CIDB, CBE, Agrement SA & IDT 2024/25 Annual Performance Plans; with Deputy Minister

Meeting report

The Chairperson welcomed all Members of the Committee and guests to the meeting. She drew attention to Human Rights Day which would be celebrated tomorrow, and reiterated the ANC’s relentless journey towards attaining freedom. She said that despite the meeting being scheduled to end at 12pm, the Committee would adjourn at 2pm to get through all the necessary meeting content.

Annual Performance Plans 2024/25

Agrément South Africa

The entity took the Committee through its presentation.

External environment analysis

• The global pandemic for the last two years has affected the South African economy, adversely affecting the construction industry

• The impact was devastating, resulting in several construction companies closing their operations.

• The increase in the cost of living will continue to impact the affordability of certification; therefore, this will cause a decrease in several project applications and revenue generation.

• Power interruptions continue to negatively impact the manufacturing industry, thus leading to low production of innovative technologies.

•The low economic growth has resulted in businesses closing down and losing employment in the country.

• The current fiscal constraints experienced by the country have resulted in low tax collections, resulting in National Treasury imposing budget cuts and cost-containment measures.

• The current Agrément South Africa Act. No 11 of 2015 and other government policies do not promote the regulation of using ASA-certified products. The voluntary certifications confront ASA with the following challenges:

o Agrément certificate holders compete for government projects with non-certified innovative technologies owners;

o Difficulty in promoting the use of certified innovative technologies;

o Difficulty in regulating the use of innovative technologies country-wide; and

o Difficulty registering innovative technologies as many products are not certified.

•The effects of climate change or the demands for carbon-neutral building technologies will increase the number of innovative technologies, requiring ASA to monitor new innovative technologies closely. • The global drive regarding environmental aspects presents an opportunity for projects like ecoASA. ASA will need to seek more climate-friendly proactively.

• To address the issues highlighted by the PESTEL tool, the following initiatives will be implemented:

• Memorandum of Understanding (MOU) signed with specifiers to promote and increase the demand for innovative technologies.

• Engaging with affected certificate holders to come up with relevant solutions. Keeping abreast of construction interruptions that affect the industry and thereby affect certificate holders.

• Review certificate holder’s database to rank certificate holders regarding micro-enterprises, etc.

• Review research and development processes to respond to technological advances.

• Continue to review the Act to limit the use of innovative uncertified systems and products and protect the public from unsafe products and systems. To engage the policymakers to expedite the review of the Act.

• ASA will continue implementing eco-labelling to address the impact of climate change, ensuring the products and materials are environmentally friendly. This initiative will facilitate the introduction of a Green Economy.

• ASA will continue to analyse industry trends regarding the usage of ASA-certified products and systems, as opposed to conventional materials and methods.

 

SA strategies over the next five years

•In the next Medium-Term Strategic Framework period, ASA will continue to focus on the following areas

• Issuing, amending, suspending, reinstating, withdrawing or renewing Agrément Certificates;

• Awareness programmes for non-standardised construction-related products or systems certified by ASA;

• Encouraging innovation in the technical, socioeconomic and regulatory aspects of a non-standardised construction

• Monitoring and evaluating the quality management systems of a certified construction-related product or system; and

• Support and promote introducing and using certified nonrelated product or system certified by ASA; standardised construction-related products or systems in the local or international market

•ece labelling

•green rating tool for public buildings

 

Agrément South Africa continues to provide innovative product certifications for SMMEs and contributes immensely towards economic growth and job creation in South Africa. Through Eco-labelling and Green Building rating tools, Agrement South Africa fosters compliance with the green economy. Contributes towards fast-tracking economic development by allowing the safe introduction of appropriate and suitable products. Facilitates partnerships with other public entities and helps reduce backlogs in different areas through innovative building technology systems (IBTs), i.e. Housing Backlogs. Facilitates the global acceptance of South African-produced products. Provides independent and authoritative technical assurance of fitness for purpose.

(Please see attached presentation for details)

Discussion

Mr W Thring (ACDP) commented that many Members felt that as an entity within the Department of Public Works and Infrastructure (DPWI), Agrément was not being utilised to its fullest potential. Many innovations have been mentioned that should be implemented within the construction industry. He therefore asked how many certified non-standardised products they had approved for use within the construction sector. Secondly, looking at the competition between certified and non-certified holders competing for government tenders, he questioned to what extent they ensured that only certified holders were being utilised. Lastly, referring to the weaknesses presented in the analysis, he questioned whether they felt as if they had the ability to overcome these weaknesses. He was hopeful that these weaknesses could be transformed into opportunities in the future. Lastly, regarding the eco-labelling and green building rating tools, he asked how many buildings these had been applied to, and whether they had been applied to the Telkom buildings that were purchased.

Ms S van Schalkwyk (ANC) said she agreed with most of the sentiments Mr Thring shared regarding Agrément not being utilised to its fullest capacity. She commented that regarding the responses to their strengths-weaknesses-opportunities-threats (SWOT) analysis, time constraints had been given, and asked when the Committee would see these innovations being rolled out. Regarding the ten percent vacancy rate, she said that this was an issue for her, taking into consideration the economic challenges and unemployment rates plaguing the country. Agrément needed to have proper action plans in place to best assist with ensuring these targets were being met.

She noted that numerous departments were falling short in achieving the Workplace Skills Plan targets, but the Committee welcomed this initiative as it was highly beneficial for the transferring of skills. This would also allow current employees to receive relevant training to their posts, where they could also be recognised for advancing their skills. She asked that during their next appearance in front of the Committee, Agrément report on what kind of training was being provided and how it had benefited employees. Lastly, she welcomed the special attention that had been granted to designated groups, and reiterated the need for serious efforts to be implemented across the Board.

Ms L Mjobo (ANC) referred to the ten percent vacancies, and asked what target they hoped to achieve. On the matter of the seven weak points presented to the Committee, she sought clarity on what the causes of these weak points were.

Mr T Mashele (ANC) noted that Agrément was one of the entities that had been doing well consistently, although there were aspects that were in need of improvement. Firstly, he questioned what the entity was doing to encourage innovation, specifically exposing this to the youth throughout schools. Significantly, he sought clarity on the efforts taken to ensure that youths within the rural communities were being exposed to Agrément and innovation. He voiced his belief that without this transformation, the country would fail long term as new ideas and innovation were of great importance for the advancement of society.

The Chairperson said the Committee was appreciative of the way in which Agrément conducts its work, but the entity had not been heard of prior to its first appearance in front of the Portfolio Committee. She therefore suggested that they focus on improving their marketing by visiting universities or high schools within the country. This would assist with the need to include young people in creating new innovations.

Agrément's response

Prof Jeffrey Mahachi, Acting Chairperson, Agrément South Africa, began by addressing the comments made by the Chairperson. He expressed his appreciation for the Committee and the ways in which they had motivated and pushed them to do better over the years, especially concerning driving innovation and ensuring that they were more visible to the public. As such, he explained that Agrément had passed the idea on to management that they need to stretch their targets, despite their limited resources. He said they had partnered with many institutions where they conducted lectures, presentations and workshops with students as a means to drive innovation. He agreed with Mr Mashele that they needed to get into the high school space, as they have not put much effort into this as of yet, but they were currently taking up that challenge.

Responding to the question on certified products, he explained that they would share this information with Members once this meeting had adjourned. Agrément certified all sorts of products within the construction industry. These could be roads, road products, bridge deck products, water retaining systems, and anything that was innovative within the construction space. However, as they did not have this information on hand, he assured Members that they would email this to the Committee secretary and ensure that this was included within the slides in future presentations.

He explained that nothing went out without it being certified by Agrément. They had done well within the human settlements space due to the National Home Builders Registration Council (NHBRC), which assists the entity with implementing building regulations. In the space of human settlements, there was no tender that was approved and made public that did not include that the product must be Agrément certified. However, within the social infrastructure sphere, he explained that they had embarked on a new project where they were hoping to revisit the acts and regulations to assess the specificities needed to ensure the empowerment of Agrément to stop specific projects where innovative products were being utilised that had not been certified.

On overcoming the weaknesses presented, he said he would need to request that management provide them with a proper project plan on how they could deal with this. However, looking at the digitalisation issues, they had already begun embarking on this matter within the organisation.

They had not yet started on the eco-labelling and rating tools, but they had developed the specifications needed and were hoping to introduce the eco-labelling into action by the end of the 2024 financial year.

Responding to the comment on vacancy rates, he said that as of that week, they had been able to reduce that percentage, and needed to fill only three positions within the organisation.

Mr Richard Somanje, Chief Executive Officer (CEO), responded to the question relating to the competition for certified versus uncertified products and said that when they do their market usage analysis report, it assists them in understanding the impact certified products have. Councillors, financial institutions, innovators and beneficiaries were consulted where these products have been utilised. It had been highlighted as a weakness, as the organisation saw room for improvement. They were hoping to design a register which lists which innovative product was used and who built or supplied it. Further, the review of the Act would assist Agrément in ensuring that all innovative products and systems that were constructed were registered and certified. However, the innovators had said that they felt as if this was unfair when they participated in municipal projects, as they were not directly stating that the products had to be certified.

On 3 November, Agrément hosted a workshop with municipalities to ensure that they were aware that the organisation was in existence. The workshop was to educate municipalities on the work that Agrément does and how they would be able to engage with the organisation. He noted that they had made arrangements to engage with the Municipal Infrastructure Support Agent (MISA), which supports municipal infrastructure. This would assist in ensuring that municipalities were specifying that products needed to be certified when tendering.

On the matter of Telkom Towers, he said that it was a new project that they were going to be implementing, and they would be engaging with the Department to ensure that the current buildings were environment friendly.

He acknowledged the comment on the training, and said that the training would be direct and specific to ensure that employees were moving forwards. He reassured Members that during their next appearance before the Committee, they would including the progress of this in their report.

Regarding the designated groupings, they would continue to engage on the matter, and their reporting would go as far as identifying how much was spent on women and youth within their procurement. With the other initiative the Department would be undertaking, he noted that they would be engaging with the Council for Higher Education (CHE) to strategise how best to utilise their visits to high schools to discuss innovation.

Ms Lebogang Dire, Chief Financial Officer (CFO), Agrément, started with the question on the compensation of employees, and said that they currently had 86 employees. She clarified that the amount stipulated was the payment that would be made to staff throughout the entire work period. On a compensation to total expenditure basis, the organisation's budget sat at over 67% of the total expenditure budget for the year.

Independent Development Trust Annual Performance Plan 2024/25

The Independent Development Trust (IDT) stated that it is a built environment project management agency that manages and delivers integrated public infrastructure programmes. The following realities informed its strategic intent:

• The state continued to experience an alarmingly huge capacity deficit to meet the demand for public infrastructure delivery. Disjointed implementation mechanisms, non-compliance with established delivery systems, and implementation inefficiencies undermined demands for fiscal prudence in the delivery of public infrastructure;
• Project cost overruns (delivery inefficiencies), overspending (inflated cost of delivery), and lack of integration and alignment of public infrastructure delivery, led to significant losses;
• The IDT remained a valuable asset of the state for public infrastructure and related service delivery. Its competency, experience and institutional memory were intangible assets the state needed to continually maximise to effectively deliver public infrastructure.

Operational context

The entity’s past challenges had adversely impacted its revenue generation and ability to fund its operating costs, threatening its going concern status. However, interventions to address these challenges were yielding positive results. Client engagement efforts were bearing positive results, with confirmed programme portfolio allocations and memorandums of agreement (MOAs) with new clients. As a result of these efforts, client confidence had risen, and the portfolio had increased to levels last witnessed in the 2015/16 financial year (FY), while programme expenditure had also risen to levels last seen in the 2018/19 FY.

Efforts towards entity transformation (future form and status) were underway. Its obsolete enabling information communication technology (ICT) was being addressed, and it was continuing to expedite the acquisition of human resource capacity

(Please see attached presentation for further details)

Discussion

Mr Thring commented that the IDT had always had a positive history with the Committee. At the start of the 6th administration, the Committee had unanimously fought to retain the IDT’s position as an implementing agent specifically for infrastructure development within public works. However, during this struggle to ensure that they remained afloat, they had unfortunately lost key members of the organisation and engineers. He asked what the turnaround time was to replace these key members to fulfil their mandate. He also noted that in order for the IDT to fulfil their mandate, they needed to employ qualified individuals who were able to perform the necessary functions. As such, he sought clarity as to what the process was to ensure that these key and critical positions had been filled. Secondly, he asked what the relationship between Infrastructure South Africa (ISA) and the IDT was like, and how it was panning out in the effort to avoid duplication.

Mr I Seitlholo (DA) sought clarity on the forensic investigation instituted into the IDT. He asked for an explanation to be provided that outlines the grounds upon which the investigation was launched, as well as what the main issues were that it was attempting to address. He noted the challenges plaguing the IDT dating as far back as 2020/21. He highlighted the fact that whistle-blowers had raised issues over an entrenched culture of fear and victimisation. He asked for an update on the entity's handling of unfair dismissal cases, as this had resulted in an extensive amount of legal fees. Clarity was also sought on the current state of the disputes between the entity and its current or former employees and their compensation.

Directing his question to the Deputy Minister, he asked what the current state of the CEO’s contract was since 2021, and whether it was more formalised or still on an acting basis. On 10 October 2023, they had had a meeting with the Auditor General (AG), where concerns were raised over the uncertainties and the financial status of the IDT. He asked what progress had been made in correcting that particular situation, and the strategy around whether they would receive a positive report from the AG.

He asked about the current state of the IDT’s head office, due to the fact that during a previous presentation, they indicated that they were looking to lease another office at the cost of R700 000 per month. This would of course ensure that the entity would run a deficit of R89 million. He asked for an update on the current state of these issues, and if there had been attempts to resolve them.

Ms A Siwisa (EFF) said that the IDT had come a long way since its inception. Commenting on the issues mentioned by Mr Thring, she expressed her interest in knowing if ISA was going to affect the work conducted by the IDT. When assessing the targeted percentages presented to the Committee, she asked why the IDT was not aiming to achieve 100 percent, and whether they foresaw any challenge that would prevent them from meeting that target.

She commented that women, youth and people with disabilities were not represented enough within the IDT. She asked what plans were in place to advocate, promote and encourage them to apply for positions. She sought clarity on the matter of Construction Industry Development Board (CIDB) grading, and asked if there were no people at present currently who had been graded. Were there any challenges in finding contractors who had been graded by the CIDB?

Ms Mjobo commented on the issue of women and people living with disabilities, arguing that the IDT could do better than the targeted percentage that had been presented to the Committee.

Mr Mashele re-emphasised the fact that the Committee had previously voted unanimously that the IDT should remain in existence. As such, the Board should understand that the Committee had an increasing interest in the success of the entity, and would continue to fight for its survival. However, part of this survival was to see that the IDT implemented a social programme within society. He asked how the IDT planned to implement their public works programme.

The Chairperson reiterated that the Portfolio Committee holds a special place for the IDT due to the fact that it was fought for when it was on the verge of being dissolved. The IDT was applauded for its improvements from where it was in the beginning, but she believed that there was room for even further improvement. She asked whether there were plans in place for the IDT to conduct business for the Department specifically concerning the maintenance of buildings. She also voiced her disappointment at the representation of women, youth and people with disabilities in the presentation. This needed to be approved, as the percentages were not good enough.

IDT's response

Ms Karabo Siyila, Deputy Chairperson, IDT, responded to the question directed to the Board, and said that there was an investigation instituted that was currently underway. Once this had been concluded, the Members of the Committee would be brought into confidence on the matter and the result of the investigation.

Responding to Mr Thring, she said that the IDT had replaced all the technical staff that had been lost with professionally registered employees. They also included additional staff members to enhance their technical capacity to deliver.

Responding to the similarities between ISA and the IDT, she explained that they were having constant discussions with the organisation, and there was an understanding that ISA was focusing on funding projects, and the IDT had in fact submitted projects to ISA that needed funding. As it currently stands, there have been no issues of duplication or issues where it might happen. She assured Members that the two organisations were in communication and would address the matter should it arise.

The disputes with former employees were currently in the labour court, as they were claiming salaries of up to R5 million. Despite their contracts coming to an end, some employees were wanting them to be extended. In their venture to professionalise the IDT, certain employees did not have the skills required by the entity.

Responding to the question about the audit and the material irregularities, she explained that there was an audit action plan in place that was being monitored by the audit and risk committee, to ensure that the findings do not recur. The IDT was making an effort to ensure that, moving forward, their audit outcome improved. They hoped to ensure that their audit outcome would be unqualified for the benefit of their clients and the state, with the responsibilities entrusted to them.

She said that they were still experiencing challenges regarding the current state of the head office, as it was still not compliant with occupational health standards (OHS). They were still attempting to maintain it with the little budget available. Until the Board gave instructions to management on what needed to be done, they would continue to maintain it. The building currently had structural issues that required a lot of cash injections, which was why the decision had been taken to sell the building. Due to the challenges of the state of the building, it had been "on hold."

Regarding the question about why the IDT was attempting to reach for 75% instead of 100%, she said that despite the contracts stating that the entity had a certain amount, the clients needed to confirm the budget. At the beginning of the financial year, funds were transferred to the IDT, but this did not happen in most cases. She explained that they received confirmation of the projects later in the year, but as they needed to plan first before the expenditure, they were not in a position to spend 100% of the capped amount. Between the clients and the IDT, the amounts depended on the approvals to ensure they started procuring and implementing. Most of the time, this did not happen all at once at the beginning of the financial year.

 Responding to the question raised by majority of Members regarding the targets on transformation and the inclusion of women, youth and people with disability within the contractor development programme, she responded that the IDT had a special target that was related specifically to women, youth and people with disabilities within the contractor development programme, and they planned to ensure that they achieve these targets. Moreover, the IDT has a social development unit that engages with entities that advocate for people with disabilities. This was to ensure that the IDT would have sufficient support from this unit when they began to struggle.

Responding to the concern over there being no targets for women, youth, and people with disabilities, she explained that the target series was related to the targets on the contractor development programme. This programme was three years long, with the first year being recruiting people into the programme, and the second year was mostly focused on training them. During the training phase, projects would also be allocated. The final year would be comprised of assessments. These projects were of importance, as it was a necessary requirement to ensure that those being trained could be promoted and upgraded.

She said Ms Mjobo's concern was noted, and they would strive to increase the target as the above project was implemented. However, after assessing the previous financial years, it was evident that they were not doing well. Therefore, whatever they set as a target, they wanted to achieve, and although the target was set at 40%, they were hoping to overachieve and would strive to continuously do better.

On the matter raised by Mr Mashele, she explained that they were waiting for the Contractors Development Programme (CDP) to assist with the legislation to ensure that they were able to set aside projects specifically for women, youth and people with disabilities. She asserted that the IDT was working very hard to ensure that projects were set aside for women, youth, and people with disabilities throughout the coming quarters. The Committee was reassured that they would see improvements in the allocation of all projects.

She agreed that the audit opinion needed improvement, and that they were striving to ensure that the IDT received an unqualified opinion during the next audit. To achieve this, they had an audit action plan in place as a form of monitoring management.

Regarding additional business from the DPWI, she explained that it was not put as a target in the budget for the IDT to effectively monitor the R2 billion they would receive from the Department. However, the IDT had taken on additional projects from the Department related to the Department of Justice, the maintenance of the lifts throughout the provinces, and Acacia Park, although the budget still needed to be confirmed for each of these projects. As such, she confirmed that new business was handed over to them, although it might not achieve the amount of R2 billion.

Follow-up question

Mr Seitlholo questioned whether it would be a better option for the IDT to use a loan to repair the building as an investment rather than sell a building of poor quality.

Deputy Minister's response

Ms Bernice Swarts, Deputy Minister, DPWI, said the Department was still experiencing issues with National Treasury regarding the full amount necessary to assist the IDT, as they had not finalised their business cases. Up until now, the Department had given the IDT R81.8 million in financial support, and in terms of implementation of non-state sectors, they had received R89.5 million in management fees. The IDT received a total of 11 projects from the Department, which were still in progress. In November 2023, a total of 28 projects were allocated to the IDT with an estimated value of R520 million. She acknowledged that it was not a lot of work that was being allocated to the IDT, but the Department was doing what it could to ensure that its actions were able to match their words.

Responding to the matter of the acting CEO, she said that the Committee had already decided to appoint the Acting CEO. When the matter was taken to Cabinet, there had been a letter from the Board indicating that there were issues about the rentals and the fact that the CEO needed to be checked, which had led to all processes of finalising the appointment to be placed on hold. Now that there was a new chairperson of the Board, they were hopeful that these issues would be resolved so that the Minister could return to Cabinet and the CEO could finally be permanently employed.

Ms Tebogo Malaka, IDT CEO, responded to the query as to why the IDT was not looking for a loan to repair the building. She explained that they had been dependent on the grant for the past three years, including the current financial year. As such, it would be difficult to receive a loan, as they were not yet financially stable, which meant they did not qualify.

The Chairperson thanked the IDT for their presentation and the responses, commenting that they were doing great work, although there was still room for improvement.

Construction Industry Development Board Annual Performance Plan 2024/25

Highlights

• 04th Empowerment and Recognition of Women in Construction (ERWIC) Awards which was held on 24 August 2023 at Indaba Hotel in Fourways

• The cidb participated in the BRICS Skills Development Group and actively supported the development of the building information modelling curriculum

• The National Stakeholder Forum (NSF) meeting with the Minister of Public Works and Infrastructure, Honourable Sihle Zikalala, was held on 12 December 2023. Minister outlined the challenges limiting the construction industry's capacity to deliver infrastructure, stimulate economic growth, and create a better environment for survival of businesses were discussed.

• Construction Management Systems Implemented as part of the BUILD Programme. The cidb seeks to develop and upskill 250 female contractors, who own at least 51% in their respective companies from Grades 5 to 8 in the Civil Engineering and General Building classes of work and will ramp up the number of beneficiaries in subsequent years. The goal is to accelerate professionalisation of companies on the Register of Contractors for success and sustainability, with women-owned contractors being the first beneficiaries of this BUILD Programme initiative. In 2023/24, around 160 contractors underwent the Construction Management Systems.

 

Audit matters

• The audit outcome improved from a qualified audit opinion to an unqualified opinion with findings.

• The cidb continued its solid performance on supply chain management processes and performance information as no material audit findings were raised.

• Cidb aims to achieve a clean audit in the 2023/24 financial year

•There were 11 key recommendations issued by the auditor general to improve the audit outcome

• 6 of the recommendations have been resolved whilst the remaining five recommendations would be resolved before 31 March 2024.

• Internal audit has started with the review of audit action plan

• Produced interim financial statements for audit to identify non-compliance before the external audit.

• Report to the Audit, Risk and Governance Committee for oversight progress in addressing audit findings, including root causes

 

2024/25 performance targets

• Administration programme plays a crucial role in the delivery of cidb services through support

• audit issues resolved.

• Ensure that sound governance practices are implemented through effective implementation and resolution of audit actions.

• invoices paid within 30 days. Invoices are paid within 30 days to maintain supplier sustainability and comply with payment directives.

• system uptime - System uptime measures the time that ICT systems are operational throughout total working hours across the financial year.

• Research and development focuses on researching subjects of importance to, or that impact on, transformation and development.

•Construction Industry Regulation is the custodian of the Register of Contractors (RoC) and Register of Projects (RoP).

•contravention notices against detected non-compliance on cidb prescripts issued within 30 days •Non-compliance with the RoP is currently high. The cidb commits to verifying compliance across provinces.

•grades 1 to 9 contractors registered within 21 working days for compliant applications. Cidb aims to register all applications within 21 days. In the 2022/23 financial 100% of applications were registered within 21 days.

•Construction Industry Performance determines and establishes best practices that promote improved industry stability, performance, efficiency, and effectiveness. Cidb produces industry monitoring reports on a quarterly basis. The focus of the monitor is on transformation. Supply and demand,  contractor development, employment, public sector infrastructure spending.

(Please refer to the attached presentation for details)

Discussion

Ms Siwisa (EFF) asked what measures were in place to ensure that the CIBD received a clean audit. Secondly, on the matter of registration of contractors from grades 1 to 9, she noted that this was very vague and sought clarity on what each grade entails. Significantly, she asked how many women, youth and people with disabilities would be registered under their leadership. Despite their successes throughout the previous financial year, she asked what was being done to ensure they improved in the upcoming financial year.

Speaking specifically on the construction mafia, Mr Thring questioned the plans in place to improve the construction sector in particular to help drive the economy within South Africa. The construction mafia had cost the country hundreds of billions of rands due to ensuring the failure of projects, the stalling of projects, causing projects to be banned, and costing people their lives. He therefore asked what was being done to mitigate these detrimental effects caused by the construction mafia.

The Chairperson appreciated the report, and said that there was a CIDB act that needed to be amended that had yet to be completed. In line with the issue brought up by Mr Thring, she asked what plans were in place to deal with the construction mafia, and whether any research had been done on the matter or not.

CIDB's response

Mr Bongani Dladla, Chief Executive Officer, CIDB, thanked the Chairperson and Members for their questions and began by responding to Ms Siwisa on the entity's plans to achieve a clean audit. He said that they were implementing all of the AG’s 11 recommendations that had been made in the previous financial year. Previously, the CIDB had been requested to make adjustments to their financial statement submissions to the AG, so in December of 2023, they had prepared interim financial statements to ensure that they could be assessed prior to the final draft being finalised. They also had an audit action plan that was being monitored quarterly by the audit committee. Additionally, there were three levels of assurance in place, the first being the management team which assesses the internal audit, and assists with the progress of the entity.

He said that the CIDB could provide a breakdown to the Committee of the registering and the targets per grade, and agreed that it was important to ensure that they had targets per grade. Within their strategic plan, they stated that from grades 4 and 7 to 9, they needed to be at 75%, and they were last sitting at 70%. The same had been done for women, but they had faced certain difficulties, as such targets were not set five years ago for people with disabilities, which was why they have decided to transform their registration process. This would ensure that they could accurately report on how many contractors had declared themselves disabled in the registration process. Additionally, this would also allow them to track how much work was being handed to this designated group from the projects available. He had noted the comment made by the AG that they could have focused more on the target, but if given the opportunity, they would share the improved targets, as the Board had come to the decision to stretch most of the targets based on the ones that had been achieved, as they could offer more as an entity.

Responding to Mr Thring, he said disruptions and invasions had been disastrous for the industry, as they were turning away good contractors due to the dangers and delays. The country had to spend so much more money to implement projects due to the forced delays on site, which was also impacting opportunities for employment. Under the leadership of the Ministry, they had decided to take on a two-pronged approach. While executing projects, they needed to partake in proper social facilitation, as this could indicate and identify local businesses in the area, as well as enable them to structure the project in a way where there was meaningful participation. Communities would not hijack construction sites in instances where they feel included.

The second part of the approach was their partnership with the South African Police Service (SAPS) due to the emerging criminal elements. Unfortunately, there was no other way to handle the matter other than with the assistance of law enforcement, as there had been instances where lives had been lost. The CIDB had also guided clients through the legal requirements. As a means to ensure meaningful participation from locals, they drafted a model policy that allowed clients to create a framework agreement where locals were able to participate in larger construction projects.

Regarding the research being done, he said there were two centres of excellence. One was stationed at the University of Johannesburg, and the second at the University of Witwatersrand. The research being conducted at these centres was not included in the current research, as it was conducted directly from the CIDB. Additionally, research was being conducted which focused on building information modelling for the professionals, as there was a need to ensure that they could capture their projects digitally. They were also looking into how to make their procurement more transparent. The focus of the research currently was primarily on how the procurement could better respond to their transformation target. He noted the compliance mentioned by the Chairperson, and indicated that it would be an important addition. As individuals registered their projects, this could be monitored using a digital platform that could indicate who benefited.

Council for the Built Environment (CBE) 2024/25 Annual Performance Plan

2024/25 annual targets

•Four business processes automated by 31 March 2025

•20% increase in CBE’s profile reach by 31 March 2025

•four stakeholder engagements held by 31 March 2025

•increase CBE’s revenue by 1% of the grant and levies received by 31 March 2025

•one programme supporting the involvement of women in the built environment by 31 March 2025

•one programme supporting the development and involvement of youth in built environment implemented by 31 March 2025

•one programme promoting the empowerment of persons with disabilities in the built environment by 31 March 2025

•one built environment career development initiative conducted for school learners in nine provinces by 31 March 2025

•one built environment enforcement tool issued by 31 March 2025

•nine district municipalities supported through the structured candidacy framework towards professionalisation of the state by 31 March 2025

•established and functional built environment national logbook by 31 March 2025

•one BE sector technical capacity baseline/skills audit report focusing on design thinking, contract and project management across the public service produced by 31 March 2025

•two research reports based on CBE research agenda by 31 March 2025

•three advisory notes on issues affecting the built environment developed and submitted to relevant stakeholders by 31 March 2025

•established and functional built environment research hub by 31 March 2025

•100% of lodged appeals finalised within the statutory 60 days from date of lodgment by 31 March 2025

•100% of complaints received from the public finalised within 90 days from date of lodgment by 31 March 2025

•one investigation report on role of local government in building low carbon and climate resilient infrastructure in communities: a case study of municipalities (two metro municipalities, two district municipalities and two local municipalities) by 31 March 2025 

(Please see the attached presentation for details)

Discussion

Mr Thring commented that while research was not a competency or a mandate, it was part of the CBE and it should not be underestimated. The countries who invested in research and development had proved that there was a correlation between development and gross domestic product (GDP) growth. Since South Africa was plagued by unemployment, any opportunity to better the economy or provide employment should be taken seriously. With regard to education projects and encouraging young people to become involved within the CBE’s sphere, he asked whether they have ever considered introducing something similar to a job shadowing opportunity that would allow learners to have some sort of practical experience in the field by the time they leave school. He asked whether they were in agreement with him about creating a programme such as this, which would need to be founded in collaboration with the Department of Education and other peers. Lastly, he noted that many municipalities were struggling financially, and key skills were being lost. He therefore asked if the CBE was partnering with municipalities to grow these skills to ensure that the country remained on the correct economic path for growth.

The Chairperson referred to the issue of governance, especially with the councils. Over time, the Portfolio Committee found out many things, such as the composition within the Council being questionable. Secondly, she noted that they had faced challenges in dealing with the issues within the councils, so she asked how they planned on dealing with these issues and how they were performing. She voiced her agreement with Mr Thring on the idea of implementing town planning within the high school syllabus. She asked what plans were in place to educate high school pupils about town planning.

CBE's response

Dr Msizi Myeza, Chief Executive Officer, CBE, said that management and the council shared the same view Mr Thring voiced, explaining that two types of research were conducted. One was done on a daily basis to assist with operations to ensure faster service, which influenced how they were able to respond to industry issues. The second type of research was related to how they were able to develop the profession beyond what was already known, such as the influence of artificial intelligence (AI). As a council within the built environment, they acknowledged their limitations, which was why they were partnering with universities. There was no objection to the opinion that they should not under-invest in research.

On the built environment career programme, he said that when the council visited schools they focused mainly on architecture, or project management. Within the entity, there were so many streams that could be pursued as a young individual, and they were engaged in many programmes that advocate for positions and careers within the value chain of the built environment. When the district development model (DDM) was created, it acknowledged that there were 44 districts with the CBE staff complement being roughly around 40 people. He argued that so much could be done when working with like-minded entities who could grant them access to the footprint of the local government space.

Ms Holovisa Mtshali, Chairperson of the CBE, said that Dr M Myeza had covered in full detail the programmes they were running surrounding the development and inclusion of the built environment within basic education. She acknowledged that they were experiencing some challenges with the governance process with the professional councils, and the misalignment of how it was maintained. Therefore, a five-year strategy was in place to measure the performance of the professionals within the built environment.

The Chairperson thanked the entity for the responses, and moved on to the adoption of the Committee minutes.

Committee minutes

The minutes of the Committee's meetings on 12 and 13 March were adopted, with no amendments.

The meeting was adjourned.