Public Works: Minister's Budget Speech
31 May 2011
Budget speech tabled by the Minister of Public Works, Ms GL Mahlangu-Nkabinde (MP), Government of the
1 Jun 2011
“Celebrating the International Day of Children: Infrastructural Development and Asset Management as a Legacy for the Children of
Honourable Members of Cabinet
Honourable chairperson and members of the Portfolio Committee on Public Works
Heads of Departments
Acting Director-General and senior officials of the Department
Heads of State Owned Public Entities
Members of the Business Community
Ladies and gentlemen
Today as the international community celebrates the International Day for Children, we are reminded once again that the world we all live in is actually not ours but an asset borrowed from our children for safe keeping. Our father and struggle icon, former President Nelson Mandela, once stated that “there can be no keener revelation of a society’s soul than the way in which it treats its children.”
It is my pleasure this evening to dedicate my maiden budget vote speech to all the children of
Honourable Speaker, I am compelled by mothers and caregivers like Mme Ma Angie Saula who is with me today and who said “even if you have to feed children starch with starch from the nothing you have, we are duty-bound to look after vulnerable and orphaned children as mothers of South Africa” to dedicate this budget to the well-being of children.
It is my privilege to table this budget vote, two weeks after a successful local government election. To this end we are grateful to all South African people for exercising their democratic right to vote, and for the continued confidence that our people have displayed towards the ANC-led government.
Seventeen years into our democracy, the political outlook remains exceedingly positive. A solid foundation has been laid with the adoption of our deep, modern and widely-respected Constitution and a firm commitment to the ten national priorities of government.We continue to enjoy good standing in the global community because of our ongoing commitment to sustainable peace and development, particularly on the African continent. Yet, this Government and all South Africans need to do much more to ensure that our hard-won democracy is translated into tangible and significant improvements that will yield a better life for all South Africans.
His Excellency President Jacob Zuma in his January 8 statement stated that “2011 will be a year of jobs through meaningful job creation.” This is the way we have approached the translation of the budget which I present today. In essence, the Budget reflects the policy focus of government through the detailing of financing and expenditure programmes. It mirrors the necessity of accelerated service delivery, the promotion of economic growth, job creation, infrastructural development and the State’s asset management by contributing to the realisation of amongst others, the following government outcomes that are informed by shift towards outcome-based monitoring and evaluation:
- Create decent employment through inclusive economic growth
- Create efficient, competitive and responsive infrastructure network
- Efficient and effective development-oriented Public Service and an empowered fair and inclusive citizenship
- Skilled and capable workforce to support an inclusive citizenship and
- Sustainable human settlements and an improved quality of household life.
In October 2010, the New Growth Path was launched as a policy framework to provide the economic trajectory of government. The New Growth path identified as one of the key drivers for economic growth and job creation, infrastructural development through the development of public goods.
The New Growth Path finds emphasis in state of the Nation Address of 11 February 2011, His Excellency the Honourable President Jacob Zuma reminded us all that, “We want to have a country where millions more South Africans have decent employment opportunities, which has a modern infrastructure and vibrant economy and where the quality of life is high.”
In reflecting these policy directives, the strategic plan of the National Department of Public Works over the next three years pave a renewed sense of enthusiasm and direction for the provision of official accommodation for all national departments, all members of Parliament, providing construction and property management services to client departments at the national level and leading the successful implementation and management of the Expanded Public Works Programme (EPWP).
An amount of R7,8 billion, has been allocated to the Department of Public Works in the fiscal year 2011/12. Of this allocation, almost R1,4 billion has been allocated for the improvement of state buildings and infrastructure, with up to 60% of it allocated to current commitments, while the remaining 40% is allocated to prioritized new projects which are at the core of service delivery.
1. Immovable Asset and Investment Asset Management
The strategic planning and implementation of the Department of Public Works’ plans are framed within the vital context of the statutory framework provided for in the Government Immovable Asset Management Act (GIAMA) of 2007 whose objective is to ensure efficient and effective planning of immovable asset management within government, as well as to improve service delivery. It is no coincidence, therefore that one of our strategic priorities is to provide strategic leadership in effective and efficient immoveable asset management, while continuing to invest in infrastructure development through the delivery of essential public facilities and other amenities calculated to improve the quality of life of all South Africans, today and in the future.
As the custodian of state immovable assets, the Department has committed to use the state immovable asset footprint towards realising government’s key national priorities and the prescripts of the New Growth Path and IPAP 2.
GIAMA (2007) makes it imperative that we facilitate the provision of accommodation and monitor the performance of the State’s immovable assets and maximizing its value through ongoing monitoring of portfolio performance.
The department also remains committed to providing lifecycle immovable asset management planning based on credible portfolio and property analyses.
In this regard allow me to add emphasis to an increasing need to build sufficient capacity for the continuous management and enhancement of the immovable asset register.
To this end, we will soon launch the Amnesty Campaign aptly named “Operation Bring Back” in order to encourage South Africans to reclaim lost and/or missing immovable assets. These properties we believe were insincerely wrested from the state in the turbulent transitional period following the demise of apartheid and were being unlawfully occupied. The significance of the state-owned real estate as a major revenue generator for government cannot be over-emphasised.
Upon recovery, these properties will either enhance our disposal programme or contribute positively to our Inner City Regeneration programme in revitalising the economy and appreciating the value of state owned properties.
The leasing portfolio is costing the state a lot of money. The department has in the past year spent billions in leases and functional accommodation for client departments. Investment in repair and maintenance, continuous maintenance and construction of new government buildings could generate major savings for the state, a process we will be embarking on in the three years.
This will also include ensuring the relocation of national departments to state owned buildings where it is feasible to do so.
We acknowledge that our lease portfolio will take a while to reduce but in the interim, the department will continue to find ways to structure its current leases such that the socio-economic goals of government are realized including black, women and youth economic empowerment. With regard to our own stock, we shall invoke the National Infrastructure Maintenance Strategy and the National Contractor Development Programme to target investment in this sector much to the benefit of our small and emerging contractors.
Linked to leasing management is the rehabilitation of underutilized and unutilised public buildings for alternative usage or utilisation. With many of our tertiary students around the country being exposed to accommodation that is not conducive albeit at high cost, the department in collaboration with the Department of Higher Education decided to convert unutilised and underutilised buildings to provide affordable student accommodation where it is possible. In Tshwane, the upgrading and refurbishment of the HG De Witt building will yield accommodation for approximately 180 students. In
Through this intervention, the department is looking alleviating the problem lack of decent student accommodation whilst creating job opportunities.
We are currently drafting a Disposal Policy that embraces the social needs of a developmental state. This also requires the review of the State Disposal Act of 1961, and its alignment to the current constitutional imperatives. In addition is the Immovable Asset Vesting Master Plan – a Plan driven by an Inter-Ministerial Cabinet Committee chaired by the Department of Rural Development.The vesting of the state immovable assets in the correct sphere of government is critical not only for proper identification, ownership and geographical location of the assets but for responding to the social objectives of the country.
Proper vesting of state property will therefore ensure that these assets are used optimally for service delivery, can be accounted for, in accordance with the prescripts of the Public Finance Management Act, No 1 of 1999 (PPFMA) and the Government Immovable Asset Management Act (GIAMA), No 19 of 2007.
2. Capital Works Programmes
We are mindful of the fact that we will always be judged by the standards with which we treat our valued clients. In-depth consideration for the accommodation needs of our clients remains a top priority for the department to arrest the fast erosion of our mandate. This issue encouraged the department to pro-actively engage with our clients as successfully demonstrated by our recent visits and continuing work at the military bases of the Department of Defence and Military Veterans and we are also working with the Department of Defence, to rehabilitate selected military bases. The department is paying attention to the deteriorating state of the infrastructure in the Harbours, beginning in
Facilities on behalf of Justice were recently completed and handed over at places like Galeshewe (Kimberely), Colesburg, Pietermaritzburg and Butterworth, among others.
Department of Public Works need to ensure that the client Department functions in proper and decent facilities in discharging their constitutional mandate.
The accommodation needs of the South African Police Service in the year under review will be extensive, given the need to fast-track the goal towards a safe and secure South African society.
The communities of Botlokwa, Jane Furse, Chatsworth and Tsakane became witnesses to their development when these facilities were officially handed over and opened, joining a long list of similar facilities either built or renovated by Public Works.
Although very rarely covered by the media, these infrastructure projects and hundreds others in our building programme, stand as concrete beacons to the service delivery track record of government and we take pride in them.Furthermore and with respect to the SAPS portfolio, I wish to announce that in the current financial year, the department will complete the first ever state-of-the-art Forensic Laboratory for SAPS in Cape Town.
With this realisation we have recently embarked on an aggressive drive to intensify collaboration with the other spheres of government. Supported by our public entities we have sought to streamline new technologies aimed at delivering basic but essential social infrastructure and other services. Through one of the entities of the department, the Independent Development Trust (IDT), we are overseeing the implementation of an intensive programme for construction of safe schools.
The school building programme in the
With us today as witness to the success achieved in the Eastern Cape, is the Chairperson of the School Governing Body of Willowvale Senior Secondary School, uMakhulu Nomandla Nongwane, through whose leadership and relentless prayer saw the transformation of Willowvale Senior Secondary School from a mud structure to a state-of-the art 18-classroom school fully furnished with 26 toilets, resource centre, administration office, sporting facilities, and kitchen to feed pupils. In her words, “with no taxi fare to return home, we made the journey to the offices of the Department of Education to ask for a decent school for our children. They could no longer go on in a mud school. Today with Public Works we have a school that has exceeded the communities’ expectation.”
I am compelled by uMakhulu Nongwane’s testimony and the testimony of Phatiswa Langeni, a Grade 12 learner at
As Phatiswa Langeni phrased it after 11 years in a mud school subjected to the elements and the threat of snakes in the mud classrooms and nearby bushes,”for years we learnt under the heat of the sun, or got wet when it rained … but today we want to bury those old memories and get the best education from our new school”.
The budget I table today is about burying old and painful memories, even the memories of many children who have lost their lives crossing flooded rivers trying to get to school. Our continued partnership with the Department of Defence meant that more bridges were built in the 2010/11 financial year, the most recent being the one we opened at the Nquqhu
Makhulu Nosizwe Mxhaka (72years) broke down and cried when the bridge was unveiled at Ngughu village. She lost her 9 year old grandchild earlier this year who drowned while crossing the river on his way to school. Makhulu Mxhaka gratefully attested that “we are blessed with a bridge today. I wish my grandchild was still alive to cross the bridge. I thank Nelson Mandela for shaping this government to work for its people”.
In partnership with provincial governments and municipalities, Public Works has also launched a pothole rehabilitation programme in response to the loud cries by our public road users about the poor state of our roads. The Programme is aimed at reducing unemployment, beginning with the metropolitan municipalities and extending to other districts and rural municipalities. The department has committed to creating 400 job opportunities per metropolitan district through this Pothole Rehabilitation Programme.
We will be going further to assist in township rejuvenation plans which include fixing of street lights to fight crime as well as cleaning cemeteries, building internal streets using paving, and cleaning and greening of open spaces for the benefit of our children.All these will be undertaken through labour intensive method to maximise job creation. We can announce that this project has long commenced in Tshwane.
Underpinning our building programme is the provision of accessibility of public buildings to disabled people in order to promote the letter and spirit of the constitution, the programme is receiving priority attention of the department.
Energy Efficiency in state buildings is central to the building programme for this fiscal year. As a strategic programme it will respond to the energy shortage facing the country. It is already being implemented in all our 8/11 Regional offices through shared contracts and an Energy Code of Conduct for users of public buildings.
Our maintenance record leaves much room for improvement. We are aware that as we make progress with our maintenance record, we continue to experience challenges brought by the ageing stock we own, most of which is of heritage value and compounds the costs associated with maintenance. This has forced us to reconsider other options which will be rolled out in this fiscal year.
Our contribution towards
Ahead of the country hosting the 2010 FIFA World Cup soccer tournament, the department successfully implemented massive infrastructure development projects at key land ports of entry including Lebombo (
3. Job Creation and Inclusive Growth through the Expanded Public Works Programme (EPWP)
The New Growth Path expects the “public investment to create 250 000 jobs a year in energy, transport, water and communications infrastructure as well as in housing, through to 2015”.
According to the New Growth Path “the provision of infrastructure also serves to enhance efficiency across the economy, laying the basis for stepped-up growth and employment creation in every industry whilst simultaneously advancing social equity goals and addressing inequalities in the society”.
It is with this compelling undertaking in mind to create decent employment opportunities particularly among the youth, that I present this budget to you here today. For us, infrastructure development and job creation lie at the centre of the mandate and the strategic plan of the National Department of Public Works. As a department leading job creation efforts of government, Public Works took a strategic decision earlier on to implement all its programmes including the Capital Works Programme labour intensively to boost employment in
The Phase 2 of the Expanded Public Works Programme has just completed its second year. I know that Honourable members have become accustomed to hearing about the delivery milestones of the Programme in job creation. The commitment is to upscale the programme in participating sectors and creating new job opportunities through innovation and ingenuity.
The partnership with non state entities continues to bear fruit, as non profit organisations are participating actively in the programme.
The EPWP is also assisting municipalities to deal with waste management backlogs. The Food for Waste programme is an innovative programme where communities collect own waste and receive compensation in the form of food parcels. This is a food security programme and 10 municipalities are currently participating. 19 municipalities will be brought on board in this financial year.
As a lead department in the implementation of this programme, Public Works will continue to use this programme in the war against poverty and unemployment, mindful of the limited resources at our disposal. The EPWP has been allocated R679 million for incentive grants to Municipalities and R267 million for provinces.Consequently, I have ordered the Department to review the disbursements of the so-called performance based incentive grants to both provincial and local governments, so that we can satisfy ourselves that such measures are cost-effective and not open to abuse.
Local government in particular requires a massive injection of relevant resources to fast track the delivery of services. As a result, the department has decided to redeploy certain of our skilled human resources from the EPWP to local government to assist with capacity in the implementation, evaluation and monitoring of the EPWP programmes and their principles at that level of governance.
Since 2006, in aid of competitive service delivery, our rates and services budgets have been devolved to the next sphere of government to enable faster transfer of payments to the municipalities. In this current year an amount of R1,8 billion has been allocated for the property rates grants. This amount has decreased by 3% from the 2010/11 allocation. Performance on this grant has improved notably in the past financial year, 2010/11 showing improved spending by provinces of 92% (2009/2010: 79%).
With regards to the promotion of the Expanded Public Works Programme (EPWP) and National Youth Service (NYS) programmes it is envisaged that the department will be in a better position to create job opportunities through direct employment compared to the private sector contractors. Another important advantage of this initiative is the element of sustainable employment through a systematic roll-out of projects using the construction management method and the deployment of labour from project to project on a continuous basis.
4. Effective Corporate Governance and Resource Management
Central to implementing the mandate of the Department of Public Works, is the need to practice effective corporate governance and resource management. We will be undertaking an independent assessment of all our Supply Chain Management processes and structure. This will include, the review and restructuring the bid adjudication committees, the review and evaluation of delegation, aggressively creating capacity in the legal services unit with property lawyers, reviewing of the supply chain management process, redeployment of officials with the aim of match the skills with the job content and centralisation of all contract in order to allow the department to have an improved administration thereof.
In partnership with the Northern Cape Department of Education about hundred (100) young men and women were placed in the artisan training programme at the Pelindaba Technical Training Centre outside Tshwane where they will be undergoing training in various trades including welding, mechanical, electrical, fitting and turning and draughting. After eighteen (18) months of joint theoretical and practical training government has undertaken to absorb them all in employment.
This is in line with our decision to not only re-open our erstwhile technical workshops but to increase their capacity so that they become the centres of further skills generation, while at the same time helping us to reduce the costs associated with unnecessary outsourcing of menial jobs, many of which can be performed in-house.It is for this reason that I have issued a national call to all professionals in the built environment and property management sectors to forward their curriculum vitae to the department. The results were overwhelming, again another indication that belies the myth of total skills shortage.
This process we believe will enable the department to run its workshops efficiently and contribute immensely to government’s National Human Resource Strategy, especially the artisans’ programme. It will also enhance inclusive growth. More than nine thousands (9 000) CVs were received and the numbers are significant to sustain our intake of technical prowess in the department in support of our mandate, not least realising the job creation targets of government.
Skills development is a central building block of a developmental state. We must at all costs turn the tide of history that has seen our people like Ntate Robert Maphutha, retiring after 36 years of service to the Department of Public Works, having served in no more a capacity than being a parking attendant. Rea leboga ntate.
To remain competitive and grow the business of Public Works, I have commanded the Department to single-mindedly focus on expediting the filling of all funded posts.
5. Empowerment and Transformation in the Construction and Property Industries
The department is responsible for the regulation and transformation of the construction and property sectors. The contribution of these sectors to economic growth and job creation, albeit within a transformative framework, is key. The implementation of the Property Incubator Programme (PIP) and Contractor Incubator Programme (CIP) are receiving priority attention.
Property ownership needs to be shared and the construction industry has to create an environment where emerging contractors graduate into sustainable businesses.
The PIP will focus on, inter alia, property ownership, property Development, facilities management, property valuation, and property research and estate agents/property brokers. The Expropriation Bill; the Agrement SA Bill and the CBE Bill are also a priority of the department. The review of the White Paper on Public Works is underway.
The challenge of unemployment is real and serious, to this end government is continuously investing resources at finding solutions that work, not least is the promotion of the Green Economy. The department in its capacity as the leader and the regulator of both the construction and built environment industries has finalised the Green Building Framework which will soon be translated into a strategy to create green jobs, promote efficient resources management in the industries and contribute to saving the environment. Along with the issues of ownership, economic access for blacks, women and youth, the Green Building strategy is one of the methods we are encouraging to bring about the transformation of these industries. Our B-BBEE strategy is being reviewed to improve on targets set particularly for women and youth.
As I conclude, I need to remind the members that the State is the biggest player in the property and construction industries both as a consumer and a regulator. Yet often we are found wanting with regard to our knowledge of the extent of our impact on these industries. To turn this situation around, firstly we have in this financial year commissioned a Ten Year Review of the State of the Property Industry to assess government’s monetary contribution to the growth of the property sector in South Africa. Concurrently, we are developing a Socio-Economic Model to measure the contribution of the government’s construction spends in economic growth and social development. The construction and property industries are pillars for growth, development and transformation and as such deserve a serious consideration.
6. The DPW Budget Allocation
An amount of R7,8 billion, has been allocated to the department in the fiscal year 2011/12. R1,4 billion has been allocated to the improvement of state buildings and infrastructure. 60% of this amount is allocated to current commitments, while the remaining 40% is allocated to prioritised new projects which are at the core of service delivery.
The EPWP has been allocated R679 million for incentive grants to Municipalities and R267 million for provinces. Overall incentive grants including the social sector, non state sector and intermediaries increased from R1,2 million in 2010/11 to R1,3 million in 1011/12 representing a nominal improvement of 5,6%.
An amount of R1,8 billion has been allocated for the property rates grants. This amount has decreased by 3% from the 2010/11 allocation. Performance on this grant has improved notably in the past financial year, 2010/11 showing improved spending by provinces of 92% (2009/2010: 79%).
As I conclude, let me thank the House for indulging me in this my maiden budget speech. I am reminded of an old West African proverb that says “He who walks alone may go fast, but he who walks with others goes further”. May the House allow me to thank those who have walked with me.
Let me first thank the President of the Republic of South Africa for his continued good leadership, support and advice.
I thank my colleagues in the Executive, for their support, invaluable advice and team work.
I would like to extend sincere gratitude to the Deputy Minister while wishing her a speedy recovery.
I also thank the Chairperson Mme Manana Catherine Mabuza and the members of the Portfolio Committee on Public Works for providing the much needed guidance, constructive criticism and oversight in assisting the department in carrying out its mandate.
I would also like to thank the Acting Director-General, Ntate Sam Vukela, his managers and all the staff in the department for their relentless support and cooperation. Service delivery and the sentiment of the President to create a responsive public service will be realised through you.
My heartfelt thanks go the public entities for the sterling work they are doing in contributing towards realising government priorities.
I wish to thank colleagues from my constituency Mr Mogafe, Ms Mabolawa, Mr Marobane, my family for the unwavering support they continue to give me throughout my life and more so in my new responsibilities. Especially General Nkabinde, my husband, who took time to be with us today.
Working together we can do more.
I thank you.
Issued by: Department of Public Works
1 Jun 2011
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