ATC110425: Report Budget Vote 7, Strategic Plans 2012 – 2016 & Annual Performance Plans 2012 - 2014, dated 25 April 2011
Report of the Portfolio Committee on Public Works on Budget Vote 7: Public Works and on the Strategic Plans 2012 2016 and Annual Performance Plans
Report of the Portfolio Committee on Public Works on Budget Vote 7: Public Works and on the Strategic Plans 2012 2016 and Annual Performance Plans 2012 - 2014 of the Department and its entities, dated 25 April 2011
The Portfolio Committee on Public Works, having considered the budget vote of the Department of Public Works, the strategic plans and the annual performance plans of the department and its entities, wishes to report as follows:
Following the tabling of the Department of Public Works Strategic Plan (7March 2012), The Portfolio Committee on Public Works conducted public hearings with the Department of Public Works, Independent Development Trust (IDT), Agrément South Africa (ASA), Construction Industry Development Board ( cidb ) and the Council for the Built Environment (CBE).
2. Department of Public Works
The mandate of the Department of Public Works (DPW) is the custodianship and management of a significant portfolio of national governments immovable assets. This includes the provision of accommodation, rendering of expert built environment services to user departments at national government level in the planning, acquisition, management and disposal of immovable assets. DPW is also mandated to coordinate and provide strategic leadership in the implementation of the Expanded Public Works Programme (EPWP).
The budget increased with 2.1 percent from R7.8 billion in 2011/12 to R7.9 billion in the 2012/13 financial year.
2.1 Key medium-term priorities over five years
To create a balance between the change and sustainable agenda, more emphasis is on:
- Stabilising of leadership; clean corporate governance and reviewing of the effectiveness of operations of DPW;
- Strengthening the States Immovable Asset Register and vesting of State immovable assets in the correct sphere of Government;
- Auditing of leases and reviewing of the lease management system;
- Establishing financial controls and addressing the audit challenges;
- Transforming the built environment through empowering emerging contractors in line with Broad Based Black Economic Empowerment (BBBEE) and promoting labour intensive and green practises;
- Effective client relations management to improve service delivery and good management; and
- Addressing the triple challenge of unemployment, poverty and inequality through the EPWP programme and job creation initiatives within DPW to create a skilled labour workforce.
To create a balance between the change and sustainable agenda, more emphasis is on:
· Improving supply chain management
· Improving human resource management
· Addressing the challenges of the Property Management Trading Entity (PMTE) to ensure proper management of client accommodation charges.
· Reviewing of the State Disposal Act of 1961
· Finalising of draft legislation for: Expropriation Bill, Council for the Built Environment Bill and Agrément South Africa Bill.
· Implementing a Facilities Management Policy and Strategy directorate;
· Development of skills in the built environment through the Young Professionals, Internship, Learnership Programmes and the bursary scheme. DPW is also reviving its workshops to absorb graduates to work under the mentorship of certified artisans.
- There are four Public Entities reporting to the Department of Public Works. The entities have identified, inter alia , the following key strategic programmes, for the MTEF period:
- The Construction Industry Development Board ( cidb ): growth and contractor development, construction industry performance, procurement and delivery management, construction registers services;
- The Council for the Built Environment (CBE); Built Environment Academy , centre for innovation and integrated planning, public interest;
- The Agrément South Africa (ASA): the focus will continue to provide assurance of fitness of purpose for non standardised construction technology;
- The Independent Development Trust (IDT): Community mobilization and development to provide support to institutions such as NPOs , serve as programme management agency on government infrastructure projects.
2.2 Planned Outputs of Programmes
The Department provides annual targets in its Strategic Plan as well as in its Annual Performance Plan. The Performance Plan includes further details of what and how the Department plans to achieve its overall objectives, by providing quarterly targets. The National Treasury expects the Departmental strategic outcomes to be: specific; measurable; achievable; relevant and time-bound (SMART). By following the above planning principle the Department may clearly account about its effort to reach its predetermined targets to the Portfolio Committee on Public Works.
2.2.1 Programme 1: Administration provides strategic leadership and support services, including the accommodation and overall management of the Department.
- Strategic Management Unit
- Inter-Governmental Relations and Parliamentary Services
- Monitoring and Evaluation
- Internal Audit and Investigation Services
- Finance and Supply Chain Management
- Corporate Services
2.2.2 Programme 2: Immovable Asset Investment Management seeks to provide and manage Governments immovable property portfolio in support of Governments social, economic, functional and political objectives.
Programme 2 receives a total allocation of R5.4 billion and constitutes 67 per cent of the total departmental allocation of 7993.8 billion. It consists of 11 sub-programmes of which a few select issues will be highlighted.
· The bulk of the programmes allocation R2.7 billion or 49.8 per cent goes towards Transfers and Subsidies.
· Current Payments receives R1.1 billion (21.2 per cent).
· Payments for Capital Assets receive R1.5 billion (28.9 per cent).
The following targets were set for the 2012/13 financial year:
· Service level agreements to be signed with 25 user departments.
· Populate 50 user departments User Asset Management Plans ( UAMPs ) to be finalised and submitted by the end of Quarter 4.
· Sign Capital Works Implementation Plans for 10 user departments.
· Monthly Reports to be submitted to 50 user departments.
2.2.3 Programme 3: Expanded Public Works Programme seeks to ensure the creation of work opportunities and the provision of training for unskilled, marginalised and unemployed people in South Africa by coordinating the implementation of the Expanded Public Works Programme.
The programme received a total allocation of R1.7 billion for the 2012/13 financial year. The bulk of the allocation goes to Transfers and Subsidies and constitutes 84 per cent of the programme budget:
· Current Payments received R265.3 million
· Transfers and Subsidies received R1.4 billion
· Payments for Capital Assets received 1.6 million.
Table 1: Quarterly targets for 2012/13
Youth Participating in NYS
1 200 increase by 300
1500 increase by
2 500 increase by 1 000
Number of on municipalities reporting on EPWP
120 increase by 60
180 increase by 20
200 increase by 60
Total no of work opportunities created
1 210 000
302 500 increase by 197 500
500 000 increase by 300 000
800 000 increase by 410 000
1 210 000
EPWP work opportunities via provincial access roads
40 000 increase by
80 000 increase by 20 000
100 000 increase by 30 000
2.4 Programme 4: Construction and Property Policy Regulation promotes the growth and transformation of the construction and property industries, as well as uniformity and best practice in construction and immovable asset management in the public sector.
Programme 4 receives an allocation of R37.4 million for the 2012/13 financial year, an increase of R2.5 million. The programme reports mainly on plans to finalise policy in preparation for tabling legislation and the finalisation of regulations.
The Department plans to deal with three pieces of legislation in the 2012/13 financial year. This includes the tabling of the Built Environment Professions and Expropriation Bill in Parliament in the 2012/13 financial year receiving approval to create Agrément South Africa as a public entity by March 2013.
2.5 Programme 5: Auxiliary and Associated Services seeks to fund various services, including compensation for losses on the Government-assisted housing scheme, assistance to organisations for the preservation of national memorials, and meeting protocol responsibilities for State functions.
Programme 5 received a total of R39.3 million for the 2012/13 financial year, an increase of R7.8 million from the previous years adjusted appropriation.
The following is reported under Economic Classification:
Current Payments : Of the 14 line items, only 3 are reported on with a total allocation of R17.3 million, while the rest of the line items do not report any allocation. However when calculating the total allocation for the three line items, it amounts to R29.6 million. This constitutes 75.2 per cent of the total allocation, instead of 44 per cent. These three line items include:
· Goods and Services R12.3 million
· Administrative Fees R2.2 million
· Contractors R15.1 million.
The stated amount is R17.2 million or 44 per cent of the total programme allocation.
Transfers and Subsidies consist of 56.0 per cent of the total allocation under Programme 5.
Payments for Financial Assets only reported an allocation of R265 000 in the 2010/11 financial year. The Committee was concerned that there was no reason reported for non-reporting in the 2012/13 financial year.
2.6 Long-term Infrastructure and Other Capital Plans
This section provides information on allocation made for various projects in different municipalities, including
· Departmental R278 million.
· Accessibility R28 million.
· Dolomite Risk Management R130 million.
· Land Ports of Entry R585 million.
· Inner City Regeneration R140 million.
· Special Projects R 323.7 million.
An additional R1.9 billion has been allocated for various maintenance and repair projects. The Committee notes that a further additional allocation of R886.7 million was for rehabilitation, renovation and refurbishment.
However, the Department has reported in the past that the allocations that were made remain inadequate for it to fulfil its mandate. Particular emphasis was placed on the allocations made for maintenance and repairs as well as rehabilitation, renovation and the refurbishment of State-owned buildings.
3. Independent Development Trust (IDT)
The Independent Development Trust (IDT) is a Schedule 2 public entity in terms of the Public Finance Management Act (No. 1 of 1999) (PFMA), reporting to the Minister of Public Works as the Executive Authority. It is a development agency offering programme management and development advisory services to Government departments and other development partners. The entitys emphasis is on the eradication of intergenerational poverty, especially among rural poor communities.
The IDT was established by Government in 1990 through a Government endowment of R2 billion, as an independent temporary grant-making agency. Between 1990 and 1996 the organisation in its capacity as a grant-making agency allocated and disbursed resources (through community-based organisations and structures) to poor and disadvantaged communities.
3.1 Strategic priorities of the IDT
The IDT has adopted four strategic objectives. These objectives are to:
· Build empowered and cohesive communities;
· Integrate social infrastructure development;
- Ensure organisational efficiency, effectiveness and sustainability;
- Transform the IDT.
3.2 Summary of the IDT 2012/13 Annual Performance Plan
The IDT presented both its five-year and annual performance plan in its 2012/13-2016/17 Corporate Plan. The IDT reported that it has budgeted a total of R376 million to achieve its objectives.
4. Agrément South Africa (ASA)
Agrément South Africa is the national centre for the assessment and certification of non-standardized building and construction products and systems. It facilitates the introduction, application and innovation of technologically sound solutions for the construction industry, by issuing fit-for-purpose certificates for non-standard products.
4.1 Recommendations on the State of the Nation Address and National Development Plan vision 2030
Strengthen broader technical capacity; hence Agrément South Africa has to:
- Review technical infrastructure supporting testing and certification in the building and construction industry
- Scope must include building regulations, codes and certification and supporting infrastructure
- Research and Development (R&D) infrastructure other than as support infrastructure to building regulations, codes and certification, and supporting infrastructure
Recommendation has been made for short-term bridging finance for Agrément South Africa . The entity is contributing towards:
- Job creation;
- Lowering the cost of doing business and the costs for households;
- Expanding the infrastructure;
- Speeding up and expanding renewable energy and waste recycling and ensure buildings meet energy-efficiency standards; and
- Transformation of urban and rural spaces.
5. Construction Industry Development Board ( cidb )
The CIDB is a schedule 3A public entity and its main objective is to provide leadership to stakeholders and to stimulate sustainable growth in, and reform and improvement of the construction sector for effective delivery. It seeks to enhance the construction industrys role in the countrys economy.
5.1 Core programmes of the cidb
- Strategic Goal 1: The achievement of sustainable contractor development requires a strong partnership with clients and associations/ stakeholders to ensure appropriate impact. The National Contractor Development Programme (NCDP) will be driven in partnership with the Provincial DPW and the Policy Unit of the NDPW.
- Strategic Goal 2: The process of improving the technology for quality service is a priority area and an exercise of enhancing the CRS system and electronic document management system (EDMS) is in the final stage and will assist in reducing the high risk of fraud in the processing of applications.
- Strategic Goal 3: The cidb will actively promotes and intensifies the mechanism of an audit blitz across the various levels of government as well as consider the establishment of an inspectorate to further enforce its compliance mandate.
- Strategic Goal 4: The cidb will engage the external stakeholders in the promotion, identification and documentation of challenges for revisions and improvements to the cidb regulations.
- Strategic Goal 5: The key instruments to support performance improvement, contractor development and risk management in procurement include the cidb Best Practice Contractor Recognition Scheme and the cidb Best Practice Project Assessment Scheme , which will be rolled-out incrementally in 2012/13. In particular, the cidb Best Practice Project Assessment Scheme will focus on providing opportunities for unemployed learners on projects, and for enterprise development through indirect targeting on construction projects.
5.2 Strategic outcome-oriented goals of the cidb
- Provide leadership and support in the development of the emerging sector;
- Improve and maintain efficient registration services;
- Enforce and monitor compliance with the cidb regulations and combat Fraud and Corruption in the construction industry;
- Promote performance improvement of organs of state through improved legislation;
- Support performance Improvement contractor development and value to clients;
- Improve the infrastructure delivery skills and management practices in the construction industry; and
- Build, strengthen and maintain relationships with stakeholders supported by comprehensive communication strategy.
6. Council for the Built Environment (CBE)
The CBE is a schedule 3A public entity and one of its main roles is to oversee the six built environment professional councils which regulate the professions of Architects, Engineers, Landscape Architects, Quantity Surveyors, Project and Construction Managers, as well as Property Valuers .
The CBE is responsible for the provision of strategic leadership to the six professional councils, and it must also ensure that the various professional councils operate and adhere to the industrys regulatory norms and standards.
6.1 Five-year strategic goals of the CBE
- Drive, support and advise on transformation in the built environment;
- Facilitate integrated development planning;
- Lead and strengthen stakeholder management;
- Develop CBE into a thought leader in the built environment;
- Reposition the CBE in the market place;
- Strengthen and implement a public protection regime;
- Inform and influence government infrastructure spend and professional practice to be responsive to public policy priorities; and
- Strengthen the administration function of the CBE.
6.2 Key priorities for the CBE
- Alignment of the policy planning and reporting processes of professional councils to the government planning cycles;
- Strengthening monitoring and regulatory work on delegated public functions of the professional councils;
- Establishment of structured candidacy programme to address bottlenecks in the skills pipeline;
- Stepping up mechanisms to drive transformation and ensuring adequate representation of women and black people within the built environment;
- Establishing and strengthening ties with equivalent bodies within the African continent with specific focus on the South African Development Community (SADC) region; and
- Enhancing internal systems, controls and capabilities to allow the organisation to deliver on its mandate and strategic goals.
6.3 2012/13 key focal areas for the CBE
- Programme 1 objective: Implementation of systems, processes and controls designed to assist the organisation to deliver on its strategic mandate and goals.
- Programme 2 objective: Drive and facilitate skills development within the built environment.
- Programme 3 objective: Facilitate participation of built environment professions to integrated development within the context of national goals.
- Programme 4 objective: Promote and enforce high standards of professional ethics within the built environment.
7.1 The IDT presented its planned strategic objectives for the 2012/13 financial year. The entity reported that it required funding for its continued viability, either in the form of a transfer or recapitalisation.
7.2 There were no specific timeframes with regard to drafting and tabling of legislation in Parliament by the Department of Public Works.
7.3 The implementation of iE Works and its challenges have not been cleared, and this would hamper progress in the finalisation of the Asset Register.
7.4 The funding of the IDT affects service delivery.
7.5 Entities reporting to Public Works to hire people living with disabilities in their organisations.
7.6 The use of innovative technology in the construction of schools results in the creation of less job opportunities or skills development for unskilled persons.
7.7 The certificate holders of Agrément -approved materials are subjected to quality audits that are performed by Agrément South Africa .
7.8 The cidb makes use of the audit blitz to monitor who complies and who does not comply with the regulations.
7.9 The cidb is providing more capacity to its Construction Contact Centres, enabling them to have full branch capacity in order to meet all the needs of the clients at regional level.
7.10 The four entities reporting to the DPW have created a forum that assists them in avoiding duplication and also assists in the sharing of resources amongst the four entities.
7.11 The Committee acknowledges that the Department of Public Works has serious capacity constraints that pose challenges in terms of delivery according to the mandate of the department.
8. Committee Recommendations
8.1 The Minister of Public Works should introduce in Parliament the outstanding legislation in the 2012/13 financial year, including amendments as proposed by the cidb on the cidb regulations that have already been submitted to the DPW.
8.2 The Minister of Public Works should ensure that all of the measures according to the annual performance plan of the Department have a baseline for easy monitoring.
8.3 The Minister of Public Works should come and present before the Committee the Department of Public Works strategy on fraud and corruption.
8.4 The Committee recommended that the internal audit controls within the Department of Public Works should be improved.
8.5 The Committee recommended that the use of consultants should be reduced in the national, provincial, regional Departments of Public Works and in all the four entities reporting to Public Works. It recommends that functions currently outsourced to consultants should be built in-house so as to ensure that the required skilled are available after the consultants complete their contracts. The contracts entered to with the consultants should be properly managed and the mandate given to the consultants should be clearly stipulated in terms of the duration of the contract and skills transfer.
8.6 The Committee should be clarified by the Minister of Public Works on how the planned transformation of the IDT will be funded.
8.7 The Committee recommended that the IDT should tighten its monitoring and evaluation processes as this has been identified as the weakest point through its business case and findings of the Committee on its oversight findings.
8.8 The Committee recommended that the entities should have people living with disabilities on their staff complement.
8.9 Agrément South Africa should assess viability over time and perform durability tests on the vela steel technology used to build schools in the Eastern Cape areas of Willowvale and Umgwili .
8.10 The Minister of Public Works should ensure that the national and provincial departments as well as municipalities comply with the cidb regulations; this can be done through legislation.
8.11 The Committee urges the Minister of Public Works to ensure a successful turn-around within a short space of time. The Department of Public Works needs to reclaim its mandate of providing state accommodation and buildings on behalf of client departments together with its entities, i.e. the Independent Development Trust in the building of schools on behalf of the Department of Basic Education.
Report to be considered.
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