Agrement SA Strategic Plan and Budget 2008-12

Meeting report

Agrement SA, a technical assessment agency with the objective of raising standards in the construction industry, met again with the Committee to present full details on their budget. Mr Joe Odhiambo, CEO, considered Agrement SA’s strength to be its technical knowledge and skills as well as its strong financial management. He gave the Committee a breakdown of Agrement SA’s progressive initiatives, which included reducing the vacancy rate in the staff complement of the Agency. He noted that the closure of several labs nationally had left the agency with no choice but to procure its own equipment. A list of required equipment was presented to the Committee. The benefits of which were pointed out as well. The cost of the new equipment in the first year would be an additional R5.72m to the amount approved in the MTEF budget.

The Committee was given insight into Agrement SA’s current organisational structure and human resources and the shortcomings that came along with it. Agrement SA wished to increase its staff complement from 11 to 23 and required an additional financial outlay of R6.784m for the 2009/10 financial year. Mr Odhiambo noted that Agrement SA’s key success factors included the adequate manning of the Agency with professionals and having ongoing in-house training and skills development. He did however point out that there were barriers, which prevented Agrement SA from being the best:
- The inability to attract and retain suitably qualified staff.
- The fact that certification was not required by law.

The Committee was given a breakdown of Agrement SA’s budget for the period 2008/09 – 2011/2012. A breakdown of the additional funding amounts requested was provided and what an ideal budget would look like. The briefing was concluded with insight into Agrement SA’s vision up until 2015.

Discussion
Ms C Ramotsamai (ANC) stated that Agrement SA was one of the oldest entities in SA. She asked why it had taken them such a long time to come to Parliament to request increases in their budget. Agrement SA should have seen and anticipated the construction boom currently in SA . She asked how Agrement SA involved universities in commissioning research and how skill transfer to young employees took place and how the older, more experienced employees assisted in the process. She asked what Agrement SA‘s take was on houses that had been built according to poor standards.

Mr Odhiambo stated that Agrement SA was 39 years old. Experts predict the construction boom in SA to last for ten years. It was therefore a great opportunity to use new materials in construction such as air rated blocks and energy efficient cement. Agrement SA used almost all of the universities. The transfer of skills within the organisation was not a problem as it functioned as a family unit. There was no holding back and teamwork was the order of the day. Agrement SA also had a good mentoring scheme in place. Agrement SA had little say in the enforcement of building standards. It was a matter to be dealt with at local level.

Ms N Ngcengwane (ANC) referred to Agrement SA’s interaction with foreign countries and asked what about interactions with organisations within SA. Given that Agrement SA was an old entity it most probably had many old white males in its employ. She asked how skills transfer to younger employees was going to take place. She noted Agrement SA’s plan to alleviate the workload of its overworked staff. She asked how close Agrement SA worked with the Independant Development Trust (IDT) on the matter of mud schools. She finally asked how Agrement SA intended to create greater awareness about its work and by when would a campaign be in place.

Mr Odhiambo responded that Agrement SA did interact with foreign countries as well as local agencies such as the South African Bureau of Standards (SABS) and IDT. He stated that even though the staff was overloaded with work, Agrement SA continued to meet its mandate. He said that activities to encourage awareness had already been started and that in 2009 a comprehensive marketing plan would be in place. 

Mr S Opperman (DA) referred to the equipment to be purchased and asked whether it was new on the market. He also asked what the reason for the closure of the various labs was. He asked for a percentage comparison of building using the traditional older materials compared to the newer materials shown to the Committee.

Mr Odhiambo answered that some of the equipment to be purchased had been around for thirty years but was updated on an annual basis. The issue was about reliability and being able to perform the required function. He pointed out that SABS labs had closed in Cape Town two months previously. The reasons for the closure were cost cutting by SABS and constraints in operations.

Mr Odhiambo said that cost comparisons varied. He noted that on wall elements there was a saving of between 60-70 percent. Most of the benefits were however of a socio-economic nature.

Mr L Maduma (ANC) asked how Agrement SA encouraged learners to undertake studies in its field. He referred to the hi-tech construction materials shown to the Committee and asked whether workshops on these materials were held with major construction companies. Mr Maduma further asked whether Agrement SA took cognizance of the ways in which houses were built in rural areas. He felt them to be very innovative in certain respects.

Mr Odhiambo replied that open days, talks and exhibitions were often held at universities. Agrement SA did interact with the bigger construction companies. The Committee was shown Chinese and French-made roofing products that had failed the test under SA conditions. Even though they were suitable for use in other parts of the world.

Mr M Likotsi (PACA) asked which lab was closed down in the Western Cape. He referred to the procurement of new equipment and asked whether there would be skilled people to operate the equipment. He asked whether SA was being used as guinea pigs for the testing of construction materials that were being imported from overseas.

Mr Odhiambo responded that with each piece of new equipment purchased, training would take place. SA was not being used as a guinea pig. The various technologies were looked at to allow SA to decide on what was best for its conditions. He showed the Committee various products that were used in the USA and Europe.

Mr N Magubane (ANC) referred to the imbizos that Agrement SA attended and asked whether they took their equipment with them for display purposes.

Mr Odhiambo replied that much of the equipment was too bulky to take along when attending imbizos.

The Chair agreed that Agrement SA should have the technical skills in order to do its work. A breakdown of Agrement SA’s human capital costs was requested. There was definitely a need for an Agrement SA awareness campaign. However she asked why the allocation for marketing was higher than that for research and development. She proposed that more should be spent on research and development. She also noted the absence of disabled employees in the organisation and said that it was an issue that needed to be addressed. She asked for clarity on the role of building inspectors.

Mr Odhiambo agreed to forward Agrement SA’s marketing plan as well as a breakdown of its human capital costs to the Committee in due course. He took heed of the Chair’s comments on the expenditure on marketing and that of research and development. He gave the assurance that research and development would obtain the appropriate funding. The issue of disabled persons would also be addressed.

Mr Odhiambo said that building inspectors approve building plans and foundations. He noted that the builder was left to choose the smaller items such as door locks and taps. He pointed out that materials used in construction did not require certification, only cement needed to be SABS approved.

Dr S Huang (ANC) was concerned whether the products shown to the Committee could withstand earthquakes.

Mr Odhiambo responded that earthquakes were not one of Agrement SA’s criteria.

The Chair said that the Committee would consider the issue of earthquakes at another time.

Ms Ramotsamai said that mud had been used to build houses in rural areas in the past. The use of brick had become fashionable and mud was considered inferior. She emphasised that vigorous marketing of alternative products was needed, as bricks had become far too expensive. 

Ms Ramotsamai also pointed out that huge contracts were often awarded to big companies even though they sometimes disregarded government’s recommendations and requirements. She felt that the Committee needed to look into the issue.

Mr Odhiambo spoke about the availability of an earth block that was made of compressed earth. It could be used as an alternative to brick as it looked the same and was just as strong.

Mr Maduma proposed that the Committee recommend the approval of additional funding requested by Agrement SA.

The Committee agreed.

The Committee discussed and finalised committee travel and logistic arrangements as well as discussing oversight visits, which it had undertaken.

The meeting was adjourned.