Public Works: Minister’s and Deputy Minister’s Budget Speech

Briefing

21 May 2008

Minutes

THE MINISTER OF PUBLIC WORKS, Ms THOKO DIDIZA, DELIVERS HER BUDGET VOTE SPEECH TO THE NATIONAL ASSEMBLY

THEME
: CELEBRATING (EPWP) EXCELLENCE

Madame Speaker
Honourable Members
Members of the Provincial Executive Councils responsible for Public Works
Chairpersons and Senior management of our Public Entities
Director General and your Senior Managers Present
Representative of our Industry
Ladies and Gentlemen:

INTRODUCTION


The year under review has seen an increase in the manner in which we have driven our labour intensive methods in contributing towards job creation in our country. As a developmental state we remain conscious that our role in intervening positively in areas of socio-economic development is necessary and cannot be under estimated.

We have improved our delivery capacity to ensure that we accelerate the Expanded Public Works Programme.  

The resources that were allocated to us in the previous budget have made it possible that we increase our staff compliment within the EPWP directorate from 34 to 100. Some of these members of staff have been deployed at provincial level in order to provide leadership and support to the relevant stakeholders.


Today we pride ourselves on the achievements we have made since 2004.
 950 000 JOB OPPORTUNITIES HAVE BEEN CREATED. It is important to acknowledge that these achievements that we celebrate today are not only as a result of what we have done on our own as government, but rather they are a reflection of the contract we made with our people in 2004 to fight poverty and underdevelopment.

A majority of participants in the Expanded Public Works Programme have earned income during their involvement in the programme which made it possible that for them to support their families and invest in entrepreneurial activities that have become sustainable after they exited the programme. This has been possible because of the limited training they received while working in the various projects.
Since 2006, as leadership, we have spent every available opportunity to physically visit most Public Works construction sites, not only to validate the quality of work being done there, but importantly to interact with participants and beneficiaries and source their impressions on the impact of our capital works as well as added benefits through the Expanded Public Works Projects. This hands-on approach assisted me and my provincial counter-parts to attest to the importance of our interventions in poverty alleviation, job-creation, skills generations, economic empowerment and entrepreneurial development.

EPWP: MILESTONES


Business Trust

The EPWP has continued to benefit from the resources and expertise provided by the Business Trust. This partnership has evolved to the point where activities of the programme and the Expanded Public Works Support Programme are difficult to tell apart, giving real meaning to the partnership that was expressed at the Growth and Development Summit in 2004. The current phase of this support is scheduled to last until 2009. I will however explore ways in which the private sector can continue to engage in the next phase of the EPWP from 2010 to 2014.

Kamoso Awards

The EPWP launched the Kamoso Awards programme in 2007 to reward municipalities, provinces, departments and public bodies that excelled in implementing the EPWP in the infrastructure sector. This year in July I intend  recognising achievements under the EPWP in all its four sectors

EPWP phase 2

My department is currently engaged in consultations and development of further details for the EPWP phase 2. This will commence in March 2009 and will set targets for the EPWP up until 2014. It has been acknowledged that the EPWP has been very effective in reaching the target of 1 million work opportunities a year ahead of schedule. However, we recognise that given the state of unemployment in the country, the EPWP needs to be significantly bigger.

The proposals that have been developed are looking at how the EPWP can significantly contribute to halving unemployment by 2014 as per the Millenium Development Goals. We are also investigating, amongst other issues, of how we could introduce a wage incentive to encourage public bodies to participate and ensure that larger numbers of unemployed benefit. We are also looking at how we could introduce more regular predictable work for the unemployed. We will be focusing on the expansion of programmes like Zibambeleni in KZN. We have studied systems in Argentina and India and hope to introduce some of that for phase 2. Also, we are exploring the role of non state institutions like the NGOs and the private sector in contributing to the EPWP.

However, the greatest revelations on the impact of the EPWP on ordinary people have been stories and other experiences one encountered on the ground during our visits to sites. In the Limpopo town of Phalaborwa, Mr Samuel Mangena, a former farm- worker and now a businessman par excellence has managed, with the help of the economic sector of EPWP, to bring 2 hectares of arid land under cultivation, planting tomatoes and other crops while permanently employing 6 women and 10 others for seasonal work. So successful is Mangena’s enterprise that today he counts among his clients, famous, well-known retailing shops around Phalaborwa. Such a daring spirit of entrepreneurial adventure should be an inspiration to the country.

WASTE MANAGEMENT

As part of ongoing monitoring and evaluation, the EPWP is continuously reinventing itself to stay relevant and broaden its impact. The Siyazenzela waste management version of the programme was piloted by the Kwazulu-Natal Department of Transport and employs the technique copied from Curituba in Brazil where poor households collect garbage which is then exchanged for food vouchers and groceries. The result is that poverty is alleviated and communities live in clean and green localities. Like most things excellent, the initiative is being rolled-out to other provinces, where municipalities are encouraged to adopt it as a way to improve their domestic waste management service.

NATIONAL YOUTH INITIATIVES IN BUILDING AND MAINTENANCE

In 2007/08, the 10 Departments of Public Works in the country recruited and trained in excess of 9 200 learners under the National Youth Service which was launched in April 2007 to train youth in built environment professions including bricklaying, building, paving, plumbing, carpentry, electrical work and others. The first batch of 298 graduates was honoured at their graduation ceremony in the Free State town of Edenburg in April and some are with us today.
 
STATUS OF SKILLS IN THE BUILT ENVIRONMENT SECTOR

While ASGISA identifies shortages of suitably skilled labour as one of its six key constraints, JIPSA elevates the built environment professions as among the critical. Following a skills audit in 2006, the forum of Public Works Minister endorsed the recruitment of 267 built environment professionals from Cuba, to be deployed nationwide. The first group of 57 arrived in January and was immediately assigned to different provinces on a three year contract.
As a department we are reviewing the legislation that governs the individual professional councils and the Council for Built Environment.
 
Internally, my department is forging ahead with efforts to contribute to skills replenishment.  About 250 bursaries pertinent to the core business of the Department were awarded to people outside the department while 691 interns, learners, young professionals and trainee artisans were recruited.

INDUSTRY DEVELOPMENT

The Register of Contractors, which is our barometer of contracting capacity, currently sits at more than 65 000 total registrations with Grade 1 at about 80% of this number. More than 3 000 contractors have upgraded, of which about 87% are black. All these contractors and other stakeholders need good quality service. The Construction Industry Development Board has had to grow to respond to these challenges.

The CIDB has partnered with the National and provincial Departments of Public Works to establish the Construction Contact Centres (CCCs) in Gauteng (PTA), Western Cape (Cape Town), Eastern Cape (Bisho) and KZN (Durban).

These offices have proved to add value to contractors, especially emerging contractors, who do not have to travel all the way to Pretoria to attend to their registration matters.  The CCCs in the last five provinces will be established during this Financial Year.
IMPROVING THE INFRASTRUCTURE DELIVERY CYCLE

A lot of work has already been done between the Department, National Treasury, Development Bank of Southern Africa and Construction Industry Development Board to improve the budgeting; planning and budget spend on infrastructure through the Infrastructure Development Improvement Programme (IDIP) in the provinces. This programme will now be extended to municipalities.
 

NATIONAL INFRASTRUCTURE MAINTENANCE STRATEGY
 
 The stock of infrastructure that is owned by government and its agencies are already major and increasing at a rapid rate because historically South Africa prioritized creation of new assets compared to their maintenance.

Cabinet has recognized the importance of infrastructure maintenance within government and the role that effective maintenance will play in support of ASGISA. To this end cabinet has approved the National Infrastructure Maintenance Strategy (NIMS) and Public Works as the lead Department. As a signal to the beginning of the implementation of the strategy, a symbolic launch event was held this morning. The effective implementation of the strategy requires significant coordination within government, in order to ensure that all the organs of state plan effectively for and implement maintenance of their strategic infrastructure.

PROPERTY MANAGEMENT TRANSFORMATION

Honourable members, last year we informed you about the need for transforming our property sector as it is our responsibility. We have together with the Members of the Executive Councils developed a strategy to achieve this objective. This has been supported by the clarification of our disposal policy which will take into consideration the issues raised in the negotiation of the Property Sector Charter and the role that government can play utilizing its portfolio to further enhance transformation.

However this has been met with some resistance from the private sector. For instance there have been reprisals that greeted the department’s decision to restructure its leasing portfolio, recently culminating in the eviction of the Department’s tenants in Johannesburg and Nelspruit. This has not stopped engagement between ourselves and the industry. We have had a Ministerial retreat with senior executives in the industry facilitated by SAPOA. A range of follow up issues were agreed upon including human resource development.

SUPPORT TO LAND REFORM
In 2007-2008, the Department of Public Works approved the release of 525 hectares of State land, valued at more than R54 million, to the Departments of Land Affairs  and Agriculture for land reform purposes as well as another land for allocation to emerging farmers in terms of Government’s Land Redistribution through Agricultural Development (LRAD) Programme.

Prioritized Capital Works and Planned Maintenance 2007/08

The construction of the Kimberley correctional facility on behalf of the Department of Correctional Services remains one of our star projects.  Despite its size and the bouts of inclement weather that we have experienced, the project is on track with the first technical handover planned for early next year. 

Border Control Operational Coordinating Committee (BCOCC)

In the 2007/08 financial year, DPW delivered over R 238 million worth of physical and ICT infrastructure to various ports of entry. The Department provided repair and maintenance services at 90% of land ports of entry and at all the border line bases, to address occupational, safety and functional requirements.
Ahead of the 2010 preparations, the Lebombo Ressano Garcia One Stop Border Post between Mozambique and RSA received added impetus and construction work will commence during 2008/09.  The designs for the redevelopment of Skilpadshek land port of entry between Botswana and RSA were completed in 2007/08 and ready for construction of operational, residential areas and bulk services in 2008/09. The contractor site handover has been  performed for Phase 1 of Golela land port of entry between Swaziland and RSA, which entails the construction of the operational and residential areas of the border post. A construction tender for the final phase (operational area) for the redevelopment of Vioolsdrift land port of entry between Namibia and RSA was advertised in 2007/08.

The department has received a total allocation of R478 million in 2008/09 for delivery of physical infrastructure, repair and maintenance of the various land ports of entry.

CONSOLIDATION OF THE AFRICAN AGENDA

 Accordingly, this year will see the commencement of the project to construct the Pan African Parliament building at Midrand in Gauteng following the successful continental architectural design competition we held last year. 

 In November 2007 South Africa and the DRC signed a Memorandum of Understanding on cooperation on issues related to Public Works and Infrastructure. A technical team is due to visit the DRC to investigate areas of cooperation as outlined by the national priorities of the government of DRC.   
In February 2008 a DPW technical team visited the DRC to conduct a feasibility study on the refurbishment of the National School of Public Administration in Kinshasa in collaboration with SAMDI. The project is estimated to cost R7 million and will be funded by the African Renaissance Fund.  


RE KGABISA TSHWANE

We are continuing to address the location of government buildings within the city centre of Tshwane as our contribution towards the inner city development programme.  We are concluding the lease agreement to ensure that as early as next year the Department of Home Affairs is back in the City Centre. During this year the Department of Health will be back in Civitas Building after its rehabilitation. We have done a land swap with the Provincial Government of Gauteng in order for us to have available the TPA building for the department of Minerals and Energy.

In support of other government departments , we are working with the Freedom Park Trust and the Department of Arts and Culture to ensure that we fast track the construction of the Freedom Park. There have been some challenges in this regard owing to the litigation by some tenants on the Transnet Properties that we had agreed with this State owned entity to acquire for the Freedom Park. It is our hope therefore that this legal process will not stand in the way of the development of the creation of this national asset.

GOVERNANCE
The Expropriation Act of 1975 predates the Constitution, which provides that any law or conduct inconsistent with the Constitution is invalid and any obligation imposed by the Constitution must be fulfilled. Cabinet tasked the Department to undertake a thorough revision of the current Expropriation Act, to ensure consistency with the spirit and provisions of the Constitution, especially those sections dealing with equality; property rights; access to information; and lawful, reasonable & procedurally fair administrative decision making.
In honor of our constitution which is the supreme law and the basis for our legal integrity, the department published in November 2007 a document on the amendment legislation for consultations, and discussions. After these consultations, Cabinet approved the Bill for tabling in Parliament where the Bill is now being dealt with.

We applaud the Portfolio Committee’s meticulous arrangements to take the Bill to the public to solicit inputs. I am informed that the public hearings have started nationwide and will culminate on 13 June 2008.

POMPFREIT
This year, we commenced the process to relocate the remnants of the former Battalion 32 from government –owned land and buildings at Pomfret.  Let me remind the house that Pomfret was not designed to be a township nor a suburb; instead it is was built to be a military base which later was declared superfluous, to the needs of the current national Defence force and was duly given back to Public Works to dispose of. 

Government takes comfort that after nearly two decades, the security of tenure of Pomfret former residents is finally guaranteed and like many South Africans they can begin to participate in opportunities brought by government programmes, projects and policies. 

ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS

DPW recognises that the energy efficiency commitments need to be seen in the broader context with the national imperatives of increased investment, economic growth and job creation; or the business drivers of efficiency, competitiveness and safety standards. Therefore, its initiatives will be aligned with the target of the Power Conservation Programme (PCP), to reduce the final energy demand of all the buildings and facilities under its custodianship by 10%.



CONCLUSION
Scholars have always argued that hope is a belief in a positive outcome related to events and circumstances in our lives. Hope implies a certain amount of despair, wanting, wishing, suffering and perseverance,  believing that a better life or positive outcome is possible even when there is some evidence to the contrary. We too, believe that today is better than yesterday and tomorrow will be even better.

I would like to express my gratitude to the Portfolio Committee on Public Works and the Select Committee on Public Works for their unstinting support during the past financial year. Your support has been vital in us taking the work of government forward and improving the lives of our people.

My thanks go to the Director General of the Department, Mr Manye Moroka and his management team for a solid performance that they have put during the past year. I also want to thank the entire staff of my Department for their work output. It has improved tremendously this year and I say let us continue.

Thank you.




SPEECH BY THE DEPUTY MINISTER OF PUBLIC WORKS, MR NTOPILE KGANYAGO, ON THE OCCASION OF THE DEPARTMENT’S BUDGET VOTE
Date: 21 May 2008

Madam Speaker
Honourable Minister
Honourable members
Members of the Executive Council Responsible for Public Works
Chairpersons and Senior Management of our Public Entities
Director General and your Senior Managers Present
Representatives of our industry
Ladies and Gentlemen

Once again we are called upon to account for the work that has been done in the Department in the last financial year and provide you with a roadmap of what lies ahead. As the Minister has indicated in her speech, a lot of work has been done as we have improved our work output throughout our operations. We are proud of the hard work that has gone onto our operations and we see the improvement as our efforts continue to make a real impact and difference to the people of South Africa.

In 2006 we took a conscious resolution to integrate labour-intensive methodologies into all work we carried out in order to fast track the achievement of the commitment we made as government, in 2004 and before. This strategic decision was born of a realization that the Public Works portfolio presented government with an even better opportunity to harness its infrastructure- developing prowess to create jobs, build skills and erect public assets that collectively serve to improve public service delivery in the country.

Our assertion that ‘South Africa Works because of Public Works” is deeply rooted in our understanding that unless we dispense our duties with urgency and care, anything to the contrary will negatively impact on government and its departments and this has got the potential to undermine effective service delivery as demonstrated time and again by the chaos caused by government buildings that are in a poor state of maintenance and functionality.

Our mainstay programme, the EPWP, has proven its worth as the Minister has indicated in her speech. The October 2007 conference on labour-intensive practices organized by the Department of Public Works on behalf of the International Labour Organisation held in KwaZulu-Natal, confirmed that our EPWP was rated among the best in international practices on labour-intensive technologies.

Despite its shortcomings, the EPWP continues to deliver in excess of its original targets and has positioned itself as a valuable intervention in the attainment of the 2014 Millennium Development Goals.  I am certain that a solid foundation has been laid for the EPWP to make a greater impact on unemployment going into the future.

The development of human capital constitutes the bulwark of government’s campaign to eradicate poverty brought by lack of employment due to inadequate skills. Consequently it is imperative for EPWP to increase the momentum of its training linked to available work. The figures, as supplied by Vukuphile Contactor Learnership Programme under the Infrastructure sector of EPWP as well as the National Youth Service, indicate the potential of the EPWP to contribute to the Joint Initiative for Priority Skills Acquisition (JIPSA) under ASGISA.

The 2014 Youth Foundation Programme has continued to promote careers in the built environment by targeting mathematics and science learners from high schools across the country.  The Youth Foundation is being assisted by the Military Skills Development - an initiative of DPW and the Department of Defence to recruit and train youth in basic military skills. Upon completion they are offered bursaries to study toward an academic qualification in the built environment fields. Currently there are 22 students placed at various tertiary institutions. DPW is committed to supporting these students until they have completed their studies.
The country is faced with a number of moving targets. First, the current boom in the industry brings along with it benefits and challenges. The construction industry has over the years been growing at more than 10%, higher than inflation until only recently. Like any sector that is blessed with growth, the boom promises to absorb many of the unemployed in our society. Current indications show that more than 800 000 people will be formally employed in the building and construction sector by 2010. Growth is projected to go beyond 2010. The many projects that have been announced are much higher in value than the 2010 Soccer World Cup stadia and related infrastructure. Also, the timing for these high value projects goes beyond 2010. It should therefore be noted that the increased investment into infrastructure by government and the private sector will lead to a longer cycle than in the past.

While it is well and good to be excited by the good news, the challenges have made us stand up and take stock of our needs and consider our options. Some of the challenges we currently face as South Africans are: shortage of skills in all aspects of the industry; power generation capacity within the country, which threatens to slow down the projected growth and delivery of much needed infrastructure.

The framework for the National Contractor Development Programme (NCDP), jointly developed by the Department and the Construction Industry Development Board, has been developed and is being rolled out to various departments and parastatals around the country. The NCDP is a pillar of contractor development that is being rolled out through the CCCs.

Indicative of the growing economy is the demand for private and public property spurred by massive investment in infrastructure development which in turn stimulates construction demand.  As a result of the boom in the construction sector, driven mainly by the public sector’s increased investment in infrastructure development and delivery, the industry is acting like a magnet drawing myriads of small contractors with big dreams. However, the capital intensive nature of the industry, the competitiveness of the tendering environment, other strict regulations and a need for professionalism have all meant that this group finds it hard to compete successfully.

In response, the Department launched the Contractor Incubator Programme in 2007 to create an enabling environment in which the existing small contractors, between CIDB grades 3 and 7, can be supported to become sustainable.  The key elements of the CIP are access to work opportunities, mentorship, training, finance and institutional support. To date, 126 contractors have been registered under the programme and a total of hundred and ten (110) projects to the value of R400 million, has been set aside to capitalize the initiative.
In the meantime, the Department has taken a decision to merge its Emerging Contractor Development Programme with the EPWP Vukuphile Contractor so as to enable a focused tool with which it can help to develop the technical and entrepreneurial skills of small contractors, largely the CIDB Grade 1’s and 2’s, who in reality lack the necessary tools of the trade to be independent, sustainable and competitive.  We believe and hope the new initiative will contribute to a seamless progression into big time construction activity, simultaneously building the kind of capacity that the country needs in order to absorb new challenges, not least the maintenance of our ageing national public infrastructure.

Notwithstanding its own muscle as the biggest role player in the property sector, government is still dependent to a large degree to private property managers, particularly in the area of leasing.  This cannot be allowed to continue.

In instances where the property landlords have established monopolistic stranglehold on property market as is the case in some towns and cities, the Department has decided that it will build the infrastructure itself to provide for government accommodation.
To further promote black economic empowerment, government will outsource all elements of facilities management including cleaning, gardening, horticulture and maintenance to BEE-compliant individuals and /or companies.

The Department has approved a property transformation strategy that will seek to expedite transformation in spite of some resistance from industry. The Department will use its R1, 4 billion leasing muscle to fast track transformation by giving preference to those companies that are serious about economic empowerment.  Preference will also be given to private individuals who take the initiative to identify, renovate and lease back some of the unused government-owned buildings. The Department will embark on a campaign to give amnesty from prosecution to anyone who comes forward to volunteer any information leading to the recovery of government property that until now had been fraudulently obtained and/or illegally occupied, vandalized or siphoned.

As a norm, our building programme is extensive and comprise of capital works projects undertaken by the department on its behalf as well as those carried out on behalf of other government departments.  This year, our budget stands at four point one billion rand (R4 141 402- 000) of which three point one billion rand (R3 195 491 – 000) will go towards the provision of land and accommodation-related solutions to government in fulfillment of our mandate to contribute to improved public service delivery.   Our clients remain the Executive that is the Presidency and Cabinet as well as the Legislature and the Judiciary, and the property we attend to is state assets. Budget by its definition is a limitation and as a Department we believe that over the years we have demonstrated tenacity to deliver maximum results, a feat born of our experience and expertise in the industries we operate in.  Possessed by the spirit of celebrating excellence, we believe that the budget allocation it is an impetus to spur us to unleash our mandate (and functions) in an unusual business manner to fast track development.
To improve service delivery to our clients, Prestige recently awarded a Facilities management contract which is 100% black owned for a 3 year period. The contract will help in the maintenance and day-to-day maintenance of all the Pretoria prestige facilities at Bryntirion, Waterkloof, Brooklyn, Union Buildings and Johannesburg. It encompasses soft services like gardening/horticulture and cleaning services as well as hard services.

In an attempt to enhance the condition and the habitability of accommodation for the Members of Parliament and sessional officials, the Department has completed its initial phase of upgrading the residences for Members of Parliament.

Currently 328 houses are completed, two houses outstanding in Acacia Park to be completed by end of May 2008, and eight former ministerial residences in Pelican Park.

In order to promote democracy, peace and stability in other parts of the African continent, DPW is involved in the construction of Oliver Tambo School of Leadership in Uganda and the Military Museum in Guinea.  The construction of Embassies in Nigeria, Ethiopia, Tanzania and Lesotho is also at advanced stage and the plan is to hand those over to the Department of Foreign Affairs in the current year.

Inspired by the philosophy of the Government-Wide Immoveable Asset Management strategy, and driven by the experiences gained under the Re Kgabisa Tshwane Programme, the Department will draw in, other spheres of government to create centres of excellence in property development and management.  Being the biggest owner of land and property in most municipalities, the NDPW intends to forge strategic relationships with Local Municipalities to roll-out its “Inner-City” Regeneration Programme to small (rural) towns in order to stimulate local economic activity.  To this end a broad spectrum of the Spatial Partners on the State’s Immovable Asset Portfolio will be established to develop specific Asset Management Strategies (AMS) and specific solutions that will be adopted and undertaken  to promote growth and transformation in the property sector.

It is imperative therefore that NDPW assumes its responsibility and engages with the Local Municipalities, the general public, communities and relevant institutions to agree on a Property Development Strategy that will contribute to the Municipalities’ Integrated Development Plans.  This will undoubtedly, when done properly, bear positive fruits and see the upgrading of the state infrastructure, revival of small towns and the development of local economies of the country. This will avail the opportunity to the State to demonstrate its commitment to redressing the ills of the past. 
As part of the apex of priorities, the Department is making a big effort to provide access for people with disabilities to government buildings.
Government has an obligation to make its buildings and facilities accessible to all its citizens including people with disabilities. Consequently the Operations branch has been mandated to make access for people with disabilities mandatory in all new buildings specifications. The existing old buildings that are non-compliant will have to be prioritised from respective client departments’ capital budget for modifications.

With a view of enhancing the value of State immovable assets and improving service delivery to clients, the department will embark on the rehabilitation of State-buildings primarily for use by government departments. Priority will be given to properties that are strategically located to support the functions of the client departments. Also, the properties that would stimulate economic development including economic empowerment in all regions in the country will be given a priority. An amount of R 235 million has been allocated for 2008/09.

With the technical assistance from the Independent Development Trust (IDT), we reached an agreement with the Department of Education in 2007/08 to deliver on their behalf, education infrastructure particularly one of pressing need such as the eradication of Undesirable Structures.  We have targeted provinces with high rural content where such infrastructure remains predominant. In acknowledgement, the Department of Education allocated a budget of R2.7 billion over the MTEF cycle thus ensuring that there were resources to sustain the initiative beyond June 2009.

In executing their programmes, the IDT were constantly reminded to deliver on their commitments to promote women contractors. I have been keeping a close eye on this throughout the year, and can report that they marginally exceeded a target of dedicating 10% of programme funds to women-owned enterprises (attained 10.1%). The aim is to ultimately attain 30% women’s participation.

So, Madam Speaker, with all these great successes that have been achieved by the Department, I believe that, indeed, we are a success story and we are making a difference to the lives of South Africa’s people.
Thank you.
















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