HSDG Performance Quarter 4

Presentation Outline 1. Purpose 2. Background 3. Q1 to Q4 performance Report (2017/18 FY) 4. Interventions

PURPOSE

PURPOSE OF THE PRESENTATION The presentation serves to; Appraise on progress relating to implementation of HSDG for Limpopo Province. Highlight the recovery plan & the New Path Plan the department has embarked on and, Outline the impact of the plan on performance during the 2017/18 financial year. To share Provincial Department state of readiness for 2018/19 FY To present a progress report on Title Deeds Programme for 2017/18 FY

Background

Background The HSDG Budget allocation for 2017/18 financial year was R1, 319 493 000.00. A roll over budget of R86, 968, 000 was approved thus making the total budget to be R1,406, 461, 000. The National Department took away from the province R150m and the remaining budget was R1, 256, 461, 000 The department managed to spend the remaining budget of R1, 256, 461,000 as at the end of the financial year translating to 100%

Background cnt… Total number of units delivered as at 31st March 2018 is 9100 out of a target of 9956. Total number of sites delivered as at 31st March 2018 is 2813 against a target of 5151. Rural housing – 1935 units completed, cumulative delivery = 8241 Rectification – 78 units completed, cumulative delivery = 385 Disaster/Emergency housing – 17 units completed, cumulative delivery = 393 Informal settlements upgrading – 1305 sites services, cumulative delivery = 3334

Quarter 1 to Quarter 4 Performance Progress Per Quarter 2017/18 FY   Quarter 1 Quarter 2 Quarter 3 Quarter 4 Units Sites Expenditure Target 2380 405 R 411 984,00 2967 1741 R 329 784,00 2555 1165 R 346 778,00 2054 1840 R 167 915,00 Actual Delivery 1934 748 R 182 036,00 2647 511 R 288 468,00 2513 770 R 275 561,00 2006 1305 R 510 396,00 Shortfall 446 -343 R 229 948,00 320 1230 R 41 316,00 42 395 R 71 217,00 48 535 R -342 481,00 Performance % 81% 185% 44% 89% 29% 87% 98% 66% 79% 71% 304%   2017/18 Summary Performance Units Sites Expenditure Target 9956 5151 R 1 256 461,00 Actual Delivery 9100 2813 Variance 856 2338

Military Veterans programme Backlog on the programme is 411 units The Annual target for 2017/18 was 200 units. : Delivery is 13 units. Challenges There has been gross under performance on the programme in the financial year that has seen only 13 units delivered in the 2017/18 financial year. This has been largely attributed to economic viability of constructing 75m2 which was demanded by the beneficiaries instead of the 50m2 national norm. Interventions A MINMEC decision was taken for provinces to revert back to 50m2 as prescribed by national policy. A Ministerial directive was issued to all provinces to upscale delivery and comply with policy on 50m2 house. The HDA as the implementing agent has since appointed 5 contractors to deliver 235 units in the current financial year.

Key challenges leading to poor performance The following are challenges that the department was faced with during 2017/18 FY: Contractor database with no bias towards built industry prescripts Late appointment of service providers Late approval of developmental areas Contractor to contractor cessions leading to poor performance None Application of consequence management for none performance of contractors Inadequate Contract Management & Planning (Geotechs & Beneficiary Management) Low staff moral resulting from abrupt staff movement and poor communication Slow delivery process of title deeds.

Phase 1 Intervention-Recovery Plan

Recovery Plan Development of a Recovery Plan/Turn around Plan focusing on the following: Increasing HSDG expenditure through appointment of HDA high capacity contractors Improving Contracts Management – ISHS meeting poor performing contractors to assist in addressing their issues, eg capacity and resource mobilization (through cessions) Improving Contractors Performance and applying consequential management Provision of Additional Capacity & Support to Specific Directorates Accelerating Supply chain processes The following are the interventions on Title deeds Meetings arranged with affected municipalities and a follow up to get the clearance certificate signed Ward councilors and committees are assisting in tracing approved beneficiaries, and announcement’s to be presented in three languages on the radio. Meetings are arranged with affected municipalities to confirm the status of signing of transfer documents to be submitted to state attorney

Progress on Recovery Plan Facilitating Increase in Expenditure on the HSDG through the following: One On One Meetings with Contractors The Department convenes meetings with high performing, average as well as poor performing contractors to agree with them on fast tracking completions of units and increasing productivity Assessing Contractor’s Performance An assessment and categorization of the currently appointed contractors was undertaken and termination of none performing contractors was undertaken and letters for none performance were respectively issued Contract Management meetings The HoD holds regular meetings with the Senior Management every week in order to assess progress and map out intervention measures on ISHS poor performing contractors Provision of Additional Capacity & Support to Specific Directorates Additional capacity was sought from HDA in order to assist the Dept with planning and project pipelining this includes a town planner a land legal person, a civil engineer and a town planner Conclusion of SLA with HDA on appointment of high performing contractors SLA was finalized by January 2018

Phase 2 Intervention-Strategic Plan

Phase 2 of Strategic Intervention Plan While implementing the recovery plan a further assessment on factors militating against the ISHS was done this was followed by a two day strategic plan session on the 23rd and 24th January 2018, which focused on finding solutions and this resulted in adoption of the following strategic goals: A new multi-layered database of contractors to be established incorporating CIDB Grading & NHBRC Registration. The Department terminate none performing contractors. The department will introduce a performance reduction matrix and delivery schedule as a standard addendum to the current Department contract The Department will set up a contract management committee that will evaluate performance of contractors and make necessary recommendations

Phase 2 of Strategic Intervention Plan cnt… As part of strengthening the Department’s efficiency staff reconfiguration process would be undertaken and this will result in some officials being moved from the current districts to new districts and municipalities. Appointment of service providers to be linked with the financial year as opposed to shorter terms Re-constitution of supply chain committees. The department will ensure that with effect from 2018/19 financial year, development areas are approved for a period of five years and council resolutions are also taken.

Phase 2 Strategic Intervention Plan cnt… Rollout of the Electronic Management System (EPMS) for effective and efficient project management would be done by the 1st July 2018 Contractor to contractor cessions will not be accepted by the Department unless if they are for material supply. Contractors prioritise building foundations and leave incomplete units in mitigating against this, the department will only release 50% geotechnical allowance at foundation phase and the balance be paid on completion of units. A project planning cycle to commence in April and be completed in August every year. This will ensure that there is enough time to develop a credible business plan e.g. start planning now for 19/20 financial year.

Progress on Phase 2 Strategic Intervention

Progress Made on Phase 2 Intervention Plan A tender process for establishment of new multilayered contractor database is currently underway and is closing on the 12 June 2018 Performance evaluation of all contractors is currently undertaken on fortnightly and monthly basis Introduction of a target reduction plan and delivery schedule as a standard addendum to the current contracts will commence on contractors that would be appointed from 2018/19 FY The EMPS has been piloted in five districts and been fully rolled out on HDA on contractors appointed to deliver 5000 units. With effect from 01 April 2018 , the department will no longer accept contractor to contractor cessions but only material supplier to contractor sessions With effect from 1st April 2018 , the department only pays 50% of geotechnical allowance at foundation phase and the balance is paid on completion of a unit.

Progress on Phase 2 Intervention Plan Cont:- The department has established new supply chain committees Re-alignment of Maraphong contract to be finalised by the 15th of June 2018 The Head of the Department continues to hold weekly meetings with DDGs The department has incorporated the function of management of title deeds in the PMU scope of work in order to ensure a speed delivery of title deeds The Department is currently finalising an evaluation process of engineering services contractor’s database which will result in appointment of service providers for mining towns and informal settlement on servicing of sites. It is envisaged that this process would be finalised by the 20th of June 2018 The ISHS DDG holds weekly meetings with all senior managers involved on HSDG The PMU submits a daily report on contractor performance The Chief Financial Officer circulates a daily report on non financial and financial expenditure A contract management committee is now place and is responsible for ensuring that none performing contractors are recommended for termination

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