13 June 2001

1
Presentation by the National Department of Public
Works NATIONAL COUNCIL OF PROVINCES NCOP
Mr A Sangqu Mr M D Mokotedi Ms L Bici
13 June 2001
2
INDEX
1. Budget Vote Information 2. Programme
2 3. Organogram 4. Source of Funds 5. Project
Status Codes 6. Client Services 7. Development
Operations 8. Property and Facilities
Management 9 State Property Holdings 10. Leasing 1
1. Municipal Expenses 12. Information
Services 13. State Property Agency 14. NPWP 15. CB
PWP 16. CIDP
3
1.1 Total Vote Per Programme
2000/01 R000
2001/02 R000
160 448
Prog 1 Administration
120 070
3 052 572
Prog 2 Provision of Land and Accommodation
3 921 717
299 575
Prog 3 National Public Works Programme
400 000
8 992
Prog 4 Auxiliary and Associated Service
10 422
Total for Vote 30
3 521 587
4 452 209
4
1.2 Total Vote Per Standard Item
2000/01 R000
2001/02 R000
332 125
Personnel
305 763
47 403
Admin
42 811
19 803
Inventories
19 803
18 988
Equipment
20 282
1 135 754
Land Buildings
833 000
1 940 602
Prof Spes
3 206 154
25 786
Transfers
18 831
1 126
Miscellaneous
5 565
3 521 587
Total
4 452 209
5
2.1 Details of Programme 2
2001/02 R000
2000/01 R000
R3 052 572 000
Provision of Land Accommodation
R3 921 717 000
Capital works (Public Works)
76 145 000
1 013 915 000
Maintenance
536 556 000
566 152 000
Planned
337 054 261
340 952 000
Unplanned
159 501 739
175 200 000
Workshops
40 000 000
50 000 000
Building Promotion Industry
3 296 000
4 900 000
R615 997 000
Total Accommodation
R1 584 967 000
6
2.1 Details of Programme 2 (cont.)
2000/01 R000
2001/02 R000
760 440 000
Leasing
832 600 000
110 300 000
Cleaning building and tending gardens
113 000 000
675 900 000
Municipal Services
665 000 000
594 779 000
Rates on State Properties
554 000 000
7 150 000
Other
6 150 000
R2 148 583 000
Total State Property Holdings
R2 170 750 000
R288 006 000
Administration Programme 2
R166 000 000
7
2.2 Complexity of Programme 2
2000/01 R000
2001/02 R000
R337 054 261
Planned maintenance
340 952 000
76 145 000
Capital works
1 013 915 000
562 127 000
Rollovers Capital works
221 564 000
56 777 000
Planned Maintenance
70 000 000
924 153 002
Voted to Client Departments
0
R1 956 256 263
Total source of funds for Capital Works and
Planned Maintenance
1 646 431 000
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4. Source of funds National Capital Works and
Planned Maintenance

• NATIONAL TOTAL (R 000) 1 956 256 263 100
• ALLOCATION 1 956 256 263 100
• Capital Works 1 562 425 002 80
  
• Planned Maintenance 393 831 261 20
  
• ROLL-OVER (included in above) 618 904 000
• Capital Works 562 127 000
• Planned Maintenance 56 777 000

11
4. Source of funds National Capital Works
Allocation (Roll-over included)

• NATIONAL TOTAL (R 000) 1 562 425 002
  562 127 000
• Department Allocation Roll-over (incl)
• Correctional Services 713 384 000 278 330 000
• Justice 203 459 000 54 659 000
• South African Police Services 195 678 000 39
  950 000
• Public Works 76 145 000 Nil
• Defence 70 826 000 19 272 000
• Agriculture 36 965 000 22 851 000
• Arts, Culture, Science and Tech 33 004 000
  953 000
• Education 2 000 000 2 000 000
• Environmental Affairs 4 658 000
  Nil
• Foreign Affairs 9 614 000 9 614 000
• Home Affairs 55 548 000 38 131 000
• Labour 65 603 000 36 390 000
• Land Affairs 12 617 000 3 253 000
• National Health 38 201 000 22 001 000
• NIDS 29 723 000 29 723 000
• Trade and Industry 15 000 000 5 000 000

12
4. Source of funds National Planned
Maintenance Allocation (Roll-over included)

• NATIONAL TOTAL (R 000) 393 831 261 56 777
  000
• Department Allocation Roll-over
  (incl)
• South African Police Services 120 979 085
  17 944 048
• Defence 79 287 560 Nil
• Correctional Services 66 009 555
  Nil
• Public Works 57 555 335 33 318 125
• Justice 36 607 776 5 514 827
• Agriculture 10 083 284 Nil
• Arts, Culture, Science and Tech 9 072
  018 Nil
• Environmental Affairs 337 443
  Nil
• Finance 6 143 045 Nil
• Foreign Affairs 1 164 331 Nil
• Home Affairs 386 125 Nil
• Labour 3 191 162 Nil
• Land Affairs 39 302 Nil
• National Health 8 933 Nil
• State Expenditure 2 966 306 Nil

13
4. Extract of the 5 Departments with the highest
Budget Allocation
14
5. Extract of the 5 Departments with the highest
Budget Allocation
15
5. Departmental expenditure to date for 2001/2002
16
6. Client Services
OBJECTIVES

• To oversee the efficient facilitation and
  co-ordination of accommodation for DO, CPJ and
  FAP
• To ensure professional support to client
  services, internal service providers and national
  client departments with regard to town planning,
  investment analysis, building standards
  development and heritage asset management
• Interaction with clients and service providers
• Building programme management
• System development and subsequent updating
• To ensure the efficient and effective management
  of generic management tasks within the chief
  directorate client services
• Conceptualisation and development of strategic
  initiatives

17
6. Client Services (cont.)
CHALLENGES Under Expenditure Capital Works -
R532 million for 2000/2001 Reasons for
under-expenditure

• Planning time frames on projects (12-18 months)
• Transfer of excessive funds by client departments
• Reprioritisation of building program by clients
• Discrepancy between estimates and tender amounts
• Contractual disputes (Litigation)
• Insufficient in-house expertise

18
6. Client Services (cont.)
Proactive steps taken to achieve high expenditure
levels

• High level of project management firms to assist
  Regional Managers
• All existing projects have been revisited
• Full allocation of available funds have been
  assigned to approved projects
• Targeting pre-selected bidders
• Training of Regional Project and Client Services
  Managers
• 49 of allocation under construction
• 20 of allocated funds in tender recommendation
  stage 2001/2002
• 31 of allocated funds in design phase

19
6. Client Services (cont.)
Rendering assistance in devolution of budgets to
clients and subsequent assistance with cost
recovery by virtue of agreements between NDPW and
clients
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7. Development Operations
1. STRATEGIC OBJECTIVES
1.1 GLOBAL PURPOSE OF CHIEF DIRECTORATE To
execute Planning Instructions, received from
Client Services, for Capital and Planned
Maintenance Projects within time, cost, quality
and socio-economic objectives and to provide
professional support, inter alia with reference
to relevant legislation.
21
7. Development Operations (cont.)
1.2 PURPOSE OF THE DIRECTORATE MAJOR PROJECTS To
execute Planning Instructions, received from
Client Services, for Capital and Planned
Maintenance Projects within time, cost, quality
and social-economic objectives.
1.3 PURPOSE OF THE DIRECTORATE
PROFESSIONAL ADVISORY SERVICES To provide
construction related professional advice to
Project Managers in the Department, aimed at the
creation of projects, which are technically
acceptable, easy in their maintenance, of high
quality, effective in their purpose and
affordable in terms of space norms and cost
limits.
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7. Development Operations (cont.)
1. 4 PURPOSE OF DIRECTORATE RISK
MANAGEMENT To manage the risk to the
Department (State), posed to, and by its
facilities and properties by the provision of
quality support, advisory and information
services in terms of risk related issues
pertaining mainly to Occupational Health and
Safety aspects.
23
7. Development Operations (cont.)
CHALLENGES AND PRO-ACTIVE STEPS TAKEN AT CURRENT
TO ADDRESS THESE

• To make full use of allocated budgets in order to
  convince Treasury that more funds are required to
  address backlogs
• Shorter planning cycles
• Skills shortages in terms of project management
• To minimize changes in project briefs as result
  of Clients revising their needs during planning
  phase

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7. Development Operations (cont.)

• Reduction of period of payment to Service
  Providers (Contractors and Consultants)
• Increased economic involvement of black business
  in the procurement muscle of the Department
  (Black Economic Empowerment)
• Management of properties on problematic soil
  conditions (reduce risk of loss of property)

25
8. Property and Facilities Management

• Challenges
• Delivery of quality capital works on time and
  within budget
• Cumbersome tender procedures
• Procurement reform in line with the disbandment
  of the STB
• Correction perception amongst Senior Government
  officials that too much work is outsourced to
  consultants
• Address backlog in the renewal of leases
• Backlog in maintenance. Facilities maintenance
  projects implemented with the aim of addressing
  25 of backlog within 3 years

26
8. Property and Facilities Management (cont.)

• Programme for accelerated project delivery
  implemented October 2000
• All regional offices have empowered through
  special approval obtained from STB to assume the
  same powers as that of head office
• DPW to develop all tender procedures delegations,
  allocation of powers, etc.
• Policy to be adopted in DPW to distinguish
  between management consultants and professional
  service providers
• NB - Transfer of risk to professionals who take
  full responsibility for design of bridges, roads,
  buildings, etc.
• Leasing project implemented
• RAMP projects initiated to the value of
  approximately R 500 million

27
8. Property and Facilities Management (cont.)

• Establishment of State Property Agency that
  operates effectively and efficiently
• Disbandment of the STB and the formulation of
  tender procedures and procurement practices that
  would meet the objectives of SPA/DPW
• Refinement of procedures, delegations, etc. to
  suit SPA model
• The continued use of consultants as a variable
  resource will be continued into the SPA and the
  rate of appointment will depend on the number of
  projects
• Adopt best practice asset management principles
  (key account management)
• Roll-out facilities maintenance in SPA
• Targeted Procurement process are applied to
  ensure involvement of ABEs and APSP and are
  constantly monitored.

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8. Apointment of Affirmable Business Enterprises
29
9. State Property Holdings and Asset Management

• OBJECTIVES
• FORMULATION OF POLICY AND ASSET MANAGEMENT
  STRATEGIES
• COMPILATION OF FOREIGN ASSET REGISTER
• ESTABLISHMENT OF PROPERTY ECONOMY RESEARCH AND
  SERVICES UNIT
• DISPOSAL OF SUPERFLUOUS STATE LAND AND FIXED
  PROPERTY
• REVIEW AND FORMULATE LEGISLATION WITH REGARD TO
  PROPERTY RIGHTS

30
9. State Property Holdings and Asset Management
(cont.)

• CHALLENGES
• VERIFY AND IMPROVE DATA ENTEGRITY ON THE ASSET
  REGISTER
• FORMALISE AND IMPLEMENT A STRATEGIC ASSET
  MANAGEMENT FRAMEWORK
• ESTABLISH BENCHMARKS TO MEASURE THE PERFORMANCE
  OF THE STATES PROPERTY PORTFOLIO
• EFFECTIVE AND EFFICIENT DISPOSAL OF SUPERFLUOUS
  STATE OWNED PROPERTY

31
9. State Property Holdings and Asset Management
(cont.)
PRO-ACTIVE MEASURES

• DEDICATED STAFF IDENTIFIED TO VERIFY AND UPDATE
  DATA ON THE ASSET REGISTER
• TENDER DOCUMENTATION HAS BEEN FINALISED FOR THE
  APPOINTMENT OF CONSULTANTS TO DEVELOP A STRATEGIC
  ASSET MANAGEMENT FRAMEWORK
• OFFICIALS HAVE BEEN APPOINTED TO COMMENCE WITH
  THE ESTABLISHMENT OF BENCHMARKS TO MEASURE THE
  PERFORMANCE OF THE STATES PROPERTY PORTFOLIO
• A DETAILED DISPOSAL PROGRAMME HAS BEEN COMPILED
  AND IMPLEMENTED

32
10. Leasing Portfolio Statistics

• 4801 Leases at 31 March 2001
• Property types
• Land
• Offices
• Quarters
• Quantity Analysis
• Value of Quantities

33
10. Portfolio Statistics (cont.)
34
10. Leasing Budget

• NATIONAL TOTAL (R 000) 753 716 717 100
• Pretoria 283 420 223 39
• Johannesburg 105 431 694 14
• Cape Town 81 022 000 10
• Durban 75 955 000 10
• Port Elizabeth 59 125 000 7
• Nelspruit 41 028 000 5
• Bloemfontein 38 898 600 5
• Mmabatho 28 966 800 3
• Pietersburg 27 825 000 3
• Kimberley 12 044 400 1

35
10. Leasing Budget (cont.)
36
10. Properties Leased from the Private Sector

• National distribution per property type
• Land 321
• Offices 1 963
• Quarters 2 517

37
10. Properties Leased from the Private Sector
(cont.)
38
10. Properties Leased from the Private Sector
(cont.)
39
10. Leasing Project

• Achievements
• Visited all properties within leasing portfolio
• Uncovered over R20 million in fruitless
  expenditure
• Stopped monthly lease payments in access of R1
  million
• Built capacity within portfolio
• Further objectives
• Renewal and revising of leases
• Continued building capacity

40
11. Municipal Expenses 1 April 2001 - 25 May 2002
41
12. Information Services
OBJECTIVES

• To provide information to serve as a critical
  tool for management decision-making through
  aligning of the systems to the business
  processes.
• To provide information services that enable the
  organisation to deliver service quickly and
  accurately.
• Integrate the current Information systems.
• Implement a new network that address the
  information flow needs of the department.
• Create a structure that is in line with the needs
  of the department.

42
12. Information Services (cont.)
KEY CHALLENGES

• Lack of resources
• Unintegrated systems

CHALLENGE RESOLUTION STEPS

• HR has been asked to be more flexible on hiring
  practices, e.g. allowance of usage of
  constructors.
• A new, more realistic budget has been submitted
  to Finance.

43
13. Role of DPW and State Property Agency
Mandate

• To regulate the build environment
• To transform the construction industry - CIDB
• To define the policy framework that shapes the
  use of government owned properties
• To address rural poverty through projects related
  to the build environment

• To facilitate the delivery of government service
  through delivery of the asset and accommodation
  requirements in accordance with the prescribed
  legal frameworks

44
13.Role of DPW and State Property Agency

• Ensure that government is meeting its
  accommodation requirements in a cost effective
  manner while addressing social objective
• Streamline service delivery by reducing the
  bureaucracy and leveraging best-of-breed skills
  and systems
• Provide value-added advisory services to ensure
  that accommodations improve governments service
  delivery

• Ensure that the build environment is effectively
  regulated to the benefit of the South African
  public
• Ensure that equity and empowerment occur in the
  construction industry
• Provide a clear and transparent environment in
  which land issues are redressed
• Leverage governments influence to impact the
  lives of the rural poor

Value proposition
45
13. SPA will have three pillars of excellence
supported by three organisational attributes
Pillars of excellence
Supporting foundation
46
13. Overall SPA Charter

• The SPA will provide the Government of South
  Africa with its core facilities and accommodation
  needs through
• Cost-effective, value-adding management and
  maintenance of its owned portfolio
• Structuring of leases with private sector owners
• Construction of on-spec, on-time, on budget new
  facilities
• Maximise the value of the property portfolio and
  minimise risk to the State
• It will meet its mandate with a customer focused,
  information rich, commercially capable
  organisation that makes effective use of private
  sector capabilities

47
13. Business Model
48
13. High-level plan over next 12-18 months
leading to successful creation of an effective
and efficient SPA

• June 2001

• October 2001

• April 2002

• October 2002

• April 2003

• Refine and syndicate

• SPA
• Act

• SPA Launch

• Legislative process

• Transition strategy concept

• Detail

49
14. NPWP Total Budget
50
14. CDCIDP Business Plan2001 - 2002
Taking forward the process of construction
industry development in South Africa
51
14. Ambit of National Goals

• 5 years to build framework for C.I. Development
  based on an ongoing analysis of South African
  industry, Government objectives, international
  trends and stakeholder engagement.

South Africas Framework Reconstruction
Development Programme
52
14. Purpose of the CD Unit

• To promote and support the
• Growth, Development and Transformation of the
  construction industry
• for
• Enhanced infrastructure delivery in South Africa

Small specialised unit
53
16. CIDP - Structure, Purpose, Issues
Public sector delivery capacity
Growth, investment
Performance improvement
Emerging contractor development
Best practice Procurement reform Targeted
Procurement
Support to overcome constraints
Public sector spending/ Private sector investment
Improved payment Improved skills
54
16. Develop Policy/ Programmes/ Legislation/
Institutions/

• Develop Programmes - eg
• - Investment, improved public sector payment
• - Rollout of Targeted Procurement best
• practice to national, provincial local
  authorities
• - Emerging Contractor Development - staff in all
• regional offices
• Develop Legislation/ Institutions - eg
• - CIDB
• - Professional Councils overarching CBE

Binding public and private sector endeavor
55
16. Achievements 2000/2001

• Legislation to establish the CIDB.
• Legislation to establish the 6 professions and
  the Council for the Built Environment
• Emerging Contractor Development
• - over 2500 contractors registered
• - increased women from 150 - 250
• - launch of major training programme
• A strategy to improve delayed payment in Public
  Works national and provincial
• Regional Conference on Developing the
  Construction Industries of SADC (April 01)

56
16. Current Challenges

• Operationalise Legislation to establish
• CIDB, CBE Professions agenda.
• Manage Ministers legislative responsibility.
• Promote Targets (KPIs) for growth improvement
  strategies to attain these.
• Intensify/ roll-out APP ECDP Support Strategies
  to promote black enterprises women and develop
  capacity through training.
• Public Sector Capacity to manage delivery with
  particular focus on delayed payment.

57
16. New Laws - Extra Responsibility
Council for the Built Environment Act
MINISTER
CIDB
Property Valuers Profession Act
Quantity Surveying Profession Act
Architectural Profession Act
Engineering Profession Act
Landscape Architectural Profession Act
Project/ Construction Management Act
58
16. Current Challenges

• Operationalise Legislation to establish
• CIDB, CBE Professions agenda.
• Manage Ministers legislative responsibility.
• Promote Targets (KPIs) for growth improvement
  strategies to attain these.
• Intensify/ roll-out APP ECDP Support Strategies
  to promote black enterprises women and develop
  capacity through training.
• Public Sector Capacity to manage delivery with
  particular focus on delayed payment.

59
16. CIDP Total Budget
60
16. CIDP Project Expenditure
61
16. CIDP Project Expenditure
62
16. CIDP Project Expenditure
63
16. CIDP Project Expenditure
64
16. CIDP Project Expenditure
65
16. CIDP Project Expenditure
66
16. CIDP Project Expenditure
67
16. CIDP Project Expenditure
68
16. CIDP Project Expenditure
69
15. Community Based Public Works Programme
RECENT HISTORY
In the 2000 calendar year, the CBPWP implemented
a R1 billion worth of projects. This massive
budget had been accumulated through roll-overs
experienced in two previous financial years.
However, the programme was able to spend all the
funds by the 31 March 2001.
70
15. Community Based Public Works Programme
(cont.)
The final close out information for 1998/1999 is
as follows
The total budget expended in this year was R271
000 million. The total amount spent per Province
excluding National Management costs

• Province Amount Spent District Council
  projects
• Eastern Cape R88 761 274 150
• Kwa-Zulu Natal R91 878 700 115
• Northern Province R65 999 152 72

71
15. Community Based Public Works Programme
(cont.)

• Projects implemented
• 38 Labour saving
• 85 Social cohesion
• 91 Improved Access
• 109 Directly productive
• 14 Environmental protection

• A total of 29 194 people were temporary employed
  and 4154 sustainable jobs were created.
• Of the total 29 194 people employed 10 981 (38)
  were women, 11 897 (41) were youth and 268 (1)
  were disabled.

72
15. Community Based Public Works Programme
(cont.)
The final close out information for 1999/2000 is
as follows
The total budget expended in 1999/2000 was R368
178 million. The total amount spent per
Province

• Province Amount Spent District Council
  projects
• Eastern Cape R 126 060 861 79
• Kwa-Zulu Natal R 82 912 910 65
• Mpumalanga R 61 921 324 48

73
15. Community Based Public Works Programme
(cont.)

• Province Amount Spent District Council
  projects
• Free State R 13 027 072 22
• North west R 13 044 921 25
• Northern Cape R 10 000 000 road project
• Gauteng R 4 427 000
• Western Cape R 1 400 000
• Northern Province R 21 946 830 19

74
15. Community Based Public Works Programme
(cont.)
In total 258 District Council projects were
implemented. Projects implemented

• 23 Labour saving
• 67 Social cohesion
• 96 Improved Access
• 58 Directly productive and
• 14 Environmental protection

75
15. Community Based Public Works Programme
(cont.)
A total of 14 825 people were temporary employed
and 618 sustainable jobs were created.

• 7 442 (50) women
• 7 406 (50) youth
• 251 (2) disabled

A total of 14 825 people were employed
76
15. Community Based Public Works Programme
(cont.)
The final close out information for 2000/2001 is
as follows
The total budget expended in 2000/2001 was 360
365 million. The total amount spent per
Province

• Eastern Cape were R 118 763
• Kwa-Zulu Natal R 84 494
• Mpumalanga R 15 992
• Free State R 7 949

77
15. Community Based Public Works Programme
(cont.)

• Amount Spent
• North West R11 845
• Northern Cape R0 allocated
• Gauteng R0 allocated
• Western Cape R0 allocated
• Northern Province R85 390
• Special projects R16 014
• Programme management fees R23 283 spent

78
15. Community Based Public Works Programme
(cont.)

• A total of R31 381 people were temporary employed
  and 1553 sustainable jobs were created.
• People employed
• 13 571 (43) women
• 13 895 (44) youth
• 637 (2) disabled
• A total of 31 381 people employed

79
15. Community Based Public Works Programme
(cont.)
BUDGET IN 2001/2002

• Projects R 374 386
• Personnel expenditure R 3 342
• Administrative expenditure R 1 141
• Inventories R 9
• Equipment R 90
• Total R 378 968

80
15. Community Based Public Works Programme
(cont.)
PROVINCIAL INVESTMENTS IN IN 2001/2002

• Eastern Cape R 111 812 094
• Free state R 9 293 240
• KwaZulu Natal R 99 814 302
• Mpumalanga R 31 066 273
• Northern Province R 79 220 603
• North West R 11 803 105
• Gauteng Province R 900 000
• Western Cape R 3 222 222
• Northern Cape R 1 500 000
• National R 25 368 000
• TOTAL R 374 000 000

81
15. Community Based Public Works Programme
(cont.)
2001/2002 PROGRAMME COMPONENTS

• Programme with 27 district municipalities
• Easten Cape
• Free State
• Kwa-Zulu Natal
• Mpumalanga
• Northern Province
• North West
• Strategic projects in partnerships with key
  stakeholders and implemented by IDT

82
15. Community Based Public Works Programme
(cont.)
STRATEGIC PROJECTS

• Community Production Centres for provision of
  the productive infrastructure upgrading
  components in co-operation with the Department of
  Agriculture.
• Multi-purpose centres one-stop shops for rural
  service delivery
• Clean and Green programme a community based
  waste management programme, in partnership with
  the South African Breweries (SAB)

83
15. Community Based Public Works Programme
(cont.)
STRATEGIC PROJECTS

• HIV/AIDS infrastructure support programme to
  offset the devastation caused by HIV/AIDS e.g.
  the upgrading of local clinics which are in dire
  need of repair
• Youth Working for Environment Accessibility
  training and employing youth to make public
  properties accessible to the disabled
• KZN Cholera Response Programme to respond to
  cholera outbreak in KZN, in partnership with KZN
  Department of Health

84
15. Community Based Public Works Programme
(cont.)
PRIORITIES IN 2001/2002

• Sustainable productive assets through linkages
  with the Integrated Sustainable Rural Development
  Strategy
• Rural roads
• Capacitation of new district municipalities

85
15. Community Based Public Works Programme
(cont.)
TARGETS FOR 2001/2002

• 40 000 Temporary job opportunities
• 3 000 sustainable jobs
• Minimum 50 women employed
• Minimum 15 youth employed
• Between 1 and 3 disabled employed
• 400 Sustainable community assets

86
15. Community Based Public Works Programme
(cont.)
FORWARD PLANNING
Being on the Medium Term Expenditure Framework
(MTEF) has enabled the CBPWP to do the following

• Sign allocation agreements with district
  municipalities up to the 2003/2004 financial year
• Enter capacity enhancement agreements with the
  European Union and the Independent Development
  Trust to establish a strong in-house management
  team
• Look for donor funding to augment MTEF project
  funds