N Kganyago: ABSA Brokers Year-End Function

12 October 2007

Programme director
Invited guests
Ladies and gentlemen

It is a great honour for me to be invited to this, your year-end function. I
have been given a very interesting topic: The importance of insuring your
assets. But before I talk about this issue in the context of government
perspective, I would like to know, why are you guys called Brokers? It sounds
like an oxymoron banking brokers that protect or enhance assets. A broker to me
sounds more like someone who breaks something rather than build something.

Talking about building, this leads me to the issue at hand. The Department
of Public Works is the property manager of all government properties. It is
involved in leasing, managing, selling and acquiring land on behalf of the
state. It also manages the building and construction industry in the country
through organisations like the Construction Built Environment (CBE) and the
Construction Industry Development Board (CIDB). The value of the properties
under management by the department is over R10 billion.

That is a huge investment that needs to be insured against all sorts of
dangers, not least of all its degradation and collapse. The government is
taking an active interest now in its property portfolio. We are becoming much
more involved in its management and securing it for the future generations.

Even at a personal level, I believe that one needs to insure one's assets so
that they can remain protected in the event of a sudden misfortune. Having an
insured asset gives one a great sense of contentment in the knowledge that even
if one were to die today, the surviving members of the family would not be left
stranded because the assets are insured against any eventuality.

I want to believe that even when one prepares for the future, that person is
insuring his assets. If you are well prepared for the future, you will never go
wrong. Nothing will catch you unawares. A future anticipated is a future well
insured. Likewise the government is in a crusade to insure its assets because
it realises that the future will be bleak without this insurance. This
insurance that I am talking about is the programme that have been launched to
ensure that the state properties are looked after and made even more
attractive.

We have realised that our property portfolio can deliver more than just
accommodation for state departments. Our property portfolio is also being used
as a training tool for the youth of our country. In April this year, we
launched the National Youth Service (NYS) in Botshabelo in the Free State. This
initiative is meant to provide hands on training for the youth in all the
relevant skills in the field of property, including building, maintenance and
management.

Ladies and gentlemen, we believe that the NYS initiative is a first step on
the long road to satisfying our country's great need for artisans as well as
providing our youth with an opportunity to get started as employed people as
well as being entrepreneurs.

During the state of the Nation address in Parliament earlier this year,
President Mbeki indicated an urgent need for the Expanded Public Works
Programme (EPWP) to be stepped up a gear to provide greater leadership to job
creation and skills development efforts of government. We have tried to carry
out the marching orders. A lot of ground has been covered since that launch and
we have since launched the programme in many other provinces.

Honoured guests, our government assets, particularly our buildings, give us
a particular leverage to be used to create employment for the youth. We are
aiming for a skills revolution and empowerment for our youth. The young people
who are being recruited to this programme will also be enrolled with our
further education colleges and those industry colleges as artisan trainees so
that at the end of their national youth service they would have given their
service to their country whilst gaining skills for themselves as well.

This programme and other like the Vukuphile Programme, which is helping
budding contractors to gain training and skills and hence the opportunity to
access building contracts, is all part of our insurance for the future. They
provide a beacon of hope for the youth of our country. They are also a clarion
call for them to pick themselves up and make use of all the opportunities that
are being availed to them for self-improvement and that of their country.

Our Expanded Public Works Programme is just one component of government's
strategy to overcome unemployment and poverty. It is a national framework to be
implemented by all public entities through their strategic objectives, revenue
base and capital budgets. We are focusing on using public sector spending so as
to achieve developmental outcomes in respect of reducing unemployment and
poverty. If implemented effectively, the impact could be significant, as public
sector spending constitutes 25 percent of Gross Domestic Product (GDP).

Service delivery, poverty alleviation and job creation are paramount
objectives of government. The National Youth Service is one of our strategies
to deliver on these objectives. The maintenance and provision of infrastructure
are some of the tactics. These areas of activity will create work opportunities
for the youth that has been selected, but they will also help improve the
skills base of the country.

Our focus on the construction sector and allied sectors takes full
cognisance of the immense potential of the industry as a creator of job
opportunities. Under the impact of growing investment and the EPWP, employment
in the construction sector has risen greatly. With construction output set to
double in the next ten years, the industry has the potential to generate
thousands of jobs by 2014, contributing greatly to the goals of accelerated
growth. Many of those who will be employed will need to be skilled.

Indeed our country is in a grip of a great skills shortage and need. Our
country is in the throes of a massive infrastructure development and
improvement programme. With growth rates in construction spend of around 10
percent per annum, the highest that it has been in the last 30 years,
construction spend is in fact growing at a higher rate than Gross Domestic
Product. However, there are many challenges that need to be tackled in a range
of public and private sector partnerships to further unlock infrastructure
bottlenecks and to create capacity and skills.

The challenges in the built environment are huge and need urgent attention
as the deadlines are so tight as well. Even as the government accelerates the
infrastructure development, the demographic profile of registered built
environment professionals is a long way from reflecting the demographics of the
country. As the economy begins to boom with upward trends predicted well beyond
2010, there are increasing demands for professional services, and the pool of
skills represented by built environment professions should increase
accordingly.

However, current trends, with specific reference to the built professions,
indicate that this important skills base is in decline, with very few new
entrants compared to the large numbers who are leaving the profession. That is
why is vitally important to continuously and urgently replenish the human
resources in the built environment with young, enthusiastic and determined
young people.

This is what I call the importance of insuring the future. We are going full
steam ahead with our initiatives because we realise the importance of insuring
our future and the following generations.

I wish you well in your future endeavours to broker and insure the future in
your own ways and means.

I thank you.

Issued by: Department of Public Works
12 October 2007