1. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 25 MAY 2004 JAMES MASEKO DIRECTOR-GENERAL BUDGET PREVIEW PRESENTATION TO THE SELECT COMMITTEE ON PUBLIC SERVICES

2. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 2  Exercise custodial responsibilities for National Government Immovable properties  Provide prompt and efficient property and project management services to our clients STRATEGIC GOAL 1 The overarching strategic goal is improvement in service delivery. This will be achieved by:

3. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 3  Providing strategic leadership to the Construction and Property industries to ensure economic growth and development  Promotion of Black Economic Empowerment (BEE)  Contributing to national goal of poverty alleviation and job creation  Contributing to African Renaissance / NEPAD  Good corporate governance  A comprehensive HR plan supporting departmental business and government imperatives OTHER STRATEGIC GOALS

4. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 4 KEY STRATEGIC POLICY DEVELOPMENTS(a) Transforming the department by refocusing its policy, Regulatory and operational functions, for effective service delivery Key policy areas to be covered: -Government-wide immovable asset management framework; -Transformation of the construction and property industries; -Poverty alleviation by the creation of jobs, human resource development, enhancement of infrastructure delivery and community empowerment through the Expanded Public Works Programme. -Improving service delivery to client departments through restructuring, business processes, reengineering and improving skills

5. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 5 KEY STRATEGIC POLICY DEVELOPMENT (b) Key operational areas: -Optimise functional, economic & social returns from the State Property Portfolio; Focus on customer service.

6. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 6 KEY STRATEGIC POLICY DEVELOPMENT (c) Formulating good governance guidelines for the management of public immovable assets, through: -the development of Government-wide Immovable Asset Management Policy Framework to culminate into an Act; and -The development of Immovable asset management plans to be implemented by all spheres of Government.

7. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 7 KEY STRATEGIC POLICY DEVELOPMENTS (d) Development of a transformation framework for the Construction and Property Sectors, focusing on the following, among others: -Intensification of BEE; -Promotion of infrastructure investment; -Productivity and excellence; -Positioning the Construction Industry as a National Asset for effective contribution to economic growth. -Improve the capacity of the Construction Industry. -Promoting best practices in the Construction Industry -Improving government procurement processes for construction services.

8. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 8 KEY FOCAL AREAS Issues for the next Budget Year -In general it is apparent that the Department’s budgetary allocation is far inadequate to fund the Department’s critical programmes as would be demonstrated in slide 13. -This is demonstrated by the Over-expenditure trend which during 2001/02 amounted to R34million and increased to R227 million during 2002/03 financial year. In order to keep the level of over-expenditure for 2003/04 to R30 million(Preliminary Figures) the department had to stop processing all payments as early as five days prior to the end of the financial year. Unfortunately this has a carry over effect on the budget for 2004/05 financial year.

9. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 9  Conducting the overall management of the Department  Formulates policy relating to the Department’s mandate  Provides centralized leadership support of the Ministry and the Senior Management  Transformation Programme PROGRAMME 1: ADMINISTRATION

10. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 10 PROGRAMME 2: PROVISION OF LAND AND ACCOMMOD ATION  Custodian of fixed State Assets  Design and Construction of Buildings and Support Infrastructure  Repair and Maintenance of State Facilities  Leasing  Municipal Services  Rates on State property  Acquisition of Property  Property and Facilities Management

11. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 11 PROGRAMME 3: NATIONAL PUBLIC WORKS PROGRAMME To implement the National Public Works Programme by:  Co-ordinating the Provision of short-term jobs and training through the Expanded Public Works Programme (EPWP)  Promoting construction and property industries growth, development and transformation for enhanced infrastructure delivery as well as addressing historical skewed property ownership

12. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 12 EXPANDED PUBLIC WORKS PROGRAMME The purpose of the programme is poverty alleviation through:  Creating short-term work opportunities focussing on sectors, such as: infrastructure, environmental, social and economic CHALLENGES  Creating national human resource capacity to execute large amount of labour intensive work properly  Mobilizing support, especially among municipal and provincial officials for implementation of the programme

13. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 13 COMPARISON OF REQUESTED BUDGET WITH APPROVED ALLOCATION AT PROGRAMME LEVEL AMOUNT REQUESTED FOR 2004/05 FINANCIAL Rmillions AMOUNT ALLOCATED FOR 2004/05 R millions DIFFERENCE R millions 1 Programme 1: Administration 230240-10 2 Programme 2: Provision of Land and Accommodation 5,2174,493723 3 Programme 3: National Public Works Programme 7469 5 4 Programme 4: Auxiliary and Associated 17 0 TOTAL5,5384,820718

14. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 14 IMPLICATIONS The implications of underfunding as they relate to the main cost Items are: -Leasing: The failure to honour lease commitments will result in the affected client departments being evicted from the offices they occupy. An additional request has just been received from SAPS for additional accommodation for the training of the police recruits in line with Government’s efforts to increase visibility of policing and reducing criminal activity -Rates on State Property and Municipal Services: Municipal services may be terminated with catastrophic results to public facilities like hospitals etc. In addition, this sphere of Government’s service delivery efforts will be greatly compromised. -Maintenance: May result in non-compliance with Occupational Health and Safety Act as some buildings are already in a dilapidated state.

15. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 15 COURSE OF ACTION In view of the under-funding, service delivery by the department will be compromised. There, however, exists a window of opportunity in that additional funding may still be secured around October during the consideration of Adjustment Estimates Appropriation Bill.

16. National Department of Public Works Republic of South Africa National Department of Public Works Republic of South Africa 16 CONCLUDING REMARKS In conclusion, the department wishes to highlight the positive impact and achievements that its programmes continue to contribute to government’s overall objectives and priorities in areas of: -Employment creation -Black economic empowerment -Infrastructure investment -Land reform initiatives and -Transformation of the Construction industry and its quest towards the transformation of the Property industry in the forthcoming years.