client procurement
  and project teams to apply improve the systems
• Register of contractors
• Register of projects
• Standard for Uniformity empowerment models
• Use the Registers to develop SA Construction
• Appropriate development programmes
• Set the standard for a transformed industry!

Enable leadership in all sectors!
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Strategic Outcomes

• A total delivery capability
• A proudly South African construction industry
• An industry that delivers to globally competitive
  standards

INFRASTRUCTURE FOR SOUTH AFRICAS ECONOMIC AND
SOCIAL GROWTH
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Joint Leadership

Infrastructure for South Africas economic and
social growth
Thank You
Construction Industry Development Board
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Budget

• This year totally committed (no reserve)
• Registers revenue to-date approx R2.5 mil
• 2004/05 R26 mil (R900 000 registers)
• 2005/06 R35 mil (R4 500 000 registers)
• 2006/07 R41 mil (R6 000 000 registers)

2005/06 and 2006/07 inclusive of VAT!