DCS PORTFOLIO COMMITTEE PRESENTATION NEW CORRECTIONAL CENTRES Introduction to Central Services Branch Building a caring correctional system that truly belongs to all Date:19 February 2008

CONTENTS General background on building New Facilities Confirming information shared with Portfolio Committee Value for Money Risks transfer Managing Risks and Integrity Current status and Project Phases Status of Kimberley Correctional Centre.

GENERAL BACKGROUND ON BUILDING NEW FACILITIES Department identified the need for building new facilities in 2002 Building was to be undertaken in two phases subjected to the Prototype Design (completed in 2004) First phase following 4 sites identified: Leeuwkop (Sandton). Nigel. Klerksdorp. Kimberley. Second phase following 4 sites: Polokwane. Paarl (Allandale). Port Shepstone. East London.

CONFIRMING INFORMATION SHARED WITH PORTFOLIO COMMITTEE Leeuwkop Correctional Centre was stopped due to Environmental Impact Assessment recommendations. The project has been suspended till the outcome of the viability study undertaken by Department of Public Works is available. Polokwane site identified, could not be acquired at a reasonable market value, which considerably delayed the project and was excluded provisionally from the rest of the projects. Continue…..

CONFIRMING INFORMATION SHARED WITH PORTFOLIO COMMITTEE (Continue1) A feasibility study report was presented to the Portfolio Committee on 6 November 2007 Report provided for Nigel and Klerksdorp Correctional Centres that were added to the remaining three which resulted in feasibility studies for five centres

VALUE FOR MONEY The Transaction Advisor recommended in the feasibility study that the PPP procurement option is best value for money. This was determined based on the Regulation 16 process that was followed: Feasibility and Options Analysis performed on a specified and pre-agreed output specification indicated that: PPP is best option in terms of: Value for Money Risk Transfer; and Affordability.

RISKS TRANSFER Construction risks transferred to private party. (Management of delays and cost overruns by private party) Facilities management (maintenance of facilities and return after 25 years of operation in good condition by private party). Management of operations: Security risks Health risks Provision of programmes risks (education, corrections, social skills, etc)

MANAGING RISKS AND INTEGRITY Every participant in the government signs Confidentiality Contract, Code of Conduct and Declaration of Interests including Transaction Advisor. Vetting process of all evaluation members. Continuous auditing both by internal and external auditors. Separation of responsibilities of evaluation between three tiers of evaluation committees.

CURRENT STATUS AND PROJECT PHASES Scope: Each Centre providing ±3000 beds. Category: Medium and Maximum offenders. Contract Term: 2 Year construction + 25 years opera- tions. Compliance with Broad Based Black Economic Em-powerment (BBBEE). Request For Qualification (RFQ) bids closed on 10 December 2007 for five new PPP Correctional Centres. Responses received: five bidders for each of the project. No late submissions for RFQ received. Bid Evaluation is in progress.

CURRENT STATUS AND PROJECT PHASES RFQ Evaluations to be completed by end April 2008. Request for Proposal (RFP) documents to be issued shortly after RFQ evaluations complete and short-list announced. RFP submissions expected back September 2008. Whole process in terms of PPP regulations, Regulation 38 of PFMA and DCS Supply Chain Management. Process to be verified continuously by DCS Internal Audit.

STATUS OF KIMBERLEY CORRECTIONAL CENTRE Aerial photo of the construction of New Kimberley Generation Correctional Centre.

STATUS OF KIMBERLEY CORRECTIONAL CENTRE (Continue 1) Background Kimberley is the first of the original eight (8) to be built with a capacity of 3000 offenders. Construction information. Tender from Grinaker-LTA/Keren Kula R662 343 119 Site Hand over date 14 Nov. 2006 Contract period 24 months Original completion date 14 Nov. 2008 Extended completion date Feb. 2009 Percentage work completed 35.00% (As on the 31 January 2008)

STATUS OF KIMBERLEY CORRECTIONAL CENTRE (Continue 2)

STATUS OF KIMBERLEY CORRECTIONAL CENTRE (Continue 3) Labour force. Total workforce 1172 Present Local Labour workforce component 1099 Present ex-offender workforce 137 National Youth Service 90 Present female workforce component 91 Present HDI workforce (14 contractors) Contract Participation Goal of total contract 29.79%

STATUS OF KIMBERLEY CORRECTIONAL CENTRE (Continue 4) Detail on cost of project. Contract price excluding VAT R 581 million Contract Price Adjustment Provision (escalation) R 100 million VAT R 96 million Budget allowed for project R 810 million (includes 5% allowance for unforeseen costs)

THANK YOU QUESTIONS? Renewing our Pledge: A National Partnership to Correct, Rehabilitate and Reintegrate Offenders for a safer and secure South Africa