Honourable Chairperson;
Honourable Premier;
Colleagues in the Executive Council;
Honourable Members; and
AmaKhosi and other structures of Traditional Leadership
Distinguished guests and business leaders, ladies and gentlemen
Introduction
Honourable Chairperson, I am honoured to present my first Budget Speech as the MEC for the Department of Public Works.
I want to draw your attention to some of the key elements of the Public Works interventions in this address and invite you to study the written report for the detail that I may not be able to speak to at this time.
In less than two years, we will celebrate 20 years of freedom and such celebrations should have cogent pointers as to the achievements of the past two decades.
One of the major thrusts of the present administration led by President Jacob Zuma is the pursuit of infrastructure development which in turn would be a catalyst for economic growth and job creation. It is a visionary programme inspired by leadership committed to genuine and sustainable solutions for the future of the country. The outcomes approach which characterises the present administration demands that we critically locate ourselves as Public Works within the new service delivery model.
Honourable Chairperson, as we strategically carve a service delivery niche for ourselves, we must, at all times, be mindful of the critical facilitation role we play in enabling other departments to deliver on their core mandates.
Therefore, this places a greater responsibility on us way beyond that of being the landlord for the State to that of being a nucleus in the entire Government service delivery value chain.
Public Works must play a leading role as an economic driver in job creation and work opportunities. Coupled with this, the department has a mandate to address skills shortage, particularly in the Built Environment professions.
While acknowledging that Public Works is a service department, to the larger public we have come to be associated with innovative programmes of poverty alleviation and work opportunities.
But the task that lies ahead is a challenging one. It is a challenge, indeed, because the expectation of our people is immense. Honourable Members, the challenges may appear vast but I have not the slightest doubt that they are conquerable.
In a way and by virtue of the title portfolio of the department, a huge expectation is created, and correctly so, that as a department we are regarded as some form of solution to the twin challenges of poverty and unemployment.
During this financial year, we shall continue as Public Works to roll back the frontiers of poverty through various programmes that create sustainable jobs and work opportunities while simultaneously up skilling the beneficiaries, particularly young people. Among the nine key challenges identified by the diagnostic report of the National Planning Commission is the one that argues that our infrastructure remains inadequate to meet our social and economic needs.
As the lead department in rolling out government infrastructure, Public Works is central to the job creation objectives.
This begs the question as to how we align our interventionist programmes such as the successful Expanded Public Works Programme (EPWP) and the concomitant infrastructure development announced by President Zuma during his State of the Nation Address earlier this year.
Honourable Chairperson, according to national statistics, more than 308 000 work opportunities were created through EPWP between April and June last year compared to 198 000 jobs in the corresponding period in 2010.
It is worth noting that a sizeable number of these jobs were created in KwaZulu-Natal. For the 2011/12 financial year, the department had an internal target of 28 000 work opportunities.
Between April 2011 and March 2012 a total of 137 207 work opportunities were created. This was a remarkable achievement.
The department’s management of the Integrated Greening Programme is also yielding positive results in terms of job creation. Job creation in the Green Economy is one of the key priority areas of the New Growth Path (NGP).
The NGP which is the Government’s job-creation blue print has identified the Green Economy as an important part of South Africa’s plan to grow its economy and create jobs through green industries and environment-friendly initiatives. The Department of Economic Development projects that 300 000 jobs could be created over the next ten years within clean manufacturing and environmental services.
Honourable Members, as a department, we are presently involved in a partnership programme led by the Office of the Premier. This partnership focuses on greening activities through job-creation for unskilled people. We have been given the task of coordinating the KwaZulu-Natal Integrated Greening Programme.
Infrastructure coordination
With the current administration placing enormous emphasis on infrastructure development, Public Works has been placed at a centre stage of the infrastructural revolution in the Province.
Presently Public Works makes a significant contribution in the coordination of the Infrastructural Working Group that involves all sector Departments, Municipalities, State-Owned Companies and Water Boards in the Province.
This coordination relates to all infrastructural work from roads, rail, water, information and communications technology (ICT), electricity, water, energy, as well as social infrastructure, schools and clinics.
Honourable Chairperson, among our key strategic goals as a department include implementation and delivery of integrated infrastructure. We have set ourselves clear objectives of satisfying client needs through construction of new buildings, repairs and renovations.
We hope to accomplish this through the continued systematic application of the Infrastructure Delivery Improvement Programme (IDIP) as an integrated, forward planning implementation tool when delivering infrastructure projects to our major clients departments, especially the Departments of Education and Health.
Capacitation plan
Over the past decade, the Department of Public Works’ responsibility for the provincial capital expenditure programme has steadily reduced. The hard reality is that for whatever reason client departments increasingly chose alternative implementing agents. The department, and indeed our provincial government, identified this as an unacceptable trend and took a firm decision to correct this. We boldly say that we have accepted this challenge to reclaim our position as the implementing agent of choice for all sector departments.
This calls for a programme of capacitation in the form of human capital with the appropriate skills and expertise.
Honourable Chairperson, the department is generating a capacitation framework that is aligned to the Infrastructure Delivery Management System (IDMS). The framework will describe and elaborate on generic steps that should be followed to address the human resource issues.
In addition, the framework intends to establish sustainable institutional capacity within Provincial Government to support effective and efficient infrastructure planning and delivery.
The focus will be on two strategic levels of the human resource strategy, namely organisational structure and people
The Human Resource capacitation strategy for the department will require alignment to:
- The National Treasury Infrastructure Delivery Management System (IDMS);
- The KwaZulu-Natal Infrastructure Service Delivery Model (ISDM) being developed; and support of the process from the KwaZulu-Natal IDIP partners the following stakeholders will also be consulted during the course of implementation of the Human Resource Capacitation framework in the province:
- IDIP Project Management Unit in National Treasury
- National Department of Public Works
- National Department of Education
- National Health Department
- Department of Public Service and Administration
The department has received an increased capacitation budget for improving infrastructure support. Given the strategic focus of government to shift the composition of expenditure towards investment in infrastructure, provinces must prioritise establishing the organisational capacity required to support infrastructure delivery.
The Minister of Public Service and Administration is expected to issue a directive on the organisational structures required for supporting infrastructure delivery in provincial Departments of Public Works and the above-mentioned additions should be used to comply with this directive.
In his State of the Province address earlier this year, the Honourable Premier gave Public Works three years to boost its capacity by “employing a full complement of engineers, quantity surveyors, architects and technicians”.
Honourable Chairperson, the HR Capacity Project Steering Committee is busy with the implementation plan and will provide regular progress reports. The Capacitation Plan will be presented to the Executive Council in the second quarter of this financial year. The department has been granted funding of R56 745 000 over this Medium Term Expenditure Framework (MTEF) to upscale its technical capacity over the next three years starting with R18 million in this financial year.
We are addressing the shortage of skilled, qualified and committed professionals through our Public Works Internship Programme. I am delighted that we have secured 27 newly-graduated engineers, architects, project managers and quantity surveyors into this Programme. I am also pleased that the interns join us in the gallery this afternoon.
Due to limited capacity, mentorship is presently done through the placement of interns with companies operating in the built environment sector.
Honourable Chairperson, statutory requirements provide that interns must serve between three to five years to qualify as professionals in their respective disciplines of study before they could be registered with the relevant professional councils.
Honourable Chairperson, with increased capacity within the department, we are of the view that some of the training and exposure required by interns could be provided within the department by way of deployment to appropriate infrastructure programmes throughout the province.
In our ongoing efforts to build a skills database and capacity, we shall continue to be innovative as we have done through our special recruitment strategy of targeting B-Tech students with infrastructure project management experience as project manager interns.
Honourable Chairperson, we realise that the turnaround we seek will not be achieved overnight. We believe, however, that over the past year we have shown significant resolve in steadily regaining lost ground. It would not be immodest to record the acknowledgement by the Finance Committee of the progress made.
The objectives we have set for ourselves demonstrate our resolve in becoming a fully-fledged implementing agent of choice. This, will, undoubtedly result in the improved service delivery in the province. When we refer to ourselves as an implementing agent of choice, we mean Public Works should be the first port of call for any infrastructural project earmarked for implementation within the public sector in the Province.
Regarding our strategic delivery services, we are delivering quality products of class-rooms and hospital infrastructure as well as accommodation needs of the client departments as per the submitted Infrastructural Plans of the client departments.
The work of the department is divided into three programmes, namely Administration, Property Management and Operations. The entire budget for the three programmes is R1 311 171 000.
Programme 1: Administration (R283 304 000)
The main objectives of this programme are to provide strategic leadership and management support to the Executing Authority and also render support and advice in terms of human resource practices, all legal matters, security and logistics.
This includes ensuring effective communication and information management systems, rendering sound financial management services and risk management. The programme comprises two sub-programmes, namely Minister’s Support and Management.
Programme 2: Property Management (R654 485 000)
The core purpose of this programme is to provide and facilitate the provision of accommodation and integrated property management services to clients through planned property life cycles in the form of acquisition, maintenance and disposal.
The programme also facilitates optimal utilisation of immoveable assets, land evaluation, maintenance of the fixed asset register, payment of property rates and integrated service delivery.
Programme 3: Buildings and fixed structures (R373 382 000)
The core function of this programme is the erection and/or acquisition of buildings, structures and engineering works as well as the maintenance of buildings to client specifications.
The core services are:
- improving integrated service delivery in the provision of buildings and structures;
- creating jobs through the Expanded Public Works Programme;
- creating an enabling environment for affirmable business enterprises;
- initiating and coordinating strategic partnerships;
- coordinating and aligning operational activities in line with municipal demarcations.
KwaZulu-Natal Department of Public Works Fraud and Corruption Investigations
The Department of Public Works commenced a determined investigation into the awarding of contracts. This resulted in a special focus on one contractor, amid persistent allegations of Fraud and Corruption, including Cover Quoting and Fronting.
On 30 August 2011, the contractor was arrested and charged with 148 counts of Fraud and Corruption to the value of R123 000 000. The amounts involved have since increased due to additional allegations of non-delivery having been identified. The total value of the tainted contracts has now been calculated to be R127 461 371 made up as follows:
Fraud regarding fronting: 95 projects to the value of R73 597 441.29.
Fraud regarding cover quoting: 83 projects and 736 day to day cases to the value of R48 312 458.39.
Fraud regarding non-delivery: 24 projects awarded to the contractor to the value of R5 551 471.70.
On 7 March 2012, assets to the value of R 80 000 000 were seized from the contractor.
The investigation included the analysis and investigation of 127 projects to the value of R83 534 767, involving more than 20 officials and 100 bank accounts.
Two additional matters that fall within the scope of the investigation are also currently underway. The projects value awarded to these two contractors is R5 523 2 044 and R140 296 406 respectively.
Arrest and possible charges against Department of Public Works officials
As a result of the above investigations, four Department of Public Works officials were arrested on 4 November 2011. Payments have been identified to a further three Public Works officials as well as four other officials from other government departments. These 11 officials are still under investigation.
Possible criminal and/or disciplinary charges are being investigated against a further 15 Department of Public Works officials. The Special Investigations Unit (SIU) is involved in this case.
The cases have been remanded in the Durban Commercial Crimes Court for further investigation. R224 859 pertaining Basic Accounting System fraud is currently also in the process of being recovered via Civil action.
Forty-two further cases reported by Whistleblowers have been finalised internally by Risk Management and resulted in 26 disciplinary cases being finalised.
The following cases reported to the department through various mediums pertaining to service delivery have also been attended to timeously.
- 20 Presidential Hotline cases
- Five Ombudsman cases
- Two Small, Medium and Micro Enterprises hotline cases
I have emphasised these matters in considerable detail to demonstrate the department’s commitment to rooting out corruption among both the contractors and Departmental staff. I also wish at this point to pay special tribute to my predecessor, the Honourable M. Govender (MPL) for her principled commitment to this priority of our government.
Review of programmes
Honourable Chairperson, allow me to sketch the main achievements and progress made by the department.
Programme 1: Administration
Skills Development
The department has responded to the call by the National Department of Higher Education and Training that “every workplace is a training centre” and we are proud of our contributions in the broadening of the skills base for our country and Province in particular.
Adult Basic Education and Training (ABET)
Our efforts to eradicate illiteracy among our staff are beginning to yield positive results. Working with our sister Departments of Education and Transport who have taken over some of the ABET learners, a total of 192 are currently attending ABET classes.
Building internal capacity through the Bursary Programme
As part of the ongoing effort to build capacity within the department, we have provided bursaries for 28 external students presently studying towards degree qualifications in the scarce skills categories. These categories include quantity surveying, architecture, electrical engineering and civil engineering. There are nine students on the Bursary Programme who will be completing their studies this year.
We have earlier already reflected on our Internship Programme.
Programme 2: Property management
Release of land and buildings for socio-economic purposes
Honourable Chairperson, the department has an obligation to release land for Human Settlement purposes and during the last financial year it had engaged the Housing Development Agency Board to fast track the release of sites for Human Settlement purposes.
Whilst two sites were released in 2011 within the uMngeni and Hibiscus Coast Municipalities, it is anticipated that considerably more will be released this financial year.
The department is also committed to making property available to non governmental organisation who benefit the community.
Provision of office accommodation
Honourable Chairperson, to ensure value for public funds, we remain committed to a transparent and competitive bidding process when securing office accommodation.
I must report that I am often called upon to investigate allegations of unfair treatment in the bidding process. Provincial Treasury has been outstanding in their support in dealing with these matters.
Disposal of redundant properties
Properties which no longer serve the intended need are disposed of through the open bid process. However, prior to advertising the property for sale, the department ensures that the property is first made available for State purposes in line with Government Immovable Asset Management Act (GIAMA).
We have currently placed a moratorium on the disposal of properties.
Acquisition of land for new infrastructure projects
Honourable Chairperson, as part of our coordinating role in infrastructure development, we are now fast tracking land acquisitions for all new infrastructure projects.
Currently the department is acquiring additional land for the projects on behalf of the Department of Health for several hospital and clinic projects.
The department is also acquiring properties for safe houses for vulnerable women and children on behalf of the Department of Social Development.
Lease agreements on Ingonyama Trust Properties
The department is engaged with the process of negotiating lease agreements for properties from the Ingonyama Trust Board for all Provincial facilities situated on Ingonyama Trust Land. This will enable the Province to account for infrastructure expenditure on these facilities.
Property incubator programme
During the previous financial year we had 63 trainees from a pool of unemployed people that underwent training for Phase One of the Property Incubator Programme. The enrolment declined to 43 due to other employment opportunities arising.
The 43 were trained in 2011/12 for Phase Two, giving them a National Qualifications Framework (NQF) Level 4 qualification.
The trainees are currently undergoing practical training on Property Management and Business Administration functions for a period of nine months ending in December 2012.
Payment of property rates
The Conditional Grant budget allocation for the payment of property rates for 2011/12 was R505 880 000. We have spent R489 480 000 of this.
The department settled all invoices submitted by municipalities. Due to over funding to the province, the remainder was surrendered to National Public Works for re-allocation to other provinces.
In this current financial year the conditional grant allocation for property rates payment is R551 000 000.
Management of fixed assets
The Fixed Asset Register has been extensively updated in line with the Government Immovable Asset Management Act’s (GIAMA) minimum requirements for completeness and integrity of information in the system.
In addition the fixed asset data has Geographical Information Systems (GIS) data. Due to the new requirements in terms of financial reporting, property values, property improvements and property rates payments, the department is exploring a new electronic system for an integrated management of immovable assets.
Honourable Chairperson, I am pleased to announce that significant progress has been made in terms of finalising the transfer of R293 properties from various municipalities to the province.
We are also going ahead with the transfer of State immovable assets located in uMzimkhulu from the Eastern Cape to the Province of KwaZulu-Natal. We hope to finalise this before the end of June 2012.
The vesting of provincial properties in the name of the provincial government of KwaZulu-Natal is progressing well taking into consideration the extensive process involved.
The Asset Register lists 14 420 properties. There are 800 missing title deeds. The process dealing with this is nearing completion.
The current IT system for the control of immovable assets is inadequate and obsolete. We are currently in the process of procuring a new system through SITA which will improve the management of information.
Implementation of Government Immovable Asset Management Act (GIAMA)
The implementation of GIAMA commenced on 1 April 2011 with funding having been provided. The department has conducted Condition Assessments on the Administrative buildings. The findings will be summarised to inform the maintenance backlog.
This will then inform the budgetary allocation for infrastructure development and maintenance. This process will also enhance information on asset lifecycle and ensure completeness of data in the register.
In the process of implementation of GIAMA, the user departments compile User Asset Management Plans (U-AMPs) in line with their service delivery objectives.
In this financial year the focus of condition assessments will be on health facilities. This is done in a phased-in approach due to limited budget.
The implementation of GIAMA necessitated the review of the KwaZulu-Natal Land Administration Act, 2003.
Izandla Ziyagezana Programme
This is one of the department’s initiatives targeting job-creation. This programme has yielded 559 jobs during the 2011/12 financial year and is expected to yield a further 78 jobs during the 2012/13 financial year.
Programme 3: Buildings and Fixed Structures
Public Works Infrastructure
One project in Mkhuze has been completed against a target of two projects. The second project is the Sisonke District Office which has received a five-star green design rating from the Green Building Council of South Africa (GBCSA). This is first government construction project to achieve this accolade. The project is set to be completed by the end of July 2012 and will provide a model for the future
Expanded Public Works Programme (EPWP)
The department has an internal target of 28 000 work opportunities for 2011/12. A total of 137 207 work opportunities have been created between April 2011 and March 2012 of the 2011/12 financial year.
KwaZulu-Natal Integrated Greening Programme
This is a partnership programme led by the Office of the Premier which focuses on greening activities through employment creation for unskilled people. Public Works is coordinating the programme in the province.
This programme is an ideal Public Private Partnership (PPP) which involves the Wildlands Conservation Trust, Department of Agriculture and Environmental Affairs, Public Works, Economic Development and Tourism, Human Settlements and Msunduzi and eThekwini Municipalities. More institutions are still being encouraged to become partners. The programme provides for:
- “Tree-preneurs” – growing and planting indigenous and edible plants;
- “Waste-preneurs” – collecting recyclable waste;
- “Green-preneurs” – trading bicycles, water tanks, solar energy devices;
- Reforestation projects, restoring community forest assets;
- Reforestation projects, restoring community forest assets.
An amount of R7 513 719 was spent on stipends between April 2011 and February 2012. The programme was initially earmarked to be piloted in Msunduzi and uMngeni Municipality however it had to be extended to other Districts due to more stakeholders coming on board.
The programme is now active in uMgungundlovu, Sisonke, Uthungulu, Umkhanyakude, Zululand and more recently eThekwini Metro.
National Youth Service Programme (NYSP)
The National Youth Service Programme aims to provide technical skills to young people while giving them an opportunity to serve their communities.
At the beginning of 2010/11 the department was granted R5 200 000 to implement the NYS Programme. In 2011 the Office of the Premier directed the department to start with the recruitment processes, orientation and the signing of contracts with participants.
Eighty learners were given funding through the Department of Higher Education National Skills Fund. The candidates will receive the National Certificate in Building and Civil Construction at NQF Level 3.
Partnerships
Construction Education and Training Authority (CETA)
Building for internal technical skills capacity remains the main objective of the department. In an effort to attend to this challenge, the department partnered with CETA which saw a grant allocation of R595 000 in February 2011 being provided towards a Skills Development Initiative.
A total of 97 internal employees ranging from handyman assistants, security guards and cleaners from all the four regions underwent the CETA accredited training on the construction trade unit standards that covers Carpentry, Plumbing and Masonry.
Provincial Infrastructure
The Department of Public Works also acts as an implementing agent for the Departments of Education and Health. It should be noted that this does not form part of the Voted Funds for Vote 14.
Department of Education Infrastructure (R900 000 000)
In 2011/12 financial year, a budget of R661 000 000 for various infrastructure projects was allocated to the Department of Public Works. The department spent the full allocation of this budget.
As a pilot project, the Department of Education also requested the construction of 64 Early Childhood Development Centres, (39 alternate and 25 conventional) in 11 districts through the use of alternate and conventional construction methods at a cost of R125 000 000.
Each region has been evenly allocated alternate and conventional construction methods which will be used as a basis for the monitoring and evaluation of the different construction methodologies. To date 50 projects have been 21 completed and the balance will be completed by the end of July. An independent assessment/cost benefit analysis will be undertaken on completion of the Project.
For the 2012/13 financial year, the Department of Public Works will undertake projects to the value of R900 000 000 as an implementing agent on behalf of the Department of Education.
Health Infrastructure (R1 324 201 000)
A total of 56 Health Infrastructure projects comprising 30 Hospital projects and 26 Clinics projects with a budget of R446 715 000 was allocated to the Department of Public Works in the 2011/12 financial year. The department spent a 100% of the budget at the end of the financial year.
Additionally the hospital revitalisation grant of R421 759 000 was allocated, of which R323 232 000 (77%) was spent. The under-expenditure was due to legal disputes and cancellation of projects.
For the 2012/13 financial year, projects to the value of R1 324 201 000 (R448 158 000 hospital revitalisation projects and R876 043 000 for hospitals and clinics) have been identified and awaits final confirmation from the Department of Health.
Conclusion
Honourable Chairperson, while the path we tread remains a trying one, I am confident that we are making significant strides in service delivery and creating a better life for all our people.
The Minister of Public Works said a month ago that the National Department was at a crossroads and that a broad turnaround strategy was being implemented. The 22 picture in the province is more optimistic. This has been acknowledged by both SCOPA and the Finance Committee.
I must acknowledge the new Minister of Public Works who brings a breath of fresh air of ideas and strategies. He also trumpets a strong anti-corruption message which has a resonance in our province.
Please allow me to acknowledge my predecessor, the Honourable Maggie Govender MPL, the Chairperson and Members of the Portfolio Committee, the HoD, Mr Roger Govender and the Department and Ministry staff at all levels for their contribution to performance of the department.
My thanks are also due to the Premier and members of this House and especially to my wife and family for their patience and understanding in the discharge of my duties.
Honourable Chairperson, it is now my pleasure to present the Budget for 2012/13 for approval as follows:
Programme 1: Administration R283 304 000
Programme 2: Property Management R654 485 000
Programme 3: Buildings and Fixed Structures R373 382 000
Total: R1 311 171 000
I thank you.
Ngiyabonga.
