ATC100504: Report Budget Vote 6 & Strategic Plan 2010/11 to 2012/13 of the Department of Public Works & its Entities

Public Works and Infrastructure

Report of the Portfolio Committee on Public Works on the Budget Vote 6 and Strategic Plan 2010/11 to 2012/13 of the Department of Public Works and its Entities, dated 04 May 2010

 

Background:

 

The Portfolio Committee on Public Works called for public comments through newspaper advertisements on Vote 6 of the Department of Public Works. An organisation named the National Association for Youth Empowerment in Construction (NAYEC) was the only organisation that responded.

 

After the initial tabling of the Department of Public Works’ Strategic Plan, the Portfolio Committee noticed inaccuracies in the document and asked the Department to re-work it. The Strategic Plan document was then withdrawn and re-tabled two weeks later. This disrupted the Committee’s programme for considering Strategic Plans and Budgets, because, at the time of the withdrawal, the Independent Development Trust (IDT) and the Construction Industry Development Board (CIDB) had already presented their business plans.

 

In preparation for the Budget Vote process, the Portfolio Committee on Public Works invited the National Treasury and the Applied Fiscal Research Centre (AFREC) to present before the Committee on the analysis of the budget and section 32 reports of the Department of Public Works.

 

Introduction:

 

Following the re-tabling of the Department of Public Works’ Strategic Plan (25 March 2010), the Portfolio Committee on Public Works conducted further hearings with the Department of Public Works, Agrément South Africa (ASA) and the Council for the Built Environment (CBE). The Portfolio Committee on Public Works wishes to report on the budget vote process as follows:

 

 

1. Department of Public Works:

 

1.1  The Department of Public Works selected the following priorities to inform their planning in their Medium-Term Strategic Framework priorities for the 2010/11 to 2012/13 financial years:

 

-          Speeding up growth and transforming the economy to create decent work and sustainable livelihoods;

-          Massive programme to build social and economic infrastructure;

-          Comprehensive rural development strategy linked to land and agrarian reform and food security;

-          Strengthening their skills and human resource base;

-          Intensifing the fight against crime and corruption;

-          Pursuing African advancement and enhanced international co-operation;

-          Sustainable resource management and use, and

-          Building a developmental state, including improvement of public services and strengthening democratic institutions

 

1.2

The Department of Public Works Strategic Goals:

 

1.2.1  The Department of Public Works has six goals for the 2010/11 to 2012/13 financial years:

 

-          Providing strategic leadership in effective and efficient immovable asset management and in the delivery of infrastructure;

-          Promoting an enabling environment for the creation of both short-term and sustainable work opportunities, so as to contribute to the national goal of job creation and poverty alleviation;

-          Contributing to the building of a developmental state and a comprehensive rural development framework through state assets;

-          Ensuring transformation and regulation of the construction and property industries to ensure economic growth and development;

-          Ensuring effective corporate governance and sound resource management;

-          Ensuring improved service delivery in all departmental programmes to meet client expectations and leverage stakeholder relations.

 

1.2.2  The Department of Public Works has four Strategic Outcomes that the Department wishes to focus on:

 

The following four outcomes were selected from twelve outcomes, approved by Cabinet in the January 2010 Lekgotla to be used by Government to trace the impact of programmes:

 

-    Creating decent employment through inclusive economic growth;

-    Creating efficient, competitive and responsive infrastructure network;

-    Efficient and effective development-oriented Public Service and an empowered     

     fair and inclusive citizenship; and

     -    Skilled and capable workforce to support an inclusive growth path

 

1.3  The new Department of Public Works’ programme structure, as approved by the National Treasury, is as follows:

 

-          Programme 1:  Administration

-          Programme 2: Immovable Asset Investment Management

-          Programme 3: Expanded Public Works Programme

-          Programme 4: Construction and Property Policy Regulation

-          Programme 5: Auxiliary and Associate Services

 

Under the above-mentioned five programmes, there are eight branches, which are: Asset Investment Management, Operations Management, Special Projects, Inner-City Regeneration, Project Management and Professional Services, Expanded Public Works Programme, Construction and Property Policy Regulation, Finance and Supply-Chain Management and Corporate Services.

 

1.4  Budget:

 

The Department of Public Works received a total allocation of R 6. 4 billion over the METF from which the Entities will be allocated funds as follows: Agrément South Africa: 10.3 million, Council for the Built Environment: 25.5 million and Construction Industry Development Board: 63.6 million.

 The Department allocated its budget amongst its programmes as follows: Expanded Public Works Programme (EPWP): R1.01 billion, R1.1 billion for compensation of employees, R570 million for goods and services, R351 million for office accommodation, R3 billion for transfers and subsidies, R1.9 billion for property rates, R1.3 billion for capital infrastructure and R69.9 million for payments for capital assets.

The Department of Public Works indicated to the Committee that they did not have enough funding for skills development, and there were no funds for the implementation of the Occupation Specific Dispensation (OSD), which was going to create a lot of unhappiness in the Department.

 

2. Construction Industry Development Board (CIDB):

 

2.1   The Construction Industry Development Board’s (CIDB) Strategic Objectives are as follows:

 

-          Organisational Capacitation;

-          “Value-added” service delivery;

-          Research and Development Agenda;

-          Phase II of the Registers, and

-          Procurement Reform;

-          Improvement of systems;

-          Facilitation of training and Contractor development.

 

The CIDB outlined to the Committee its key focus areas for the 2010/11 financial year and indicated in section 6 of their business plan how they wished to measure their output targets.

 

CIDB receives its income from the Government allocation, registers of contractors and also from interest on the funds they have in their bank account.

 

2.2  The Construction Industry Development Board’s focus for their 2010/11 budget will be on the following:

 

-          Building human resource capacity;

-          Human Resources Development;

-          Establishment of Construction Contact Centre’s – North West Province;

-          Improving value-add at the Construction Contact Centres;

-          Improving of Registers service delivery;

-          National Infrastructure Maintenance Strategy staffing and operationalisation;

-          Focussing on fraud and corruption/forensics;

-          Enforcement and compliance

-          Facilitating the establishment of the Employment Skills Development Agency (ESDA);

-          Phase II of the Registers (Quality, H&S, Environment) Best Practice – to be piloted in 2010/11;

-          Promoting of Research and Development agenda: consultation, seed funding, etc;

-          Academic institutions to teach CIDB requirement – consultative process;

-          Prioritising the Electronic Document Management System (EDMS);

-          Stakeholder management;

-          Upscaling communication; and

-          ICT-hub of operations e.g. registered software rewrite is a major requirement

 

3. Independent Development Trust (IDT):

 

The 2010/30 Strategic Vision of the IDT is premised on the understanding that eradication of chronic intergenerational poverty requires a long-term, targeted, integrated and comprehensive strategy and programme.

 

3.1  Strategic objectives of the IDT:

 

-          To attain sustainable livelihoods through people-centred development interventions;

-          To pioneer innovative development solutions;

-          To ensure excellence in service delivery;

 

The IDT’s immediate strategic focus for 2011/13 is to execute a turnaround strategy through strategies, strategic objectives and targets in the 2011/13 Corporate Plan. They hope to achieve this vision through the implementation of the following key initiatives:

 

-          Business growth in line with key strategic priorities of Government, including the rural development, community-based sustainable development projects and the targeting of vulnerable groups;

-          Intensifing local government support;

-          Long-term financial sustainability of the IDT through finalising the Business Case for approval by the Shareholder, and

-          Developing a matching Human Resources strategy.

 

 

3.2 Budget:

 

The IDT requests the Committee’s support in addressing provincial budget deficits which impact profoundly on emerging contractors; and, in the process of confirming the IDT’s future role in the development landscape and funding thereof.

 

The IDT applied to Treasury for funding in 2010/13 Medium-Term Expenditure Framework process, and introduced cost cutting and accelerated revenue generation.

 

The IDT’s total budget decreased in 2011/12. The IDT reiterated that allocations cannot be afforded in year three of the MTEF period. The IDT had concerns about the limited capacity that had significant impact on revenue generating capacity in the short term.

 

The IDT needs significant restructuring to be sustainable in the long term.

 

4. Agrément South Africa:

 

4.1  Strategic Goals of the Agrément South Africa are as follows:

 

-          Providing active support to the Minister’s strategic programmes and initiatives aimed at transformation of the Department of Public Works;

-          Transforming Agrément South Africa into a viable and modern organisation with sound corporate governance;

-          Driving the growth and development of Agrément South Africa as a leading state-owned enterprise

-          Enhancing its position, leadership and strong global presence through innovation, research and development;

-          Addressing current and future human resources challenges.

 

The Agrément South Africa anticipates being regulated under an Act of Parliament in the current financial year.

 

 

5.  Council for the Built Environment (CBE):

 

5.1  The Council for the Built Environment (CBE) strategic objectives are as follows:

 

-          Developing a policy framework on Standard Generating Body’s function/mandate and drafting a policy framework on the recognition of the profession’s function/mandate;

-                Facilitating and monitoring the management of international agreements and improving the CBE’s enforcement abilities;

-          Facilitating improved access to funding by previously marginalised learners;

-          Facilitating access to information and compatibility of IT infrastructure between the CBE, Built Environment Professional Councils and the Department of Public Works;

-           Providing a comprehensive capacity programme for all the professional councils to enable them to discharge their respective mandates;

-          Facilitating interaction and fostering relationships with stakeholders to improve service delivery and develop & implement a public-participation programme to educate the public on their rights with respect to the Built Environment Professions industry;

-          Implementing a change-management program geared towards output-oriented delivery, and reviewing the structure and capability of the organisation.

 

The CBE is concerned about inadequate funding. It requested R60 million over the MTEF period; however, this amount was not appropriated.

 

6. National Association for Youth Empowerment in Construction (NAYEC):

 

6.1  National Association for Youth Empowerment in Construction (NAYEC) responded to the Committees call for public comments and made the following input before the Committee:

 

-          The youth organisation asked that the NYDA and NAYEC be invited by the Department of Public Works to be part of a task team that would assist youth in construction and assist the government in creating a platform where youth can participate meaningfully in government programmes.

-          Department of Public Works must allocate enough money for youth skills development, career development and entrepreneurship.

 

7.  Committee Recommendations:

 

-          The Committee values the work done by the IDT and recommends that government provide adequate funding to the IDT.

-     The National Association for Youth Empowerment in Construction (NAYEC) was encouraged by the Committee to work closely with the National Youth Development Agency (NYDA) in its programmes.  These programmes need to be supported by the Department of Public Works.

-          The Committee encouraged NAYEC to broaden its scope of work and area of jurisdiction in order to increase its visibility.

-          With regards to the other three entities reporting to the Department of Public Works, the Council for the Built Environment (CBE), Construction Industry Development Board (CIDB), and Agrément South Africa (ASA), the Committee agreed to conduct a comprehensive oversight over each of them in order to deal with issues of accreditation in the built environment, grading of contractors and certification of building materials. The Committee also recommends that legislation and regulations relating to these entities be reviewed and strengthened.

 

8. Appreciation:

 

The Portfolio Committee on Public Works wishes to put on record its appreciation of the Department of Public Works, the Construction Industry Development Board (CIDB), Council for the Built Environment (CBE), Independent Development Trust (IDT) and Agrément South Africa (ASA), as well as to the National Treasury, AFREC and NAYEC for participation in the Budget Vote process.

 

Report to be considered