Theme: Improving public infrastructure and creating employment
opportunities to make Gauteng work better
Honourable Speaker
Honourable Premier of Gauteng
Colleagues in the Executive Council
Honourable members of the Provincial Legislature
Distinguished guests
Members of the Fourth Estate
Ladies and Gentlemen
All Protocol Observed
Honourable Speaker, We stand to note and acknowledge the inputs of various honourable members of this esteemed house regarding our Annual Report for the financial year 2011/12, which we tabled before you in September.
Indeed we welcome due oversight and critique of the work we do, as a department charged with the responsibility of literally changing the landscape of Gauteng for the benefit of our communities.
I want to assure honourable members that we take this noble mandate very seriously, and are determined to channel all our energies each day, towards making life that little bit better for
Gauteng citizens, by getting it right in Department of Infrastructure Development (DID).
Allow me Speaker to briefly highlight some features of our annual report, to refresh the minds of some of the honourable members.
Honourable Speaker, we announced in our Annual Report that the Department of Infrastructure Development has received an unqualified audit opinion for the 2011/12 financial year.
While this achievement is a source of some comfort, it is anything but satisfactory for a department seeking to perform a few notches above average.
As a service provider department, ours is a privileged position from which we can touch the lives of our people in many ways.
But that can only happen when we do it diligently, as we say in DID. Doing it Diligently starts with getting our own house in order. As such, we have noted the matters of emphasis that the Auditor-General highlighted in as far as our finances are concerned.
We wish to flag issues to do with contract management and our supply chain management that attracted the Auditor General’s eye in particular.
The AG raised with us about 39 exceptions, ranging from our human resource practices and policies, to supply chain management, performance management to even issues to do with collection of parking fees from our employees.
We take the AG’s findings so seriously that we’ve responded with a clearly spelt out, target-specific action plan, with clear lines of responsibility for implementation.
Allow me honourable speaker to run through the highlights of our detailed action plan to address the challenges the auditor general identified in our department.
The Auditor-General was concerned about the issue of under spending on the conditional grant totalling R 28 million, received from the National Public works Department.
Honourable speaker, as we explained to the house when we tabled the annual report, part of the reason for this material underspend stemmed from municipalities not submitting claims on time.
The working team established jointly by the department and municipalities has begun work to once and for all address this issue and ensure that it doesn’t recur.
Our response to this particular matter of emphasis raised by the AG goes beyond just the R28 Million rand conditional grant. I have instructed all senior managers in my department that we are to have no issue of under-expenditure by the end of this financial year, period. This applies even to appropriations from client departments.
It is unacceptable that we have funds allocated for service delivery, only to sit in departmental coffers for a full financial year, and then surrendered back to treasury, while the needs of our communities remain unattended.
Allow me speaker to highlight the work we are doing to address the issue of accruals.
Accruals have been on a steady and commendable downward trend for the past 3 financial years. In the 2011/12 financial year accruals amounted to R 159 million, of which R100 million related to invoices received within the month of March 2012, as the financial year end
drew to a close.
The work of the Supply Chain Management Re-engineering Project is beginning to pay off.
Speaker since the last time I stood in this house tabling our annual report, we’ve instituted key interventions in our supply chain management, including filling the strategic position of Chief Director, and kick-starting the recruitment process for vacant posts within the SCM unit.
We are also reviewing our business processes, and supply chain management policy. New bid committees have been appointed, and training is underway for officials in supply chain management. And I need to highlight the importance of the last point Speaker, about the appointment of the new bid committees.
In terms of our new approach, two ad-hoc bid committees will deal with the initial phases of project conceptualisation, development of specifications, advertising, as well as vetting, and evaluation of suppliers and service providers.
The third committee, being the bid adjudication committee will be a permanent structure that considers and approves tenders based on recommendations of the two earlier committees. More importantly these bid committees will be constituted by experts in various fields, to ensure that the decisions they take are sound, both technically and financially.
I’m determined Honourable Speaker and Honourable members that soon there’ll be no room for consultants to do any tender specifications on our behalf. We are the service provider department of the Gauteng government, we know the needs of client departments, we do the project scoping, we oversee the project implementation, and ultimately we take responsibility for the quality, scope and cost of all capital projects.
Speaker, recently we’ve seen the public service commission conducting public hearings on the issue of government departments’ adherence to the public finance management act requirement for service providers to be paid within 30 days of invoice.
The hearings have been a sore reminder, if we needed one, of our collective culpability in what those who attended some of these hearings described as ‘turning service providers into beggars’.
I am determined Honourable Speaker, that this will not continue at DID, NOT ON MY WATCH! As such, our supply chain management and finance units are toiling tirelessly at ensuring that we comply with this requirement of the public finance management act.
Among the many interventions we are putting in place is the payment register, which is to be kept in our finance directorate and updated daily. Our aim is to have daily cash reconciliations done, regarding client funding to ensure that payments are released expeditiously. In addition we want this cash register to be signed by our finance director once a week to monitor progress on payments.
We are not at the compliance level we want to be, with regards to the 30 day payment principle, but I will not relent until we achieve full compliance.
Honourable speaker, honourable members other issues raised by the Auditor General include concerns about our performance monitoring. Basically the concern here is that our planned performance targets for the various directorates and units are neither specific, nor time bound. A further concern is that our reported performance is below what we had targeted. Our intervention in terms of the action plan includes a requirement we’re insisting on for the current financial year, that reasons for variance between targeted and reported performance are disclosed, no matter how significant or otherwise, the variance is.
In addition, we’re introducing a system of certificates to be issued by our Monitoring and Evaluation unit when unit heads submit quarterly reports.
Speaker our stated goal is to be the premier construction agency of the Gauteng government. That necessarily means we have to ensure that each and every one of our employees puts their shoulder to the wheel, especially those in senior management. I can proudly report to honourable members that nearly all of our senior managers have now signed performance agreements.
Speaker we continue to attend to the various aspects of finance, contract, and supply chain management, with one resolute goal in view; a clean audit opinion for the next financial year. It is well within grasp, and with the full implementation of all the measures we’ve put in place, we will attain this goal.
We are addressing for instance the issue of unauthorised expenditure, which the AG raised with us, by ensuring all payment batches for purchases and acquisitions above the threshold of R 500 000 are accompanied by at least 3 quotations, as required by law. Our finance department has been directed to ensure that no payments are effected on a payment batch with just one quotation, as happened in the past.
Based on our annual report the auditor general also raised concerns about our employees not making declarations of interests. This, Speaker was a truly worrying phenomenon, especially in an environment where questions of transparency crop up from time to time. We’re in the process of addressing that anomaly Speaker, and have started with our senior managers and DDG’s, ensuring that they declare their interests. Our plan includes a register that will tabulate employee interests, which will be kept in the office of the MEC.
Speaker, as part of a battery of measures aimed at ensuring that the senior managers we entrust with state resources and key decision making are beyond reproach, we’ve begun the process of vetting of our senior managers and DDG’s, focusing especially on those senior employees who deal with procurement, including those who sit in bid committees and Departmental Acquisition Committees.
Honourable speaker, honourable members, our ‘raison d’etre’, the reason why we exist as a department is to build and maintain quality public facilities that enhance the overall experience of each and every one of the 12.3 million citizens who call this province home.
Our strategic objectives are to expand and maintain public infrastructure to promote the development of the province and redress economic disparities.
To manage the provincial property portfolio for the optimum benefit of all citizens, with an emphasis on maximising access, utilisation and value.
To implement and coordinate the Expanded Public Works Programme (EPWP) in a way that enhances skills development and optimises decent employment and entrepreneurship.
Lastly to improve the technical and administrative capacity of the department in providing an efficient, effective and development oriented public service and creating an empowered, fair and inclusive citizenship.
Speaker when we meet these strategic objectives, the difference will be felt by Gauteng citizens in the quality of the schools their children attend, the primary health care clinics and hospitals they seek help from when they’re sick, and in the old age homes the elderly spend
their latter days in.
Honourable speaker and members, Knowledge of our strengths and weaknesses will go a long way towards helping us unlock our potential to live up to our noble mandate as a department.
We’ve undertaken a comprehensive diagnostic study of the department, the facilities and properties it manages, as well as the projects and works it carries out on behalf of client departments.
The outcomes of this comprehensive environmental scan point to the need for a complete overhaul, a restructuring of the department as a whole.
Among many issues, our study has pointed to the issue of Capacity, as the key to delivering projects that are within scope, on time and within budget.
I don’t need to remind the honourable members about the unacceptably high cost of failure to deliver projects on time, and within budget.
Costs escalate when a project that was meant to be done and completed within a year, ends up running for 4 years. Such escalation of costs robs the tax-payer of financial resources that could be channelled towards the betterment of citizens’ lives.
Our study found among others that one of the key challenges in delivering on our mandate has been the disproportionate ratio of 80 percent of DID employees being administrative staff and only 20 percent being technical.
Speaker, needless to say this is clearly unacceptable in a coalface department such as ours. Our plan is to change this ratio around, to 80 percent technical expertise, and 20 percent administrative. Our drive which began in August this year, to recruit specialists in the fields of engineering, quantity surveying, and architecture is well underway.
This is of utmost importance Speaker and honourable members, as it will allow us to be hands on, in the projects we carry out, rather than relying on contractors, and consultants telling us what work needs to be done, over what period of time and for how much. Our approach going forward is, for all the capital projects we’re undertaking we do the project scoping, and we do the specifications.
In addition, it is our stated objective to deploy a DID project management team, that includes a project manager for every capital project we’re undertaking. The days of service providers delivering to a site 99 bags of cement, instead of the agreed 100 are over.
We plan to condemn project over-runs to the dustbins of history. We plan to have our eyes everywhere, with our own project managers ensuring that quality projects are delivered on time and within scope and budget. We will also be holding all contractors doing work for us accountable to the same standard of quality infrastructure delivered on time, and within budget. We will not hesitate to black list those contractors who fail to live up to expectations.
This hands-on approach necessarily dictates that we need to enhance our capacity to plan, coordinate and monitor delivery on our key functions. Speaker, I’m pleased to announce that we are putting final touches to our Organisational structure, with a focus on those directorates that are technical in nature and will help us put consultants out of business in DID. In the days to come, we will be submitting our organisational structure to the Minister of Public Works for approval.
Honourable Speaker, as part of our restructuring process we are also doing away with regional DID offices altogether. Instead we will align our field offices with the central hospitals cluster model. It’s more efficient to do this Speaker and honourable members, as it allows hospital CEO’s for instance to hold DID employees stationed at their hospitals to account.
Part of the reason we’re doing this speaker and honourable members is that in our comprehensive environmental scan, we have picked up that many of the problems we’ve experienced in the department have their roots in the system of regional offices. Until now, regional offices had the authority to deliberate and decide on projects of up to R 500 000. Our on-going investigations point to systemic weaknesses and downright unscrupulous practices such as inflation of prices. The new cluster model we plan to implement will help enhance accountability, and help the department negotiate some of the pitfalls inherent in the supply chain management system.
On the maintenance side of business, we are also emphasising the importance of capacity. Among the key decisions we’ve taken, is the deployment of teams of 7 technical experts to the province’s 4 central hospitals, Dr George Mukhari, Steve Biko, Charlotte Maxeke and Chris Hani Baragwanath. The teams will be made up of a mechanical engineer, civil engineer, quantity surveyor and 4 other artisans. This is aimed at helping us quicken response times, in the event of infrastructure related problems.
Our commitment to client departments such as health, education and social development is such that we want them to hold us accountable if, for instance at health a patient dies as a result of a structural defect that we should have prevented by doing our job of maintaining hospitals and clinics. We should take the flak, and the resultant lawsuit in those instances, not our client departments.
Honourable speaker and members, I’ve spent considerable time in the past few months visiting the province’s hospitals and clinics to assess the state of infrastructure. Our main focus has been on the electro-mechanical challenges such as the state of boilers, chillers, autoclaves, lifts, and generators.
The challenges we’ve identified are quite serious, especially those relating to the age of infrastructure like coal and diesel fuelled boilers.
In our interactions with doctors and nurses at these institutions we visited, we witnessed for ourselves how something as simple as a non-functioning boiler can trigger a chain reaction of dysfunction in the entire system.
At George Mukhari doctors told us how a backlog can be created for their theatres, when a boiler is not functioning, therefore affecting availability of steam for various uses, including sterilisation of garments.
These challenges are receiving our urgent attention under Project 274, with a commitment that we will resolve most of these electromechanical problems in the health sector by the end of this financial year. We have committed approximately R450 million towards electro-mechanical and plant equipment at health care centres.
In addition, we continue to seek permanent, sustainable and eco-friendly solutions to those challenges that arise out of the unreliability of old electro-mechanical and plant equipment, such as boilers.
Speaker, and honourable members, I will soon be in a position to give details of an exciting Natural gas fuelled power generation plant we are proposing at Chris Hani Baragwanath academic hospital.
Speaker we’re consulting our colleagues at Health, and other stakeholders in the Provincial Executive Council, on this proposal which we are confident is both feasible and worthwhile.
The proposed plant would ease the headache of old boilers that need constant and costly repairs, as well as challenges relating to the quality of coal delivered to our hospitals by suppliers, and the costs of electricity, coal and diesel.
Honourable speaker, the sharp increase in our population as a province, as reflected in the latest Census figures means we have to be innovative and creative in the solutions we implement to keep up with ever-growing demand for services and infrastructure. As our provincial government motto says, ‘Kuyasheshwa’!
Speaker in that spirit, I wish to give honourable members, just a teaser of some of the exciting work we’re doing in pursuit of the outcome of achieving quality basic education. Speaker, we are proud to have launched, just last week, the state of the art, fully resourced Orefile Primary school in Olivenhoutbosch, constructed in a record breaking time of just under eight months using Alternative Construction Methods. Working with our partners the Independent Development Trust, we are exploiting the advantages of these Alternative construction Methods and are using ACM’s in the construction of 3 other schools, and Grade R classrooms and ablution facilities at schools across the province.
Other programmes and projects we’re carrying out in pursuit of the objective of quality education include our New Priority Schools Programme, which we launched a few weeks ago. We’ll spend R 700 million on schools in terms of this programme. 9 of these schools
will be completed by the end of this financial year.
Honourable Speaker, I feel the need to address the issue of the National Youth Service, which is one of our flagship programmes aimed at nurturing young people and endowing them with skills and experience in various fields. The NYS has unfortunately faced a myriad of challenges, and has dominated headlines for all the wrong reasons.
Speaker, the main problems we’ve experienced with the NYS have to do with the expectations of the participants, not aligning with the aims and objectives of the programme. We’ve witnessed on a few occasions NYS participants staging protests, demanding for instance that the current stipend be increased manifold.
Here are the facts of the National Youth Service. The NYS is a training and skills enhancement programme, and not a form of employment. It is merely a vehicle to help our youth ready themselves for further study at institutions of higher learning, or employment.
The stipend is not determined at provincial level, but rather at the national level, and therefore demands for DID to increase the stipend are misplaced.
We are dealing with the backlog in payments and as we speak, our finance unit has effected over 95% of the outstanding payments. The only outstanding payments are those where bank account details needed to be verified.
With regards to over-payments, we can confirm that these amounted to R 1.8 Million. The process to recover the overpayments is well underway, and to date we’ve recovered R 63 800. Letters are currently being sent out to other debtors, to ensure full recovery of these amounts.
2500 learners have been recruited for the 2012/13 financial year, and they started on the 1st of November. They will be stationed at diverse institutions such as the City of Johannesburg, Sedibeng and West Rand District municipalities, as well as the departments of Health, Community Safety and Roads and Transport.
Speaker, we remain committed to ensuring that this very important programme succeeds in making a real difference in the lives of our young people.
Speaker and honourable members, I’ve given you an outline of the various programmes and projects we’re undertaking as a department, mainly to demonstrate that this train of tangible service delivery has left the station, and is moving full steam ahead.
By the time we table our 2012/13 annual report, you’ll be seeing a decisive turn around in the department’s outlook and orientation. With the dedication and innovation of our team at DID, and your support honourable members, we are progressively approaching our target of being the “Premier construction entity of the Gauteng Provincial Government”.
I thank you.
