1. 29 MAY 2012 HEARING ON FOURTH QUARTER CONDITIONAL GRANT School Infrastructure Backlog Grant 1

2. ASIDI BACKGROUND 2

3. SCHEDULE 7: SCHOOL INFRASTRUCTURE BACKLOGS GRANT The purpose of the grant is – for the eradication of entire inappropriate schools; – provision of basic level of water, sanitation and electricity to schools. The grant is also referred to as the ASIDI (Accelerated School Infrastructure Delivery Initiative) 3

4. ASIDI Targets The targets are as follows: Infrastructure CategoryBaseline2011/20122012/20132013/2014 Inappropriate Structures49650100346 Water12571881069 Electrification878164714 Sanitation868354514 Specialist Classrooms50 MTEF ALLOCATIONS 2011/12R 700 2012/13R2 315 2013/14R5 189 TOTALR8 204 The budget allocation for the ASIDI programme over the MTEF period is R8.2 billion and allocated as indicated in the table below: 4

5. ASIDI 2011/12 FINANCIAL BUDGET SPLIT In 2011/12 financial year the budget split was as follows – R420mil was allocated towards the eradication of 50 entire mud schools; – R280mil was allocated towards provision of water, sanitation and electricity to schools 5

6. ASIDI 2011/12 TARGETS 6 InappropriateElectricitySanitationWater Province Eastern Cape501045584 Free State0261332 Gauteng0270 KwaZulu Natal008310 Limpopo044038 Mpumalanga04700 North West0000 Northern Cape00166 Western Cape07213 Total50190235173 The following work was implemented during the 2011/12 financial year:

7. ASIDI IMPLEMENTING AGENTS 2011/12 DBSA is the appointed Implementing Agent for the 50 inappropriate schools in the Eastern Cape However only 49 schools are being implemented, 1 school is being implemented by EC DoE and has therefore been removed from the ASIDI programme, Mvula Trust is appointed to implement water and sanitation projects in Limpopo and Eastern Cape Eskom is the appointed Implementing Agent for electrification of schools in Eastern Cape, Mpumalanga and Limpopo Provinces. Free State, Gauteng, KZN and Western Cape were the Implementing Agents in 2011/12 financial year. 7

8. ASIDI ACTUAL FINANCIAL COMMITTMENTS 2011/12 The actual commitments made in 2011/12 financial year – R841mil was committed towards the eradication of school infrastructure (including professional fees, etc.); – R217.3mil was committed towards provision of water, sanitation and electricity to schools Therefore approximately R1.058bil was committed in contracts for the ASIDI implementation during the 2011/12 financial year. 8

9. 2011/12 EXPENDITURE 9

10. TOTAL EXPENDITURE AT 31 MARCH 2012 Description Allocation per project Expenditure as at 31 March 2012 Deviation% Spent R’000 Inappropriate Structures 420 000 48 353371 647 11.5% Sanitation138 252 7 918130 334 5.7% Water38 826 1 11637 710 2.9% Electricity65 573 4265 531 0.1% Other37 349 2 25435 095 6.0% TOTAL700 000 59 683640 317 8.5% 10

11. TOTAL EXPENDITURE AS AT 23 MAY 2012 Description Allocation per project Expenditure as at 31 March 2012 Expenditure as at 23 May 2012 Total Expenditure at 23 May 2012 % Spent R’000 Inappropriate Structures 420 000 48 3530 11.5% Sanitation138 252 7 918 22 097 30 01521.7% Water38 826 1 116 13 969 15 08538.9% Electricity65 573 42 6 378 6 4209.8% Other37 349 2 2540 6.0% TOTAL700 000 59 683 42 444 102 12714.6% 11

12. ASIDI CHALLENGES IN 2011/12 Progress has been delayed on the construction of the 49 schools due to the following challenges: – Procurement of Implementing Agents took longer than anticipated. – Negotiations with DBSA started in April 2011. – There were delays in the finalisation of the MOA with the DBSA as the bank had to receive approval from the Minister of Finance before the MOA could be concluded. – Subsequently, DBE signed the MOA on the 13th June 2011 and DBSA only signed on the 06th July 2011. The DBSA submitted the implementation Plan on 03 August 2011 – DBSA planned to use PSPs to undertake scoping work which was crucial for determining the extent of scope of work. – This process for procurement of PSP to undertake the work had to be rescinded end of August after issues of conflict of interest were discovered between the companies bidding for the PSU and Project scoping. 12

13. ASIDI CHALLENGES IN 2011/12 – DBSA then started another process to appoint PSP’s for scoping, planning and detailed designs which was concluded on 15 September 2011 and resulted in a delay in the finalisation of scope before going out on tender in October 2011. – A strategy adopted for procurement of contractors was to pre-Qualify contractors initially and appoint from a pool of pre-qualified contractors. – The process halted due to a dispute by contractors from the Eastern Cape who requested consideration of Grade 6GB instead of Grade 7GB. – Procurement of contractors resumed on the 25 th October 2011 and was concluded on the 04 th and 29 th November for 28 of 50 schools and 22 of 50 schools respectively. – Tenders received were based on the generic scope of work due to the delay in the development of project scoping per school. – As a result the tendered amounts for the first 28 of 50 and 22 of 50 schools were R711 044 966.48 and R595 167 614.37 respectively. This resulted in a prolonged adjudication process and appointment of successful tenderers. – Sites were handed over to the contractors on the 12th and 13th January 2012 for a contraction amount of approximately R675mil (excluding professional fees, etc). 13

14. Progress Report 14

15. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS (END APRIL):DBSA ContractorContract NoNo. SchSch IDSchool NameBuilding Progress Building Progress (Mean) ArmstrongRFP 29/2011-E12 Schools 1Qaka JPS17.40% 11.60% 2Ntsonyini JSS12.70% 4Ngidini SPS11.10% 10Ndluzula JPS2.40% 11Nomandla SPS16.80% 15Gcinizizwe SPS32.10% 20Maqolo SPS9.70% 24Jonguxolo JSS24.90% 27Vuyani SPS4.80% 30Sidanda SPS7.00% 36Tembeni SPS0.60% 38Sizwe JPS0.60% 15

16. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Keren Kula ConstructionRFP 31/2011-I9 Schools 5Mpatiswa SPS26.00% 14.10% 7Zingisile SPS12.30% 14Goso JPS5.90% 18Eludikidi SPS9.40% 25 Upper Mbange SPS 19.20% 32Welese JSS20.10% 33Sizane JSS14.70% 46Nginza SPS10.00% 50 Lower Mpako SPS 9.50% 16

17. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) SSI Mafuri JVRFP 29/2011-F16 Schools 12Manzabila SPS17.30% 11.00% 13Gqweza SPS16.20% 28Tshantshala SPS6.00% 29Mseleni SPS10.30% 31Mceteni SPS5.90% 37 Maphindela SPS 10.40% TBPRFP 29/2011-F26 Schools 16Gungubele SPS13.50% 9.20% 21Mahahane SPS4.20% 22Madwaleni SPS10.80% 23Ludeke SPS3.80% 34Sompa SPS9.50% 35Nkonkoni SPS13.40% 17

18. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Trencon Construction RFP 31/2011-G 5 Schools 3Notsolo SPS18.60% 17.40% 6 Mqokolweni SPS 13.60% 9 Ndlovayiphath wa SPS 15.90% 19Mdavuza SPS19.10% 26Dumile SPS19.60% Alfdav Construction RFP 31/2011-F x1 45Vulindlela JPS 18.60% Base Major Construction RFP 31/2011-H x1 40Mazama SPS 17.50% Cecils RFP 29/2011-C x1 48Kwezilethu JPS 30.60% Inyameko / Vukukahnye JV RFP 31/2011-B x1 17Dikiso JSS 4.10% Inyameko Deck Steel JV RFP 31/2011-C x1 41Thabatha SPS 28.20% 18

19. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Ishvuyo Building Construction RFP 31/2011-E x1 44Dakhile JSS 35.70% Leungo Construction RFP 31/2011-D x1 43Dumakude JPS 10.50% Marnolda RFP 29/2011-B x1 47Kwenxura SPS 22.30% Mauga Projects cc RFP 31/2011-A x1 8Nogaya SPS 17.40% Setheo RFP 29/2011-A x1 39Mandlobe SPS 15.80% Sizisa Ukhanyo RFP 29/2011-D x1 49Nobantu JPS 28.50% 14.37% 19

20. ASIDI 2011/12 PROGRESS ANALYSIS: INAPPROPRIATE SCHOOLS The programme is behind schedule on all of the schools Contractors are behind schedule by between 16 and 77 days based on their baseline programmes Progress at 16 of the schools is between 0.6% and 10% Progress at 24 of the schools is between 10.1% and 20% Progress at 6 of the schools is between 20.1% and 30% Progress at 3 of the schools is over 30% Notices have been issued to contractors and recovery plans produced for the 3 contractors (SSI Mafuri JV, TBP and Armstrong). DBSA is monitoring implementation of the plans and shall advice on subsequent steps thereafter. DBSA has begun the process to terminate Inyameko Vukukhanye contract Availability of skilled labourers has proven to be a challenge. The programme is successfully contributing towards socio-economic uplifting of the locals as many jobs are being created. Availability of material suppliers has been identified as a risk factor. 20

21. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : MVULA TRUST PROGRESS IN LIMPOPO Thirty-two (32) of the 40 sanitation projects have achieved practical completion. Thirty-two (32) of the 38 water projects have been completed. 21

22. PROGRESS IN EASTERN CAPE ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : MVULA TRUST Forty-nine (49) of the 55 sanitation projects have achieved practical completion. Eighty-two of the 84 schools have been provided with Rain Water Harvesting tanks and related infrastructure. Twelve (12) of the 38 projects have been connected to municipal bulk supply. None on the 49 projects identified for borehole connections are completed yet. 22

23. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : KZN KZN is the Implementing Agent. There were 88 schools identified in this Programme, after assessments 5 schools were taken out after it was found that they were already addressed. Out the 83 2011/2012 projects 28 schools have been completed, 17 projects are in progress and are between 60 and 90%. There are 38 projects that were handed over in March and April 2012, and are between 1% and 20% 23

24. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : WC Western Cape is the Appointed Implementing Agent. Project scope entailed upgrading of water, ablution facilities & electrical and sanitation facilities. The targets were 7 schools for electrification, 21 schools for Sanitation and upgrading of water in 3 schools. All projects have achieved final completion. 24

25. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : GAUTENG Gauteng DoE is the appointed Implementing Agent. Seven (7) sanitation projects were implemented and two (2) electrification projects. All nine projects have achieved practical completion. 25

26. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : FREE STATE Free State DoE is the Implementing Agent. Scope in implementation is 32 Water projects; 13 Sanitation projects and 26 Electrification projects. Eleven (11) Water projects; 11 Sanitation projects and 22 Electrification projects have achieved practical completion. 26

27. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : NORTHERN CAPE Northern Cape is the Implementing Agent. Scope in implementation is 6 Water projects and 16 Sanitation projects. All schools are in construction. 27

28. ASIDI 2011/12 PROGRESS ANALYSIS: WATER AND SANITATION Most of the projects were completed by end of Q4. Delays in Limpopo were mainly due to work stoppage due to non payment which was as a result of scope change process. Payments have been processed and anticipated completion date is end May Delays in EC were generally due to a delayed manufacturing of some of the materials (e.g. Urinals) Only one supplier is manufacturing the specified quality and therefore had to provide large quantities of orders. EC MT started late with the process of investigations into alternative water source other than rain water harvesting. 28

29. ASIDI 2011/12 ELECTRIFICATION OF SCHOOLS PROGRESS : ESKOM Province Total Planned Connections March Planned Connections March Actual Connections YTD Planned Connections YTD Actual Connections Eastern Cape1041755318 Mpumalanga180000 Limpopo33030 Grand Total1252055618 29

30. ASIDI 2011/12 PROGRESS ANALYSIS: ELECTRIFICATION This sub-programme is behind schedule and ESKOM is planning to complete the 125 schools by September 2012. Main reason sited to this is the late conclusion of the MOA and Advance payments The following risks have been identified in the Eastern Cape: Bush Clearing Teams - There is a shortage of registered bush clearing teams within Eskom in the Eastern Cape Province. Indigenous Forest -Survey to Gwexintaba SPS (500284) is hampered by the indigenous forest. A line through the forest would mean cutting down of trees and would also cause a concern in maintenance of the line. 30

31. 2012/13 PLANS 31

32. ASIDI 2012/13 PLANS: PROGRESS : MASTER LIST InappropriateElectricitySanitationWater Province No of 2012/13 No of 2012/13 No of 2012/13 No of 2012/13 Schools Eastern Cape 42450317213345290619535 Free State302012910326129961 Gauteng222 021140 0 KwaZulu Natal 33116 13956229219 Limpopo33141137773712183 Mpumalang a 55129828817 North West2241 33 13 Northern Cape 110 01936 0 Western Cape 22147 021 03 0 Total492100882692 6894531 107928 32

33. ASIDI 2012/13 PLANS The scope includes 100 inappropriate, 692 electrification, 453 sanitation, 928 water and 50 Specialist class rooms projects Scoping process for inappropriate schools, water and sanitation is completed and cost estimations have been made. Scoping for specialist class rooms is in progress. COEGA, IDT AND DPWEC have been appointed for the implementation of the 50 schools in the EC. Adverts are out in the Tender Bulletin (04th May) for IAs, BEPs and Contractors for implementation of the ASIDI programme in the 2012/13 to 2013/14 financial years. Briefing sessions were held from the 21 May 2012 to 23 May 2012 33

34. THANK YOU 34