BRIEFING THE PORTFOLIO COMMITTEE ON WATER AND SANITATION ON THE OVERVIEW OF CONSTRUCTION MANAGEMENT UNIT WITHIN THE NWRI BRANCH Presented by: Mr. Leonardo Manus Acting Deputy Director-General NWRI 21 June 2017

1. Background

History of Construction As early as 1930, the development of water resource infrastructure required a labour intensive approach to construction. The Water Act (No.54 of 1956) saw a more formalised formation of construction capacity. (1965: Orange-Fish River Project) Subsequent to Democracy (1994), the National Water Act (1998) sought to amend recruitment.

National Water Act, Act No 36 of 1998 Section 76. Appointment of persons on contract. (1) The Director-General may, when necessary, appoint employees on contract outside the provisions of the Public Service Act, 1994 (Proclamation No.103 of 1994). (2) Appointments made under subsection (1) must be limited to persons to perform duties at sites where the Department— (a) is engaged in actual construction or investigatory work; or (b) is associated with specific projects relating to actual construction or investigatory work. (3) The Director-General must, from time to time, and after consultation with the Department of Public Service and Administration, determine the conditions of employment of such employees. (4) Such employees shall be remunerated from money appropriated for that purpose by Parliament.

CONSTRUCTION MANAGEMENT PURPOSE & MANDATE The construction, rehabilitation, refurbishment and maintenance of National Water Resources Infrastructure, in order to ensure a sustainable supply of water to meet the social and economic needs of the people of South Africa. The CD:CM resides within the NWRIB, and is mandated to construct new water resources infrastructure to meet industrial, agricultural and social (domestic) bulk water supply requirements and to facilitate economic growth and development, including the rehabilitation and upgrading of existing water supply infrastructure to comply with international dam safety standards.

CD:CM WITHIN THE DEPARTMENT Minister Director General DDG: NWRI CD: INFRASTRUCTURE DEVELOPMENT CD: ENGINEERING SERVICES CD: CONSTRUCTION MANAGEMENT CD: OPERATIONS AND MAINTENANCE CD: STATEGIC ASSET MANAGEMENT CD: REGIONAL BULK INFRASTRUCTURE GRANT

2. Construction Staffing

CD:CM PERSONNEL COMPLEMENT AS AT JUNE 2017 Count of Pers.No. Column Labels Row Labels Project Based Specialist Contract Standard Contract Grand Total CONST MNGMT SUPPORT 1 12 13 CONST NORTH SUPPORT 372 22 226 620 CONSTRUCTION CENTRAL 93 94 CONSTRUCTION EAST 948 41 298 1287 CONSTRUCTION SOUTH 126 33 145 304 CONSTRUCTION WEST 728 74 228 1030 FLEET MANAGEMENT SUP 5 2174 172 1007 3353

Contract vs. Permanent Appointments Type of Appointment No. of Employees Levels NWA Section 76 Employees 3353 Up to Level 12 PSA Employees 3 (+1 Vacant) Level 13 Upwards It would only be Director level upwards who are appointed as permanent staff to ensure continuity at management level.

CD:CM EMPLOYMENT PATTERN OVER THE 5 YEARS Total Workforce in Construction - 3 747 No. as at May 2017 Engineers - 9 No. [1 Black, 3 Female] Technicians - 136 No. [ 63 Black, 16 Female ] Workforce Black - 85 % Workforce Female - 25 % Workforce Youth - 41 %

CD:CM OVERALL DEMOGRAPHIC OVER THE YEARS (Management Levels) BLACK COLOURED INDIAN WHITE TOTAL 9 4 37 45 10 6 1 22 30 11 34 36 12 104 122 2008 LEVEL BLACK COLOURED INDIAN WHITE TOTAL 9 52 2 83 137 10 23 4 61 88 11 12 3 47 64 31 33 89 222 322 2012 LEVEL BLACK COLOURED INDIAN WHITE TOTAL 9 100 13 1 55 169 10 42 69 122 11 25 6 36 68 12 2 27 44 180 31 5 187 403 2016

3. Transformation

Transformation of the Construction Unit: CD:CM OVERALL DEMOGRAPHIC OVER THE YEARS (Management Levels) Transformation of the Construction Unit: There has been a concerted effort to transform the management of the unit to portray the demographics of the country (primary transformation initiative) A Joint Transformation Committee was established in October 2015 to ensure that transformation is an inclusive project. Part of the transformation process is to find the most viable option to ensure economic viability. (secondary transformation initiative) Transformation is still work in progress. Various (Business Model) options are currently being explored. An example of one of the options…. LEVEL BLACK COLOURED INDIAN WHITE TOTAL 9 4 37 45 10 6 1 22 30 11 34 36 12 104 122 2008 LEVEL BLACK COLOURED INDIAN WHITE TOTAL 9 52 2 83 137 10 23 4 61 88 11 12 3 47 64 31 33 89 222 322 2012 LEVEL BLACK COLOURED INDIAN WHITE TOTAL 9 100 13 1 55 169 10 42 69 122 11 25 6 36 68 12 2 27 44 180 31 5 187 403 2016

Business Unit Option Example This would mean that the current could be sub-divided into the following sub-units Sub-Unit Option Function(s) Possible Funding Source 1.) Specialised Construction Unit -Dam Construction -Dam Rehabilitation (Advanced) -Measuring Weir Construction Project-based Augmentation 2.) Project Management Support Unit -Focus on support to all CAPEX projects incl. RBIG, ACIP, ROCS (or anywhere W1014WTE contracts used as means to assist with SMME development). 3.) Rapid Response Unit (lean and mean; fit-for-purpose) -Respond to Drought and Flood related emergencies, -Respond to Water Services (Supply and Sanitation) related emergencies. Could be possibly funded by the Water Management Charges as part of the Catchment Management functions. (There will be a need to differentiate between Government Water Scheme and Water Services emergencies). 4.) Operations and Maintenance Support Unit -Support with Maintenance -Assist with maintenance requirement assessments to reduce outsourcing dependency. -Respond to O&M related emergencies. This function can be included in the WTE Revenue stream as part of the O&M function.

4. Construction Projects

CD:CM PROJECT EXPENDITURE OVER 4 YEARS * All values excluding VAT and R ‘000

Construction Project Allocation Programme 2014/15 Budget (R`000) 2015/2016 Budget (R`000) 2016/2017 Budget (R`000) RBIG R 387 564 R 581 169 R 498 074 Cluster Projects (Maintenance) R 390 060 R 284 304 R 328 372 Infrastructure Development R 195 343 R 100 158 R 60 945 Water Services Projects R 342 601 R 73 636 R 20 695 Dam Safety Rehabilitation R 136 738 R 183 625 R 158 227 Hydrological Services R 21 350 R 24 661 R 27 689 Intervention Projects R 84 967 R 90 868 R 145 792 TOTAL R 1 558 957 R 1 338 420 R 1 239 793

1st Excel spread-sheet attached CURRENT PROJECTS OVERVIEW Main Account: RBIG R330M CD: SAM R45.5M CD: Infrastructure Operations & Maintenance R78.3M CD: Infrastructure Development R9.4M Main Account: WIM R18M Total R481.2M 2017/2018 Projects 1st Excel spread-sheet attached

5. Construction Assets

CD:CM PLANT AND EQUIPMENT AS AT JUNE 2017 Total Number of Yellow Fleet – 1 317 No. Net Book Value – R 467 686 703 Acquisition Cost – R 1 026 610 019 Total Number of White Fleet - 708 No. Net Book Value – R 46 928 461 Acquisition Cost – R 117 231 290 Total Number of Stationary Machines - 720 No. Net Book Value – R 43 933 636 Acquisition Cost – R 177 026 295 Total Number of Equipment – 2745 No. Total Net Book Value – R 558 548 800 Total Acquisition Cost –R 1 320 867 603

ASSETS: Buildings

Asset Management (Plant Management) The Auditor General is generally concerned with the accurate verification of the fleet. Part of the Construction Equipment system processes is the verification of the entire fleet, twice a year. The last forensic audit done by PWC yielded a very good result with minor findings. PWC was also satisfied with the verification process and the result

Suppliers to Construction Suppliers contracted to supply services to Construction are not necessarily confined to a specific project. Services are obtained from suppliers to serve various projects. The spread-sheet provides details of suppliers providing services for the 2017/2018 financial year Supplier List 2nd Excel spread-sheet attached

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