Public Works and Rural Development 2009/10 budget speech tabled by MEC Fezi Ngubentombi

28 Jul 2009

Honourable Speaker and Deputy Speaker
Honourable Premier, Mr E S Magashule
Members of the Executive Council
Chairperson of the Portfolio Committee and honourable members
Mayors and councillors
Head of the department and officials
Honoured guests and people of Free State province
Ladies and gentlemen

Introduction

We dedicate the tabling of this first budget vote of the newly configured Department of Public Works and Rural Development in this fourth term of the democratic government to the rural communities of the Free State province. A large portion of our people in the Free Sate resides in rural areas. They constitute the majority of the poor. Most of them are women, children and the aged. As the ANC government we are duty bound to pay particular attention to the issue of rural poverty and underdevelopment.

Ditlhoko tsa batho ba rona mahaeng di sithabetsa maikutlo, ke ka hoo re tlang ho hlasela bofuma le tlhoko ya mesebetsi mahaeng a rona. Re tla etsa matsete metseng ya mahae ele ho theha menyetla ya mesebetsi. Re tla eketsa matsete a mmuso ho eketsa marang-rang ao e leng oona motheo wa moruo o phetseng hantle le keketso ya mesebetsi.

We begin this new term of office with a clear electoral mandate to work together to do more for the betterment of the lives of all our people. Central to this mandate is a programme of economic development and transformation aimed at putting our economy onto an employment led growth trajectory. This mandate was developed and will be implemented in the context of the global economic crisis and the need to address deep structural problems that preceded the crisis.

2009/10 budget allocation

Honourable speaker, our total budget allocation for this fiscal year is R709 million; Public Works which includes works and property functions has the biggest slice of this allocation at R544 million. For this financial year, rural development has been allocated R28 million. This allocation will expand during the three year Medium Term Expenditure Framework (MTEF) period. I must add that when the function has been fully defined the baseline allocation will be revised accordingly.

The allocation for Expanded Public Works Programme (EPWP) coordination is R46 million. Because of the transversal nature of EPWP, additional budgets for projects will also come from all provincial departments and municipalities

A new department with a strategic mandate

Speaker, we are conscious of the strategic mandate entrusted to our newly reconfigured Department of Public Works and Rural Development. The core areas of the department encompass public works, rural development, property management and the EPWP. These key government programme areas are central to the priority of economic development, transformation, employment and sustainable livelihoods.

We will use our infrastructure development programme to stimulate the economy during this period of recession. The Public Works portfolio will, once more, be at the centre of economic revival and development during these trying times. The sustainable way to economic development for the province is to build the industrial capacity in major sectors of our economy. We must therefore use programmes of infrastructure development for building the industrial capacity of the provincial economy.

Infrastructure development can have an impact far more beyond than just in the construction sector. It can positively impact in the entire business cycle of the economy. This is because a well developed infrastructure is a sound basis for higher rates of growth and sustainable development in the economy. Infrastructure development must lower the cost of doing business and facilitate social development.

Properly executed, infrastructure development can contribute towards labour absorbing industrial growth and competitiveness in the main industries of the provincial economy, namely mining, agriculture, manufacturing, tourism and petrochemical industry. This is how we need to understand the role and potential of public works in the current economic policy trajectory.

Speaker, our electoral mandate enjoins us to treat rural development with more urgency and as one of our main five priorities. We will therefore work to build vibrant and sustainable livelihoods in rural areas. In the medium to long term, we will develop the economic and social infrastructure, agro-industries, cooperatives and vibrant local markets in rural areas. We will also give more attention to the issue of a synergy between land reform and sustainable livelihoods in the rural areas.

We are currently in the process of developing a comprehensive rural development strategy for the province. The corporate strategy and structure of the department will therefore be designed to articulate Public Works and Rural Development as two important distinct yet interconnected functions of the department. During this financial year we will reorganise to improve our capacity to deliver in terms of the core functions of the department with special emphasis on rural development and job creation. We will enhance our capacity in all our components, both line function and support service. As a new function of the department, the rural development will be expanded over the MTEF period.

Honourable speaker, the security function will during the course of the financial year, no longer form part of the mandate of the Department of Public Works and Rural Development. Thank you to the women and men who rendered commendable security services to this department and trust that you will take security to greater heights at the Department of Police, Roads and Transport.

We will fill strategic posts to fulfil our mandate of leading infrastructure and rural development. Recruitment will be prioritised taking into account the empowerment of women, youth and people with disability. Our recruitment and skills development program will focus on project management, technical, professional, artisan, risk, finance and especially the property environment. Professional registration as prescribed by law for staff within the built environment will also be actively pursued. We will further enhance the culture in this department towards service excellence to create an environment departmentally where all staff renders high quality service to all clients and customers within the ambit of the noble principles of Batho Pele.

Public Works

Speaker, following the pronouncement by the premier to consolidate all Public Works functions back to the Department of Public Works and Rural Development; we will start the process of accommodating and integrating within our department all Public Works components from provincial departments during August 2009. We will therefore redesign our structure to accommodate all the requisite capacity for this function.

As I speak, we are hosting the fourth National Construction Week since 26 July until 2 August 2009 to highlight the centrality of the construction industry in growing and developing our economy. We are therefore involved in activities aimed at showcasing the construction work we are doing in the health and education sectors as priorities for building a better life for all. In celebrating the August Women’s Month, we will also host the Women in Construction Awards on the fifth of August 2009 to pay tribute to women who are making strides to change the gender make-up of the construction industry as part of building a non-sexist South Africa.

During this financial year and beyond, we will move with speed to deliver the much needed social infrastructure such as schools and hospitals. We are already tightly monitoring all the projects we are doing for the Departments of Education and Health in this regard. We are continuing with works projects that started in the past financial year as announced by my predecessor in this house.
Construction of healthcare facilities will go a long way in expanding access to health care services which are so basic in our quest to build a better life for all. We are also working very hard to do away with sub dividing schools in all parts of the province. The development of school infrastructure will feature prominently in our priorities.

A business case was pursued and accepted for an alternative funding methodology that will be used for the phase two of the development of the government building. We will continue to render service for the support of our small contractors. The Construction Contact Centre (CCC) which was officially opened last August will play an instrumental role in this regard. The Construction Contact Centres will embark on a road show programme to hold workshops for contractors in the other four districts; Lejweleputswa, Fezile Dabi, Thabo Mofutsanyane and Xhariep. The main focus areas would be the small towns in these places. The expansion of the Construction Contact Centres footprint in the other districts will be considered within this financial year (2009/10). This could be a pilot project from which to draw lessons before the concept is implemented in the other four districts.

Mass mobilisation of the Expanded Public Works Programme (EPWP)

Honourable speaker, building on the successes of the first phase of EPWP, we will implement the second phase of EPWP with more vigour to create job opportunities and develop skills for beneficiaries. In the current financial year, my department will implement labour intensive construction projects aimed at delivering much needed community level infrastructure, whilst at the same time, contributing towards attaining the 50 000 job creation target set by the premier in his state of the province address on 15 June 2009. We can indicate that we will create 18 000 job opportunities that is a national set target.

As part of Operation Hlasela, we will contribute, through EPWP projects, to the revitalisation of Batho Location, particularly renovating the Maphikela Triangle. In building social cohesion in rural areas, the Expanded Public Works Programme will renovate four community halls in the Xhariep district towns of Smithfield, Jacobsdal, Edenburg, Rouxville as well as Boshoff in the Lejweleputswa district.

From November 2009 for a period of 12 months, the department will commence with a labour intensive access road in Jaggersfontein amounting to R10 million.
We will respond to the call of Township Revitalisation programme by building an ablution block and fencing the cemetery in Jaggersfontein. These projects will alleviate unemployment in the poverty stricken district.

To heed the call of the president and continue the spirit of Mandela Day, we will renovate the Kroonstad house of the late Reverend ZR Mahabane, former President of the ANC. The Constitution of the Democratic Republic enjoins us to honour those who fought for national liberation because they gave us our humanity. As part of our commitment to providing accommodation to Early Childhood Development Centres the EPWP unit will complete the construction of the Smithfield Crèche. The department together with the National Department of Public Works and Masilonyana local municipality have put systems in place to launch a pilot project on waste management, the aim of which is to clean and green the designated areas.

This is consistent with the premier’s call in his state of the province address about launching National Youth Service (NYS) projects focusing on cleaning and greening. It is expected that 60 households will benefit from this pilot project budgeted at R600 000, all goods and services linked to the project will be sourced from local suppliers so as to contribute to the local economic development.

On 9 July, I had a workshop with all the municipalities to discuss the effective implementation of the second phase Expanded Public Works Programme (EPWP) in collaboration with the municipalities. At the workshop, we also agreed with the municipalities on signing a Memorandum of Understanding (MOU) on institutional mechanisms for effective implementation, reporting and monitoring and evaluation of EPWP by all 25 municipalities of the Free State. To date three municipalities in our province have signed a memorandum of understanding with the national Department of Public Works to access the incentive grants as a result of their performance in the implementation of EPWP and job creation. We will together with the Department of Corporate Governance and the Office of the Premier sign memorandum of understanding with all municipalities in the province, the purpose of which is to define the roles and duties of each public body in the execution of EPWP which will go a long way towards attaining the 50 000 job opportunities set by the premier in his state of the province address.

Honourable speaker, the department has been coordinating all National Youth Service (NYS) activities in the province and will continue to do so even in the current financial year. There have been successes and challenges that were experienced during the execution of the NYS programme. We do, as the coordinating department take directives from the premier’s state of the province address that with regards to the NYS emphasis should be laid on the clean and greening projects as well as in the built environment. This is a directive that is applicable to all departments and municipalities in our province.

The lessons we learnt from the previous financial year as well as our successes in the implementation of the NYS programme, will assist us in taking forward the programme. In the last financial year we were able to select and train 107 young people from Motheo and Xhariep in the built environment, some of them have since been absorbed by parastatals and the private sector as part of their exit strategy. We however continue to source funding from potential partners so as to ensure that 393 youth who were not able to participate on the programme do so.
Our emphasis in this current financial year is on ensuring that all departments and municipalities in particular, participate in the NYS programme. We will engage the municipalities in this regard.

In an endeavour to absorb youth and women into the active sectors of our economy, the department in partnership with Whole and Retail Sector Education and Training Authority will implement a new venture creation learnership. 30 young people from all over the province will be participating in this 18 months learnership. Upon successful completion of this learnership they will become fully trained entrepreneurs who will be having the necessary capacity to provide quality goods and services to the market.

Property

Speaker, as part of our contribution to the objectives of the Property Transformation Charter, we have now got twenty four lease contracts with historically disadvantaged individuals out of one hundred and forty seven, and monthly payments to the amount to R1,6 million out of a total of R9 million. This has been realised despite resistance from the established property players to transform and the inability to access finance by most historically disadvantaged individuals. We must however also report that this achievement was not realised without any challenges, hence the department working together with the Office of the Premier has interacted with established property industry players where effort is made to facilitate disposal deals to historically disadvantaged individuals.

The department will in this financial year implement the Property Incubator program which seeks to develop skills in property related disciplines and create new ventures. We will in the current financial year create five new historically Disadvantaged individual (HDI) companies in the property industry. The department will be disposing of numerous residential properties which are not used for government’s service delivery objectives. We will, during this financial year, continue the process of disposing residential properties in Kenzie Town, De Bult, Botshabelo, Thaba-Nchu to mention a few to their current occupants. This process will commence once rates clearance certificates have been issued by the municipalities.

The rates and taxes function was devolved from the National Department of Public Works (NDPW) on the first of April 2008 with a conditional grant of R125 million and R140 million for 2009/10 which amount is based on what NDPW had been paying for provincial properties’ rates and taxes. We must also report that the grant was under spent by R48 million in the last financial year, and this is despite the fact that we know that we were liable for more. Property rates and taxes remain a challenge for this department because of substantial number of government properties not registered in the name of the Free State provincial government due to:

undue delays in the vesting process;
reluctance by municipalities to issue rates clearance certificates on provincial properties previously registered in the name of the municipalities without collecting the related outstanding rates revenue.

We are working tirelessly with the National Department of Public Works and Provincial Treasury to settle all rates and taxes debt accrued before April 2008 as a result of properties not being registered, this is an act of goodwill on the part of the province because the Municipal Ordinance eight of 1962 clearly states that only the owner registered in terms of the Deeds Registry Act is liable for payment of rates and taxes in a municipality. We are proud to mention that we are paying rates and taxes 95 percent correctly on verified properties and invoiced in nineteen of the twenty local municipalities in the province.

The department will engage the municipal chief financial officers on 13 August 2009 to ensure that all the challenges regarding property rates and taxes are dealt with in order to support the municipalities in their revenue generation.
There was a call at the health summit to prioritise residential accommodation to health professionals of the Department of Health. In this regard, the department will issue eviction notices to people currently occupying the doctor’s quarters at national hospital in Bloemfontein and then renovate for occupation by the end of December 2009.

The department is also working on maintenance and revamp of the houses of the political office bearers. Speaker, our success in pursuing rural development should serve as litmus test for the all important cause of building a better life for all in the Free Sate province because we are largely a rural province. Our rural development function is more than just a core function that can not only be delivered by a single government department. It is a transversal function that has to be performed in collaboration with other government departments, provincially as well as local government.

As mentioned before, we will develop a comprehensive rural development strategy for the province. The main pillars of such a strategy will be building social infrastructure, economic infrastructure and public amenities and facilities in rural areas and building sustainable and vibrant rural communities. Rural development is about empowering rural people to take control of their destiny, thereby contributing towards the eradication of poverty and addressing underdevelopment through optimal use and management of resources.

Government has in the context of building sustainable livelihoods advanced the need to build a vibrant cooperative movement. Whilst this perspective was not specifically targeted to rural development, we need to ensure that the building of vibrant cooperatives becomes an important ingredient of our rural development strategy. Within the context of the R28 million budget allocated to rural development, and the R50 million of the national Department of Rural Development and Land Affairs allocated to the Free State province, we will during the year in consultation with the local communities kick-start projects as follows:

Cornelia Premier Flagship project
Agri-Village Projects in;

Thabo Mofutsanyane
Roadside
Thaba Nchu
Bethany resettlement (Xhariep)

In executing the above projects we will be biased towards local communities, local suppliers, and particularly youth, disabled people and women.
Honourable speaker, I wish to report that the premier, the minister of Rural Development and Land Reform and I visited the Diyatalawa agricultural project on 23 July 2009. We conducted house to house visits in the area to listen to the needs of our people. This project exemplifies collaboration between national, provincial and local governments. Collectively the role players will during the course of this financial year invest in building houses, roads construction, agricultural projects and a crèche.

Conclusion

We pledge to continue building on the past political term achievements. We will intensify our efforts to accelerate property industry transformation, mass mobilisation of Expanded Public Works Programme, improve and speed up our pace of infrastructure delivery. We will implement our development projects and programmes with the sole purpose of growing the economy, reducing poverty and unemployment in the Free State. We salute the continued good work performed by Cuban engineers in the Department. Their contribution helps to strengthen the relation and solidarity that exist between the peoples of Cuba and South Africa.

In conclusion, our people yearn for improvements in their lives and rural development. All they deserve from us is a quality and speedy delivery of basic services. It is our firm belief that we can together do more and better. Honourable speaker let me take this opportunity to thank the new Head of Department, Me Nthongoa and members of the senior management, my support staff and all officials in the department for their commitment and dedication. I thank my husband and family for their support and understanding they have given me during my unavailability in time of need. This support has been important in placing our department’s developmental mandate at the top of the provincial government mandate.

Speaker, the 2009/10 Budget Vote of the Department of Public Works and Rural Development is hereby tabled.

I thank you.

Annexure
Departmental budget per programme
Public Works and Rural Development budget per programme, 2009/10 budget (Rand thousand)

Administration: 91 596