M Gwala: KwaZulu-Natal Public Works Prov Budget Vote 2006/07

31 March 2006

“Meeting the Challenge of Accelerated Service Delivery”

Mr Speaker
Honourable Premier
Executive Council Colleagues
Honourable Members

Introduction

Mr Speaker, as members are well aware, this has been a year of profound
change for the Department of Works. In my budget address to this assembly last
year I confirmed my commitment to transforming KwaZulu-Natal Works from its
previously dysfunctional and under-performing state to an organisation of
excellence. The Department has embraced this process with a vigour and
intensity that is unprecedented. We are well on our way on the journey to
excellence. In the 2006/07 financial year, we will meet the challenge of
accelerated service delivery!

The challenge of accelerated service delivery

Mr Speaker, It is widely recognised that infrastructure development is one
of the fundamental cornerstones for development in South Africa. Funding
support from the National Government continues to increase, taxing the ability
of all of the players in the infrastructure development sector to deliver on
these very ambitious expectations.

The Department of Works has a mandate to provide comprehensive building
infrastructure services to the departments of the KwaZulu-Natal provincial
administration. This mandate is not binding on other departments and the
Department of Works must rely on the decisions of the client departments to
fulfil their building needs by employing the department as the preferred
service provider.

Over a number of years the department has had difficulty in meeting the
infrastructure needs of its client departments in a manner fully acceptable to
them. This problem became increasingly more serious in recent years with the
department unable to meet timing expectations, contributing to infrastructure
backlogs and significant unexpended resources.

The Department of Works needs to ensure that it is capable of meeting all of
the expanded expectations and to do so without sacrificing any of the critical
objectives of cost effectiveness, high quality construction and timeous
completion of projects. Accelerated service delivery requires the adoption of
innovative new approaches to service delivery. The traditional approaches,
quite frankly, cannot meet the ambitious targets that have been set.

Mandate for change

Mr Speaker, as I stated in my Budget Address last year, upon my appointment
as Minister for Works I made a commitment to the Premier to transform the
Department of Works from its traditionally underperforming state to an
organisation of excellence. To give life to this commitment, I commissioned the
development of a Change Agenda which sets out the key objectives that form the
core of the major turnaround initiative for the department.

In the many meetings and workshops that the management of the department and
I have had over the year to give life to this transformation, we have
affectionately referred to the Change Agenda as the “chorus” it has become the
driving force of the department and I must state, for all to hear, that the
revitalized senior management team of the department has fully taken up the
challenge to become the most well functioning public works organisation in
South Africa.

Mr Speaker, the Change Agenda, the Works Chorus, includes:

* transformation of the department into a high-performing organisation
* redesign of the department’s service delivery model to effectively,
efficiently and timorously meet client expectations
* development of new partnerships and service delivery agreements with client
departments
* fast tracked development and implementation of a new flagship programme for
elimination of the classroom backlog
* development and implementation of a provincial Fixed Asset Management
System
* full engagement of the Expanded Public Works Programme.

The mandate for change was clearly established and widely endorsed.

Principles for developing new strategic direction

Mr Speaker, underpinning the implementation of the Change Agenda, basic
principles has been established to provide the filter through which to examine
the issues and challenges facing the department. If the Change Agenda is the
chorus, these principles are the first verse. Allow me to highlight these
principles:
1. National and Provincial agendas provide the framework for the department
especially related to accelerated service delivery.
2. As a service provider, the department must be business based and client
driven.
3. The concept of “excellence in service” must overarch the entire business
model of the department.
4. The culture of the department must reflect the values of team work,
integrity, transparency and professionalism.
5. Partnership must be the cornerstone of all client relationships.
6. Responsibility, authority and accountability must be completely
aligned.
7. Planning is the foundation for any successful infrastructure program and the
earlier and the more strategic the better.
8. Internal structures and processes must be based on a team concept – one
objective, mutual support, with high levels of delegation fully empowering
decision makers at all levels.
9. Decision-making processes must be simplified, incorporating the principles
of “value added” and empowerment.

Accountability

Mr Speaker, the key to successful transformation is to create sustainable
long-term change. The journey to excellence is filled with challenge and
progress requires a continuing commitment. It also requires accountability.
Close to a year ago, I gave you my commitment that I would be accountable to
you for our progress in implementing the Change Agenda.

Major progress achieved in 2005/06

The launch of the Change Agenda in April 2005 initiated a series of actions
intended to fundamentally transform the department into a well functioning
service provider of choice.

Mr Speaker, I am very pleased to advise Members today that all items in the
Change Agenda have been auctioned and substantial progress has been realised in
2005/2006.

Governance Structures

Following the appointment of Dr F B Madlopha as the new Head of Department,
a new framework for management has been put in place and energised. The senior
management team has been substantially strengthened with the appointments of
Mrs M S Linda as General Manager: Professional Services and Mr T A Mdadane as
General Manager: Operations. A new Head of Ministry has been appointed and that
organisation is being updated and strengthened. We have also made appointments
to the Managers of Finance, Legal Services and Supply Chain Management and the
Regional Managers of the North Coast and eThekwini regions. A recruitment
process is presently underway for the Chief Financial Officer. Early in the new
financial year, the department will have in place a complete and newly
energised senior management team, part of the fully consolidated corporate
headquarters in Pietermaritzburg.

One of the earliest initiatives of the new senior leadership team has been
the introduction of Operation Shonaphansi to bring senior management to the
coalface of the department’s operations. The monthly EXCO meetings are now
often held in the regions, usually at a district office, and include site
visits, work audits and meetings with staff. These visits are proving to be
enormously valuable, supporting the new culture of service excellence.

The Performance Management and Development System have been firmly
established as the business management framework for the department. A
disciplined, accountable approach to the business of the department is now in
place and providing the framework for the establishment and implementation of
the department’s new strategic objectives.

For the first time, performance plans were completed for all programmes of
the department in 2005/06. Progress is monitored monthly to support on time
completion of all of the key performance indicators. The Balanced Score Card
system has been developed for the department and will be fully implemented for
the new financial year.

A fraud and corruption prevention plan has been adopted by the department.
The plan is being auctioned through a series of staff workshops. An internal
fraud hot line has been implemented.

Strategic Direction

Mr Speaker, to begin the change process for Works, a comprehensive analysis
of the strategic issues and challenges facing the department was completed and
thoroughly addressed by the department’s senior management team. Resolutions
were taken and an action agenda developed. We would be pleased to provide
copies to any member who has not yet received one.

Human Resource Management

As all members are aware, a well functioning organisation must have
positive, service oriented and professional human resource management. A high
priority for 2006/07 is the development and implementation of a comprehensive
transformation plan for human resource management in the department.

For the 2005/06 financial year, the most urgent priority for human resource
management in the department has been the elimination of the backlogs of vacant
posts and unresolved misconduct cases.

The priority posts for recruitment were systematically identified and costed
by the end of April 2005. The highest priorities are management, professional
and technical posts. 171 posts were advertised in 2005/06. By the end of the
financial year, 70 posts in total had been filled, with processes still
underway for an additional 56 posts.

The significant number of posts advertised and not filled reflects the
continuing problem with attracting professional and technical candidates.
Discussions with other jurisdictions confirm that this is a national crisis.
Frankly, government is simply not competitive in what is a much smaller labour
pool than is needed to meet the country’s growing infrastructure development
initiatives. The department has addressed this very difficult challenge in
every way possible including internships, increased outsourcing, additional
scope for utilisation of technologists and central pooling of staff to provide
service to the regions which have the greatest difficulty in attracting and
retaining qualified staff.

While progress has clearly been made, the backlog is such that the fast
track process must and will be continued until all recruitment targets are
met.

Mr Speaker, at the beginning of the 2005/06 financial year, the department
had 118 unresolved misconduct cases. As I reported in my Mid-Term Address, a
workshop was held to review all of the backlog cases and it was determined that
68 cases had sufficient cause to proceed with due process.

To provide the capacity needed to address the backlog of misconduct cases in
an urgent manner, 125 department staff has been trained as investigating and
presiding officers.

As members will recall, responsibility for 11 high profile cases was
directly assumed by the Head of Department, after insufficient progress was
made by DPSA. Investigations are completed in all of these cases and the
disciplinary processes have been initiated and are proceeding to conclusion. In
all 11 cases, the Commercial Crimes Unit of SAPS has been asked to complete
investigations to determine whether criminal charges should also be
pursued.

Of the remaining 57 cases, 36 have now been finalised. All of the remaining
cases will be resolved early in the new financial year.

Mr Speaker, the Department of Works has adopted a zero tolerance approach to
fraud, corruption and nepotism. Prompt internal action is being taken on all
new misconduct cases and we are and will continue to work closely with the
Commercial Crimes Unit of South African Police Services (SAPS) to ensure that
criminal charges are aggressively pursued wherever appropriate. I would note
that in 2005/06, criminal proceedings were initiated against 30 officials and
suppliers. Additional investigations are presently being finalised which
implicate another 46 officials and suppliers.

Information Technology

Mr Speaker, the management of a major infrastructure development programme
make Works an ideal candidate for substantial information technology,
particularly through the introduction of web-based e-business. Works is in the
process of establishing a fully functional information technology unit, with
the first assignment for the new group the preparation of a fully costed,
medium term information technology plan for the department.

While creating the capability to be a leading edge e-business organisation
is a high priority, the department has not waited to take action on immediate
needs. The focus in 2005/06 has been on the completion of five major systems
which will underpin the new service delivery model. A new departmental web site
was launched in November 2005. This new web site has been designed to assume
the major new role that e-business will require. While the basic features are
in place on the web site, we will be incorporating a number of new e-business
components as these systems are completed. Our goal is to have a web site which
provides one stop shopping for all of our suppliers, clients and departmental
staff.

Mr Speaker, the number one priority for information management and one of
the cornerstone initiatives in the Change Agenda is the development of a
provincial fixed asset management system. Today, I am pleased to inform this
House that this system is now operational, with data population ongoing. The
project is on schedule and the province’s new Fixed Property Asset Management
System will be fully operational in May 2006, as I promised in last year’s
budget address.

This system has been developed using PREMIS as the software platform,
ensuring maximum integration with Treasury and key client departments. I would
also note that our system fully meets all of the requirements established by
the National Government.

As members would expect, development of such a system is never complete.
Work will continue on an ongoing basis to ensure that the system is always
current and new applications are developed to facilitate the most wide ranging
and convenient accessibility to this critical information. The Implementation
of the asset register now enables my department to assess the extent of excess
or under-utilised property with a view to developing an asset disposal
strategy. Additional my department will be developing a policy to govern the
allocation and rent payable in respect of houses rented to officials and
parliamentarians within the Province. Both of these issues will be incorporated
within the KZN Administration Bill.

I am also pleased to advise Members that we have completed a comprehensive
redevelopment of the Works Control System and have launched the new Works
Information Management System (WIMS) in April of this year. The new system is
web-based, allowing for extensive, but carefully controlled, access by client
organisations, financial managers and departmental staff at all levels. The
system has been designed to easily create management information related to
both programme and project status and expenditures.

A new electronic system has been developed to enable a web based roster
system to be used in the appointment of consultants. Application of this system
will generate major time savings in the procurement of project consultants.

The fifth information technology initiative completed in the past financial
year has been the installation of the QPR software which provides the platform
for the Balanced Score Card system. As I noted earlier in my address,
performance management is critical to accelerated service delivery and this new
system provides the business framework for the infrastructure development
programme.

Partnerships

Mr Speaker, led by the Head of Department, new partnership based
relationships are being established with the three client departments that
commission the largest part of the province’s building infrastructure programme
– Health, Education and Social Welfare and Population Development. This new
partnership approach is being auctioned through the development of a
comprehensive infrastructure management model including new service level
agreements and operating protocols.

The Joint Task Team on Education Infrastructure has been re-established and
is addressing the issues which must be resolved to allow the province to fully
meet its school infrastructure targets.

The Departments of Works and Education have together embraced the second
phase of the nationally supported Infrastructure Development Improvement
Programme. The programme provides senior technical assistance and programme
management systems which will aid the departments in ensuring that the school
infrastructure development programme is able to fully meet its targets and
eliminate the backlog of classrooms as quickly as possible.

A similar national programme will become available to the Departments of
Works and Health, beginning in July 2006.

Partnership is the approach we are introducing to all of our relationships,
both inside and outside of government. Under the direct leadership of the Head
of Department, new strategic partnership opportunities are being actively
pursued with industry associations and key corporations to more effectively
engage them in addressing and achieving the department’s objectives.

Job Creation and Business Development

Mr Speaker, the Department of Works has become fully engaged in the
programmes designed to maximise employment opportunities, encourage the
development of Small Medium Micro-Enterprise (SMME) and Black Economic
Enterprise(BEE), and provide opportunities for women, youth and the disabled.
An EPWP component is now included in all projects and EPWP principles are
included in all tender documents. The department has initiated a training
programme for consultants and contractors to assist them in complying with the
objectives of EPWP and the emerging contractors development programme.

Building the construction industry

Mr Speaker, as has been noted on many occasions, the construction industry
is significantly lacking in capacity in South Africa, and KwaZulu-Natal
reflects this reality. Works is exploring strategies for growth of the
construction industry in KwaZulu-Natal, in co-operation with industry
associations, key corporations and national agencies.

Of particular note, Mr Speaker, is the new initiative on Women in
Construction the department has aggressively adopted in this past year.
Building on the first of what will be annual conferences, the department has
committed significant funding to assisting women to establish construction
companies and undertake a significant portion of the construction of the Multi
Purpose Community Centres. The department intends to commit as much as possible
of this co-operative initiative to women in construction on an ongoing
basis.

2005/06 Building Infrastructure Programme

Mr Speaker, the 2005/06 building infrastructure programme has been a
transition programme for the implementation of the Change Agenda and the
department’s turnaround strategy. While working to meet client service delivery
expectations, the department has used this programme to introduce improvements
to all of the processes of procurement and project management.

The Head of Department has led the process to develop fast track procurement
processes within the department. A new sense of urgency has been instilled in
every process related to procurement with the objective of eliminating “still
time” which accounts for much of the slowness in initiating construction.

The 2005/06 works programme included 787 projects with total expenditures
topping the R800 million mark for the first time.

The school infrastructure delivery programme of the Department of Education
allocated 877 new classrooms to the Department of Works in 2005/2006. By the
end of the financial year, 765 of these classrooms were completed with the
remainder scheduled for completion by the end of June. An additional
22-classroom school is scheduled for completion in October 2006. While the
department’s overall performance clearly improved in 2005/2006, we are well
aware that there remains much to do to fully meet all of the expectations of
the client departments.

Redesign of the service delivery model

Mr Speaker, as I have noted, in 2005/06 the department has concentrated on
putting in place basic management structures and streamlined business
processes. These improvements set the stage for the more profound change needed
to meet the ultimate objective of the department to fully satisfy all of the
building infrastructure needs of the KwaZulu-Natal Provincial Administration in
a timeous, high quality and cost effective manner.

Comprehensive redesign of the department’s service delivery model for the
provision of building infrastructure is the next stage in the change process.
The implementation of the Accelerated Service Delivery model will be the
flagship programme of the KwaZulu-Natal Department of Works in 2006/07 !

Mr Speaker, a departmental Service Delivery Redesign Team was appointed in
October 2005, comprised of senior managers and the international consultant,
well known to members of this House, who was appointed to assist the department
in its transformation.

The team workshopped in detail every aspect of the department’s service
delivery model with a view to identifying innovative new approaches capable of
meeting all client expectations, recognising a two-fold increase in
departmental capacity may well be needed.

The review perspective has been business based and client driven; targeting
effective, efficient and timeous delivery. All of the issues which impact on
service delivery were examined. The Redesign Team has focused on identifying
and adapting the innovative approaches of other South African infrastructure
development organisations for which there has been demonstrated and sustainable
success.

The redesign is being completed and implemented in three phases. The first
phase, the resolution and documentation of the strategic actions required to
fully address each of the major issues, was completed in January 2006.

After confirmation of the strategic direction, the Redesign Team completed
the development of more detailed proposals and implementation plans for each of
the major elements of the redesigned model. This process has proceeded on a
fast track with a view to being able to begin implementation as we enter the
new financial year.

The 2006/07 financial year will be a transition period to ensure the smooth
and productive introduction of the new accelerated service delivery systems. It
is expected that the implementation phase will be fully completed within the
new financial year. Mr Speaker, while this is not the forum to present in
detail the new Accelerated Service Delivery model for the department, I would
like to give Members a few highlights:

1. The core functions of the department are being realigned to ensure that
all service delivery functions are integrated and streamlined;

2. New infrastructure planning and co-ordination capacity will be created to
work with client departments to develop and manage a multi-year provincial
infrastructure programme;

3. Policy development, planning and co-ordination functions are being
significantly strengthened;

4. The heart of the new accelerated service delivery model is a new
programme management system which will appoint comprehensive programme
management contracts that provide programme co-ordination, consulting services
and contractor management for a multi year envelope of infrastructure projects.
This new approach will overcome the chronic shortages of professional and
technical staff creates significant new capacity and produce substantial
management and financial efficiencies;

5. The implementation of Supply Chain Management, which provides major
potential efficiencies on its own, will be tailored to support the new
accelerated service delivery model;

6. Management of consultants will now be undertaken through performance
based contracts;

7. A new monitoring and reporting protocol is being developed to provide
accurate, current information in support of effective management and oversight
of the programme;

With the redesign of the service delivery model, there can be no doubt that
the KwaZulu-Natal Department of Works will be able to meet the challenge of
expanded and accelerated service delivery in 2006/07 and beyond.

Budget for 2006/07

Mr Speaker, as Members are aware, Vote 14 represents the budget for the
Department of Works and includes the funding needed to deliver the
infrastructure programme for the provincial administration and the actual
infrastructure funding for the Department of Works.

The Public Finance Management Act requires that each Department budget for
its own expenditure, including all infrastructure required by that department
or funded through its programmes. Funding is directed by those departments to
the appropriate service provider based on the work assigned.

The budget for the Department of Works covers only the infrastructure
requirements of the Works Department, and for certain shared facilities. The
remainder goes towards paying for the services and associated costs of its
specialised staff that do work on behalf of the other Departments.

The Department of Works is unique in that it exists solely to provide
service to the departments of the provincial administration. It has only one
programmatic focus, to meet all of the building infrastructure needs of its
client departments in an effective, cost efficient and high quality manner.

Mr Speaker, the total budget for Works for the 2006/07 financial year is
just over R450million, including a modest 6% increase over the previous
financial year. As I have already noted, this budget is unlike the budgets of
line departments, in that it is entirely focused on meeting the infrastructure
needs of the provincial administration.

The complete focus of the Department of Works in 2006/07 is on the
implementation of accelerated service delivery. Every resource available to the
department is being committed to delivering all of the expectations of the
client departments.

Mr Speaker, a year ago, I made a commitment to this House to transform the
Department of Works into an organisation of excellence. I am very pleased and
proud of the progress that has been made the planning and design has been
completed, the foundation has been laid and building is well underway.

As impressive as our progress has been, this next financial year will
see the redesign of the service delivery model provide the tangible benefits of
the department’s transformation. Accelerated service delivery will be achieved
in 2006/07. Client expectations will be met and likely exceeded!

Conclusion

In conclusion, Mr Speaker, I want to take this opportunity to express my
thanks to Dr Madlopha and the staff of my Department who have committed
themselves to the creation of this new organisation of excellence. I salute
them because their dedication has made possible the substantial progress we’ve
made in this past year. I also thank the oversight committees Portfolio
Committee, Finance Committee and Standing Committee on Public Accounts for
their constructive criticism that has enabled this Department to re-shape
itself.

Today, Members, I reconfirm the commitment that I made last year. The
Department of Works will fully meet all of the needs of the KwaZulu-Natal
provincial administration in a cost effective, efficient and timeous
manner.

Mr Speaker, I table the budget for Vote 14 and move that the House approve
it.

Issued by: Department Of Public Works, KwaZulu-Natal Provincial
Government
31 March 2006