1. By Cathy Motsisi Chief Financial Officer
Presentation of the MTBPS comments to the Standing Committee on Appropriations 2 November 2009 By
Cathy Motsisi
Chief Financial Officer

2. Table of Contents Introduction
Additional Funding through the Adjustment Estimates
Additional funding requested for the next financial year
Financial Performance as at 30 Sept

3. Introduction
The department welcomes the MTBPS as announced by the Minister of Finance, Mr Pravin Gordhan.
And yes indeed, the department received an additional funding of R751 mil representing an increase of 14,18% to the baseline.
The additional funding relates to unforeseen and unavoidable expenditure and requested roll over of the capital budget.

4. Adjustment Estimates: Unforeseen & Unavoidable – R524 mil
Unallocated during the ENE:
The amount which was announced by the Minister of Finance in his budget
speech but unallocated during the ENE is R 114,500 million. Funds have
been allocated through the adjustment estimates. The allocated funds are for
EPWP Incentive grant and will be distributed to:
Independent Development Trust R 5 million
Community Works Programme R 51 million
Trade and Industrial Policy R 58.5 million
Provision of office & residential accommodation for new Ministers & Deputy Ministers including furniture & security: R150 mil
Increase to the Devolution of Property Rates Grants: R353 mil
General salary adjustments R 21,7 mil

5. Adjustments Estimates- Funds Rolled Over
Funds Rolled over: R mil
Inner City Regeneration Projects R mil
Bloem - Upgrading of buildings R 6,187 mil
Land Ports of Entry redevelopment projects R mil
Prestige Accommodation R mil

6. Additional Funding Requested for 2010/11 Financial year.

7. Policy Option 1 and 2
Option 1. Additional Funding for Compensation of Employees:- R mil
The department is currently facing serious challenges around operational resources and the filling of strategic and technical skills. The budgetary constraints have made it more difficult to implement retention strategies as well as to create the necessary capacity needed to maintain and manage the immovable assets of the state.
The department is also faced with the challenge of implementing the OSD as approved by DPSA. The costing exercise undertaken with the assistance of DPSA showed that an additional R20.3 million is required for the implementation.
Option 2. EPWP:- R mil
Contribution to the national priority of job creation and poverty alleviation through the strengthening of the Expanded Public Works Programme incentive scheme. The additional funds will cover other sectors which were not included in the incentive scheme such as the Social Sector, Environmental Sector, Community works Programmes etc and the additional funding for the infrastructure sector including capacity building for the management of the grants.

8. Policy Option 3 –Infrastructure/Capital Budget
Border Control Operational Coordinating Committee (BCOCC); –R mil
DPW is the custodian of immovable assets (infrastructure) at 54 land ports of entry on behalf of the BCOCC, which is responsible for the co-ordination of strategic and operational management of the South African border environment.
Readiness of infrastructure to support operational mandates of the various departments at land ports of entry by 2010, and beyond; to support economic growth and socio-political stability in SADC is an increasing imperative.
DPW provides redevelopment projects; additional accommodation; upgrades; repair; maintenance; facilities management services; and provision of temporary infrastructure resources for peak season (festive and Easter) on a limited budget; which has potential to create challenges and risks of national safety and security in border control.
Implementation of this programme will be Labour and BEE Intensive to support Expanded Public Works Programme.

9. Policy Option 3 –Infrastructure/Capital Budget cont.
Parliamentary Precinct:- R mil
This is for the construction of a New Parliament Precinct, construction of parking bays and multipurpose centre to address expansion requirements, compliance with OHSA and need for the parliamentary precinct to meet the international Standards and reputation of first class countries. Extension of the Parliament will also cater for the public participation which was never catered for in the old regime.
Comparison with other countries was undertaken and this showed that the present Parliament is not as functional in terms of condition and size, etc.
A comprehensive feasibility has already been completed.

10. Policy Option 3 –Infrastructure/Capital Budget cont.
Accessibility:- R mil
As per the legal requirements, the projects aims to make State-owned buildings accessible to people with disabilities and in this way make government services accessible to all. The programme also aims to minimise risk to citizens and to Government resulting from claims for damages and non-compliance.
Water Efficiency:- R mil
In line with life cycle management, the project aims to address problem of old and inefficient water works systems in State-owned buildings. The Department is also proactively addressing the problem of water shortages in South Africa through this project.

11. Option 4 - Additional Funding for Entities of the DPW
Independent Development Trust (IDT): - R200,000 (2009/10; 0)
The request for additional funding for the (IDT), is a new request which has never been part of the department’s baseline. The IDT has always been self funding, however, due to their increased mandate and their reducing capital reserves the request for additional funding is included in this submission.
Council for Built Environment (CBE):- R30,375 (2009/10; R24,155)
The CBE has always been funded through the goods and services budget of the DPW. An amount of R24,155 million was budgeted for in the 2009/10 financial year. During the course of the previous fiscal year, 2008/09 the CBE realised that in order for the institution to effectively deliver on its mandate additional capacity would have to be obtained, this resulting in 7 new posts being created and filled within the organisation.
This capacity will ensure that some of the projects and research originally performed by external parties on behalf of the CBE will now be produced internally.

12. Option 4 - Additional Funding for Entities of the DPW cont.
Agrément Board:- R42,733 mil (2009/10; R8 554 mil)
The main objective of Agrément S.A. is to support and promote the process of integrated socio-economic development in South Africa as it relates to the construction industry by facilitating the introduction, application and utilization of satisfactory innovation and technology development in a manner which will add value to the process of assessment and certification.
It was established by the Minister of Public Works in 1969 as an independent organization to bring impartial judgment to the evaluation of innovative construction products and systems in the interest of the consumer.
Currently the department is only providing R8,5 million funding for the entity. The Agency is grossly under-resourced and is struggling to fully and effectively discharge its mandate.
The Agency relies heavily on CSIR Built Environment for certain services. Intervention in the form of additional funding will allow Agrément South Africa to begin to address its capacity problems and to more effectively fulfil its mandate.

13. Financial Implications of the Options over the MTEF
Policy Options
2010/11
R’000
2011/12
2012/13
TOTAL
Infrastructure/Capital Budget
Expanded Public Works Programme
OSD Implementation
 20 344
 21 565
 22 708
64 617
Increase of Transfers to Entities
73 108 b b b b

14. Financial Performance of the Department for the period ending 30 Sept 2009

15. Exp % as at the 1st Quarter 2009 Possible overspending/ Savings
Total Department: Financial Performance per Economic Classification as at 30 Sept.
Economic classification
Budget Allocation
2009/10
Exp as 30 Sept 2009
Exp % as at 31 Sep
2009
2nd Quarter
NT Benchmark
Exp % as at the 1st Quarter 2009
Available Budget
Possible overspending/ Savings
R'000
R’000
Compensation of employees
52%
49%
26 %
93 mil
Goods and services
36%
59%
19 %
63 mil
Property Management
73%
86 339
20 mil
Transfers and subsidies
54%
61%
21 % -
Infrastructure
25%
27%
Machinery and equipment
47 524
17 157
46%
17 %
30357
Total
51%
22%
23 mil

16. Financial Performance per Programme –(Benchmark 50%)
Appropriated allocation
2009/10
Exp as 30 Sept 2009
Exp % as at 31 Sep
2009
Exp % as at the 1st Quarter 2009
Available Budget
Possible overspending
% Possible Overspending
R'000
R’000
Prog 1. Administration
50%
31%
Prog 2.
Provision of Land and Buildings
48%
22%
Prog 3.
National Public Works Programme
26%
13%
Prog 4.
Auxiliary and Associated Services
42 243
47 773
113%
70%
-5 530
Shifting will be made from Prog 2. under Goods & Services
Total
46%
39 %

17. I Thank You.