2022/2023 Budget policy speech for the Department of Public Works and Infrastructure, presented by the Honourable MEC Motshidise Koloi:
Madam Speaker
Honourable Deputy Speaker of the Provincial Legislature Honourable Premier
Honourable Members of the Provincial Legislature Members of the Executive Council
Executive Mayors and Mayors Present Councillors Present
Leaders of the Opposition Parties Traditional Leaders Present
Director General and Heads of Departments Senior Managers and General Staff
Our Invited Business People Our Strategic Partners Distinguished Guests Comrades and Friends
INTRODUCTION
Madam Speaker
I am here once again to table and present to you our Departmental Policy Budget Vote in an endeavour to bring back hope and assurance to our people that we are here to serve.
We table this budget vote noting the challenges of service delivery in our communities and we remain committed in addressing those challenges. Our commitment is that the country should not go back to the society we had before the health emergency COVID 19 pandemic, where we were the one of the most unequal society. We had high levels of poverty with an economy unable to register significant levels of growth. Unemployment was very high and continue to be so. In a nutshell we exhibited all the fault-lines of an economy of an under-developed country.
Madam Speaker, this ANC led government has made a firm commitment to ensure the reconstruction and development of our people and also to transform as many of our people as possible into conscious agents of change for the construction of a winning and humane society to ensure access to a better life for all. As people we have every reason to be proud of our historic gains during our twenty eight years of Democracy. The expansion of the frontiers of human fulfilment, of which President Mandela spoke about in 1994 are being fulfilled day by day. We have made many gains notwithstanding the challenges we are facing including COVID 19 pandemic.
For the Provincial Government and the citizens of the Free State, this is a critical period in our term as we are visited by the Honourable President of the Republic at a time when various Provincial Departments are tabling their budget votes. His Excellency is present in our midst with the objective and zeal to interact with the citizens of the Province through the Presidential Imbizo. The Imbizo will seek to hear and listen to project implementation progress, concerns, challenges and possible solutions to improve service delivery in our Province.
Madam Speaker, most will attest that recently we’ve experienced constant water and electricity disconnections effected by our Metro Municipality due to non-payment of the arrears coming from over 4 years ago. These disconnections detrimentally affected our communities as they could not access government buildings and other service delivery points. Through the engagement between the Honourable Premier and the Executive part payment of arrears and arrangements to pay the arrears, the services were restored. The budget allocation for the payment of municipal services is always insufficient and it creates accruals for the Department, however proactive payment arrangements are always made with the municipalities.
The country at large is experiencing a consistent shrinkage of the fiscus which is attributable to a variety of economic factors. More than before, it is expected that we should do more with less and still maintain the high level of service standards. This is the critical economic period were we need to leverage on our revenue and income generation streams to augment the shrinking equitable share allocation. We need to utilize our wits, innovativeness and explore avenues that government can use to offer services at the least cost. Our plans on revenue enhancement have gained momentum and will be bearing the desired fruits in the 2022-23 financial in line with our implementation plan. I will elaborate on these plans later in my speech.
Madam Speaker, infrastructure delivery is the fundamental aspect towards the economic recovery and reforms; and at the coalface it is evident as hope for job creation and sustainable livelihoods is awaited with great anticipation.
As we ensure support to our SMME’s, we remain committed towards paying our creditors within 30 days and for the financial year that has ended we managed to maintain 30 days payments at an average of 98, 3%.
Madam Speaker, in attempts to transform and accelerate the economic recovery, out of the nine (9) material bids advertised by the Department six (6) have been successfully awarded to the black companies and of those six (6), three (3) are women owned companies.
Madam Speaker, despite the excruciating challenges and the painful circumstances that we are faced with, the Department managed to consistently obtain an unqualified audit opinion which signifies the positive improvement in our endeavours and encourages us to exert more effort collectively. The only barrier to achieving the clean audit remains the inconsistent payment to municipalities for the services, rates and taxes. The budget allocation remains insufficient and all relevant stakeholders are constantly engaged to turnaround the situation.
ADMINISTRATION
Madam Speaker
The Constitution of the Republic of South Africa requires a high standard of professional ethics in the Public Sector. Public Administration must be governed by the democratic values, principles and standards for professional ethics enshrined in the Constitution. Ethical conduct and Departmental integrity are key to eradicate fraud and corruption within the Public Service.
The Department up-skilled staff members on the building blocks of integrity, compliance and ethics in an anti-corruption context. As at 31 March 2022, 660 of the 1317 employees have concluded the Ethics in the Public Service skills intervention. In order to achieve this milestone the Department invested R730 000 for face to face training of 250 staff members in the unskilled category. The remaining staff attended this ethics training intervention online. We will continue with this intervention during 2022/2023 financial year.
Furthermore the Department applied the ethical principles outlined in the Code of Conduct for the Public Service and the Financial Disclosure Framework provided for by the Minister for Public Service and Administration. The Departmental Compliance was 100% for all categories of staff who are required to disclose their business interests.
In addition Madam Speaker, the Department also complied with the life style audit imperatives introduced into the Public Service by the Department of Public Service and Administration. 21 life style reviews were concluded and none of them demonstrated any red flags hereby confirming the proactive approach by the Department to inform staff of the necessity to maintain ethical standards, on a regular basis.
During my previous budget vote, I announced that the Department has delayed its commitment to fill some of the critical posts due to Covid -19 budget considerations. Today I can report that we have subsequently achieved this commitment and appointed 116 new staff members from our allocated compensation budget and 53 of those appointed were females. These appointments included 4 registered professionals within Construction Project Management, Structural Engineering and Quantity Surveying of which 75% of these professionals are female. Furthermore 42 other posts were filled within the other technical, Artisan and related disciplines. Of these 42 appointments 45% were suitably qualified females within this previously male dominated area.
Madam Speaker, in this era and environment of cybercrime we appointed a suitably qualified IT security specialist to safeguard our IT systems and records, the posts within Internal Audit and Internal Control that seek to strengthen corporate governance and financial controls were also filled. The other posts that were filled addressed other capacity short comings within cleaning, security, legal services, finance and supply chain management.
As we reviewed the Departmental structure we have identified short comings within construction procurement, property management and inventory stores. In the new financial year we will establish a fully functional inventory store in each of the regions. This will render support to our technical teams and shorten the turnaround time to finalise emergency and other maintenance issues required by our district offices.
For the 2022/2023 financial year we will strengthen our SCM environment by conducting a skills audit, providing necessary skills development intervention and appointment of suitably qualified Supply Chain Management Practitioners. In addition we have targeted professionalising our immovable asset management chief directorate, with special emphasis on revenue generation mechanisms.
PUBLIC WORKS - MAINTENANCE
Madam Speaker
Our mandate as the Department of Public Works and Infrastructure in line with Government Immovable Asset Management Act is to serve as the custodian of all immovable assets belonging to Provincial Government.
The Department conducted Condition Assessments on 13 buildings in the 2021/22 financial year and as the custodian of government buildings, we are responsible for keeping these facilities functional and to move the building status from poor/bad to good.
The Department has a total of 1549 facilities and the breakdown per category in relation to the state and condition of the facility is as follow:
- Facilities that are at Good -condition = 171
- Facilities that are at Fair-condition = 1302
- Facilities that are at a Poor-condition = 76
Properties that are in poor condition will be either demolished or refurbished or be disposed-off in order to enhance revenue collection of the Province. Maintenance of properties is central to ensure service delivery to communities by bringing services closer, spending less on leasing in of office space and enhancing revenue when leasing out.
Madam Speaker, in the Province, our Department fulfils its mandate as delegated by the Hononable Premier, for implementation of maintenance and new projects which are valued at more than R15 million as well as shared buildings that are multi- tenanted. Each User Departments is responsible for its own maintenance function as the maintenance budget is allocated to the user.
In the 2021/22 financial year, the Department allocated an amount of R28 million for planned maintenance of government facilities. However, Madam Speaker there is significant backlogs in building maintenance due to limited funding for condition
assessments and planned maintenance remains a major concern as reflected in the breakdown of buildings conditions I presented.
To further mitigate the deterioration and closure of buildings by the Department of Labour due to non-compliance with health and safety standards, a total amount of R67 million over a period of three years is required for planned maintenance, this amount does not include maintenance requirements of the user departments. For 2022/23 financial year 10 Conditional Assessments will be conducted.
Madam Speaker, during the 2021/22 financial year the Department managed to complete the following renovation and maintenance projects:
• The renovation of our staff offices in Kroonstad, using our Artisans;
• The upgrading of the Premier’s boardroom to a state of the Art facility;
• The installation of a fence at Thaba Nchu Ratlou complex;
• The renovation and upgrading of the following offices for the Department of Agriculture and Rural Development:
- Koffiefontein offices;
- Reddersburg Offices
- Smithfield offices and
- Bothaville offices
- It is important to indicate that the Smithfield and Bothaville offices are fitted with a 5 kVA Solar PV System with batteries that will provide energy to the buildings and reduce electricity consumption.
For the 2022/23 financial year, the budget allocation for maintenance and renovations is R20.5 million. This budget will be used for scheduled maintenance and renovations of the following buildings:
• Kopano office in Welkom, for the Departments of Human Settlement and Agriculture using massification through our Artisans and EPWP participants.
• Adelaide Tambo hall at OR Tambo House
• Fourth Raadsaal – for our Free State Legislature where an amount of R2.5 million is allocated by the Provincial Treasury
• Free State House
The number of work opportunities to be created from these renovation projects is estimated at 60.
Madam Speaker, the budget allocation for the Refurbishments and Upgrades is R92.6 million and the following projects will be implemented:
• The refurbishment work at Tshireletsong Children’s home is continuing, with Phase-Two having started towards the end of the previous financial year.
• In line with our revenue enhancement strategy, we are refurbishing and upgrading part of Kopano building in Welkom, which was used as a Nurses Home and will be converted to student accommodation for Central University of Technology students.
• Upgrading the Premier’s offices to cater for extra security and improved technology, on the 4th Floor of OR Tambo building.
• Old Reserve Bank building will be converted to offices, the project will provide space to the staff of the Premier’s office.
• MPL Village upgrades continues, including security upgrades
• Installation of a Rooftop Solar PV plant at Hamilton offices, this project will help in mitigating the ever increasing electricity cost.
• The upgrading of the Department of Agriculture offices in Ladybrand and Odendaalsrus.
• The water reticulation network, at the Qwaqwa Office Complex, which houses multiple Departments.
• Refurbishment work at Sassa Offices in Welkom will and
• The upgrading of electronic security at OR Tambo, Fidel Castro.
• Work has commenced with the upgrading of Thusanong building and the project will be implemented over a three year period.
The Department is continuing with the implementation of the annual maintenance plan, which includes scheduled and day to day maintenance on buildings and other minor maintenance projects.
Madam Speaker, the energy crisis requires the Department to explore and initiate green technology across its existing properties and future infrastructure in a cost effective manner. The Department entered into a Shared Services contract targeting water saving initiatives at hospitals which started in 2020 and will be running over a period of seven years an amount of R 46 million has been saved through this project since inception.
The Department has requested participation in the Integrated Resource Efficiency Programme (IREP) for Government buildings under the auspices of Strategic Integrated Project 28: that was gazetted in July 2020
The objectives of this programme are:
• Installation of Solar Photovoltaic plants (rooftop or other structures).
• Renewable water heating solutions.
• Waste management.
Due to budget considerations, the department’s focus area in this regards will be on:
• Installation of rooftop Solar PV plants with back-up batteries;
• Renewable Energy solutions for water heating;
• Retrofitting of old lights with energy efficient light (led lights);
• Gas powered boilers (two electric boilers at Fidel Castro).
INFRASTRUCTURE DELIVERY
Madam Speaker
Our Department is an infrastructure implementing agent for various Provincial Departments on projects that are valued at R15 million and more. Over the last two financial years we have re-aligned our project management processes and capacity to ensure improved delivery of projects. We also prioritized completion of old projects that were delayed due to various reasons. The rearrangement of the project management unit resulted in completion of the following projects over the last two financial years:
• Thembalihle School in Vrede;
• Grassland Secondary School in Bloemfontein;
• GM Polori School in Hoopstad;
• Silindekuhle School in Warden;
• Grassland Primary School in Bloemfontein;
• Mooifontein Primary School in Zastron;
Madam Speaker, Rehopotswe School in Bethlehem and Ruang Tsebo School in Clocolan were completed in 2021/22 financial year. The schools are currently in use and will be officially opened by the Hon. Premier in the new financial year.
The following two schools and two hostels will be completed in the financial year ending March 2023:
• Tshehetso School in Bothaville
• DR Sello in Vieljoenskroon
• Breda School Hostel in Fouriesburg that will accommodate 200 learners
• Leboneng School Hostel in Welkom that will accommodate 396 learners
We are pleased with the progress made by the new contractor appointed for the construction of Katlego Mpumelelo School in Sasolburg after the termination of the
first contractor due to poor performance. The school’s construction progress is currently at 36% and will be completed in 2023 calendar year. Construction of the mentioned schools and hostels has created about 120 job opportunities for the local community in 2021/22 financial year.
The Department will be constructing 2 new hostels and 4 schools for the Department of Education in the new financial year, progress on these projects is as follows:
The sites have been handed over for the construction of Oranjekrag School Hostel in Gariepdam and Morena Tsohisi Primary School in Harrismith.
Contractors will be appointed in April for the construction of Trompsburg Special School and Hostel in Xhariep; Construction of Boitumelong Special School Hostel in Thaba Nchu and Father Balink School in Parys.
The construction of these schools will create about 900 job opportunities over the next two financial years that will benefit the local community.
Re le lefapha re leka ho lwantsha tlhokeho ya mesebetsi le bofuma bo aparetseng metse ya rona. Re a tshepa hore hohahwa ha dikolo tsena ho tla tlisa diphetoho maphelong a setjhaba sa Free State.
The Department is an implementing agent of only four projects for the Department of Health.
• The construction of Thandanani and Rheederspark clinics in Welkom are currently underway;
• Planning for Dinaane and Lesedi clinics is at an advance stage. Contractors will be appointed in 2022/23 financial year.
It is anticipated that 250 job opportunities will be created for the local community
PROPERTY MANAGEMENT
Madam Speaker
Immovable Asset Register
The Department of Public Works and Infrastructure as the custodian of Provincially owned properties has a mandate of maintaining this property portfolio as it contributes immensely towards the investment value and revenue potential of the Province. The register currently has a total number of 4 893 immovable assets to the value of R11, 4 billion.
The Department has planned to dispose-off 68 vacant sites and 14 plots situated in Clocolan, Tromsburg, Charlesville, Wepenar, Edenburg, Smithfield, Bloemfontein, Botshabelo, Thaba Nchu, Hertzogville, Odendaalsrus, Frankfort, Heilbron, Koppies, Orangeville, Kroonstad and Winburg in the 2021/22 financial year. The Department went out on tender and advertised 17 vacant sites and 13 plots in various towns. The remaining 51 vacant sites and 1 plot will be advertised during the 2022/23 financial year. Our Department will continue with the audit and the identification of the residential houses that will be disposed-off during the 2021/22 MTEF.
Property Portfolio Transformation
The Department of Public Works and Infrastructure plays a central role of promoting transformation in the property industry which is by far dominated by white people. The Department has paid a total amount of R243, 6 million for office accommodation in the 2021/22 financial year. Currently we have 59 leases for office accommodation of which 37 representing 63% were concluded with Previously Disadvantaged Individuals thereby exceeding our transformation target of 63% by 1% percent.
Municipal Payments.
Despite the fiscal constraints and the recurring shortfall on our budget for municipalities a total amount of R 403.3 million has been paid to municipalities for water, refuse, sanitation and electricity and R 458.5 million has been paid for municipal rates taxes as at 31 March 2022 representing 100% expenditure on our allocated budget. Of these amounts R 278 million was paid to Mangaung Metro; R 107 million to Centlec; R 170.4 million to Matjhabeng and R 62,5 million to Maluti-a- Phofung Municipality.
For the 2022/23 financial year, a total of R 201.5 million is budgeted for municipal services and R 480.6 million is budgeted for rates and taxes. Mangaung Metro; Centlec; Matjhabeng and Maluti-a-Phofung remain the biggest beneficiaries of this budget.
Madam Speaker all the municipalities were paid rates and taxes for 2021/22 in full including Mangaung Metro. We however acknowledge that we have arrears from the previous years on the rates and taxes due to Mangaung Metro.
Property rates payments trends over the financial years -
In the financial year 2019/20, a total budget allocation of R 431.3 million was made and paid towards the municipalities property rates. This represented an increase of 15% from the previous year budget. All the municipalities in the Free State were paid up to date. Our closing balance was standing at R 212 million.
In the financial year 2020/21, a total budget allocation of R436 million was made and paid towards the municipalities property rates. All the municipalities in the Free State were paid up to date. Our closing balance was standing at R 258.3 million.
In the 2021/22 financial year a total budget allocation of R 458.6 million was made and paid towards the municipalities property rates. All the municipalities in the Free State were paid up to date and the last payments are due by the end of March 2022.
Municipal Services payments trends over the financial years -
In the financial year 2019/20, a total budget allocation of R 409.3 million was made and paid towards the municipal services. Our closing balance was standing at R 616, 8 million.
In the financial year 2020/21, a total budget allocation of R 254.8 million was made and paid towards the municipal services. Our closing balance was standing at R 716 million.
In the 2021/22 financial year, a total budget allocation of R 237.7 million was made and paid towards the municipal services. An adjustment budget was also approved during March 2022 to allocate more funds towards the payment of services. Our closing balance was standing at R 816, 1 million.
Our outstanding debt to municipalities’ increases yearly and serious executive decisions needs to be taken.
Madam Speaker, during the 2019/20 financial year the Department introduced water demand management system whereby check meters were installed and leaks were repaired in Free State Psychiatric Hospital as a pilot site.
The programme was rolled out to Botshabelo Hospital; National Hospital; Universitas Hospital; Pelenomi Hospital and Dr JS Moroka Hospital in 2021/22 financial year. We are pleased to report that the water savings of over R29 million was realized from April 2021 to February 2022.
Cleaning and gardening Services
A dedicated team from the Department of Public Works and Infrastructure is continuously ensuring that buildings are hygienically cleaned to prevent the spread of diseases and infections throughout COVID-19 pandemic.
EXPANDED PUBLIC WORKS PROGRAMME
Madam Speaker
In the context of Covid-19 impact, the need to massify the implementation of Public Employment Programmes has become even greater to reduce the scourge of poverty, enhance income protection among the poor while creating public assets and providing services.
To this effect, through EPWP, the Department commits to implement various community based programmes in support of municipalities and government at large towards service delivery as follows;
• Cash for Waste
• Community Work Programme
• Cleaning and Greening a
• Township Revitalisation Programme
Madam Speaker, as we implemented the EPWP community development initiatives, we managed to create 2 192 work opportunities against the target of 2 190 work opportunities in the last financial year.
Under the wing of the Expanded Public Works Programme, the National Youth Service as a government initiative was launched here in our Province during April 2007 by National Government.
The aim was to interact and engage with young South Africans within the service delivery spectrum in order to strengthen and promote their participation in the world of work. The Department is proud to report that we developed 315 young people jointly with the National Youth Service and the National Youth Development Agency in the past financial year.
The Department in collaboration with Sasol Company managed to train 71 young people of Parys in Building and Civil Construction NQF Level 3, of which 11 were placed within Parys Tourism Network, 34 were placed with an NGO and are focusing on kids’ programmes, administration and 19 are placed within the municipality. The Department remains cognisant of the challenges our youth face on daily basis in crafting their future.
We therefore commit to support them with specific programmes to sharpen their skills and knowledge towards improving their employability as they participate in the National Youth Service. It is anticipated that a total of not less than 500 unemployed youth will participate in the programme during the upcoming financial year across the Province.
Madam Speaker, Meaningful developmental impact is realised when all spheres of government and private sector form collaborations to address the challenges of unemployment. This was also a call by the President in his SONA. In response to that call, the Department will collaborate with key stakeholders for DIGISKILLS PROGRAM.
In 2022/23 financial year, the Department will expand its current NYS initiative by supporting the training of young people in the following courses:
- Data Analyst,
- Project Management,
- Software development,
- IT support and Customer Service specialist.
An additional budget of R5, 8 million has been allocated for National Youth Service to expand youth empowerment initiatives.
Against a flat economic backdrop, the Department managed to facilitate the creation of 54 080 work opportunities in the third quarter of 2021/22 with the following contribution breakdown:
• National Departments = 2 856
• Provincial Departments = 16 656
• Municipalities = 7 983
• CoGTA-CWP = 22 448
• Non-State Sector = 4 137 Madam Speaker,
A total of 2 600 work opportunities will be created towards the implementation of poverty alleviation programmes which are community based by nature in the 2022/23 financial year.
To this effect, a budget of R97, 542 million has been budgeted for towards implementation of 4 community based programmes such as:
- Cash for Waste,
- Community Work Programme,
- Cleaning,
- Greening Programme and
- Township Revitalisation Programme.
As per SONA commitment by the President, the Township Revitalisation Programme through EPWP remains a major vehicle that showcases Labour Intensive Construction methodologies towards massification of employment creation and skills development in our communities.
We have contributed towards improving the economic outlook of our townships though implementation of Township Revitalisation Programme in 12 towns in the last financial year. In the new financial year, the programme will be implemented in these towns:
- Petrus-steyn,
- Phillipolis,
- Brandfort,
- Ficksburg,
- Botshabelo,
- Bultfontein,
- Frankfort,
- Koppies,
- Memel,
- Oppermansgronde,
- Paul Roux,
- Villiers,
- Vrede and
- Zastron.
Madam Speaker, the Provincial and Local spheres of Government are the main delivery arms of the Government of South Africa and are the primary implementing bodies for the EPWP. Provincial Departments and municipalities are required to make a
systematic effort to draw significant numbers of unemployed persons into work. I thank all MEC’s and Mayors for placing job creation on top of the local economic development agenda.
The Department will facilitate the creation of not less than 50 000 work opportunities in the new financial year with a target of 60% women, 55% youth and 2% people with disabilities. These work opportunities will be created from the budgets of different Departments and Municipalities.
CONCLUSION
Madam Speaker
We must address the plight of our people because we are a republic established on the values of human dignity, the achievement of equality and the advancement of human rights and freedom. This we do because we want to advance towards people sharing in the country’s wealth and thus creating work, social security and eradicating poverty. Public works contributes directly to government’s economic growth, employment-creation priorities, in transforming the construction industry and supporting small business.
Detailed and thorough planning is the cornerstone of our performance and we commit to our people to deliver the Departmental mandate. We cannot over-emphasise the importance of achieving more with less, moreover in the times with live in.
Government service delivery offering has been overshadowed by the global coronavirus pandemic and our people have been impacted negatively as most sectors shed employment. We are obliged to triple our efforts in the emancipation of our citizens from the dire situation of extreme poverty. It is a clarion call for all government spheres that we must expedite the delivery of services whilst working collaboratively.
Madam Speaker, without the guidance and leadership from our Honourable Premier, Ms. SH. Ntombela the work we do would not be an easy task. We appreciate her visionary leadership and support.
I would also like to extend appreciation to my colleagues in the Executive Council, for always availing themselves whenever requested, that is sign of a committed leadership driven by one sole purpose of service delivery.
As the Department we continue to shine and do well on our Departmental Performance due to the support and advice that we receive from the Chairperson of the oversight, we therefore extend our heartfelt gratitude to the Portfolio Committee on Public Works, Infrastructure, Roads, and Human Settlements, competently led by the Chairperson Me. Sarah Moleleki.
My family, I wish to thank you for the unwavering and undying support you giving me. I know that my demanding schedule as the Member of Executive Council doesn’t allow me to be with you whenever I’m needed, however I draw strength from you to serve our communities for another day.
Madam Speaker, lastly, I would like to thank all the staff of the Department under the stewardship of the intelligent, diligent and industrious Head of Department Mr. Ernest Mohlahlo. I would not be standing here today tabling this budget if it weren’t due to their commitment, hardwork and dedication. This team ensures that all stated herein is implemented in an exemplary and extraordinary way.
Madam Speaker, I now table the budget for the Department of Public Works and Infrastructure, and accordingly request the house to approve an amount of R1.814 billion for the 2022/23 financial year, which is allocated per programme as follows:
- Programme 1: Administration (R 157.327 million)
- Programme 2: Public Works and Infrastructure (R 1.541 billion)
- Programme 3: Expanded Public Works Programme (R 115.713 million)
I THANK YOU,
KE YA LEBOHA.
