Budget Speech: Vote 15 Delivered by MEC Jacob Mamabolo, Gauteng Provincial Legislature
Hon Speaker and Deputy Speaker
Premier David Makhura
One and Only Chief Whip
Members of the Executive Council
Hon Chairperson and Members of the Infrastructure Development Portfolio Committee
Hon Members
Councillors and Members of the Mayoral Committees on Infrastructure Development
HOD Bethuel Netshiswinzhe
Our Officials,
Guests,
DID Partners and Stakeholders,
Ladies and gentlemen
Hon Members, allow me to first to extend a word of special welcome to the family of Moses Kotane, the former General Secretary of the SACP and former Treasurer-General of the African National Congress.
I extended an invitation to the family, because I thought in the year of Oliver Tambo, with whom Moses Kotane worked very closely, especially in exile till the last days of the life of Kotane, it will be best to celebrate the year of Oliver Tambo.
I also thought that, because the community of Braamfischerville, honored Moses Kotane by naming one of the state of the art schools, that myself and MEC Lesufi handed over in April this year I certainly thought it will be appropriate to dedicate this speech to him.
Invited and present are the two Ward Cllrs of Braamfischerville, an area where we handed over three state of the art school this year, including Moses Kotane Primary School. I would like to sincerely thank them and the community of Braamfischerville for honoring Moses Kotane.
From being a self-taught intellectual, Moses Kotane rose to become the champion of non-racialism very early in the 30’s, and the true founding practitioner and living embodiment of the Alliance, its theory and practice with the ANC, COSATU and SANCO.
I honor Moses Kotane, because his ideas and his scholarly contribution, known as the Kotane line, still guide our entire Alliance today. Moses Kotane remains a scholar par excellence.
Hon Members allow me to remember Fidel Castro, El Kommandant Heffe of the Cuban, who died last year, and may his soul rest in eternal peace.
Hon Members, I am pleased to congratulate our Premier, that the people of the world represented by global Cities bestowed an honor of recognition to him for his outstanding contribution and commitment to the cause of humanity.
Opposition parties tried to undermine the outstanding leadership of the Premier, and the people of the world said no, and reaffirmed the Premier as an outstanding leader of our time. The people of the world have shamed you and shame on you.
Hon Members, I am very much pleased and privileged to present the budget of DID of R2,5 Billion. This budget will certainly help us to provide services to our Client Departments that have entrusted us with a total of R2,7 Billion to deliver over 500 infrastructure projects to our people.
Hon Members, the DID R2, 5 Billion budget will drive our Twelve Point Plan, as part of our contribution to the realization of the popular and overarching vision of Transformation, Modernisation and Re-Industrialisation and the targets outlined by the Premier in the State of the Province Address.
Hon Members, today we are celebrating as DID the qualitative progress we have made of building capabilities of DID as a critical organ of the developmental state in our province.
We are celebrating that DID is now the point of reference and site of best practice with respect to the infrastructure project management practices and the best leading practitioner of National Treasury policy known as Infrastructure Delivery Management System, otherwise referred to as IDMS.
We are celebrating, as DID, that we are simply the best on the most advanced tools and techniques of delivering infrastructure to our people. Just two weeks ago, we hosted the delegation of National Treasury, led by the Chief Procurement Officer. They came to see how Lutsinga Infrastructure House drives the implementation of IDMS.
They confirmed beyond doubt that we are the best champion and the lead Department on the implementation of IDMS. They committed to partner with and support DID to ensure that our experiences and achievements are a source of benchmark for other provinces and Departments delivering infrastructure.
I am also aware that the Auditor General will also be auditing the implementation of the IDMS, as official National Treasury policy. We are ready as DID.
Hon Members, in matters of efficiency and effectiveness, we have no more stress, today we can formally and officially say, we are ready to “Take Infrastructure to the People” as the key theme that will drive our work this financial year. We are ready to pluck and play, we are ready to Rock and Roll.
Hon Members, in case there are still any doubting Thomases amongst us on whether DID is simply the best and lead practitioner on best tools and techniques of infrastructure delivery, (and I know that Hon Fuchs of the DA is no longer one of the Doubting Thomases and hoping he does not change today), let me help you to understand what we are talking about.
Please Hon members, please and I plead, join me in the journey to clarify what I mean when I say DID is the practitioner and leading champion of best Infrastructure delivery practices. I hope you are on board, no need to fasten your safety belt.
Let me first quote what McKinsey Global Institute says in a research report entitled: Reinventing Construction: A Route to Higher Productivity, released this year in February.
“Construction is a key industry in countries across the world, but one that has struggled to evolve its approaches as other industries have done, and one whose productivity has suffered as a result. Even while other sectors from retail to manufacturing have transformed their efficiency, boosted their productivity, and embraced the digital age, construction appears to be stuck in a time warp.”
McKinsey Global Institute then proceeds and makes the point that,
“Every year, there is about $10 Trillion on construction related spending globally, equivalent to 13% of GDP. This makes construction one of the largest sectors in the world economy… Construction matters… However construction has suffered for decades from remarkably poor productivity relative to other sectors.” Close Quote.
McKinsey, then eloquently makes a profound and very interesting point that
“Some governments have now begun to address the poor productivity of construction head-on and are attempting to break the deadlock in which the industry appears to find itself. The industry needs a more productive approach-demand for construction is rising. And the tools for that more productive approach are increasingly available through digital technologies and new materials.”
Hon members, whilst the construction and build environment is notorious for lack of efficiency and effectiveness, I am very much pleased to stand here before you with great pride that, as DID we have cracked the code, we have found the secret, we have found the pin code of what McKinsey calls “the more productive approach through digital technologies”.
Through our partnership with Statistics SA, led by the SG, whom we hosted at Lutsinga, we were invited in January to the first United Nations World Data Conference where we presented Lutsinga Infrastructure House as the site of the fourth industrial revolution using smart technologies to deliver Infrastructure.
We hosted a delegation from Botswana Presidency we also hosted a high level government delegation from Uganda. I can say without any fear of contradiction, state that Lutsinga Infrastructure House is a real live point of reference for the delivery of Infrastructure using productive methods powered by smart technologies.
Already Hon Members, we are seeing remarkable progress in the delivery of schools. Every month, without failure, we hand over a school with MEC Lesufi to our communities. We will be making sure that we provide this level of efficiency and effective to other client Departments.
Hon Members let me remind you that construction and build environment is a highly regulated industry. Compliance in this sector is not an option but a must. We have no choices to make on whether to comply or not.
If we do not enforce compliance, we will have similar problems like those they have just recently experienced in Britain, on a building that burned and killed so many people. If we do not enforce compliance, we will have problems like those we had in Charlotte Maxeke, where a roof collapsed due to non-compliance by the contractor. We have already released the key findings of this report.
Let me emphasise and re-emphasise that in construction, we cannot afford to cut corners, we cannot accept short cuts, and we cannot rush projects by sod turning at the expense of compliance. We must enforce without fear or favour, without blinking. We must enforce compliance.
I am therefore pleased to formally announce that based on the work we have been doing in Lutsinga Infrastructure House, we have adopted a practical, easy to follow and very friendly tool. This is the compliance, monitoring and oversight tool known as the Project Readiness Matrix, based on the IDMS policy.
Hon Members, PRM forms part of applying productive methods using smart technologies to deliver Infrastructure as mentioned by McKinsey Global Institute.
Let me thank our Executive Council and the leadership of the Premier for supporting this tool of efficiency and compliance with Infrastructure Delivery Management System, IDMS.
We are also excited as DID, that the Premier and EXCO entrusted us with a mandate and task of technical coordination and integrated planning of Gauteng Provincial Infrastructure Portfolio. I have no doubt that this level of confidence in DID is based on progress we have made to create technical capacity of DID as part of building a capable developmental state.
I would also like to take the opportunity to thank the DID Portfolio Committee for endorsing and supporting the Project Management Readiness Matrix.
Let me also thank the Portfolio Committee on Finance for giving us sufficient and adequate time to present, and finally supporting the Project Readiness Matrix as an important tool.
Through the PRM, we can fully comply with all the steps and the methodology of IDMS.
Through the PRM, we can now assess the state of readiness for the implementation of all the 500 Projects we implement on behalf of client Departments.
We are able to prepare scientific and statistical reports, communicate quality information to our client departments about project status. We now have the tool to prepare the project pipeline, in other words, we can tell the projects that are at planning and design, those in construction, those in handover phase and those in close out.
Hon Members, remember that our Infrastructure delivery requires that Client Departments should play their part and comply before DID can play its part. With the PRM, all those steps and roles are clearly mapped out. PRM is now the single source of truth about project status.
Hon Members, gone are the days when we will make unrealistic promises to the people about completion dates of our projects. Gone are the days when in case of delays, we are unable to provide proper, credible and true data about a Projects.
It is for this reason that we can say without fear of contradiction that we can take Infrastructure to the people. This we can say because the PRM provide us with the tools for practical project controls.
We can now say with confidence that that we will be able to effect 30 days payment for service providers because we will now be able to find each other on bottlenecks and delays that affect 30 day payment.
Based on the PRM, we have now introduced new Service Level Agreements for suppliers to play their part, and manage performance linked to invoicing process.
We are putting in place the Invoice Crack Team linked to the stages in the PRM and the SLA to ensure that we no longer wait for the supplier to invoice, but that we proactively manage invoices.
I am very much pleased that I will be signing Memorandum of Understanding with MECs to ensure that we plan, budget and manage resources in a manner that will ensure that have clear plans in advance, and manage the budget to ensure that suppliers are paid in 30 days.
The PRM will now help us to manage Construction Sites in the most formalized and effective manner, and with full compliance. The Charlotte Maxeke roof collapse has exposed the fact that our Project Managers relied too much on the service providers, and were not playing their part to manage construction project sites. We have now adopted as part of the PRM, standards for Construction Site Management with clear guidelines.
Hon Members, please support our intentions to formally approach the Legislature to Gazette the PRM with Construction Site Management Toolkit as a site management compliance tool.
Hon Members let me announce that with the PRM and the SLA’s, we have committed ourselves, working with municipalities to ensure that each of our Projects is now a site for Expanded Public Works Programme. We have adopted a target of 600 000 for the next two years. Let me also emphasize our commitment to partner with TVET Colleges in our province to ensure that we train and reskill EPWP beneficiaries.
Hon Members, let me announce that based on progress we have made to clean the nuts and bold of Infrastructure delivery pipeline, we are now able to focus on turning the corner on other areas.
We have now developed capacity to use our completed Property Portfolio or the Immovable Asset Register valued at R32 Billion to provide land necessary for Infrastructure delivery. Land is critical to construction, and is part of the PRM compliance.
As part of leveraging our Immovable Asset Management Register, we have now made great progress to use our existing government office park to revitalise the Inner City of Joburg through the more than R6 Billion Kopanong Precinct.
This Project, which we will run as the PPP, is now at an advanced stage. We are now finalising the last compliance stages with Treasury to ensure that construction and renovations of the buildings start next year April.
As part of leveraging our Property Portfolio, and the revitalisation of the Inner City through Kopanong, we introduce a new aspect, which will follow a different process, to be known as Kopanong University Precinct. This partnership with Universities is based on the Roundtable with have established with GP Universities.
This will be the special project to leverage of our property portfolio, that is, land and buildings, working with the Department of Higher education to support Universities Infrastructure requirements.
As a quick win of the Kopanong University Precinct Project, we have now identified buildings and land to provide student accommodation as an urgent intervention and quick win to ameliorate the conditions of the students.
Already before Universities reopen in July this year, working with the Department of Higher Education, we will be leasing the first building to assist Wits University to meet its challenge of students who desperately need accommodation urgently.
We are finalising a six months lease agreement, using the 300 bed facility at Charlotte Maxeke Academic Hospital ending in December this year whilst we find medium to long term solutions on the matter.
We will then expand to other Universities and to this extent, we have already identified properties to expand this intervention and the identified buildings will be handed over this year already across the province.
We have committed ourselves to make our contribution to the Tshepo 1 million. These we will do by amongst others ensuring that establish a data base of all graduates in our province with qualifications in the build and construction environment. We will work with them to ensure that none of them possessing these rare and scarce skills is in the street, without any hope for the future.
We will be utilising our Property Portfolio to ensure that we use land optimally to drive and change the space economy by supporting the Township economy through multiple land use delivering a Government Precinct. This is part of the TMR objective of spatial transformation.
Given the complexity of planning Mega-Infrastructure Projects, such as Government Precincts, we intend to Pilot this Project in Soweto in and around the Chris Hani Baragwanath Hospital as we will be delivering about R1,5 billion worth of Lilian Ngoyi Hospital for the Department of Health.
We will use this Lilian Ngoyi Project as an enabler and pillar of support to launch the Government Precinct that will see us use the land in the area to partner with the private sector to deliver multiple Infrastructure facilities.
We plan to utilise the opportunities provided by the Chris Hani Bara and now Lilian Ngoyi to crowd in private sector investment. In our visit to Montreal, Canada, we have seen a practical Office Precinct and its impact on communities. We will work with GIFA to drive the implementation of this project.
If this model proves successful, we will use it to drive Government Precincts in other areas.
Using our property portfolio, we are now able to dispose of the underutilised properties and are currently left to waste in various parts of the province. We have to ensure compliance with GIAMA on value for money on government properties.
In his regard, we have already tested this process by placing on Auction the Official residence of the Premier and other properties. We are now finalising all the technical issues and the audit of the process and we will be making an announcement before the end of July.
This will also give us the opportunity to work with communities and client departments on properties that under utilised and many of them are already a sore point in many communities. We have set a Special Committee to work on this matter.
We have committed ourselves to achieve clean Audit before the end of the current term of office and ensure that public money is managed in the most ethical and morally accepted manner in line with Public Finance Management Act.
Hon Members let me conclude by celebrating our achievements of the implementation of the I Care We Care Campaign to ensure that we mobiles communities and our people to preserve protect and take care of public as the common heritage of our people.
I am very much pleased that in the last wave of protests, the people heeded our call that what're the issues, however angry and aggrieved by issues of service delivery; they must not destroy public property. Working with the Moral Regeneration Movement, we will now be intensifying the campaign.
I call members to join us to celebrate our achievements of building capabilities of DID as critical organ of the Developmental State.
Today we also launch the Inaugural Gauteng Infrastructure Newsletter.
I thank you.
