1. Introduction
Honourable Chairperson
Honourable members of Cabinet
Honourable MECs
Honourable Chairperson and members of the Select Committee on Public Services
Honourable Members of Parliament
Distinguished guests, ladies and gentlemen
Welcome.
As the Department of Public Works (DPW), we stand at a crossroads:
- We know what the problems are.
- We have developed a broad strategy to turn the department around.
- The task now is to implement.
Nothing I promise you here today will come to fruition until, and unless, we tackle the underlying systemic flaws in the department.
2. The budget vote
We welcome the allocated budget of nearly R8 billion for DPW in the fiscal year 2012/13 – an increase of 2% from the previous year. The message to DPW is clear: don’t even think of a real increase in budget until there is a real improvement in performance.
The budget reflects government priorities and the department’s efforts to address its core mandates:
- as custodian and manager of the state’s immovable assets, and
- to create jobs and work opportunities, and to address skills shortages particularly in the Built Environment professions.
Despite many flaws, major sections of the DPW remain productive – due to the commitment and hard work of officials. EPWP – the Expanded Public Works Programme - is a case in point.
3. Expanded Public Works Programme (EPWP)
EPWP is part of government’s response to the triple challenge of poverty, unemployment and inequality – highlighted in the President’s State of the Nation Address. Our target in the second phase of the EPWP - for the period 2009 to 2014 - is to create 4.5 million work opportunities. More than two million work opportunities have already been created since 2009.
This programme is making a real difference to people’s lives, bringing back a sense of responsibility and dignity. One beneficiary stated recently, and I quote: “because of EPWP, I am now able to walk into Shoprite and buy food for my family”.
None of this would be possible without the active partnership and participation of municipalities, provinces and non-profit Non-Governmental Organisation’s (NGO). I am pleased to share with you that 98% of municipalities have now signed up for the EPWP.
4. Capital Projects
In the course of 2012/13 some 250 projects are scheduled for completion. The department has created 200,000 jobs – directly or indirectly – over the last five years.
We are also resuscitating the departmental Workshops to develop in-house maintenance capacity, as well as providing training opportunities for some 500 graduates and students in the built environment sector. This will include the training of professionals, technicians and artisans.
5. Asset Investment Management
The department’s Long Term Infrastructure Plan comprises three elements:
- New buildings and additions – to ensure appropriate buildings for clients;
- Maintenance and repairs – to safeguard the assets we have; and
- Refurbishments and conservation of existing state buildings – many of them heritage buildings. This is central to our strategic goal of shifting the larger percentage of government accommodation away from leases to occupation of our own buildings.
Eleven buildings were rehabilitated last year, with a further 10 earmarked for this year.
As part of the Accessibility Programme, 51 state buildings were made more accessible for people with disabilities last year, with a further 100 buildings prioritised for this year.
6. Prestige
The following steps have been taken to revamp Prestige:
- The specialised areas of facilities management and events management are being separated to provide greater focus and accountability;
- Policies are being developed to govern the acquisition and control of moveable assets;
- Most important, we are now committed to a process of consultation with MPs - and other clients - to ensure service is responsive to clients’ needs.
7. Policy: Transforming the Built Environment
The Department of Public Works remains responsible for the regulation and transformation of the construction and property sectors. Racially skewed property ownership patterns need to be addressed, and the construction industry has to allow emerging contractors to graduate into sustainable businesses.
We are also developing a Green Buildings Policy in line with the principles of the Green Economy Accord – which will contribute towards green jobs.
On the legislative front, this year the department will be tabling in Parliament the Expropriation Bill and the bill to establish Agrement South Africa as a public entity. The department will also introduce a bill addressing transformation of the built environment professions.
8. The department’s public entities
I need to mention the important work done by the Entities that report to the Minister of Public Works:
- Agrement South Africa – whose primary role is to assess and certify fitness-for purpose of non-standard construction products in South Africa.
- The Construction Industry Development Board (CIDB) - The Board’s outputs include: combating fraud and corruption; and maintaining the contractor registration and grading system which is both a risk management tool for clients as well as a development tool for emerging contractors.
- The Council for the Built Environment (CBE) - enhances public protection by ensuring that only registered and competent professionals are allowed to practice. It remains a concern that only 24% of registered professionals are black. The Council, in partnership with the Department of Higher Education and Training, is developing a candidacy programme to remove bottlenecks in the skills pipeline to allow aspiring young black professionals to attain professional registration.
- The Independent Development Trust (IDT) - supports the DPW to fulfil its mandate – as well as providing project management services to other national and provincial departments.
9. DPW: The Turnaround Strategy
Any successful turnaround starts with strong and determined leadership. That’s my job from the side of the executive authority – but it also requires strong leadership within the department and a shared vision of what we want to achieve.
As DPW, we do not have the luxury of time. We are running a business. This is the paradox which faces us as a department: to stabilise the operations of the department short-term, whilst we embark on fundamental review and transformation.
I announced my turnaround strategy at the end of January, which included:
- The establishment of an Inter-Ministerial Committee to provide advice and political support to the department, as well as a Technical Advisory Committee to draw on appropriate experience and best practice.
- The establishment of a Support Team under the Office of the Director-General of DPW to oversee and manage the change process. There is no point in putting such a team in the ministry – because ministers change with every election. A Team Leader has been appointed to lead this process.
Amongst the concrete interventions already made are crucial stabilisation projects, including the following:
1. Preparation of a comprehensive reliable Immovable Assets Register
I am pleased to announce progress:
- Department officials have been working closely with auditing firm - Ernst and Young – on a desk-top exercise to reconcile deeds records and other existing databases to identify gaps. This initial exercise has been completed.
- The physical verification of the cleansed database will take a further year to complete.
- The cleansing of the Immovable Assets Register allows us to complete the devolution of some 50,000 properties to provinces.
Stabilisation Project 2: Leases
Years of poor management, under-capacity and lack of financial controls have provided fertile terrain for fraud and corruption. It is for this reason, that shortly after my appointment I removed certain financial delegations to regions of the department, such as withdrawing their powers to sign leases.
Twenty-two irregular leases have already been identified in one region alone – involving payments of over R64 million. This includes leases where DPW paid for the duration of the lease without the building being occupied. We have instructed our lawyers to approach the High Court to nullify these irregular lease agreements, and institute civil action against whoever benefited unduly.
Criminal cases are being opened against several officials; more are expected.
As far as the much publicised South African Police Service (SAPS) lease is concerned, the department launched an application to the High Court to declare this lease agreement invalid. The matter is now before the Court for adjudication.
Treasury has announced a joint programme with the Department of Public Works to audit its 3,000 current leases with the following objectives:
- to further identify irregular leases and collect monies owed to the department; and
- to review and strengthen the systems of the department relating to lease management, and to train and capacitate staff accordingly.
For the review of leases we project a completion period of 12 months.
Recent media reports have highlighted problems experienced by the South African Police with their accommodation. This is why the Acting DG has met with the HOD of the South African Police Services to establish a Task Team to address lease related issues.
Going forward, as DPW we are committed to reconfiguring our operations to be responsive to our clients’ needs.
Stabilisation Project 3: Achieving a Clean Audit
Too little, too late - has been done to fundamentally change the audit outcome for financial year 2011/12. That is why, for the current year that has just commenced (2012/13) we have employed additional capacity.
I am confident that the first positive results of this will be visible by mid-year when the Interim Audit results are presented by the Auditor-General.
To develop a metaphor I used previously: DPW is still in ICU, but we are now stopping the bleeding, and stabilising the patient - before deciding on the appropriate long-term treatment.
10. Relations between national and provincial Public Works
You know it has always struck me as odd that the time allocation for the Budget Vote in the NCOP is so short. Surely I need additional time to address the additional challenges across the spheres of government. Let me then conclude by sharing with you the outcomes of a very fruitful MinMec we held last month.
High on the agenda were the following issues:
- The need to address the lack of professional and technical skills – understanding that Public Works is a highly technical department of government. In the meantime, provinces undertook to share scarce skills.
- We also discussed the use of Alternative Construction Methods to replace mud schools in the Eastern Cape and North West provinces. These methods produce buildings that are more sustainable, cheaper and quicker to erect. There are also important gains in terms of job creation and skills transfers to local communities. The MEC for the Eastern Cape has invited other provinces to visit these pilot projects. Perhaps the invitation needs to be extended to include honourable members.
- The implications of the recently announced national infrastructure roll-out plans were considered at the MinMec. The revitalisation of health facilities and the national school building programme – require that Public Works, nationally and provincially, together with client departments, local authorities and implementing bodies - work closely together to ensure effective delivery. This means changing the way we work to reduce delays and cut through the bureaucracy.
- We also debated the issue of co-operative governance and concurrent mandates – concepts which are central to improving coordination between the spheres of government. This may require developing a memorandum of understanding to clarify roles and responsibilities. But in the end, the MinMec concluded, it is down to all of us to make this relationship work to enhance service delivery.
The message is clear: that working together we can achieve so much more.
I thank you.
