I Public Works I Parliament I Cape Town 1 Presentation to the Standing Committee on Appropriation 10 November 2015

2 Contents 1.Budget AdjustmentsSlide Budget Adjustment ImplicationsSlide 7 3.Financial Performance Slide 10 4.Non-financial PerformanceSlide 13

3 Budget Adjustment Purpose of the Presentation

4 Adjusted Budget Allocation 2015/16 Voted (Main appropriation) Virements and shifts due to savings Declared unspent funds Adjusted appropriation R thousandR`000 Programmes Administration 475,996 1, ,346 Intergovernmental Coordination 47,223 (1,500) - 45,723 Expanded Public Works Programme 1,992,234 - (38,865) 1,953,369 Property and Construction Industry Policy and Research 3,802,962 - (60,000) 3,742,962 Prestige Policy 92, , Total for Programmes 6,411,087 - (98,865) 6,312,222

2015/16 Voted (Main appropriation) Virements and shifts due to savings Declared unspent funds Adjusted appropriation R thousandR`000 Economic classification Current payments 882,781 1, ,081 Compensation of employees 474, Goods and services 407,786 1, ,086 Transfers and subsidies 5,500,246 (1,300) (98,865) 5,400,081 Provinces and municipalities 1,178,866 - (38,865) 1,140,001 Departmental agencies and accounts 3,703,137 (1,300) (60,000) 3,641,837 Foreign governments and international organisations 23, Public corporations and private enterprises 50, Non-profit institutions 534, Households 10, Payments for capital assets 28, Machinery and equipment 28, Total 6,411,087 - (98,865) 6,312,222 5 Adjusted Budget Allocation

Reduced Transfers Voted (Main appropriation) Declared unspent funds Adjusted appropriation R thousandR`000 Provinces and municipalities 591,175 (38,865) 552,310 Expanded public works programme integrated grant for provinces 350,612 (24,405) 326,207 Social sector expanded public works programme incentive grant for provinces 240,563 (14,460) 226,103 Departmental agencies and accounts 3,584,652 (60,000) 3,524,652 Property Management Trading Entity 3,584,652 (60,000) 3,524,652 Total 4,175,827 (98,865) 4,076,962 6 Reduced allocations

Budget Adjustment Implications Purpose of the Presentation

 A total of work opportunities were planned for 2015/16, with the total budget allocation of R1.7 billion.  During the adjustment estimates R38 million was reduced from both EPWP Integrated Grant (R24 million) and Social Sector Incentive Grant (R14 million) resulting in the revised target of for work opportunities.  Reduced budget allocation for the grants will result in:  Creation of less employment opportunities for the current financial year  Less opportunities for skills development  Service delivery being impacted negatively as less people being employed Budget Adjustment Implications: EPWP Incentive Grant

 The Department is in the process of acquiring the property known as Parliament Towers in Cape Town.  This property houses the DG’s of the respective departments and is in close proximity to Parliament.  An investment analysis has shown that it would be in the best interest of Government to acquire the property instead of continuing the lease of the building from a private sector company.  Due to the budget adjustment, the department will not be able to afford the full offer price in the current financial year and the acquisition will have to be postponed to the next financial year Budget Adjustment Implications

10 Financial Performance Purpose of the Presentation

30-Sep-15 Adjusted appropriation ExpenditureProjections for the remaining period Actual Expenditure % R thousandR`000 Programmes Administration 477, , ,60345% Intergovernmental Coordination 45,723 15,024 30,69933% Expanded Public Works Programme 1,953,369 1,029, ,44453% Property and Construction Industry Policy and Research 3,742,962 1,194,894 2,548,06832% Prestige Policy 92,822 42,123 50,69945% Total for Programmes 6,312,222 2,498,709 3,813,51340% 11 Financial Performance

30-Sep-15 Adjusted appropriation ExpenditureProjections for the remaining period Actual Expenditure % R thousandR`000 Economic classification Current payments 884, , ,25946% Compensation of employees 474, , ,13646% Goods and services 409, , ,12345% Interest and rent on land % Transfers and subsidies 5,400,081 2,083,241 3,316,84039% Provinces and municipalities 1,140, , ,32755% Departmental agencies and accounts 3,641,837 1,076,200 2,565,63730% Foreign governments and international organisations 23,273 23,363 (90)100% Public corporations and private enterprises 50, % Non-profit institutions 534, , ,66255% Households 10,154 9, % Payments for capital assets 28,060 10,529 38% Machinery, equipment and intangible assets 28,060 10,529 17,53138% Total 6,312,222 2,498,709 3,796,09940% 12 Financial Performance

13 Non-financial Performance Purpose of the Presentation

14 Selected Performance Indicators as per the ENE Performance IndicatorAnnual Target Cumulative Performance (Q1&2) Comments (on the basis of Q2) Number of work opportunities reported work opportunities created through EPWP Phase work opportunities reported through EPWP Phase 3.. Target partially Achieved - Delays in the reporting system Number of work opportunities created in rural municipalities aligned to the EPWP business plan Work opportunities created in rural municipalities work opportunities created in rural municipalities. Target partially Achieved – Delays in the reporting system Percentage of EPWP participation among designated groups (women, youth and persons with disabilities) aligned to the EPWP Phase III Business Plan. 55% Women 55% Youth 2% PWD 70.5% Women 45.4% Youth 1.7% PWD The target on Youth will improve once the projects that target Youth have been awarded.

15 Non-financial Performance Performance IndicatorAnnual Target Cumulative Performance (Q1&2) Comments (on the basis of Q2) Number of IGR forums convened for oversight of the Public Works Sector 12 intergovernmental forums convened 7 intergovernmental forums convened Target Achieved Promulgation of a public works act -Draft 1 of Public Works White Paper consulted with key stakeholders Revised procurement strategy (moving from nominated service provider to open tender) was initiated. Development of Prestige norms and standards Norms and standards for category III approved by Parliament First Draft norms and standards for category iii clients developed In the process of completing the remainder of standards and norms and getting them approved

16 Non-financial Performance Performance IndicatorAnnual Target Cumulative Performance (Q1&2) Comments (on the basis of Q2) Number of projects completed within agreed construction period 6248Target overachieved Continuation of the turnaround strategy to improve performance. 1). Encourage termination of non performing contractors & consultants. 2). Called intervention meetings with contractors. 3). Issued mora letters. 4). Increased project monitoring Number of projects completed within approved budget 7747 Percentage of identified Real Estate Assets verified 100% of identified Real Estate Assets verified 99.12% of identified Real Estate Assets verified Target Achieved: Cumulative target therefore most of the Real Estate Assets were verified by 31 March 2015 Percentage efficiency (turnaround time) for unscheduled maintenance on freehold property within 5 days 65%32% calls managed (logged and completed) Currently developing the manual for uniformity and alignment of business processes to the system Some PMTE Performance Highlights

Department of Public Works (National ) Head Office: Public Works CGO Building Cnr Bosman and Madiba Pretoria Central Private Bag X65 Pretoria 0001 Website: Thank You 17