ATC090128: Report Annual Reports of the Department of Public Works; IDT; AGRÉMO; CIDB; CBE 2006/07

Public Works and Infrastructure

Report of the Portfolio Committee on Public Works on the Annual Reports of the Department of Public Works, Independent Development Trust (IDT), Agrément SouthAfrica (Agrémo), Construction Industry Development Board (CIDB) and the Council for the Built Environment (CBE) 2006/07, dated 28 January 2009:

 

Background

 

The Constitution of the Republic of South Africa mandates Parliament through Committees to exercise oversight over the Executive, pass legislation, monitor the implementation of such legislation and encourage public participation.

 

Guided by the Constitution and Rules of Parliament, the Committee has to scrutinise the annual reports of departments in order to see if the funds allocated have been spent as per their strategic plans.

 

Introduction

 

The Report provides an analysis of the 2006/07 Annual Report of the National Department of Public Works (NDPW), Independent Development Trust (IDT), Construction Industry Development Board (CIDB), Councilfor the Built Environment (CBE and Agrément South Africa.

The Committee wishes to ensure that the Department of Public Works and entities reporting to it carry out and comply with their mandates and responsibilities. Viz:

 

·        Policy implementation at all spheres of government;

·        Progress on service delivery and meeting of targets;

·        Strengthen intergovernmental and interdepartmental relations;

·        Management and maintenance of state asset, and

·        Monitor the Integrated Sustainable Rural Development Programmes (ISRDP).

 

The briefing by the NDPW and interrogation by the Committee focused on the responsibilities of the NDPW as set out hereunder:

·                    Provision and management of land and accommodation to national departments and public institutions;

·                    Leadership given to the construction and property industry by the department;

·                    Co-ordination, monitoring and the implementation of the (Expanded Public Works Programme (EPWP);

·                    Adherence and conformity to the requirements of the Public Finance Management Act of 1999 (PFMA) and Division of Revenue Act (DORA);

·                    Support given to entities by the Department, and

·                    The role and the responsiveness of Entities to their assigned mandates.

 

1. Departmental Programmes

 

·                    For the first time in the 2006/07 financial year the NDPW reported on two sets of financial statements including the trading account: Performance Audit was carried out on main programmes of the department and these programmes formed part of the core presentation on the DPW annual report.

 

1.1       Human Resource Management

 

The Department’s employment profile is as follows:

 

a)                  Overall vacancy rate is 17% (995);

b)                  Among critical professional occupations 39% (220);

c)                  Women employed 45%;

d)                  Whites employed 14%;

e)                  Disabled people employed -1% (29), and

f)                    The department has learnership programmes on various occupational   

g)                  classes

 

1.2       Strategic Corrective Measures

 

a)                  The department is addressing audit concerns and other matters of emphasis through a comprehensive action plan;

b)                  The department is implementing turn around strategy refocusing the mandate and functions of the department;

c)                  Capacitating the organisation for increasing contribution to Accelerated and Shared Growth Initiative for South Africa (ASGISA), Joint Initiative of Priority Skills Acquisition (JIPSA) and service delivery.

 

The department reported that it managed to improve on the following:

 

a)                  Reduce vacancy rates from 990 in April to 400 currently;

b)                  Cuban experience – replenishing professional skills;

c)                  Launched external bursaries and has internship programmes in place;

d)                  Launch a built environment and industry related skills improvement drive;

e)                  Introduced the Transformation charters, and

f)                    National Infrastructure Maintenance Strategy (NIMS) operationalised and EPWP upscaled.

 

1.3       Operations

 

a)                  Debt reduction by regional offices is improving;

b)                  The design and tender documentation for the Foreign Affairs embassies in Addis Ababa, Lesotho and Nigeria was completed in January 2006 and November 2006 respectively and is in an advanced stage of commencement with construction;

c)                  Draft property management strategy for BEE, Poverty alleviation and job creation has been developed;

d)                  The Zimisele call centre for unplanned maintenance was implemented in March 2007 at 3 pilot sites: Port Elizabeth, Kimberley and Johannesburg;

e)                  In Kimberley the R 35 million pipeline contracts was completed, using EPWP guidelines.

 

1.4       NPWP & Policy

 

a)                  This programme is responsible for promoting good governance and regulation of the construction industry;

b)                  It is also responsible for promoting good governance in the management of public immovable assets – GIAMA.

 

1.5       Re-Kgabisa Tshwane Programme

 

a)                  It is a DPW programme that is aiming to develop a conceptual framework for long term accommodation solutions for Government in partnership with the City of Tshwane;

b)                  Aims to improve the standard of physical accommodation of national department’s head offices in the inner city of Tshwane;

c)                  Through this programme a database of land and building management within the inner city was developed and has been finalised.

 

1.6       Asset Management 

 

a)                  The Department has introduced a draft turn-around strategy which will focus on: revenue generation and cost reduction measures, financing and restructuring, integrated approach to decommissioned and/or underutilized assets, value enhancement, institutional reform and implementation plan which is to be finalized in 2007/08;

b)                  The Department is working on the approval of the procurement method and budget for the building of the Pan African Parliament;

c)                  For monitoring and evaluation purposes, a committee that will look on budget and maintenance was established;

d)                  The Department has an Investment Analysis Framework in place which will amongst other things be used in the evaluation of clients’ proposals for fixed property acquisitions, refurbishments, exchanges, demolitions and disposals;

e)                  The National Infrastructure Maintenance Strategy (NIMS) was approved by Cabinet and DPW was appointed as a lead department, NIMS will cover infrastructure owned by the State, SOE and Municipalities;

f)                    The User Asset Management Plans (UAMP) was reported as a programme that will assist in verifying the accommodation occupied by the user; determine utilization of accommodation, determine surplus accommodation to be relinquished, determine repairs that need to be conducted and prepare a budget for accommodation occupied by the user;

g)                  The DPW has introduced Service Delivery Standards (SDS) which were split into head office service standard performance and regional offices services standard performance, these SDS include but not limited to: acquisition of fixed property (buying & leasing), disposal of State Owned Property, facilities management, property payments and utilization and contracts;

h)                  The DPW Chairs the Border Control Operational Coordinating Committee (BCOCC). The work that the BCOCC is responsible for has a value equal to R4 billion.

 

1.7       Expanded Public Works Programme (EPWP)

 

a)                  More departments/public bodies are now participating in the EPWP and it has created more work opportunities;

b)                  Additional budget has been allocated to the programme to upscale social  sector and access roads, respectively.

 

1.8       Financial Management

 

a)                  The Department underspent R99 million due to delays in site acquisitions of   the properties identified for the Re-Kgabisa Tshwane Programme projects, R68 million which has been rolled over with Treasury approval;

b)                  R3.9 billion revenue generated through the agency work of the trading account;

c)                  The trading account obtained an unqualified audit report from the Auditor General.

 

Recommendations:

 

a)                  The Department should address the BEE participation challenge in the construction and property sector, skills shortage in the built environment and registration of professionals in the built environment industry;

b)                  The NDPW should involve other departments concerned in the Re-Kgabisa Tshwane Programme as it affects other portfolios e.g. Ministry of Transport;

c)                  The EPWP Programme needs to improve the quality of data and reporting by public bodies, increase the labour intensity of the projects, improve the training ad exit opportunities and mobilize more public bodies to implement the programme.

 

2. Entities

 

2.1       Independent Development Trust (IDT)

 

2.1.1    Responsibilities and functions of the IDT

 

a)                  plays a crucial role in the three Government’s flagship development initiatives: the Integrated Sustainable Rural Development Programme (ISRDP), the Expanded Public Works Programme and Project Consolidate;

b)                  Contributes in three specific areas of the national development agenda: poverty reduction, the development of community capacity, and the reduction of infrastructure backlogs;

c)                  Manages programmes known as ‘special projects’, on behalf of the National Department of Public Works (NDPW). In addition, the IDT manages projects for other departments, such as the Department of Social Development (viz. the Poverty Relief Programme) and the Department of Provincial and Local Government (viz. the Programme Design Document);

d)                  Works towards being a fully transformed Government development agency implementing projects commissioned to it by Government departments;

e)                  Contributes in the eradication of mud schools in rural areas.

 

2.1.2    IDT Strategic Objectives

 

a)                  Impact on absolute poverty through innovative and best practise models in the provision of comprehensive development programmes;

b)                  To promote people centred development;

c)                  Position the IDT as a best practise and development agency capable of serving national and regional development agenda;

d)                  To institutionalise and sustain effective and efficient internal business processes.

 

2.1.3    Findings

 

a)      Government did not have any integrated and structured processes for

development sector engagements on the continent. There was no NEPAD country strategy and no dedicated country desk the IDT could interact with in order to achieve their strategic objective of serving national and regional development agenda

b)      On the advise of the Minister, the IDT ended up abandoning one of its

strategic objectives, the engagement with the continent and instead the IDT opted to engage with the continent through other forums;

c)      The IDT has a 2008/10 corporate strategy which aims at reinterpreting the

IDT mandate and make the IDT more focused and precise;

d)      The IDT wishes to strengthen their policy environment and 13 policies have

already been approved;

e)      The IDT wishes to transform its systems and has initiated Kitimang project;

f)        On Human Resources, the IDT has managed to fill 100% of the executive

posts, 80% of senior management posts are filled and they are strong at occupancy rate in regional offices but still has a high staff turnover. They are targeting the Human Resources Development project to enhance management capacity. They have concluded a critical skills profile and finalising revisions in their remuneration policy in order to retain scarce skills for their operations;

g)      On finances, the IDT spent 97% of its operational budget

h)      The IDT managed to address the root cause of queries and matters of

emphasis raised in their 2005/06 audit report as a result the 2006/07 Audit Report expressed an unqualified opinion without any matters of emphasis

i)        They are the leading entity in assisting the DPW in the eradication of mud

j)        schools

k)      The IDT has introduced a beneficiary management system which will enable

them to track back the EPWP beneficiaries for future jobs or training

 

Recommendations:

 

a)                  The R50 stipend to the EPWP beneficiaries, training provided to beneficiaries, these should be reconsidered and monitored to check if they are the same in all the EPWP projects;

b)                  The DFI Review found that the IDT needs to take a policy shift and focus on women and rural areas but not abandoning those Provinces that are not rural.

 

2.2       Agrément South Africa

 

a)      Enabling the introduction of innovation into markets, and minimising

associated risk;

b)      Established by the Minister of Public Works in 1969 as an independent

organisation to bring impartial judgement to the evaluation of innovative construction products and systems in the interest of the consumer;

c)      The Agrémo SA is a member of the World Federation of Technical

Organisations (WFTAO).

 

2.2.1    Findings

 

a)                        The Agrément South Africa is a DPW entity;

b)                        The technical agency of the Agrément South Africa is managed and reports to

the Director of CSIR, Built Environment Unit;

c)                        The financial statements of the Agrément SA are audited under the CSIR and

its finances are managed by the CSIR;

d)                        The Agrément South Africa received an unqualified report from the Auditor

General, it had an allocated budget of R 7 456 297 for the 2006/07 financial year;

e)                        There is a shortage of technical skills in South Africa and the Agrément South

Africa plans to fund more students as means of trying to address this problem.

 

2.2.2    Recommendations

 

a)         The Committee advised the Agrément South Africa to draft a five year plan, 

            this will guide them on areas of focus

b)   Agrément South Africa was advised by the committee to buy their products

                              from BEE enterprises

      c)         The committee advised the Agrémo Board to address the accountability

                       problem of the Agrément South Africa as it reports to CSIR which is an entity    of the department of Science & Technology

 

2.3       Construction Industry Development Board (CIDB)

 

2.3.1    Legislative Framework and Mandate of the CIDB

 

a)      CIDB Act 38 of 2000 mandates the CIDB to establish the National Register of Contractors by facilitating public sector procurement, delivery and risk management, supporting contractor development and promoting better performance – improved quality, safety, health & environment;

b)      To categorise contractors in accordance with their capability.

 

2.3.2    Findings

 

a)      There is a boom in the Construction industry and the CIDB is sitting with more than 51 000 contractors in its register of constructors

b)      The backlog CIDB had in contractor registration was resolved in March 2007

c)      CIDB had to increase its internal staff in relation to the growth of the register of contractors

d)      The CIDB introduced Construction Contact Centres (CCC), they hope to have 1 CCC per province. These will be more like regional CIDB offices whereby contractors can get access and responses to the CIDB more quicker than before

e)      CIDB is giving support to the 2010 Infrastructure Team, in the construction of the Stadia

f)        CIDB conducted its five year independent review which was done by international and local consultants. The report on the review will be tabled to the Minister of Public Works

g)      The CIDB will be doing internal audits and will also be implementing the Auditor General’s recommendations

 

2.3.3    Recommendations

 

a)                  The next time the CIDB comes to present their Annual Report to the Committee, they must show in numbers the staff they employed in that financial year so that the committee can be able to weigh the number against the figures provided;

b)                  CIDB should also give breakdown on staff e.g. number of women, youth, men, disabled employed;

c)                  The Committee asked the  CIDB to address the imbalances of the past when selecting their key role players in the industry while at the same time they should not be compromising quality;

d)                  Seeing that CIDB has a register of contractors which is at 51 000, it was suggested that some of the registered youth contractors can be assisted through the Department off Public Works’ National Youth Service programme.

 

2.4              Council for the Built Environment (CBE)

 

a)                  The CBE is a schedule 3A entity established by the Council for the Built Environment Act (Act No. 43 of 2000). Through the Act, the CBE is tasked with the regulating and governing of the following six built environment professions: Architects, Engineers, Landscape Architects, Quantity Surveyors, Project and Construction Managers and Property Valuers, through the six professional councils that were also enacted through this legislation.

 

2.4.1        Findings

 

a)      The Council acknowledged the legislative gaps in the current Act governing it as it was established as a coordinating body rather than an authoritative body;

b)      The CBE was unaware whether the professional councils also had to report to the Auditor General;

c)      The professional councils used PFMA as a guide but did not necessarily have to comply with it;

d)      CBE did not register professionals; this had implications when a person lodged a complaint, they would be sent back to the professional councils;

e)      CBE collaborated with the Department of Public Works to review or amend the Act;

f)        Gender representation in the Built Environment sector still remained a challenge hence it would be ideal for the CBE to intervene from a school level;

g)      The greatest challenge regarding appeals and tribunals was funding. The CBE does not have backlogs on appeals but had backlogs on complaints on different professional councils;

h)      Should there be a decision to make registration compulsory for built environment graduates then the professional council’s registration process would have to be simplified and friendly to those people registering;

i)        Further Education and Training (FET) colleges produced artisans which did not fall in under the CBE scope;

j)        The CBE and professional councils have not yet reached a stage where they blended together;

k)      It was noted that, it remained a challenge to obtain accurate data on skills in South Africa but the skills audit initiative would try and rectify that.

 

2.4.2    Recommendations

 

a)                  The professional council’s audit process would have to be conducted by the Auditor General but CBE would first consult with the National Treasury;

b)                  The CBE Board should promote and strengthen the relationship between CBE and the professional councils

c)                  Compulsory registration of professionals and this would make it easier to enforce disciplinary measures for mistakes conducted by engineers.

d)                  Set norms and standards for professional councils

e)                  Committee would engage the minister on the legislative framework regarding compulsory registration for the built environment professionals.

f)                                                            Professional councils should simplify the registration process;

g)                  The Committee recommends that in future IDT, CIDB and CBE submit to Parliament their strategic plans at the beginning of each financial year. This is to ensure that the achievements as detailed in the Annual Report are benchmarked against the performance and outputs as stated in the Strategic Plan.

 

Report to be considered.