T Didiza: Department of Public Works Annual Lekgotla opening

1 November 2007

The Deputy Minister, Mr Ntopile Kganyago
The Director-General, Mr Manye Moroka
The Chief Executive Officers of the Public Entities
Members of the Executive Committee
Other senior managers

Introduction

I welcome you all, as the leadership of Public Works to the 2007 Department
of Public Works (DPW's) Lekgotla. We met precisely a year ago to steer our
organisation firmly onto the path of its assigned mandate and our collective
promise to the people of this country that South Africa works because of Public
Works.

We meet again this year to take stock of our progress, achievements,
shortcomings, and the challenges ahead as we strive towards a world class
public works, committed to efficient, effective and timeous service delivery.
Building on last year's Lekgotla, this is the goal we have set ourselves for
the year 2009/10 and your leadership is the key ingredient to convert this
aspiration into tangible and measurable outcomes.

I believe we have made great strides on the path we set ourselves at last
year's Lekgotla. We have not yet reached our destination and, indeed, we need
to understand that our progress, in itself, has opened up new opportunities and
new challenges that we must grapple with over the next two days.

We therefore need to leave this Lekgotla with a clear understanding of what
we collectively, and individually, need to do to fulfil our aspiration, and to
deliver the undertaking we have made, as part of government, to ensure a better
life for all our people.

Our mandate

The effort of national transformation therefore continues to occupy the
central focus of the Department of Public Works. As the infrastructure delivery
arm of government, we are moving ahead to construct the new face of South
Africa's infrastructure and property sectors and to attack poverty and economic
marginalisation.

We address these national issues using in the first instance, the portfolio
in the hands of government. This includes the full cycle of immovable asset
management, strategic leadership and regulation of the property and
construction industries and leadership of the Expanded Public Works Programme
(EPWP).

Poverty, unemployment, underdevelopment and inequality remain the greatest
challenges to government and constitute a threat to our democracy, to
stability, peace and prosperity. The role of Public Works is therefore crucial,
and we can be proud that our effort has contributed to the overall progress
made towards meeting the basic needs of our people.

A week ago Statistics South Africa (StatsSA) published its Community Survey
2007 with statistics demonstrating vast improvements in access to water,
sanitation, electricity, housing, schooling and higher education. Improvement
in employment is also evident though we have much still to do.

The report tables what South Africans say (and I quote). "They say in these
areas of delivery of meeting basic needs, 2007 is better than 2001 and indeed
2001 was better than 1996. Today is better than yesterday."

We can all be proud of these achievements, but not complacent. Indeed we
need to raise our efforts and respond to the call of our President, Thabo
Mbeki, to guarantee our people that "Tomorrow will be better than today!"

Public Works and Accelerated and Shared Growth Initiative (AsgiSA)

Because of our collective effort we are on track to achieving the goals of
the Accelerated and Shared Growth Initiative (AsgiSA). These are to achieve a 6
percent growth rate in Gross Domestic Product (GDP) and to meet our commitment
to the United Nations (UN) Millennium Development Goals by halving poverty and
unemployment by 2014.

The role of public works is central to this initiative, particularly with
regard to the massive infrastructure investment programme that is currently
underway to enable economic growth. Our role is pivotal in the regulation and
development of the construction industry, the built environment professions,
the procurement environment, the development of skills and capacity and our
leadership in infrastructure delivery.

This week, in his Mid-term Budget Policy Statement, the Minister of Finance
added a further R20 billion to the R320 billion public sector infrastructure
allocation over the 2008 Medium-Term Expenditure Framework (MTEF) period and
re-emphasised the importance of labour intensity and skills development.

Driven by this massive programme of public investment, the construction
industry has emerged from decades of declining investment into a period of
sustained growth that will go on way beyond 2010. In fact the 2010 stadiums and
associated infrastructure represent less than five percent of the overall
investment by government in the period ahead.

Despite the loss of skills and capacity during preceding decades, the
construction economy has already doubled its output over the past five years.
This growth trajectory and the associated capacity challenges, including rising
costs, are something we as the public works family must grapple with. We have
already been called upon to bring our expertise to bear on the challenges
facing some municipalities in the delivery of stadiums.

Aligning the combined impact of public works

Over the past year, we have been determined to align the combined effort of
the entire public works family in order to achieve maximum impact in support of
service delivery and the national transformation agenda.

While on the one hand these are exclusive functions or responsibilities
given to national and provincial government and to an extent, to our entities,
Independent Development Trust (IDT), Construction Industry Development Board
(CIDB), Construction Built Environment (CBE) and Agreement Board (AB), it is
also true that clear co-ordination of policy and implementation is critical to
ensure synergy and impact.

In this regard, I am pleased to report that we have consolidated our
intergovernmental structure and I have no doubt that the benefits of synergy
and impact will permeate nearly all the presentations made at this
Lekgotla.

Our public entities are now full participants in the work of the DPW family
and participate in the Head of Department and Minmec meetings. They are in a
valuable resource and an extension of the pool that will enable us to achieve
our objectives.

Importantly also, is the fact that the South African Local Government
Association (Salga) has become another active participant in our forum,
supporting our outreach to municipalities as we roll out EPWP, the National
Contractor Development Programme (NCDP), the National Infrastructure
Maintenance Programme (NIMP) and other aspects of our mandate.

Indeed, this forum has become indispensable as a school of shared learning,
a common compass and a platform of mutual accountability.

Last Year's Lekgotla undertakings and challenges

As our last Lekgotla, we adopted no less than six key strategic imperatives
as our radar as we had into the future, informing every strategic conversation
in the organisation. It is important to pause, occasionally, to review the
strides we have made in the following strategic imperatives:

* asset management
* human resource development
* job creation and EPWP
* enhanced role of our public entities
* transformation of the construction and property sectors
* enhanced relationship with Parliament.

I would like to make a few observations on these imperatives and related
issues of our strategic plan and our performance.

Asset management

Asserting our commitment to our mandate, the top management recently
produced an asset management turnaround strategy, firmly placing the management
of immoveable assets of states on the shoulders of Public Works. This mandate
we regard as inalienable because it distinguishes Public Works from any other
government department.

Sadly, we have had in the past allowed others to nibble at this sacrosanct
responsibility of the department. Our abdication of our own powerbase has given
the impression to the others that they can do the work better. A week ago, the
Department of Environment Affairs and Tourism requested proposals for the
Private Public Partnership (PPP) to construct their head offices, all this
without the involvement of public works.

This erosion of the Public Works mandate affects provinces as well and
featured on the agenda of both Minmec and Head of Department (HOD) meetings. We
have jointly agreed that the primary onus is on us to display flair, expertise
and professionalism in an effort to reclaim that only we can do better. The
turnaround strategy should serve as a head start.

The recent enactment of the Government-Wide-Immovable Asset Management Act
(Giama) should further strengthen our hand because it is a national endorsement
of our leadership and ability to successfully manage this treasure house of the
state. To implement Giama effectively, the department shall require a strong
will.

Human resource development

To this end, the department needs to recruit, appoint, and retain an
appropriate cadre of skilled personnel. Since the last Lekgotla, the department
has worked frantically to advertise shortlist and appoint no less than 500
posts, effectively reducing our vacancy rate, from around 900 to fewer than
400. In the process, we paid serious attention to the fact that bottlenecks
occur at the top of the bottle and we successfully appointed the Deputy
Director-General (DDG) in Operations in July and are currently finalising the
position of the DDG: Corporate Services.

Despite these achievements, we cannot rest on our laurels but need to forge
ahead to recruit more dedicated people into our ranks in order to improve our
service delivery track record. The launch of the external bursaries and the
intensification of the programmes targeting learners and interns is a further
indication of our resolve in this matter. We have left no stone unturned in
exploring other options and I am proud to announce that the existing bilateral
agreement between South Africa and Cuba has enabled us to successfully recruit
the first 48 of the more than 260 built environment professionals from Cuba to
be deployed in the various provinces. I shall be officially welcoming the first
batch of Cuban professionals on Tuesday, 5 November 2007

Expanded Public Works Programme (EPWP)

The National Treasury has heeded our request and early this year an amount
of R125 million was approved for the capacitation of the EPWP Unit over the
next three years. This step is critical as it comes at a time when the EPWP is
delivering jobs ahead of the target date of 2010.

Currently the programme is sitting with around 717 194 of net job
opportunities created and the momentum is increasing judging among others by
the quality of EPWP projects we have had the chance to visit in the recent
months. Our commitment to deliver one million jobs is therefore non-negotiable.
It is the epicentre of government's undertaking at the 2003 Growth and
Development Summit to contribute to poverty alleviation, among others, by
creating jobs linked to the development of skills.

At the recent International Labour Organisation (ILO) Seminar on Labour
Intensive Practices, we experienced the dedication of African governments and
other developing countries in maximising public investment in job-creation.
Concomitant with the creation of jobs is the development of skills hence we
shall accelerate this component of EPWP including the Vukuphile and the
National Youth Service elements. Our decision at Lekgotla last year to regard
every capital works project as EPWP potential should escalate the numbers of
jobs created and the skills developed.

Our commitment to the President and the country is to increase the number of
youths already enlisted under National Youth Service, by additional 10 000,
this referring strictly to artisan skills as we understand them in the context
of the built environment sector, hence our stern warning at the MinMec in May
against claiming any glory for opportunities created in unrelated sectors
and/or industries.

Integrating our public entities

Last year we undertook to improve the synergy with our public entities and,
in a number of respects we have gone further to achieve united action.

The launch this year of the Construction Contact Centres in three provinces
is one of the fruits of our inter-governmental forum, essentially a partnership
between CIDB and provincial public works departments to take our services
closer to the people. Further roll-out is envisaged to ensure access to
registration, access to information, procurement know-how, to skills and
business to business linkage.

We look forward to hearing from CIDB the progress made towards implementing
the National Contractor Development Programme aimed at growing contractors up
the grades, ensuring greater equity, particularly in the upper grades, raising
the skill and performance of the contracting sector of the industry; and
ensuring focussed development impact across the country. As part of the
Presidential Apex Projects, this commitment is one of our priority areas of
focus.

Successful emerging contractors will be given an opportunity to cut their
teeth in programmes such as the Eradication of Mud Schools, successfully
shepherded by the Independent Development Trust, also under the Presidential
Apex Projects.

The pace of infrastructure development has intensified and we believe that
there is a need for the Agreement Board to increase its focus on more
innovative and alternative products that are easier to use and will help to
contain costs.

In the area of skills development we need to build on the progress made by
CIDB and CBE towards implementation of the Employment Skills Development Agency
(ESDA) as envisaged in the CIDB report published earlier this year. Using the
platform of the EPWP and NCDP, we have taken bold steps to play a central role
in addressing the skills gap and to reinforce the role of the Construction
Education and Training Authority (Ceta).

We must build on the initiatives of industry and provincial public works to
support expanded partnerships. It is important also to link these initiatives
to the National Youth Service. Growth in the construction sector also creates a
range of opportunities: To quote my colleague, the Minister of Finance once
again:

"In addition, both industrial and labour market policies must focus on
raising the labour intensity of the economy so that we can create jobs at an
even faster pace. Greater progress in channelling young people into jobs has to
be a central policy objective in coming years".

Transformation of the Construction and Property Industries

We remain committed to fundamental transformation of these industries that
are an integral part of our mandate. During the past year transformation
charters have been gazetted. This is an achievement that raises the challenge
of implementation, monitoring and evaluation. In some areas there is anecdotal
evidence to suggest we are doing quite well. In other areas we are not. In fact
we do not have a comprehensive methodology to measure empowerment across these
sectors.

Construction

In addition to the issues already touched on in relation to the construction
industry, I would like to single out a few areas that require our focus.

An area that is less understood by the public sector is the materials supply
sector and I am pleased that CIDB has embarked on a study of this sector. We
have good reason to be concerned about rising prices.

We also have reason to remain concerned about the continued influx of Grade
1 contractors, with the Register of Contractors now totalling about 50 000.

The regulation of the professions is another area that we may need to
revisit. Many built environment professionals are not registered and the
question is whether there is sufficient motivation to register, as appears to
be the case in other professions, e.g. accounting and medicine. Also bodies,
such as the Medical Council are not fragmented into silos as is the case with
the Council for the Built Environment. These are issues that will need to be
considered in order to ensure greater effectiveness of the current regulatory
system.

By and large, we have continued to make progress in the transformation of
the construction industry.

Property

On the other hand, the property industry continues to pose a challenge to
government. Property ownership, development and distribution still follows
apartheid patterns to a large extent and interventions such as our Property
Management Strategy in aid of Black Economic Empowerment (BEE) are a necessary
mechanism to redress patterns of ownership and distribution.

The strategy seeks to address the skewed property ownership that currently
exists in the property industry by promoting property ownership and management
through leasing where long-term leases will be encouraged for BEE property
participants so as to ensure that they acquire the necessary collateral from
financial institutions thus enabling them to gain the necessary skills and
capital to further invest in the property industry.

Furthermore, the strategy will encourage the establishment of landlords and
property brokers incubator programmes that will assist in identifying property
practitioners that have the necessary potential to prosper in property
investment and nurture them to ensure that they meaningfully participate in the
property industry thus promoting equality as the dominance by the few
established landlords will be balanced in the long run.

Strengthening relations with Parliament

We shall strive to build on the foundation we have developed with
parliamentary oversight bodies to strengthen our working relationships.
Continuous engagement with our legislators is key, enabling them to gain and
understanding in our complex world. In return, their inputs are invaluable and
we like to thank them for their support.

As a department we shall continue to involve them in our business and events
including the Anti-Corruption and ILO seminars, while prioritising their
invitations to participate in their campaigns, notably, the Taking Parliament
to the People which the Deputy Minister and the department have just returned
from.

I have noted the progress we have made since November 2006 and will continue
to highlight challenges where there are any.

Governance

The recent Anti-Corruption Conference encapsulated our stance against any
forms of poor governance, be it fraud bribery, maladministration, nepotism or
theft. We have committed to deal harshly with these. We are committed at the
same time to an ongoing programme of learning and mentoring to enable not only
compliance but the inculcation of a public works ethos of service.

Concurrently, as management and leadership, we should frown upon apparent
weaknesses in our financial management. Opinions raised by the Auditor-General
in our annual reports deserve our urgent attention and hopefully DPW and CIDB
will hasten to fix the cracks.

This step is important in re-asserting ourselves as a professional body
driven by a culture of quality, speed, innovation, cost-effectiveness and
ethics. This is the time for visible leadership and management.

As part of finalising the 2008 MTEF, it is important that we take note of
the Minister of Finance's call to national departments to make R2,3 billion
worth of savings as part of an efficiency programme. National departments are
asked to improve their management of expenditure on travel, entertainment,
marketing, catering, events and consultants. These savings will be
reprioritised towards frontline services.

Closing

There is an urgent need to mobilise our staff behind the vision, mission and
values of the organisation as a way to minimise the extent of their detachment.
We need the support and passion of every one of our people in our struggle to
re-assert our mandate.

Therefore we need to inject a new culture of hope and optimism as we firm up
our role to manage for optimum performance. To achieve this, our people at
every level, need to understand that they are indeed creating the new South
Africa as a better place for all our people. That is the challenge of
leadership that rests on your shoulders.

As we deliberate, let us ponder over our responsibility and competency, with
full knowledge that the future and viability of public works function depends
on our ability to think strategically. The outputs of our commissions later in
the Lekgotla should demonstrate that indeed South Africa can work because
Public Works is working.

Together, we can and will succeed.

I thank you.

Issued by: Department of Public Works
1 November 2007