1. OVERVIEW OF CONSTRUCTION MANAGEMENT UNIT WITHIN THE NWRI BRANCH
Presented by:
Zandile Makhathini
Acting Director-General
Date: 20 March 2018

2. Contents History of construction unit Construction staffing
Transformation
Construction projects
Construction assets
Recommendations

3. 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.

4. 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. 4

5. 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.

6. CD: CM within the Department
MINISTER
DIRECTOR GENERAL
DDG: NWRI
CD: INFRASTRUCTURE DEVELOPMENT
CD: ENGINEERING SERVICES
CD: CONSTRUCTION MANAGEMENT
CD:
OPERATIONS AND MAINTENANCE
STRATEGIC ASSET MANAGEMENT
REGIONAL BULK INFRASTRUCTURE GRANT

7. NWRI Organisational Chart Relating To Construction Management
DEPUTY DIRECTOR GENERAL
DDG: NWRIB
CD:CONSTRUCTION MANAGEMENT Vacant
CONSTRUCTION SUPPORT M Maraka
CONSTRUCTION EQUIPMENT K Fortuin
CONSTRUCTION NORTH F Mothiba
CONSTRUCTION
EAST Z Zenani
CONSTRUCTION SOUTH H Swart
CONSTRUCTION WEST W Theron
FLEET MANAGEMENT
CENTRAL WORKSHOP J Bezuidenhout
CONSTRUCTION PROJECTS
CONSTRUCTION PROJECTS
CONSTRUCTION PROJECTS
CONSTRUCTION PROJECTS
EQUIPMENT AQUISITIONS
MANUFACTURING
Tshwane (DWS Head Office)
Head Office: Construction Management, Support and Equipment Management, Drilling Workshop
Paarl
Construction South Headquarters: Implementation of projects in Western Cape, Northern Cape and Eastern Cape Provinces.
Potchefstroom
Construction West Headquarters: Implementation of projects in Gauteng, Free State and Limpopo Provinces.
Tzaneen
Construction North Headquarters: Implementation of projects in North West and Limpopo Provinces.
Standerton
Construction East Headquarters: Implementation of projects in Mpumalanga and Kwazulu Natal Provinces.
Jan Kempdorp
Construction Central Workshop Headquarters: Manufacturing, refurbishment and re-building of plant and equipment.
EQUIPMENT
RE-BUILDS

8. CD: CM Core Competencies
Core competencies includes the construction of, but is not limited to:
Large Dams;
Rehabilitation of existing Dams;
Pipelines (Bulk and Reticulation);
Canals;
Roads (Gravel, Paved and Asphalt);
Gauging Stations; and
Building work.
Water Purification Works;
Reservoirs;
Pump Stations;
Bridges;
Weirs;

9. 2. Construction Staffing

10. 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
730 41
298
1069
CONSTRUCTION SOUTH
126 33
145
304
CONSTRUCTION WEST
728 74
228
1030
FLEET MANAGEMENT SUP 5
1956
172
1007
3135

11. Contract vs. Permanent Appointments
Type of Appointment
No. of Employees
Levels
NWA Section 76 Employees
3135
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.

12. CD: CM Professional Registrations
Race
Gender

13. CD:CM EMPLOYMENT PATTERN OVER THE 5 YEARS
Total Workforce in Construction No. as at May 2017
Engineers - 9 No. [1 Black, 3 Female]
Technicians No. [ 63 Black, 16 Female ]
Workforce Black - 85 %
Workforce Female - 25 %
Workforce Youth - 41 % 13

14. 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
2017

15. 3. Transformation

16. 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
2017

17. 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 where 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. 17

18. 4. Construction Projects

19. CD:CM Project Expenditure over 4 Years
* All values excluding VAT and R ‘000 19

20. Construction Project Allocation
Programme
2014/15 Budget (R`000)
2015/2016 Budget (R`000)
2016/2017 Budget (R`000)
RBIG R R R
Cluster Projects (Maintenance) R R R
Infrastructure Development R R R
Water Services Projects R R R
Dam Safety Rehabilitation R R R
Hydrological Services R R R
Intervention Projects R R R
TOTAL
R 1 
R 1 
R 1 

21. Construction Management Current Status
The financial constraints that is placed on the Department as a result of the heavily reduced funds available for the 2017/18 financial year and over the MTEF is excessively felt within the CD: CM.
All operational activities (Cost of Employment, Procurement of Goods and Services, Maintenance and Procurement of Construction Equipment, Manufacturing of Material and Equipment and Training and Development) are funded by projects that are obtained from clients.

22. CoE on Project With Budgets Vs. Projects Without Budgets
At some projects clients had indicated that there is no budget allocation for the 2017/18 financial year but CD: CM still incurs costs as the sites are still operational. The intention is to deplete material which has been purchased on site before commencing with the site disestablishment process. The table below indicates the expenditure incurred on employee related costs within CD: CM during the month of August 2017 as some employees only report for work at their work stations without visiting sites:

23. 5. Construction Assets

24. CD:CM Plant and Equipment as at June 2017
Total Number of Yellow Fleet – 1 317 No.
Net Book Value – R
Acquisition Cost – R
Total Number of White Fleet No.
Net Book Value – R
Acquisition Cost – R
Total Number of Stationary Machines No.
Net Book Value – R
Acquisition Cost – R
Total Number of Equipment – 2745 No.
Total Net Book Value – R
Total Acquisition Cost –R

25. Assets: Buildings

26. Recommendations
Allocate projects to the CD: CM to reduce the impact of the over expenditure that is caused by the existing resources within the CD: CM.
Fix the procurement processes as the delays directly hamper progress on projects. The fixing of the procurement processes must be done as a matter of urgency. If this is not fixed, the over expenditure is going to be a lot more than the mentioned R 594 Million.
The CD: CM to terminate all Specialist Contract employees above 65 years of age who are still working within the CD: CM. Termination of these contracts can result to a saving of approximately R10, 452, per annum.
Allow the NWRI Branch to appoint a Professional Service Provider specialising in Construction Business, Human Resources, Procurement, Construction Asset Management Specialist, Construction Administration Specialist, to further investigate the areas of wastage within the CD: CM and also develop a turnaround strategy for the unit.

27. Recommendations Cont.…
Collapse the WTE, Infrastructure Branch (incl. Construction Unit) and TCTA to form a state owned entity:
Explore a public private partnership
Ownership: To be determined but the state will be the majority shareholder
Get National Treasury concurrence

28. THANK YOU