PORTFOLIO COMMITTEE PRESENTATION NATIONAL DEPARTMENT OF PUBLIC WORKS 28 MARCH 2001

Accommodation and Asset STRUCTURAL OVERVIEW National Public Works Programme N D P W Accommodation and Asset Management Finance and Corporate Services

MISSION To ensure that National State Departments of South Africa have a Built Environment that meets their financial, technical and social requirements through the: Provision, development and maintenance of accommodation Acquisition and disposal of state land Management and maintenance of State Property Portfolio

MISSION Cont’d To implement the National Public Works Programme by: Creating assets through the Community Based Public Works Programme Influencing and stabilising the Construction and Property Industries and ensuring that infrastructure is provided in a way that creates jobs, empowers communities and develops human resources.

NATIONAL PUBLIC WORKS PROGRAMME

National Public Works Programme (NPWP) Community Based Public Works Programme Construction Industry Development Programme

COMMUNITY BASED PUBLIC WORKS PROGRAMME (CBPWP) CBPWP is a specific job creation and poverty relief programme of government, targeted primarily at the rural poor. Construction of public assets – short term employment opportunities Creating sustainable employment opportunities – facilitating micro business opportunities Targeting poorest of the poor

CBPWP Pilot Project Era 1994 – 1996 Realigned CBPWP 1996 - Mid 1999 Labour Based Approach Supply Driven Realigned CBPWP 1996 - Mid 1999 Demand Driven Approach by Communities Targeting – Women and Youth Clustering of projects 0Implementation and Monitoring Categorization of Projects

CBPWP New Dimensions - Mid 1999 to Present Community Production Centres (CPCs) Multi Purpose Centres (MPCs) Land Rehabilitation Programme Clean and Green Programme Youth Working Towards Environmental Accessibility(YOWOTEA) HIV/AIDS Infrastructure Support Programme

CBPWP - Temporary Employment Opportunities Created Women Youth* Disabled* Totals 1996-1997 5300 5020 169 - 10320 1998-1999 18512 10848 11334 269 29360 1999-2000 6348 5008 5119 199 11355 2000-2001 11022 8208 8772 289 19230 Total 41182 29084 25394 757 70266 *The Youth and Disabled are part of the number of Men and Women and can thus not be calculated into the total number of Jobs created.

CBPWP – Expenditure to Date Year 1998/99 1999/00 2000/01 TOTAL Budget 274,0 377,0 349,0 1 000,0 Expenditure 270,9 366,1 352,4 989,4 % Expenditure 99 % 97 % 101 %

Construction Industry Development Programme(CIDP) To develop and transform the South African Construction Industry

CIDP Construction Industry Development Board(CIDB) Act(Act No. 38 of 2000) Council for the Built Environment Bill,2000 Construction Industry Development Board April 2001 6 Councils for the Built Environment Professions June 2001

CIDP NDPW will financially support Total amount of R13,6 million Establishment of CIDB The new Council for Project and Construction Management Council for Built Environment Total amount of R13,6 million

Developments within CIDP To enable government to monitor growth, performance, delivery and transformation of the industry. A study on the Current State of the Industry Partnering approach with contractors and parties involved in the supply chain. Projects worth R600 million identified Developing the role of the Built Environment Professions

CHALLENGES - CIDP Delayed Payments Targets set for the reduction of delayed payments 10% for selected provinces 20% for National Department of Public Works Development and Adoption of a Client Charter by National and Provincial Department

CHALLENGES - CIDP Empowerment of Black Contractors Training Campaign Procurement Workshops CET training programme developed with ILO Women in Construction targeted. Mentoring Programme Access to Finance R20million commitment mobilised from IDC Banking Council to be approached by Minister

ACCOMMODATION AND ASSET MANAGEMENT

DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT CLIENT SERVICES CLIENT FOCUS SERVICE AGREEMENTS BUDGETS PROJECT INITIATION BY CLIENT SERVICES MAJOR PROJECTS RAMP PROJECTS FOR PRISONS, LIFTS IN GOVERNMENT BUILDINGS R1,2 billion KHAYELITSHA MAGISTRATES OFFICE R26,9 million KOKSTAD MEDIUM SECURITY PRISON R84,0 million EMPANGENI PRISON : HOUSING R58,0 million

DISPOSAL OF PROPERTIES DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT DISPOSAL OF PROPERTIES ADJUDICATION CRITERIA PRICE CONCEPT PLAN FINANCIAL VIABILITY TENDERERS EXPERIENCE AND EXPERTISE ECONOMIC EMPOWERMENT SOCIO-ECONOMIC OBJECTIVES PROPERITIES TO BE DISPOSED SUMMERSTAND - PE MIDRAND SILVERMINE – CAPE TOWN PMB – FORMER COURT MILITARY BASES

DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT DISPOSAL OF PROPERTY PROGRAMME FOR DISPOSAL : MILITARY BASES APRIL 2001 : BOURKES LUCK MAY 2001 : ZWARTKOP AFB JUNE 2001 : GEORGE ARMY COLLEGE JULY 2001 : YSTERPLAAT AFB AUGUST 2001 : CAMDEN OCTOBER 2001: WATERKLOOF AFB

PROPERTIES AND FACILITIES MANAGEMENT DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT PROPERTIES AND FACILITIES MANAGEMENT REPAIR AND MAINTENANCE PROGRAMME CORRECTIONAL SERVICES LIFTS DEPARTMENT OF DEFENCE

CORRECTIONAL SERVICES DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT CORRECTIONAL SERVICES NUMBER OF PRISONS : 33 BUILDING AREA COVERED (33 PRISONS) : 2,030,00 m² CONTRACTS AWARDED : 55 NUMBER OF PRISONERS IN REPAIR AND MAINTENANCE : 95,500 63% OF TOTAL

COST MANAGEMENT : CONSTRUCTION AND CONSULTANTS DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT COST MANAGEMENT : CONSTRUCTION AND CONSULTANTS

DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT

APOPS Procurement model which is a PPP which enables the Private Sector to participate in Finance Design, Construction Management and Maintenance of Public sector facilities for a period of 25 years prior to transferring the asset back to the state.

APOPS - Projects Department of Correctional Services Maximum Security Prisons Bloemfontein - 2928 prisoners Louis Trichardt – 3024 prisoners Department of Education Head Office – Business Case approved Dec 2000

APOPS - Projects Department of Foreign Affairs Head Office – Business Case submitted to National Treasury Union Buildings and Parliament Negotiations currently ongoing

DEPARTMENT OF PUBLIC WORKS March 2001 ACCOMMODATION and ASSET MANAGEMENT LEASING PROJECT 700 Leasing Files Identified as Problem Files R 1 000 000 worth of incorrect monthly lease Payments were stopped R 20 000 000 identified as fruitless expenditure (combination of over payments for vacant properties R 158 000 recovered as being incorrect amounts paid to landlords so far.

FINANCE AND CORPORATE SERVICES

FINANCE AND CORPORATE SERVICES (F&CS) Human Resource Development and Management Registration with the relevant SETA Information Technology MOU with SITA

F&CS Fraud Awareness and Special Investigation An amount of R 2,266,092.87 is being investigated in the following regions Johannesburg Pietersburg Durban Head Office Last Year: 8 people were dismissed 3 pending suspensions 2 out of 3 above found guilty – Process for termination initiated

F&CS Financial Management Regional Financial Reviews introduced Inadequate Internal Controls Decentralisation of Functions Review of Budgeting Process Multi-year plans Expenditure Management Implementation of PFMA Risk Management Plan

MTEF ALLOCATION 2001/2002 -2003/2004 Vote 30: Public Works 2002/3 2003/4 Expenditure Component R’000 Personnel Expenditure 332 125 355 027 382 079 Capital Works 76 145 135 148 238 266 Alloc. For Other Services Function Shifts 650 715 787 Inflation and Related Adj. 46 229 66 574 77 881 Poverty Relief 274 000 Carry Through (2000/01) (82 152) (91 786) (88 752) Residual Allocation 2 874 590 2 976 710 3 115 780 TOTAL VOTE 3 521 587 3 716 388 4 000 041

BUDGET ALLOCATION PER PROGRAMMES Programme 1: Administration Programme 2: Provision of Land and Accommodation Programme 3: National Public Works Programme Programme 4: Auxillary and Associated Services TOTAL: DEPT. BUDGET R 168, 802,507 R 2,975,651,861 R 366,510,612 R 10,622,000 R 3,521,587,000

CURRENT INITIATIVES Capital Expenditure Project Devolution of Budget Transformation Project Decentralisation Project Asset and Facilities Management

CAPITAL EXPENDITURE PROJECT Ensuring that the budget for 2001/2002 for capital expenditure is spent.

CAPITAL EXPENDITURE PROJECT Contributing Factors Planning Process Lead times and Building Programmes Transfer of excessive funds to NDPW Reprioritization by Client Departments Capacity and non-performance culture within NDPW Solutions Review of Planning Process Multi-year allocations of funds to NDPW Client Liason Forum Project Managers appointed Major Construction Companies Involvement

DEVOLUTION OF BUDGET Responds to PFMA Separation of ownership and occupancy roles Centralised ownership and NDPW being the custodian/owner of state assets. Business Model Window of opportunity proposed for 5 years

BUSINESS MODEL CLIENT DEPARTMENTS NDPW State Accommodation Advisory Services Option Evaluation Single Interface for need Transversal Policies. Customer Services Lease Brokering Lease Management Municipal Services Management Custodian of State’s Fixed Asset Landlord role – Asset Register(B/S), Rates and Taxes, Acquisition and Disposal, Ensuring Compliance, Maintenance and Construction Planning Promoter of Construction Industry Monitoring and Benchmarking

Transformation Project AIM To achieve operational efficiency Objectives Institutional Arrangements including the SPA Organisational Structure for future NDPW Organisational arrangements for the SPA Best business processes for the proposed arrangements Interim arrangements that will ensure a smooth transition towards future organisational arrangements.

Transformation Project – Cont’d Progress to date Consultants appointed for the initial phase Transformation Task team appointed Strategic Planning Session planned for the end of April

ASSET AND FACILITIES MANAGEMENT Strategic Partner Alliance Properties Developers Conference

Decentralisation Project The project aims to equip regional offices to being viable and efficient business units.

Accommodation and Asset Management LEGISLATION POLICY / MANAGEMENT ISSUES PROCUMENT FINANCIAL OPERATONAL EFFICIENCY, CLIENT FOCUSSED, OPTIMALLY RESOURCED ORGANISATION

Pillars for Success Procurement Issues Policy/Legislation Issues RAMP APOPS Other PPP’s initiatives Normal Tender Processes Policy/Legislation Issues State Property Agency Bill Property Bill

Pillars for Success Financial Issues Supporting Management Issues Implementation of User Pays Financing Model for SPA Business Case for SPA Review of Accounting System Disposal and Acquisition of Property Accounting Standards Board Supporting Management Issues IT systems HRD Strategy Risk Management Plan Transformation - Decentralisation

FLIGHT PLAN Capital Expenditure Project Decentralisation Project Strategic Partner Alliance Establishment Transformation Project Business Case for SPA approved by Cabinet State Property Agency Bill Property Bill Establishment of SPA Financing Model for the SPA

Critical Success Factors Acceptance of Protection Period – 5 years Client Departments to budget and pay for Municipal Services Furniture for Prestige Accommodation Valuation of state fixed assets Implementation of a commercial accounting system(User Pays, Accrual Accounting) Buy-in from key stake holders – National Treasury and Client Departments Service Level Agreement Implementation