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Meeting Summary

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Meeting report


28 May 2003

Acting Chairperson:
Mr M E Hlengwa (ANC)

Relevant document:
Minister's Budget Speech of 3 June 2003 (see Appendix)

The Committee briefly discussed issues that would be raised at the Minister's Budget Speech on 3 June 2003. The Department did not present a budget briefing as planned.

The Chairperson welcomed the Ministry officials to the meeting. The purpose of the meeting was to discuss the Committee's contribution to the budget debate, which will take place next week. The Chairperson pointed out that the Department would not be making its presentation on the budget as was planned for this meeting.

The Chairperson noted that the work done by the Committee concerning HIV/AIDS should be stressed at the budget debate.

Mr Moonsammy (ANC) stated that the achievements of the departments should be lauded, especially in the face of criticism. Attention should be given to the weaknesses that confront the Committee and to the Committee's future plans.

Mr Chikane (ANC) believed that attention should be given to the provincial visits as this would give a human face to the Department of Public Works. Their aim of labour intensive projects that incorporate all people should be focussed on the community based projects as well. Presently, these projects are being transferred to local government who do not yet have the capacity or training to deal with them. The role of the Department, therefore, needs to be established.

Mr Hlengwa (ANC) asked whether this could be referred to as expansion.

Mr Sigwela (ANC) stated that projects lack focus, that money is not spent where it is most needed and that changes in local government are not properly negotiated.

Mr Hadebe (ANC) asked who had a problem with the proposed budget. Furthermore, he felt that a history of the Department should be highlighted, especially in the light of the high turnover of Director Generals and the impact that this has had on the department.

Mr Opperman (DP) had a problem with the fact that the Department does not meet its obligations with local governments and the impact of restructuring.

Mr Chikane (ANC) raised the issue of the asset register, stating that not enough is being budgeted for the maintenance of buildings which are now becoming eye sores.

Mr Hadebe (ANC) asserted that the Committee needs to play a more coercive force in obtaining the funds needed from the Treasury if it is to be effective in addressing the problems confronting the Committee.

Mr Sigwela (ANC) was concerned with the construction of the new development program, especially in the light of training those whom the Department aims to employ. A budget of R33,5 million is not enough to implement the Department's plan.

Mr Opperman (DP) felt that training and monitoring the empowerment of management is an infrastructure battle.

Ms Sigcawu (ANC) stressed the tender problem facing the Committee. It is unfortunate that the lowest tenders are accepted resulting in poor construction and workmanship.

The Chairperson stressed the poor quality that results from accepting the lowest tenders.

The Departmental Officer stated that the Treasury is to make funds available for poverty alleviation. He was also interested in establishing the degree to which transformation fatigue will have a negative impact.

Ms Sigcawu said that contractors should be guided by the Department as contractors are not always self-sufficient.

Mr Chikane (ANC) said that they should be looking at the main function of the Department and how the management of the budget affects the Department.

The Departmental Officer said that the budgets are managed by the client departments. As such, the Department of Public Works is responsible for its own budget management.

The meeting was adjourned.


Madame Speaker
Honourable Members

Public Works has over the past nine years pushed for change in a number of areas. From being a simple handyman, the Department has managed to incorporate world standard operations and policies in the management of the huge state fixed property portfolio for which it is responsible. The count includes the thousands of rural infrastructure projects created to speed up development for the poorest of the poor and also the growth and stimulation of broader participation in the construction and property industries.

A significant mark has been made in the areas of procurement reform as an empowerment tool, property management, job creation, gender and health issues.

A major policy development that affects all of government that we are currently dealing with, is the Government-Wide Immovable Asset Management Framework.

The key purpose of this framework is to establish a set of minimum norms and standards in respect of the management of such immovable assets on a government-wide basis.

This will help deal with any inconsistencies and inefficiencies in the manner in which government assets are managed within different organs of government. Our plan is to have such a policy document translated into an Act in due course.

The Department will be looking into establishing an indicative value of the State Property Portfolio in this financial year.

Property Holding and Asset Management

The work on the Asset Register is ongoing.

Some of the key benefits we seek to obtain from the compilation of the asset register include:
* Having comprehensive, uniform and consolidated information in an electronic format
* Having an ability to match expenditure against a group of properties, government departments, geographical areas, financial years, etc.
* And the ability to better assess the level of utilisation of properties so that properties that have no strategic value and can thus be disposed of
* And the ability to combat fraud and corruption through the detection and reduction of fictitious maintenance, abnormal costs for similar types of properties, etc.


Public Works in the previous financial year, disposed of 835 properties, in extent 63 544 hectares, with an estimated market value of R55,2 million. Of these:

* (803 properties (63 140 ha) were for land reform purposes
* 19 properties (359 ha) were for low-cost housing and related infrastructure
* 13 properties (45ha) with a market value of R24,7 million were for commercial purposes).

In addition, 2 properties valued at R983 000 were acquired in exchange for State land.

Following the announcement by the President in February of an Expanded Public Works Programme (EPWP) the Department is taking concrete steps to ensure that the concept of an expanded public works programme is fully understood and supported within and outside government. Though coordinated by the Department of Public Works, this is a national effort which will mean the participation of government, business, Unions and civil society in general.

Part of our challenge is to ensure that the objectives of the EPWP are properly understood. These objectives are:

* Job creation
* Poverty alleviation
* Investment in social and economic infrastructure
* Human resource development through the training of participants.

The key focus areas where Public Works is in a position to optimise contributions are:

* Labour based methods: Optimal use of labour as the predominant resource while ensuring cost-effectiveness and safeguarding quality, primarily within the construction industry.
* Emerging contractor support programme: SMME development and support, to have resources circulate within communities and create capacity for maintenance.
* Procurement policy: Ensure policy responsiveness, uniformity and adjustment throughout all spheres of government
* Monitoring and evaluation: Ensure mechanisms to track developments, focus on objectives and targets.

Capital Works
Our record of improving delivery levels to our client departments continues to improve.

For the second consecutive year, the national Department of Public Works has succeeded in spending almost 100% of the Capital Works funds i.e. R1.623 billion from an allocation of R1.631 billion.

This achievement was due to:

* Improved data integrity in our Works Control System
* Improved client interaction
* Improved project management and procurement efficiency.

In alignment with government's priority of security and crime prevention, projects for the Departments of Correctional Services, South African Police Services and Justice have assumed a special importance.

For Correctional Services Projects we spent R759 million in 2002-2003.

A major step in the development of prisons in South Africa today is the New Generations Prison initiative. My Department together with Correctional Services is involved in the design of a prototype prison, which should result in the converging of all prison demands into a functional, cost effective and efficient operation. This prototype prison will carry reduced numbers of inmates per unit and is planned to be rolled out throughout South Africa. The procurement of these facilities will be in support of Black Economic Empowerment, as projects will be packaged into smaller contracts.

For the South African Police Services Projects we spent R216,7 million in 2002-2003.

Public Works was instrumental in the provision of accommodation for some 6 000 SAPS recruits within 6 months. A pilot RAMP project has been introduced for the first time to SAPS in an endeavour to quantify and address the maintenance backlog in police facilities.

In the previous financial year we completed and handed over various projects for SAPS including community safety centres at Khutsong, Tshidilamolomo, Centane and Leboeng where SAPS is the lead department.

Justice Projects in 2002-2003 accounted for R237,9 million on our expenditure.

Several major Justice projects are completed or currently in the construction phase. (Such as the Pretoria North, Port Elizabeth, Tembisa and Khayelitsha magistrates' courts.)

Madame Speaker, the Khayelitsha magistrate's court project requires a special mention as it is the second largest magistrates' court in the country. The building of such facilities in Khayelitsha and Blue Downs represents government's commitment to bring not just service, but justice closer to the people in our townships as well as stimulate urban renewal.

During 2002-2003 R33,66 million was spent on 42 RAMP projects for Justice, the largest amounts expended was for the repair at the Klerksdorp Magistrates' Offices and the Durban High Court.

On Defence Projects, my Department spent R53,5 million in 2002-2003. This includes the work done in order to address the dolomite problems in Defence occupied areas in Thaba Tswane, with special reference to the Waterkloof Air Force Base. The dolomite project cost more than R24 million in 2002-2003 and the budget for this financial year is R73,6 million. The emphasis is on activating an early warning system, monitoring and remedial actions.

Large projects for Defence include a new communication tower in construction at the Waterkloof Air Force Base and a major repair programme at the Dry Dock in Simons Town.

Other Departments:

For Arts and Culture we were commissioned to expend R54,8 million on museums and other projects in 2002-2003.

A new facility for weather observation and scientific research on Marion Island to the value of R117 million over three years is being planned to replace the existing deteriorated infrastructure.

The RAMP initiative has also been applied to upgrade fishing harbours in order to provide vital support to the fishing industry in the Western Cape. Currently 15 contractors have been appointed at 8 harbours. This is for a contract value of R85 million, opening up 900 job opportunities. On schedule for the end of 2004 we are looking at 27 contracts at all 12 fishing harbours with a contract value of R161,5 million and 1 700 job opportunities.

Public Works will, on behalf of the Department of Foreign Affairs, complete the South African Chancery in Berlin in July 2003. This facility will showcase South African high quality finishes and character in the famed Tiergarten Strasse, embassy belt in the city. The Chancery in Kinshasa to the value R72 million will soon be completed.

New accommodation

Public Works has set up an Asset Procurement and Operating Partnership System Unit that specialises in delivering infrastructure through partnering with the private sector.

There are at present three Asset Procurement and Operating Partnership System (APOPS) projects, namely for the Department of Environment and Tourism, Department of Education and Department of Foreign Affairs, all to be within the Struben Street Boulevard precinct - contributing to the urbanisation renewal initiative in the Pretoria CBD. Requests for qualification and subsequent proposals have been received.

Client Services

Client Service relationships have improved since we secured the service level agreements with national departments, compiled a manual for their use and opened country-wide helpdesks, leading to a reduction of 75% in client complaints.


Our maintenance budget of R557 million, has been fully utilised.

* Since its implementation, the Repair and Maintenance Programme (RAMP) has grown to 654 contracts to the value of R2,8 billion. Departments that have invested in the process are Arts, Culture, Science and Technology; the Border Control Improvement Programme (BCIP); Correctional Services; Defence; Home Affairs; Justice; Labour; National Health; Public Works and the South African Police Services.

Leaseholds and Acquisitions

* Eighty per cent of the 442 requests for leased accommodation have been finalised.
* Properties worth R14,7 million were acquired and registered in the name of the State on behalf of SAPS for police stations and the Department of Water Affairs and Forestry for constructions of dams; the main area of focus for the latter was the Mooi Mngeni Water Scheme.
* Properties worth R16 million are in the process of being registered for the same client departments.
* The procurement of accommodation has been identified as an area that offers opportunity for implementation of Black Economic Empowerment initiatives. Resolutions taken at a recent workshop with various stakeholders encompassed issues of equity ownership by Historically Disadvantaged Individuals (HDIs) in companies from which we lease buildings, outsourcing by those landlord companies of services like maintenance, cleaning etc. to Affirmable Business Enterprise (ABE) companies and the revision of leasing delegations that impact upon lease terms to facilitate access to finance by emerging HDI property owners.

* A significant contribution was made to the World Bank report on the country wide assessment and review of procurement reform within government and the private sector.

* We are currently reviewing the Targeted Procurement Strategy to assess and evaluate the further commitment to the promotion of BEE.

In 2002-2003 tenders to the value of R400 million were awarded to work in contribution to Black Economic Empowerment.

Women in Construction

We have started a strong thrust to empower women in the construction industry. The objective of women-owned businesses being to:

* Build sustainable capacity with women-owned business enterprises,
* Accelerate the development of women contractors who are capable of executing large construction projects as prime contractors,
* Raise the profile of women contractors,
* Ensure that women business enterprises have access to opportunities presented by the departmental projects and lastly,
* To ensure that women owned and controlled business develop and grow.

To date 79 construction related projects valued at R188 million have been awarded to women-owned enterprises.

Community Based Public Works Programme

Since 1999 until the end of 2002-2003 we achieved a total of 2 517 rural infrastructure projects with 106 000 job opportunities created. A total of 39 125 jobs were taken up by women, 47 323 by the youth and 2 249 by people with disabilities. More than 3 273 sustainable jobs were created.

The Communicty Production Centres and the37 operational MPCCs have made a big difference to the lives of our people, they are really turning the tide.


The Lambasi CPC is producing an average of 2500 tons maize per year in an area of +-500 hectares.

At Ncora they are selling cabbage from 10 hectares for over a month with sales up to R40 000 paid for. The seedlings for cabbages were produced by a nursery run by locals within the CPC.

A group of women has been established that, with technical support from the Agricultural Research Council, is experimenting in the production of herbs.

At the Highlands CPC, of the 640 hectares fenced. 100 of have been put under maize.

Partnerships with the Department of Agriculture Mass Food Production will consolidate and extend the benefits to about 400 households. With 10 hectares under cabbage about R20 000 has been raised on one hectare.

The Keiskammahoek CPC entered into a community private partnership between smallholding farmers and Clover. Irrigation infrastructure is currently under repair. A refurbished dairy is being used for the milking of 51 cows.

At Elandskraal CPC in Limpopo the community is benefiting from the rehabilitation of irrigation infrastructure while approximately 290 small farmers are engaged in reaping the winter wheat crop for subsistence consumption and local markets.

The Upper Arabie CPC in Limpopo covers approximately 540 hectares is supported by around 400 small scale farmers. The community will benefit from the rehabilitation of irrigation infrastructure such as pumps, supply lines and infield irrigation.

The Cairn Lemon CPC in Mpumalanga has a management partnership arrangement with a commercial farmer. The community is benefiting from the rehabilitation of bulk water supply, the development of a lemon orchard, and the rehabilitation of irrigation infrastructure.

This CPC has a secured market with Coca-Cola, which is their primary market.

In KwaZulu-Natal the NDAYA CPC measures approximately 18 hectares, and is managed by a group of 18 local women and 5 men.

The community is benefiting from the development and fencing of arable land and the provision of infrastructure, i.e. a pack house, storage facilities, toilets, a crèche, and a road.

The CPC produces a variety of crops, i.e. potatoes, green peppers, cabbages, butternut, etc.

The produce is sold to local hawkers, and the town market.

Profits are shared between members, and dividends are based on the members contribution to the crop production.

Members are engaged in farming activities daily, which is a means of employment.

The CPC has a nursery that provides the seedlings for cropping.

At the Makhathini Flats CPC (KZN) Public Works has completed the infrastructure provision. The Provincial Department of Agriculture is busy with production and development.

The Schmidsdrift CPC in Northern Cape serves 770 households who farm in goats and sheep.

The provision of fencing and the rehabilitation of the water supply, will enable them to graduate from subsistence to a commercial level of farming.

In an effort to keep the projects sustainable, for the first time in 2002-2003, an allocation of R6.5 million aimed at revitalising projects that were not operational was given to municipalities. Positive results were obtained and the lessons learnt have enabled the Department to make revitalisation a permanent feature of the CBPWP. We say no to white elephants.

I again express a word of thanks to the South African Breweries for their partnership in the Clean and Green Programme).

2003/04 BUDGET

For the financial year 2003/04, Public Works is presenting a budget of R4.47 billion (R4 466 700). The provision for land and accommodation accounts for 86% and the National Public Works Programme for 7% of this budget, thus leaving 7% of our total budget for administration and other auxiliary and associated services.

During the current fiscal year, the department will also facilitate the planned gradual devolution of budgetary allocations to client departments starting with the devolution of Rates and Taxes in respect of Provincial properties to the Provinces in the next financial year to be followed by other operational budgets in subsequent years. This planned devolution of budgets will once fully implemented bring about clearly defined accountability responsibilities between my department and other organs of the State that we service in line with the policy developments I referred to earlier.


The Deputy Minister and I wish to thank the Portfolio Committee for their role in guiding us in our task. The cooperation of Provincial Ministers and Heads of Departments as well as staff in the public works portfolio is appreciated.

A special word of thanks goes to James Maseko, our new Director-General, for his approach to management, his determination to deal with auditing issues - I do believe that we shall reap the benefit of his endeavour, coupled to that of the management and staff of Public Works. By and large the tide has turned - the challenge remains for us to keep it flowing in the right direction.


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