Government Printing Works Budget and Strategic Plan Presentation

Meeting report

Government Printing Works (GPW) Strategic Plan and Budget
The Chairperson noted that no women were part of the GPW presentation team. 

Mr Tom Moyane, Chief Executive Officer (CEO), GPW, said that efforts to get the fully representative team were underway. 

Mr Moyane said that GPW wanted to become a strategic player in the country and the region and were engaged in a critical assessment of their current status. The operating model of the organisation had been transformed into a government component (GC). The changes incorporated were to be outlined by the Presidential announcement and the ministerial notices. They also wanted to implement sound financial management and become profitable and economically viable. Their overall vision was to become the States mandated printer and to focus on their core business: security printing.

The strategic implementation plan was as follows: Conversion into a government component (GC), optimise the production process; migrate with the changing technology, effective marketing, financial management. The strategic management plan included Financial management; Cost management, Operations Management; ICT management; Supply Chain Management, Human Resource Strategy; Transformation, Security, Regular Internal Audits and Marketing.

A key project was installing and commissioning of a new security printing division.  The GPW also issued new certificates to crewmembers of SAA and Maritime certification. The Department of International Relations requested the printing of accreditation of diplomats. As part of the regional work, GPW was printing the vehicle testing certificates for Mozambique. The Enterprise Resource Planning (ERP) system and the development of a new facility were also underway.

Mr Rassie Barnand, Chief Financial Officer (CFO), GPW, detailed the funding requirements for the organisation and stated that the transformation and modernisation required additional capital injection from the state.

Another major cost for GPW was the replacement of assets; IT systems and machinery that was outdated. The new IT system had a huge investment in 2010/11 and would decrease in the future. The facilities upgrade had not been determined for the coming year.

To facilitate growth and be financially viable, GPW needed to replace the fragmented IT system. Income estimates summarised were as follows, transfers received from National Treasury were R 25 million instead of the requested R 325 million. The CFO brought to the Committee’s attention the pressure faced due to none-payment from the Department of Home Affairs (DHA).

Discussion
The Chairperson commented that the layout of the presentation had to include the objectives and corrective action to solve the challenges.

Ms Terblanche wanted to know when the Committee could visit the site in Pretoria to get a better understanding of the physical environment. Her second question related to passports. She mentioned how she is always asked about the delays in getting passports; she wanted to ascertain why there are delays? Another burning issue was the cost of the old passport versus the new one?

Mr Moyane responded that PW had two operations. The first printing of the passport book, which is stored and retrieved as, needed. The second is the actual personalisation of the passport book. The DHA has its own system to approve passport applications and gather data. The DHA then sends GPW a data package with the applicants’ personal details and this is uploaded onto the data system at GPW. He stressed that there is no backlog in printing at GPW; passports were printed within 24 hours. GPW receive approximately 500-2000 data packages to print a day and the equipment is able to print 20 000 a day. He elaborated that GPW had bought state of the art personalisation equipment from Germany and were able to personalise a higher volume of passports per day than they were currently doing.

On the issue of costs, Mr Moyane said that the old passports were sold to DHA for R18 and the new passports for R218. The paper cost was much lower when the paper was imported from France.  Paper was now locally manufactured, at higher cost. Also manual labour was cheaper on the assembly line and the machine assembly line is more expensive.

GPW had taken over the personalisation of passports from DHA and now used a polycarbonate paper imported from Sweden which can be used for the E passports.

Advocate Z Madasa (ANC), asked why GPW were marketing themselves to government departments if their core business is security printing and they have a mandate to print for government? He also wanted to know why there is a problem with funding.


Mr Moyane said their core business is security printing, they see no confusion with that. The operating model allows GPW to operate as a business.  In the past GPW had not received a budget from the state, and that this was the first time that government funding would be issued.  GPW had also gone through a process of asset stripping.

Mr Moyane stressed that the organisation does not have management problems and that the organisation provides training plans for the various departments. Operation plans dictate training requirements. They market to government on a constant basis as they found that not all government departments printed with GPW.

The Committee noted that the IEC did not prefer to use GPW to print the voters’ roll and said it was too expensive.  The Committee asked what the cost management plans were.

The IEC wanted cheap and efficient printing and at the time GPW was not able to print quickly due to old and outdated equipment. GPW now had new equipment and will approach the IEC for business. On the question of prices, security printing is an expensive business.

The Chairperson then raised the issue of training and skills development, he noted that this should fall under Human Resources but he wanted to know if this should not be under operations. The Chairperson wanted more details on training and skills retention and the retention of clients.

Mr Moyane said that a lot of skills were lost but the solution was to create conducive environment to retain people, and to avoid training people only for them to join the private sector. 

Several Committee Members wanted to know about the supply chain management and how prepared GPW was to prevent fraud?

Mr Moyane said that the GPW had realigned their procurement processes lat year.  They drew up new terms of reference but are also not immune to fraud.

Mr Moyane added that DHA owed GPW R 100 million for passport services. The entity was unable to print any more if this money was not paid.

Advocate Madasa asked how GPW went about recouping these monies.

Mr Barnard responded that various methods were used to recoup monies, dependent on the severity of the issue. They had elevated the Home Affairs issue to the highest levels and were in discussions with the Deputy Minister. GPW used the same procedures as the private sector to recover money. An agreement with Treasury stating that if GPW were able to prove monies must be paid to them; Treasury would deduct it from the relevant department’s allocation. This measure had not been used yet.  

Ms Terblanche asked if GPW was ready for the roll out of the smart card ID system.

Mr Moyane said that GPW was ready for the smart card, and as soon as DHA gives them the go ahead they could start the printing. He also added that they are competing for IEC contracts during municipal elections and the printing of passports in South Africa is environmentally friendly as the volume is still low.

The Chairperson thanked the delegation for their detailed response and promised that the committee will raise the DHA payment issue. He asked Adv. Madasa and Ms Terblanche to take forward the strategic plan presented and asked the Committee to accept it.

The committee approved the plan.

The meeting was adjourned.