CIDB & CBE 2022/23 Annual Performance Plans; with Minister

Public Works and Infrastructure

04 May 2022
Chairperson: Ms N Ntobongwana (ANC)
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Meeting Summary


Construction industry development board (cidb)

Council for the built environment (CBE)

The Committee had a virtual meeting to review the strategic and annual performance plans of the Construction Industry Development Board (CIDB) and the Council for the Built Environment (CBE) for the 2022/2023 financial year. The Minister of Public Works and Infrastructure was in attendance.

The Construction Industry Development Board provided an updated situational analysis hitch, including the impact of COVID-19 on the entity, transformation concerning historically disadvantaged groups, contractor upgrades, challenges and interventions to improve on transformation, contractor and skills development. The entity also presented implementation progress made, which also included compliance with the registration of projects with the entity, which was a precursor to the BUILD Programme was slow, averaging 38%. There were promising signs as large State-Owned Entities (SOE) had made commitments to the BUILD Programme.

The Minister clarified that the Department was responsible for driving all strategic infrastructure projects that cut across all three spheres of government, SOEs and National Departments. All other infrastructure that was in line with departments and on a provincial and local level was the responsibility of the executive authorities of these spheres. She said that they were trying to improve coordination within these spheres. The Minister also expressed confidence in the new entity’s board and noted room for improvement. She said that the Department and the entity would work to ensure a clean audit at the end of this financial year.

The Council for the Built Environment focused on transforming the Built Environment, producing skilled Built Environment Professionals that were fit for purpose and expediting the empowerment of women, youth and the disabled. The Council said it would also drive programmes to create economic opportunities for previously disadvantaged groups who were professionally registered persons, reforming policies that hinder transformation in the Built Environment and collaborating with various sectors to professionalise the Built Environment by doing away with poor workmanship, construction mafias and corruption. Over the medium-term, the Council would continue to advocate for the Councils for the Built Environment Professions’ (CBEP) contributions to social and environmental, including climate action and economic development.

The Minister shared her concern about the slow pace of transformation in the sector. She said that the Built Environment was the least transformed sector in the country, and the role played by entities was to help the government with transformation, as per legislation. The only success they had so far was the appointment of the boards of the entities. However, they had been unable to transform the sector fully. The Minister said the focus should be on implementation, not making plans. The Ministry was focused on monitoring, improving and evaluating the Department’s and the entities’ targets.

The Committee raised issues with the slow pace of transformation, the allocation and expenditure of budgets and the programmes dealing with administration, empowerment and economic development, professional skills and capacity development, research and knowledge management and public protection, policy and legislation.

Meeting report

Opening Remarks by the Chairperson
The Chairperson greeted all those in attendance and said that the meeting would deal with the Annual Performance Plan (APP) presentations by the Department of Public Works and Infrastructure (DPWI) and its entities. She said the meeting would be twofold, reconvening for a second session at 18:00 to finish the agenda. To save time, the Chairperson asked the entities presenting not to detail their mandate and vision but focus on their APPs instead.

She noted apologies for the absence of Ms Noxolo Kiviet, Deputy Minister, and the request from Minister Patricia De Lille, Mr W Thring (ACDP) and Ms L Mjobo (ANC) to be excused from the meeting early. The Chairperson welcomed the return of colleagues who were not present on the previous day due to observing a religious holiday.

Construction Industry Development Board Strategic Plan 2020-25 and Annual Performance Plan 2022/23

The Minister agreed with the Chairperson that the presentations should focus on the highlights, challenges, and priorities in terms of the economic reconstruction plan to save time.

Mr Bongani Dladla, Acting Chief Executive Officer, CIDB, introduced delegates from the CIDB, including Ms Susan Bouillon, Deputy Chairperson of the CIDB, and the executive management.

Mr Dladla stated that they would be presenting a transitional APP, as the new board has adapted the previous APP, having only commenced its term in December 2021. There are certain aspects of the APP that the new board would like to look at and highlight during the presentation. As the Minister has stated, they would try to highlight only the most important issues.

Updated Situational Analysis

Transformation of Black-Owned Contractor Enterprises in Grades Seven to Nine, 51% and above:

Black ownership has decreased tremendously across grades two to nine, from an average of 58% in 2020Q2 to around 35% in 2021Q2.
The slow pace of transformation in those grades has been exacerbated by Covid-19.
Transformation Women-Owned Contractor Enterprises in Grades two to nine; 51%+ woman ownership decreased from 30% in 2020Q2 to 18% in 2021Q2 across grades two to nine.
Ownership 90% and above also decreased – from 24% to 10%, a decrease of 14% in 2021Q2.

Transformation Youth-Owned Contractor Enterprises Ownership across all Grades; 51% and above:

The state of transformation decreases with an increasing CIDB grade (size of the company).
For ownership of 51% and above, youth ownership across all contractors dropped from 19% in 2020Q2 to 10% in 2021Q2 – a decrease of nine percent.
Access to Work: Black and Women-Owned Contractor Enterprises
Black-owned contractors (51% and more), which make up 92% of registered contractors, accessed around 29% of public sector awards in 2020Q2;
Black-owned companies decreased to 56% in 2021Q2 and the awards increased to 52%. For woman ownership, awards increased from about 10% to 16% in 2021Q2 in grades two to nine.


CIBD’s BUILD. Programme;
Client capacitation on Infrastructure delivery management system (IDMS) to ensure efficient procurement processes by the client with much focus on municipalities;
Contractor Development;
Revision of registration criteria to enable transformation;
A total of 285 contractors to be offered business advisory services in the 2022/23 financial year.

CIDB Governance and Performance

Audit Outcomes

CIDB's objective is to get a clean audit
The audit outcome of CIDB has remained the same – an unqualified opinion with findings in other areas
2022/23 APP Output Indicators
The CIDB's Strategy is enabled by Four Core Programmes, with Administration and Provincial Offices Supporting Implementation.

Implementation Progress

Compliance with the registration of projects with the CIDB, which is a precursor to the BUILD Programme, is slow, averaging 38%. There are promising signs as large SOEs, such as SANRAL and Eskom, have made commitments to the BUILD Programme.
Client capacitation is conducted nationally.
Further guidelines for client implementation of the BUILD Programme are being developed.
Key account managers have been assigned to work with selected clients.
The support of the Portfolio Committee to improve compliance so that the industry's development and transformation can be accelerated as requested.

The Chairperson asked if the Minister had any additional comments.

Minister De Lille said, about the CIDB Amendment Act, that the delay was due to the delayed socio-economic impact study. However, follow-ups were made to the Department of Planning, Monitoring and Evaluation (DPME), and the study would be received within the week. The study would allow her to prepare a Cabinet memorandum with the amendments to take to Cabinet.

On the issue of non-compliance with the registration of projects, she said that it was a major concern because it has persisted for years; the CIDB needed to be proactive. To assist the entity, she would raise the issue in the Cabinet memorandum to inform all relevant executive authorities that they must ensure their departments comply with the registration of projects. The Minister added that registration of projects compliance was not even at 50% for the national government, and intervention was needed through the MinMec structure. At this forum, the Minister would engage with provincial MECs to improve the registration of projects in provinces and local municipalities.

The Minister clarified that the DPWI was responsible for driving all strategic infrastructure projects that cut across all three spheres of Government, State-Owned Entities (SOEs) and National Departments. All other infrastructure that was in line with departments and on a provincial and local level was the responsibility of the executive authorities of these spheres. She said that they were trying to improve coordination within these spheres.

With the establishment of Infrastructure SA, the Minister added that they wanted a single entry point for all infrastructure so that there was a proper database for all infrastructure across all three spheres of government. However, this was work in progress.

She said that the DPWI signed service-level agreements (SLAs) with all their entities at the beginning of the financial year. The Deputy Minister’s office put a monitoring system in place where the DPWI met with entities quarterly to ensure that issues were picked up earlier in the financial year. Improvements would be made to the monitoring and evaluating entities through the service level agreements and the additional key performance indicators (KPIs).

The Minister expressed confidence in the new CIDB board and noted there was room for improvement. She said that the DPWI and CIDB would work to ensure a clean audit at the end of this financial year.

The Chairperson appealed to the Chairperson and CEO of the Council for the Built Environment (CBE) to not spend much time on the mandate but instead focus on the actual presentation. She invited the CBE board and executive management to present.

Council for the Built Environment 2022/23 Annual Performance Plan

Mr Msizi Myeza, Chief Executive Officer, CBE, apologised for the absence of the Chairperson and Deputy Chairperson of the CBE board and said they would rejoin the meeting. He introduced delegates from the CBE: Ms Nana Mhlongo, Chief Operating Officer (COO); Ms Lindsey Jansen van Vuuren, Chief Financial Officer (CFO); and Ms Maphefo Mogodi, Deputy Chairperson of the board.

Mr Myeza said that he would not go into the mandate in detail. He mentioned that the mandate was structured in four parts, as captured in the Act.

CBE Medium-Term Priority Areas

  The CBE will focus on:
Transforming the Built Environment;
Producing skilled Built Environment Professionals (fit-for-purpose);
Expediting the empowerment of women, youth and the disabled.

The CBE will drive programmes aimed at:
creating economic opportunities for previously disadvantaged groups (professionally registered persons);
reforming policies that hinder transformation in the Built Environment;
collaborating with various sectors to professionalise the Built Environment (poor workmanship, construction mafias, corruption).

Over the medium-term, the CBE will continue to advocate for the Councils for the Built Environment Professions’ (CBEP) contributions to social, environmental (climate action) and economic development.

The CBE Programmes are:
Empowerment And Economic Development
Professional Skills And Capacity Development
Research And Knowledge Management
Public Protection, Policy And Legislation.

Mr Myeza concluded that the information contained in the presentation was the same as what they had submitted to the Ministry as part of the APP, except for six slides relating to the economic recovery plan added to the presentation. He said that the exclusion had been because their understanding was only the APP was being presented. Their presentation and the document they had submitted had the same information. He apologised for the miscommunication and added that the decision to make the addition to the presentation was to ensure that the information given to the Committee was comprehensive.

The Chairperson said that it was important that the Committee received the presentations beforehand to ensure that they could adequately engage with the presentations. It was unacceptable that the presentation sent to the Committee beforehand was late and completely different to the CBE’s presentation during the meeting, as this made the Committee’s work difficult.

The Chairperson asked if the Chairperson or the Deputy Chairperson of the CBE had additional comments.

The Chairperson of the CBE, Mr Khulisile Nzo, apologised for his late connection. As indicated by the CEO, he said that their key priorities over the next financial year were those in the presentation, fundamentally being the transformation of the sector. Dr Dlamini said about 73% of registered professionals across all six councils were white people, and the built environment was not reflective of the country's demographics. The entity’s priority was also also to empower women and youth. He added that the details on how the CBE aimed to resolve these issues were in the presentation.

The Chairperson of the Committee asked the Minister if she had additional comments.

Minister De Lille said that she had not received the added presentation slides and would ensure that these would be sent to the Committee immediately. She apologised for the presentation being sent late to the Committee and explained that the delay was due to her and the Deputy Minister being unavailable.

The Minister shared her concern about the slow pace of transformation in the sector. She said that the Built Environment was the least transformed sector in the country, and the role played by entities was to help the government with transformation, as per legislation. The only success they had so far was the appointment of the boards of the entities. However, they had been unable to transform the sector fully. The Minister said the focus should be on implementation, not making plans. The Ministry was focused on monitoring, improving and evaluating the Department’s and the entities’ targets.

Mr W Thring (ADCP) said that transformation, although necessary, must not compromise quality and safety standards. He asked what was being done to ensure this.

He noted that the expected outcome of municipal infrastructure expenditure was 90%, which contradicted the Auditor General's findings of a two-percent spend on infrastructure and maintenance in most municipalities. This indicated a large gap between what the CIDB wanted and what was happening.

He asked what was being to done close this gap. Mr Thring said that the bar graph on slide eight was difficult to read because no indicators showed what one was reading. Slide 15 reflected that
government’s failure to roll out large-scale infrastructure negatively impacted the CIDB. He asked what was being done in other government departments to ensure that there was no failure. He added that this was important for employment creation.

Mr Thring commented that the percentage expenditure of 65% for the 2020/2021 year, compared to the 82% for the 2018/2019 year, was unacceptable in light of the highest unemployment levels that have been seen in decades. Low expenditure of 65% was intolerable and had to be turned around.

Slides 23 and 48 spoke to 38% average compliance, which could not be the norm; a turnaround was needed. He asked what the actual findings by the Auditor-General were on what needed to be addressed so that improvements could be made.

On the CBE, he said that the central focus area of the CBE, in his opinion, should be Priority Two, which was producing the skilled Built Environment professionals. He stated that he believed that black children were not intellectually inferior and that, given equal opportunities, the transformation sought would occur naturally. He said it must be ensured that transformation did not result in stagnation and deterioration.

He added that the professionals coordinated by the CBE were crucial for the country's economic development. What is the percentage of the per capita requirement of professionals as a minimum requirement for successful development?

Ms L Shabalala (ANC) asked what was happening, considering the changes within boards, and if there was a new CFO, as she did not hear if the CFO was a part of the presentation. She asked the Minister if it would not be best to start with a new board at the start of the new term.

Ms Shabalala wanted clarity on the arrangements for the signing of the contracts and the selection of the board, as they seemed to be a disjuncture that was perhaps not the Minister’s doing. There were contradictions in requirements for registrations, as people were being mentored by people not registered with their municipality. She stated that people working in the Department and its entities were not qualified, and monitoring of this is needed beyond registration.

She pointed out that the renewal of registration was an issue for some contractors due to favouritism within the departments. She was unsure how the CIDB could monitor company rotations and monopolies to avoid the disparity between certain companies getting jobs and others not getting any jobs. Ms Shabalala asked what the CIDB had to say about companies with monopolies on jobs.

She commented that the CBE had a presentation slide that spoke about the assistance of 1 000 graduates. She asked what the ratio was compared to all graduates in the country and the spread of the 1 000 graduates across the country. She added that the flagship could be done via the provinces and the target of the districts hit hard by the floods, which could give the graduates field experience.

Ms A Siwisa (EFF) asked how much advocacy had been done by the CIDB to lure contractors into registering. She recounted the CIDB had given a presentation last year on how they were embarking on a programme to bring more contractors on board to register. However, the entity still had an issue with contractors renewing registration due to the lack of work despite construction projects needing to happen.

Ms Siwisa asked which provinces were affected by the non-renewal of contractors, especially with the recent floods in KwaZulu-Natal (KZN) and the Eastern Cape’s dire need. Also, what intervention is the Minister putting in place, considering departments were unwilling to state what constructions for different buildings they need?

She commented that the CBE’s presentation was not detailed. The CBE had two councils that did not have presidents, affecting the CBE’s work, programmes, and ability to be functional and effective.

She asked how the CBE planned to function and achieve programmes one and two if their councils that were meant to speak on the empowerment of women, youth and people living with disabilities were incomplete and without leadership. She noted that the summary indicated that organisational design would be at 100% by 2023 and asked what would happen next month. The CBE and CIDB worked hand in hand; where one is not functional, a problem arises.

She said that the CBE was dysfunctional. The changing and late arrival of presentation slides undermined the Committee, and the Minister needed to take responsibility instead of shifting blame.

Ms M Hicklin (DA) agreed with Ms Siwisa. She then started with questions pointed to the CBE. She said that the fee guidelines in 2021 showed that the gazetted fees for architects were 15% lower than they were in 2015; she did not understand how this was possible, as the consumer price index (CPI)  increases by 6% per annum and yet professional architect fees had decreased by 15%. She asked how this was possible when the CBE wanted fit-for-purpose professionals. 

On transformation, she noted that the approved budget was R369 million; the audited outcome was R11 000, a spend of 2.98%. The second had an approved budget of R246 million with an audited outcome of R3 000, which was a spend of 1.21%. Ms Hicklin asked how their targets could be reached if only 2.98% and 1.21% of an allocated budget were spent.

She said that the gender transformation desks claimed to have asked the CBE for money but had been told that no money was available. She refuted this claim. She explained that the CBE spent 99.2% of their allocated budget and mostly met its KPIs regarding the administration programme. She commented that the CBE asked for an increase in the coming budget despite not having full staff capacity. The IT structures in the 2020/2021 financial year had an approved budget of R919 million that was not spent. Ms Hicklin asked why the CBE wanted an increase in the 2022/2023 financial year.

She said that the communications and marketing budget was R319 million, and the audited outcome spend was R192 million but no indication was given on what and how the money was used. The increase the CBE wanted in 2022/2023 was not accompanied by a detailed plan on how and what the money would be used for.

She also noted the finance and crucial leadership for the CBE’s financial allocation was 55% of the CBE’s approved budget. R57.298 million was spent on the compensation of employees despite the large vacancy rate within the CBE, but they still asked for R35.458 million in the 2022/2023 financial year. Ms Hicklin asked what the reason for this increase was.

Looking at the second CBE programme, she noted that the CBE had an underspend of 97,56%, which was a monumental failure. The CBE spent 2.43% of its approved budget and still asked for an increase in the 2022/2023 financial year despite this.

She pointed out that the CBE had not met its transformation KPIs for women-owned professional practices, the empowerment of youth and people with disabilities or sector collaborations to transform the built environment.

The programmes to support women-owned professional practices had an approved budget of R150 million, with an audited outcome of R0 spend. The programmes to empower the disabled had an approved budget of R100 million, with an audited outcome spend of R0. The Programmes to empower youth had an approved budget of R150 million, with an audited outcome of R0 spend. Programmes for sector collaborations to transform the built environment had an allocated budget of R1.616 million, with an audited outcome of R49 000. She stated that none of the above programmes met their targets and that targets in the APP were a pipe dream.

The third CBE programme had an approved budget of R2.708 million, but the audited outcome was 43.09% of the budget. The CBE was, however, still asking for an increase. She said that there was no single instance where the District Development Model had been a success because of flawed monitoring and evaluation.

The fourth CBE programme had an audited outcome spend of 2.2% of the approved budget and the CBE asked for an increase. She said the CBE was not meeting its transformation targets; this should be a priority, as the transformation was their key mandate.

Ms S Graham (DA) asked why the CBE had spent money on branding itself, as its function was coordinating the councils for the built environment. She expressed concern that the CBE was overstepping its mandate and attempting to garner some of the money and outcomes that the councils should be doing. She said this could be the reason for the councils’ failure.

Ms Graham noted that there were major problems within the councils, and less attention should be given to promoting the CBE as an entity. She commended the CIDB as an organisation,  board and management on its resilience and flexibility in addressing issues under budgetary constraints over the last year. She asked if the setting of numerical targets affected the quality and reliance of enterprises, as the emphasis was placed on numerical outcomes instead of quality outcomes.

She suggested support be given to assist enterprises to become more resilient in dealing with the demands resulting from COVID and the downswing in infrastructure builds. This could result in successful enterprises that were equipped to employ and mentor people, growing the industry.

Ms Graham warned against focusing on numerical targets as opposed to quality. On slide eight, the decline in the number of contractors, she said that rural areas had limited projects. Those based there battled to maintain registration and grading because no income was generated. She suggested that contractors in rural areas be looked at differently from those in urban areas due to the constraints they face.

She said that much of the municipal budget was spent on repairs and maintenance, and grants were given to municipalities for big new infrastructure builds. Treasury or government must be lobbied to ensure more money is made available for maintenance, repairs and refurbishment projects because not enough money was being spent on this.

Ms Graham said that the municipalities did not always have the capacity for new infrastructure builds but there was a lot of stuff that needed to be done in terms of repairs and maintenance of infrastructure. A way must be found to provide funding to municipalities to do this locally so that they are in the position to employ local contractors to assist.

A major problem around client departments, especially in the Eastern Cape and its Education Department, was multi-year project budgeting that was only done for the first year and not the successive years. The stopping of payment hinders the projects.

Ms S Van Schalkwyk (ANC) said that most of her points were sufficiently covered. She raised an issue with the CBE’s continuous reporting on the candidature programme that has been in place for four years. She pointed out that the number of professional candidates per profession and details on race, gender, age, and spread were all unknown to the Committee. This information was important and could be used to spread capacity across districts and local municipalities.

Ms Van Schalkwyk was concerned with the slow pace of transformation in the CBE and shared the Minister’s sentiment. She said the issues were not being effectively monitored or reported quarterly so that progress could be traced. She suggested implementing measures to address this and that a progress report be given to the Committee.

On the CIDB, she expressed concern about the entity’s capacity. She wanted a report from the entity on its capacity because of the several operational risks that could affect programme performance, such as the failure to pay financial obligations on time, the financial system failure, loss of projected revenue, and the reliance on a few key personal amongst others. She asked how the CIDB planned to rectify this.

Ms Van Schalkwyk said that, in previous financial years, most of the programmes had underspent, and the CIDB had indicated its intentions and plans to improve this. The Committee had hoped this would reap positive rewards. She wanted effective continuous monitoring of this and, if possible, the plans to be revised if they did not reap positive rewards. She also requested a quarterly report on the progress of the CIDB on this.

The Chairperson spoke on the issue of transformation in the CBE and the executive councils being transformed, but the councils' members are still predominantly white men. She said that this was a problem that had been first raised in 2019, and it was still a problem in 2022. The CBE seemed not to have the appetite for addressing transformation.

Concerning the CIDB, she noted the indication from the CEO that external researchers were relied on to research, but she insisted an internal research system was needed in the CIDB.

The Chairperson said that it could not be that, after 28 years of freedom, there was no transformation in the construction industry. The executive of councils, especially those in the CBE, raised that the slow transformation pace was due to the CIDB Act. The Committee has suggested that the Act be amended to drive transformation, but this was yet to happen.

She added that emerging contractors from townships and rural areas frequently complained about not getting jobs, and the CIBD had said it would train these emerging contractors. The Chairperson asked for a process update on capacitating emerging contractors to get to the next level. She also pointed out the challenge of high-grade contractors competing with lower-grade contractors for lower grade jobs, decreasing the chances of the lower-grade contractors getting these jobs.

She said that the CIDB and the executive needed to work hard to ensure the CIDB Act was changed to drive transformation. The mandate and vision were about transformation but this was not happening.

Responses from the CIDB

Minister De Lille said that the amendment of the CIDB Act would be addressed. Concerning the issues raised by the Chairperson about contractors being unable to find work, the falling away of grading and the grading timeframe are some amendments in the Amendment act that would be sent to Parliament. She looked forward to Parliament making further improvements to it.

She said the fee structures of the entities, charges for registration and what the money was used for were being evaluated. There was also an evaluation of whether the registration fees were a barrier to entry, as the registration fees increased with the grades. The Presidential State Owned Entity Council reviewed all entities to possibly merge some of them. The Minister stated that six of the entities in the DPWI were established by an Act of Parliament, and this review could streamline entities with duplicated mandates. Through the Deputy Minister’s office, Entities were asked for submissions and advice on some of the duplications within entities. 

Om the matter of maintenance, especially in municipalities, she said that there was a National Treasury directive that at least eight percent of the total grant had to be spent on maintenance for all grants given to municipalities. This seemed low but was a starting point. The Minister said she preferred 60% on new infrastructure and 40% on maintenance split because of the maintenance backlog.

She said that an Act of Parliament determined the term of boards. On the question of the appointment of presidents, she indicated that the South African Council for the Landscape Architectural Profession (SACLAP) had elected a president in the past month. The Engineering Council of South Africa (ECSA) president had passed away, and the Council needed to elect a new president. The Minister did not appoint the president in that case, but they looked up vacancies within the boards and ensured they were filled.

In terms of transformation not comprising excellence and safety standards in the Built Environment, she said that there were checks and balances in place – standards, the code of conduct and ethics for all professionals in the Built Environment – to ensure the transformation effort would not lead to this.

The entity's statement that the failure of government to roll out big infrastructure projects impacted the construction industry needed to be linked to the councils – the CIDB only being able to register 48% of the infrastructure projects within the government. This meant that they were not aware of 52% of the projects. To improve this, proactiveness was needed in terms of registration by the CIDB. There had to be monitoring of National Treasury’s e-Tender portal and follow up with departments putting up tenders to ensure that projects are registered. The Minister would be assisting the CIDB with this exercise; this was a priority that would be discussed with the Deputy Minister. A quarterly report would be given to the Committee to ensure progress.

Mr Dladla addressed Mr Thring's concerns. He said that there was a challenge around maintenance. The CIDB could join groups in lobbying Treasury in terms of appropriations as the appropriation of funds is dealt with on a National Treasury level.

In slide eight, he explained that the bar graph’s horizontal axis dealt with the percentage of upgrades, which was elaborated on in the table above. The CIBD would ensure that future bar graphs were clear. On the client departments' failure to implement construction projects, the CIBD would appreciate the continued support of the Minister, the compliance strategy, the Infrastructure SA aspect and the CIDB’s capacitation on infrastructure management systems to ensure clients were able to move forward with their projects.

On concerns around the infrastructure budget, he said it was a shared concern, hence the interventions that have been put in place to improve this aspect.

The Minister addressed the issue of compliance, and the CIDB would follow her directive.

On the Auditor-General’s comments that led to the opinion given, there was the issue of performance information. The others related to tenders and a difference in opinion on quotations and who could have signed these off. There would be an inquiry engagement with the Auditor-General to resolve these issues. The CIDB felt that the size of the tender could have been approved at a certain level, but the Auditor-General did not, in light of the CIDB’s delegation of authority.

The Minister covered matters relating to the board. He said that, concerning the CFO, she was part of the team and was present in the meeting to answer questions that were within her purview. Concerning contractor access to work and company monopolies on work, he said that most entities have control over the quotations aspect, and the Auditor-General checked for rotations in this. However, for larger projects that the public tenders before the constitutional ruling, it was based on the functionality gate whether contractors were capable, and the preferential points – which would be the 80-20 for projects above R50 million. This was open to everyone. NDMC challenges would be found with contractors’ under-pricing, pricing at the bare minimum or having the financial muscle to negotiate with suppliers and ensure lower pricing. It was important to ask how the CIDB could provide support to smaller contractors to ensure that they had the same competitive advantage. Mr Dladla said this was an area that needed work.

He said that, for larger projects, with the current procurement rules, 20 points were based on one’s Broad-Based Black Economic Empowerment (BBBEE) rating and the 80 points were based on pricing. The BUILD programme was important because it covers gaps such as development finance initiatives and other quality management systems that could make one efficient as a contractor.

He responded to a question on the R8 billion contracts that could be directed. This was also the potential of the BUILD programme, where, if fully implemented, there would be at least 1 000 contractors getting support through direct engagement with contracts up to R 8 billion. These contracts were designed to provide developmental support, not just economic participation. The contract was designed to provide not just labour but also participation that assists contractors with developing specific skills to provide them with a competitive advantage for the next project.

He addressed the question of what the CIDB was doing to lure contractors into renewing their registrations. He said that the CIDB called all the contractors, including high-grade contractors, to ask about their registration renewal and what challenges were they facing in this regard. They found that contractors had simply forgotten to renew their registration, were waiting for projects that they could do or had been suspended. The suspension was due to not meeting conditions such as updating your information annually, which was essential to having a registered with integrity. Mr Dladla said that campaigns were being run on social media to ensure people were aware of the work of the CIDB. The most important aspect that encouraged the renewal of registration was economic opportunity. There was always a huge influx of registrations when economic opportunities were available.

On transformation and excellence and safety standards, he said that the CIDB was not just chasing numbers but also ensuring that the registry had integrity because clients not trusting the competency of the contractors resulted in the hindrance of the transformation project.

The amendments made to the CIDB were to provide additional support, which was the basis of the BUILD programme that the Minister gazetted in 2020. This was to provide enterprise development support to ensure the entities can do the work and do not fall into the excessive use of financial indicators as a proxy for contractor capability.

Numerical targets have been put in place, but this is not done at the expense of quality. The main thing done by the CIDB was to partner with clients with very good enterprise development support and assist them in drawing policies that would enable development. This had been done with Eskom and SANRAL. There was a lot of emphasis on balancing the direct CIDB interventions. When the numbers were looked at, it was a small percentage. The CDB also needed to learn from this direct involvement and when policies were written regarding skill standards for construction projects and indirect targeting so that other clients could use this as a basis for their enterprise development approach.

He said more was gained from working with others than alone. The suggestion on how to deal with procurement rules and the registration, as they pertain to rural areas, would be taken back to the board of the CIDB to see if this was feasible and ensure that these contractors were not unfairly disadvantaged.

He said that the budget issues around maintenance, refurbishments and repairs were addressed. The CIDB would lend its voice in making Treasury understand how replacing was much more expensive than repairing.

He said this was an issue the infrastructure delivery management system sought to cover about the multi-year budget and the client bodies only budgeting for a year. The infrastructure delivery management system required a holistic look at projects over their lifespan and a focus on project management principles that were quality and had timely delivery; it also had a strong financial aspect that allowed for project pricing.

The concern with the capacity of the CIDB to meet its core mandate was a concern that the CIDB had too. The CIDB was working on repurposing and developing workers who would be replaced by introducing technology. Core operations had been capacitated, but more work and alternative revenue streams were needed in this area. This was important because it posed a risk to the CIDB.

He addressed the issue of the building of internal research capacity, saying that a research unit had been established with a director and four or five other professionals. However, due to budget constraints, only the director could be hired. The CIDB relied on the University of Johannesburg, Walter Sisulu University and the University of Zululand to undertake their research in the interim. In the previous financial year, almost 100% of the remuneration was spent from the budget.

The CIDB, in the last financial year, had directly capacitated 283 contractors and aimed to increase these numbers whilst ensuring quality standards were met. The BUILD programme would assist in this respect. As indicated by the Minister, the participation of higher-grade contractors in lower-grade projects had been raised in the National Stakeholder Forum and formed part of the regulation amendments.

Mr Nzo, Chairperson of the CIDB, added that he understood the frustration with the amendment of the Act. The board had taken the approach of revisiting regulations under the current Act to see what could be changed to promote transformation. The medium- to long-term approach would be the amendment of the Act, which was sitting with the DPWI. Some issues raised had been discussed in CIBD committees – for instance, the downgrading of contractors and contractors that did not have to the CIDB. The CIDB would look into these issues and act on amendment proposals that could be made to the Ministry. This was their short-term approach.

Responses from the CBE

Mr Myeza said that the questions and comments include advice on how the CBE could refocus on their mandated areas. He reflected that the entity only had been six months since his and the COO’s appointment. Issues of transformation, focus on the mandate, how best to deal with the skills pipeline and the support given to women, youth and people with disabilities were also raised by the Committee.

There were engagements with the industry. There was concern with the focus on candidacy registration and the professionalising of the industry, but people were unemployed. He said an argument could be made that the unemployment was due to COVID-19.

He said that the CBE would ensure that the transformation would not affect safety standards. He addressed the concern with detailed information on registered professional candidates and said the Minister's quarterly report would be provided on this committed by the Minister. There were about 36 000 candidates across councils, the bulk coming from ECSA. This was according to their database at the end of the last financial year. Compared with the number of registered professionals in the Built Environment, there were about 56 000 in the country – the bulk being with ECSA.

Mr Myeza noted that the numbers were interesting, as the status quo of the demographics in 20 years had not changed, and white men still dominated the sector. Attention should be paid to the numbers to ensure equity amongst professionals.

The primary reason for the CBE was to transform the sector. The CBE and the new management decided to embark on a 20-year review. The study would be shared with the Committee. The purpose of the study was to thoroughly research why the sector had not transformed and what role the CBE played in pursuit of transformation.

He said that the CBE accepted criticism on the slow pace of interventions but emphasised the re-platforming of the CBE would not happen overnight. On the mentorship of candidates, he said that there were candidates that did not have mentors. To augment this, the CBE, along with the councils, initiated a mentorship programme and hoped this programme would be structured and sustainable. The previous mentees would return to mentor others as adopted in the accounting industry.

Mr Myeza, on administration and governance, said that challenges in councils affected the CBE, which was something they were aware of. However, the responsibility of senior management in terms of administration was to ensure their work was still completed.

He accepted comments made by Ms Hicklin and clarified that there was an error of omission by the CBE, as they had not demonstrated the shift from the previous APP. The delegation also did not indicate its intention to re-platform the CBE concerning the current APP. The actual document submitted captured this narrative.

The CBE's intervention to address the large allocation of the budget for employees was to ensure that productivity was maximised to justify the allocation.

 Concerning some programmes, an issue was how the work done by the CBE would be communicated. This communication could only be done if councils were functional, and this was why the CBE worked closely with councils.

He said the CBE and its councils would like to demonstrate the assertion made on the collaborative work done to address issues to the Committee. The issues raised by Ms Hicklin would be best addressed in a report back to the Committee.

The functionality of councils was being addressed, as senior management had reignited energy within their forums to isolate strategic issues of importance. 

Issues were being addressed collectively, including concerns raised by the Competition Commission. Progress was being made in addressing issues with quantity surveyors, ECSA and SACLAP. However, property valuers' issues had not yet been addressed.

He thanked the Committee and said that the issues would be addressed.

Ms Lindy Jansen van Vuuren, CFO, said the transformation spend in 2021, being R0 on three projects, was due to the introduction of new projects that did not form part of the 2021 but the next financial year. The budget would then be carried to the 2022/2023 financial year. 

Sector collaborations had a slow start due to the delay with forum meetings, but they were now underway. Ms Jansen van Vuuren said the employee cost was 60.79% of the total budget for 2023. Comparisons were made with the employee costs of other entities, which were comparable to the CBE. The CBE was an entity intensive on employee professional services.

There was a new re-skilling project that was not planned for 2021. The budget was then carried to the 2022/2023 financial year; this was the reason for the increase in budget.

Concerning research, the BBBEE and online reports were done internally, and due to COVID-19, there were savings on workshops, conferences and travelling.

An online Transformation in Indaba and the hiring of interns to research resulted in savings in spending.

The identified IT project for 2021 was delayed due to disagreements on the IT strategic plan; this resulted in no capital project spent in the IT budget. The funds were rolled over, and the project was awarded in 2022.

Mr Myeza added that the candidacy programme was a pilot implemented over four years by CBE. The CBE needed to address the feedback, issues, and strategies for implementing the pilot; this halted the programme. The programme was now being rolled out with full steam.

He apologised to the Committee for the late addition and submission of the presentation slides.

Further discussion

Ms Shabalala asked a follow-up question concerning the 1 000 contractors and their ratio compared to contractors in the country and their spread across provinces. She asked if the R8 billion would be spent on this.

On the issue of economic transformation, she suggested an engagement with SANRAL, Eskom and Water & Sanitation, where the Committee could push economic transformation relating to young graduates and the accommodation of new contractors.

She commented that SANRAL was doing a good job in KZN and asked for the CIDB’s take on getting their emerging contractors and graduates involved in the South African Defence Force (SANDF) bridges being built.

She pointed out a bridge that was meant to be built by the DPWI and SANDF but had not materialised but noted that this was for future discussion.

Ms Hicklin said that if transformation and upliftment of Built Environment professionals in SACLAP meant the categorising drafts people as professional architects, she rejected it. This must be graded against.

Ms Van Schalkwyk, on the question of the professional candidate database, commented that the database was not sufficiently organised to assist with infrastructure development in underdeveloped municipalities through the district development model. The database was not sufficiently organised to address unemployment, inequality and poverty.

Ms Graham commended the intervention made in business advisory services for contractors, adding that this would empower smaller businesses. The credit fund for smaller contractors and businesses was a good idea but consideration must be given to the buying power of smaller contractors, as this could be a disadvantage.

Improvements to artisan skills were needed, and the CIDB needed to be involved in this. Proper training in this respect was also needed, not what was currently taking place.

She shared her concern with the cost of compliance and said they should be careful not to overburden private individuals to fund government entities. This issue was probably raised in the National Stakeholder Forum. She asked if the National Stake Holder Plan would be available to the Committee.

She was concerned with the CBE, CIBD and potentially other entities wanting to ring-fence money off-contract, as this could overburden those trying to create employment.

Responses from CIDB

Mr Dladla said that the total registered number of contractors was 100 000, with the majority being grade one contractors. The BUILD programme was between grades seven and nine because, even though higher-grade contractors benefitted from the indirect targeting, lower grade contractors would be introduced to work done at higher grades. This made a huge difference with transformation initiatives, as the development of even 1 000 contractors within the grade seven to nine bracket, who did not have access to larger projects, made a huge impact. One thousand (1 000) would be spread across the country. This would be made a condition to tenders that, in addition to the work, lower grade contractors had to be included in economic participation, skills transfer and enterprise development. The 1000 contractors and the R8 billion would be distributed to where projects were. This was a sustainable approach to ensuring transformation in higher grades.

The CIDB could provide information on the top twenty infrastructure spending clients in the larger infrastructure project. Interventions at this level make a huge difference in the development and transformation of the industry.

Mr Dladla said this was a much-needed intervention in the business advisory services because contractors need assistance with many business aspects. The entity endeavoured to expand this service online and partner with client departments. The credit fund was important in assisting smaller contractors with pricing, and the issue of buying power would be addressed; this would also extend to clients.

The Acting CEO said that the resolution of the limitations of downgrading would also assist with fair competition. Provincial offices need to be more accessible, and partnerships should be the focus. There was only one office per province, causing access was an issue, but the movement of some services online has been proposed. The Minister gave strict instructions on the cost of compliance, and it should be reduced not to burden the economic recovery and reconstruction initiatives of the government.

With the BUILD programme, he added that clients were expected to fund the 0.02% bill fee, as they benefitted most from a developed industry. He said that the Minister had instructed that the core structures of the CIDB needed to be looked at to determine what drives fees, and sustainable proposals needed to be made.

The National Stakeholder Forum plan could be made available to the Committee. They do share oversight on progress being made. It was a very important forum.

Mr Dladla said the information could be found on the SANDF bridge that did not materialise and that any large project could be an opportunity for the development of candidates. However, he would have to determine if the SANDF bridge in KZN met the requirements.

Responses from CBE

Ms Msizi agreed with Ms Hicklin's sentiments and indicated inconsistencies in categorising those with different qualifications within professional councils. This was a matter that professionals needed to contest, as it could not be correct.

This concern would be addressed with SACLAP, although it seemed like an issue in other councils.

In terms of the database, he said the Minister raised the same issue as part of her economic recovery plan. The information has now been categorised in accordance and is available. This was why engagements with provincial governments had started. He said they possibly missed the planning cycle on how best they could influence strategic planning. This information would be available to provinces, districts, and municipalities to have access to professionals to hire.

The Chairperson thanked the CBE and the CIDB. She expressed her condolences to the former Sectary General of the EFF, Mr Godrich Gardee, for the loss of his daughter.

The meeting was adjourned.


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