Minister & Department of Public Works briefings on Strategic Plan; Construction Industry Development Board, Independent Development Trust, Agrèment SA & Council for Built Environment Strategic Plan & Budget briefings

Meeting report

Minister of Public Works Briefing
Mr Geoff Doidge, Minister of Public Works, noted that the Strategic Plan of the Department of Public Works (DPW) was informed by a number of government strategic documents. These included the Current Medium Term Strategic Framework, the Fifteen Year Review, the 2009 Development Indicators, the Medium Term Budget Policy Statement and the Budget Vote, Millennium Development Goals and the May 2009 Cabinet Lekgotla decisions.

Mr Doidge stressed the importance of the DPW being the custodian of State immovable assets. Public Works programmes ran at national, provincial and local levels, with an increasing involvement of the non-State sector.

The bid process for the following year’s budget had already started. He identified the Expanded Public Works Programme (EPWP) as a policy priority. Goals of the EPWP centered around the creation of sustainable livelihoods and skills provision. Efforts would be made to place recipients of skills training with contractors, and to allow the migration of skilled people into the open market.

Mr Doidge singled out that DPW needed to reclaim its mandates, especially with regard to construction. Skills were lost to other departments, who would co-opt over to their own building projects professionals originally trained by the DPW. The DPW had to strive to retain architects and other building professionals, so that it could be proactive in construction.

He continued that every effort would be made to run the DPW as a business, and that there was a need for a new business plan. This had to result, among other things, in the pro-active provision of accommodation for government departments.

Mr Doidge proceeded to speak to strategic priorities in the Medium Term Strategic Framework (MTSF) approved by the 2009 May Cabinet Lekgotla. Priority 3 referred to a development strategy linked to land and agrarian reform. He dealt in particular with issues around the use of farms, the ownership of land, what the Department could do to clean up rural towns and the tracking of missing assets.

Strategic Priority 4 referred to the strengthening of the skills and human resource base. He noted that the Council for the Built Environment (CBE) had met with professional councils regarding accreditation, which he defined as a cornerstone of bigger and better transformation.

He then touched on Strategic Priority 6, intensifying of the fight against crime and corruption, and mentioned that there had been meetings with Department of Correctional Services, in an effort to reclaim the DPW mandate to build courts and police stations. He noted that Strategic Priority 8, the pursuing of African advancement and international co-operation, had been adhered to through the building of the Pan-African Parliament building.

Concerning strategic priority 9, sustainable resource management and use, Mr Doidge emphasised an increased commitment to energy efficiency.

Department of Public Works (DPW): Strategic Context and Goals briefing
Mr Solly Malebye, Acting Director General, DPW, briefed the Committee on the strategic context and strategic goals of the DPW. He elaborated on themes introduced by the Minister, and especially on Departmental responses to strategic priorities. Phase 2 of the EPWP was a response to the priority of decent work and sustainable livelihood creation. R787 billion had been made available to build social and economic infrastructure, and to upscale sustainable job opportunities.

In response to the need for land reform, DPW would prioritise rural areas through inner-city regeneration programmes. DPW had identified a number of human resource management initiatives, like learnerships and internships, to strengthen the skills and human resources base. It also envisaged accelerated provision of correctional facilities and police stations, and the establishment of a border management agency, to intensify the fight against crime and corruption. Its work with the Department of Foreign Affairs (DFA) and the provision of the building for the Pan African Parliament and embassies would advance the African agenda and international cooperation.

Briefing by Chief Financial Officer, DPW, on budget allocation
Ms C Motsitsi, Chief Financial Officer, DPW, briefed the Committee on budget allocation. She noted that R167 million had been made available as additional funds allocated to the baseline for 2009/10, but budgets were reduced due to the economic meltdown. Budget allocation was being reviewed, with stringent measures implemented. Every effort was made to allocate monies to service delivery projects. The Department had overspent on employee compensation, but savings mechanisms were in place.

Construction Industry Development Board (CIDB) briefing
A representative of the Construction Industry Development Board said that some doubts had been expressed as to the role of the CIDB, and as to whether it was in fact both a player and a referee in the industry. Against the background of a distilled mandate, the CIDB could be viewed as an enabler/developer, and also a regulator/enforcer of compliance. The latter component represented a new focus. The distilled mandate, backed up by the relevant legislation, required the CIDB to exercise leadership and enforce a regulatory framework for a total construction delivery capability to achieve South Africa’s economic and social growth, and to promote empowerment to the historically disadvantaged.

In the external context, stakeholders were identified as crucial. Some of the most important internal matters were identified as specialisation and risk exposure.

Exponential growth had been experienced with regard to registrations, from 1 500 in December 2004, to 80 000 at the end of March 2009. There had been upgrades in the register, and the CIDB had developed the ability to better classify the contractors who were registered. Black-owned enterprises constituted 87% of all upgrades.

The CIDB was run like a business, with an operational plan and staffing structure.

Key focus areas for 2009/10 included contractor registration, the development of a revenue model, and, importantly, compliance enforcement. Forensic investigators would be employed to act against fraudulent practices. A concern for better safety in the construction environment was also crucial, as were accredited management systems, and the establishment of an employment and skills development agency.

The presentation concluded with a summary of the budget for the Medium Term Expenditure Framework and the summary of the budget per programme (see attached document for details).

Independent Development Trust (IDT) Briefing
Ms Thembi Nwedamutswu, CEO, Independent Development Trust, noted that the IDT had been established in 1990, and had developed into a redistributive organ of government. Its mandate reflected its dedication to halving poverty. Its activities could largely be identified as responses to millennium development goals.

The IDT had evolved from a grant-making to a programme-implementation agency. It operated according to a business model, and was dedicated to the eradication of poverty. It relied on government donors, as well as donors from the private sector. The IDT was committed to sustaining a niche as a knowledge-based development agency, with a central aim of unlocking of potentials with a view to establishing sustainable livelihoods. This was attained through people-centered development interventions. In such ventures, the IDT saw itself as a catalytic player. 55% of its operations centered around school building and poverty relief, hence its programmes were linked to intensification of the EPWP 2.

Ms Nwedamutswu emphasised the commitment of the IDT to water and sanitation programmes. The objectives of the IDT were aligned to the Medium Term Strategic Framework (MTSF) and national priorities. Community based investment mobilisation was a favoured strategy. Every attempt was made to bridge gaps between communities with or without resources. Social protection and community development was achieved through the building of schools. A strategic shift was occurring, away from subsidisation, towards obtaining revenue from charging clients. Budget increases could be termed conservative.

Partnerships had been established with such agencies as the Kellogg Foundation, the Republic of Cuba, SA Women in Dialogue (SAWID), and SA Women in Construction (SAWIC). The aim of such partnerships was to cultivate long term sustainability.

Recently the IDT had decided to reduce its capital base, and to encourage recapitalisation through demonstrating effectiveness. It had developed into a leading development agency to eradicate poverty.

Briefing by Agrement South Africa
Mr Pepi Silinga, Chairperson, Agrèment South Africa Board, outlined Agrèment South Africa’s (Agrèment) objectives. He defined Agrèment as an agency committed to improvement of quality of life, through the control of the standard of building materials used in the country. A situation had arisen where domestic companies could not compete with low quality and inferior imported building materials. Agrèment provided certification of quality building products, and attempted to eradicate the supply and use of inferior products.

Mr Joe Odhiambo, CEO, Agrèment South Africa, briefed the Committee on the business plan. Agrèment was currently part of the Council for Scientific and Industrial Research (CSIR). Once a product had been developed, it was handed to the South African Bureau of Standards (SABS). The role of Agrèment was to assess products, specifically non-standardised products.

The Agrèment vision consisted of a commitment to establishing technical assessment organisations. Since its inception, Agrèment had issued 482 certificates. It had to be borne in mind, when considering this figure, that the building industry was not very innovative. Certain building products could be classified as standard fare that continued to be used over decades. 169 valid certificates had been issued for products such as hollow concrete blocks, copper piping and waterproofing.

Mr Odhiambo said that Agrèment was a major player, the only one of its kind in Africa, and was internationally recognised.

Mr Odhiambo then moved on to describe the challenges facing Agrèment. A delegation had met with the Minister of Public Works, to initiate the establishment of an Act to support Agrèment objectives. In the past, Agrèment had relied much on CSIR research, but now aimed at increasing its visibility and awareness of its objectives. Consistency in enforcement had been identified as a challenge. Other challenges included raising of industry standards and the enhancement of service delivery. The quality of testing could be further improved, and industry experts were currently serving on a technical committee, towards that end.

The scope of Agrèment’s evaluation included testing for strength and stability of materials, accuracy in building, durability, and compliance with national building regulations. The quality management system had to be rendered more visible. Substandard products had to be prevented from reaching the market.

Mr Phumlani Myeni, Chief Financial Officer, Agrèment South Africa, briefed the Committee on budgetary matters. He noted that the bulk of Agrèment expense consisted of human capital costs. The CSIR had until now charged Agrèment rent below market rates. The budget needs centered on the need for Agrèment to become more independent. It had hitherto relied on the SABS for testing, but there was a need for Agrèment to acquire its own testing facilities. Since it also could not indefinitely remain a “younger sister” to the CSIR, it had to become more visible.

Council for the Built Environment (CBE) Briefing
Mr Bheki Zulu, CEO, Council for the Built Environment described the CBE as an umbrella organisation for regulation of building professions such as engineers, architects, landscape architects and quantity surveyors.

The CBE’s mandate was geared towards protection of the public in the built environment, and the development of human resources in the environment. Participation by the built environment professions in integrated development remained an area of weakness. The promotion of appropriate standards of health, safety and environmental protection in the built environment was considered crucial.

The CBE’s vision and mission centered around the provision of sustainable built environment professions, and around facilitating integrated development whilst promoting efficiency and effectiveness. Intervention towards improving the performance of the skills delivery pipeline was an important strategic objective. There was a commitment to facilitate the development of international agreements, to increase South African ability to take advantage of international skills. The same applied to the improvement of stakeholder relations and the creation of partnerships to improve service delivery.

Mr Zulu identified the main challenges as being the lack of integrated planning with built environment councils, and inadequate funding that caused such councils to be unable to deal sufficiently with their mandates.

Discussion
The Chairperson noted that only a few minutes of the session remained for questions. She called for very brief comments or questions from Members.

Mr T Magama (ANC) suggested that the various entities, in turn, meet with the Committee individually, so that such matters as deadlines and measurable objectives could be discussed and interrogated.

Several other members expressed agreement with the suggestion.

The Chairperson asked Members to familiarise themselves with the documentation, so as to be prepared for meeting with the entities one or two at a time.

Deputy Minister of Public Works, Ms Hendrietta Bogopane-Zulu thanked the Committee for its time and attention. She agreed in principle with the suggestion to engage with the entities on a one-to-one basis. She shared the Minister’s desire to see the DPW run along business lines, especially since it brought in revenue. The Ministry would be relying on the oversight capacity of the Committee. She urged members to use their constituency offices, in order to be partners in Public Works projects.

Minister of Public Works Mr Geoff Doidge then expressed thanks to the Acting Chairperson and all presenters and Members. He reminded Members that the Budget Vote was scheduled for 17 June.

The meeting was adjourned.