Honourable speaker
Premier Nomvula Mokonyane
Members of the executive Council
Honourable members
Business people
Learners from Moletsane high and Jabulani technical
Family, friends and comrades
Members of the media
Fellow Citizens.

I stand before you this morning, with humility and honour. This is my 10th budget speech, since I became an MEC in 2004. I have learnt a lot over the years and am proud to say while it has been a very tough journey, it was worth every pain. Just yesterday, a simple message on the back of a sugar sachet had me reflecting on own life experiences. It was a quote attributed to Herbert Gasser, that simply said;
“Forget the times of your distress, but never forget what they taught you.”

The year 2013/14 marks the final lap of this political term. As in any race, the signal of the final lap should infuse in all of us, a renewed sense of energy and vigour to finish strong on the tasks, priorities and objectives we set ourselves four years ago.

Honourable Speaker, while we are in the final lap of this political term, we are also ushering in a new and exciting epoch in our history as a nation. 2014 is a seminal year in our evolution as a democratic state, an evolution that has its genesis on that glorious autumn Wednesday, 27 April 1994. It was a period, to borrow from Jawaharlal Nerhu’s immortal words that signalled our nation’s “trust with destiny”. Indeed ours was a pledge to be of service to South Africans and the whole of humanity.

The road we have traversed is marked with great achievements, but also with formidable challenges, key amongst which are poverty, inequality and persistent high rates of unemployment, affecting mainly young people.

This season in the life of our nation calls for imaginative and bold leadership. In the words of Roberto Mangabeira Unger; “The task of the imagination is to do the work of crisis, without crisis”.

With this 2013/14 budget vote, we are putting our hand up to say ‘here we are, ready, willing and able to take the lead in the project to improve the quality of life of our citizens’.

Building a capable Department of Infrastructure Development (DID), poised for service delivery excellence

Honourable Speaker, members upon arrival at DID in July last year, I commissioned a departmental scan, with an objective to identify strengths and weaknesses, and craft appropriate response plans. Among the findings on the state of the department was a need to review integrated systems in the department, skills shortages in key strategic and operational areas as well as an inappropriate organisational structure. At the time, the composition of the department’s human resources was 80% administrative staff, and just 20% technical staff. For a department like ours, the picture is actually supposed to be the other way round, with the balance tilted in favour of technical staff, by at least 70 – 30 percent respectively.

We have over the past year undertaken a concerted drive to recruit the technical expertise that will enable us to execute the construction and maintenance work we are mandated to undertake on behalf of various client departments.

So far we have recruited 214 technical staff, including 143 artisans and 71 engineering professionals of various cadre. We are currently in the process of filling 42 technical posts. This is a clear indication of our commitment to strengthen the state’s technical expertise and thus radically improve the quality of service delivery.

Honourable Members, while on this point, please allow me to pause and acknowledge our very special guests in the house today; the 10 girl learners from Jabulani technical and Moletsane high schools, seated in the gallery today. They plan to pursue careers in engineering and architecture. Having them among us inspires us to work even harder to ensure that we lay solid foundations that are exemplary in the expectation that some of them will consider public service.

During the 2013/14 fiscal year we will continue relentlessly with our drive to attract and retain appropriate technical expertise required at all levels. This commitment is reflected in the amount of resources allocated to human capital development. 33% of our budget is for salaries and remuneration, inclusive of R 21.3 million for business process re-engineering to implement the infrastructure delivery management system (IDMS) model. IDMS is our core operating framework, which requires substantive investment in achieving the certification of our professionals with the relevant professional bodies.

Budget allocation

In keeping with our government’s strategic focus on infrastructure delivery, DID’s budget allocation for this fiscal year increased by 4% from the previous year representing a total budget allocation of R1.47 billion.

We plan to deploy these allocated financial resources efficiently in order to achieve maximal positive impact on the lives of Gauteng citizens.

Allow me Honourable Speaker and members to share with you, some of the plans and programmes of note.

Taking the lead, creating conditions for all South Africans to enjoy long and healthy lives

As the infrastructure department, we operate at the coalface of service delivery. To secure reliable support services, we have deployed qualified professionals as resident engineers in charge of all maintenance activities at Chris Hani Baragwanath, Steve Biko, Dr George Mukhari and Charlotte Maxeke Academic Hospitals. Indeed reports from the hospital CEO’s have confirmed the success of this initiative. Furthermore, we have strengthened our maintenance and upgrade programmes at health facilities, principally through Project 274; specifically, installation and replacement of electro-mechanical equipment’s such as lifts, autoclaves, chillers, electrical reticulation, boilers and generators.

Leading Infrastructure maintenance: the service improvement plan.

Our diagnosis of the infrastructure related challenges at our health facilities suggests a proactive approach to our maintenance regime and rapid response to breakdowns. With this in mind, we have developed a support structure that is best captured as ‘Twenty-Four -Seven, Three Sixty Five’ strategy.

It commits us to;

• Attend to minor breakdowns within 24 Hours
• Major breakdowns within seven days
• And carry out major refurbishments within 365 days.

At the heart of this strategy is deployment of skilled professionals, including artisans, engineers, technicians and inspectors at hospital level. Our plan is to have these skilled workers, who are able to carry out day to day maintenance as well as respond to emergencies.

To further enhance turnaround times and quality of work we have engaged the big hardware retailers to explore inventory management solutions that will ensure that replacement parts and consumables are available just-in-time. This will ensure that niggling maintenance challenges are addressed swiftly as they arise, and that there’s no need to go through the whole procurement value chain for minor day to day maintenance.

We will further place emphasis on training of artisans to ensure that they specialise in equipment such as lifs, boilers, autoclaves etc. We are in the process of engaging with Original Equipment Manufacturers (OEM’s) to create opportunities for this kind of training and exposure to foster specialisation

All of this will be accompanied by a strong element of monitoring and supervision to ensure quality maintenance work at our health facilities. This will be achieved through a system that includes the introduction of job cards, a planning function, as well as a computerised maintenance management system referred to as the eMaintenance system.

Honourable speaker, we are proud to announce that the eMaintenance system will be piloted at Chris Hani Baragwanath Hospital starting from 03 June 2013.

We will introduce a system that will allow any member of the public, and not just hospital staff as is currently the case, to log any maintenance issue via platforms such as the maintenance reception at the facility, SMS, website, call centre, a mobile app and social media.

R10 million has been allocated for the implementation of the maintenance service delivery strategy.

Taking the lead, setting Gauteng on a sustainable and green trajectory.

Our green and renewable energy strategy will help us respond decisively to the call made in the National Development Plan for the reduction of Carbon emissions. In line with national objectives, we will fast track the implementation of the Gauteng Integrated Energy Strategy and ensure that we all work towards achieving the targets and milestones set.

Taking the lead in solar energy

In this regard, our focus in the 2013/14 fiscal year will include the initial phases of a large scale rollout of roof top solar panels, to be installed on government buildings across the province. This will enable us to harness the sun’s rays to meet, in part, government’s energy needs.

Studies by researchers at the University of Johannesburg, suggest that Gauteng receives between 1900 and 2100 Kw/h per square metre of solar irradiation, all year round. We’ve quantified the available roof top space on government owned buildings to be about 8 million square metres. Our calculations indicate that mass roll-out of solar panels on government roof tops will come at a cost of about R11.2 billion and lead to the generation of up to 300 MW of electricity.

The entire project will be self-funding, from existing financial resources meant for current electricity costs. A number of private sector companies from as far afield as South Korea are currently exploring opportunities to invest in the establishment of green technologies manufacturing facilities in South Africa, including solar panel manufacturing.

We plan to use this mass roll-out to drive job creation and enterprise development through local content requirements. This will require us to work together with municipalities to create the prerequisite demand in order to attract investors.

To ensure the long term sustainability of the solar industry in Gauteng, we are engaging a number of stakeholders including City Power, SANEDI, and the minister of energy on ways of identifying and dealing with constraints.

Leading the natural gas revolution

Gauteng has the most developed natural gas infrastructure in South Africa. This constitutes a natural gas pipeline infrastructure connecting from the supply source in Mozambique, through Secunda to Babelegi. March 2014 will herald the end of Sasol’s natural gas monopoly and the start of a natural gas industry regulated by NERSA.

It is at the back of these developments that our ambitious plans for natural gas are rooted. Our first project is the replacement of the 77 coal fired boilers in Gauteng hospitals with natural gas or diesel fired boilers. 21 boilers are planned for replacement this fiscal year and the balance over the next three years.

As part of this project, DID has entered into a partnership with iGas to conduct a feasibility study on gas infrastructure required to supply natural gas to hospital boilers. A study by iGas reveals that approximately 186km of additional natural gas pipeline infrastructure is required to supply natural gas to 25 hospitals at an estimated capital cost of R1.4 billion. In addition to the natural gas initiative, we are investigating landfill sites to extract methane gas which we plan to use for energy needs in our health care facilities.

Our biggest showcase for the use of gas to meet hospital energy needs will be the trigeneration plant proposed for Chris Hani Baragwanath as a pilot project. In this regard, the consultation process with stakeholders such as the Department of Health, and Treasury is at an advanced stage.

In addition, the natural gas infrastructure will benefit households as the pipeline will run through townships and suburbs. Our initial research suggests that of the 3.9 million households in the province, nearly 2 million are deemed to be middle class, a potential market for natural gas reticulation for cooking and heating, as is the case in many countries.

Through the guidance of Minister Dipuo Peters, we are now working with the team that is coordinating Strategic Infrastructure Project/ SIP 8, led by the IDC, for possible inclusion in the PICC initiatives.

Taking the lead in social infrastructure provision: Capex projects

Speaker, Honourable Members, the developmental challenges associated with a burgeoning city region such as ours need no reiteration. The pressure and demand for public resources and facilities is immense. The departmental scan we conducted last year, also pointed to challenges in the planning, implementation and management of our capital projects. It highlighted project cost overruns, quality concerns, late delivery of projects, as well interest charges on late payments for service providers.

In the last financial year we placed special emphasis on addressing these challenges and made delivering quality projects, on time, within scope and budget our mantra.

Leading the drive for a long and healthy life for all South Africans

Honourable members, ensuring a long and health life for all citizens is a top priority of our government. A big part of doing that is ensuring that quality health care services are rendered in appropriate and adequate infrastructure.

In the last fiscal year we carried out projects to the tune of R 409 million aimed at improving health infrastructure. Some of our highlights included the completion of some long-standing construction projects such as the New Natalspruit and Jabulani hospitals, which are now being prepared for commissioning. There are lessons that we have learnt from these two hospitals projects, which have taken more than 5 years to complete.

In this fiscal year we will also undertake 21 refurbishments and upgrades at hospitals, clinics, including Psychiatric and neonatal wards, at health facilities such as Chris Hani Baragwanath, Tambo memorial, Pholosong, Kopanong and Tembisa, among others.

Leading the provision of quality basic education

Part of creating a conducive learning and teaching environment includes provision of sound infrastructure, with decent sporting facilities. It is in this context that we have placed greater emphasis on planning and approval of projects, as well as appointing project managers per site. This helps us to control project costs and deliver projects on time and on scale.

In the 2012/13 fiscal year we completed the following education infrastructure projects;

• 59 school restorative repairs
• 24 fencing projects
• 47 grade R classrooms
• 25 septic tanks

Since November last year, there are 9 schools that are currently under construction across the province. The schools are at different stages of construction, and I am confident that all of them will be completed and be ready to be occupied soon.

Chief Albert Luthuli primary and Noordwyk high school are an example of what we can deliver with good project planning, budgeting, and project management. It also affirms our strategic bias in favour of emerging women entrepreneurs in our procurement policies. Both schools are being built by women led contractors Motheo and Clear-choice construction, within record time. Chief Albert Luthuli was completed within record time of just under four months and Noordwyk is also on track for completion in under six months.

New schools

Key school construction projects for this fiscal year include the following:

• 14 new schools
• 29 restorative projects
• 13 grade R classrooms

Recently there have been some attempts to compare the cost of building a school in Gauteng with the cost in other provinces. These comparisons have no basis, as the market realities, size and quality of schools differ vastly.

For the sake of indulging this baseless comparison, in Gauteng, the average construction cost, including professional fees is R55 million. In both the Eastern and Western Cape it is estimated to be between R27 million and R30 million. However, the averages in those provinces exclude professional fees, which as I said are included in the Gauteng project costs. Furthermore the average school built in the Eastern Cape for example, accommodates an average of about 400 learners. In Gauteng the schools we build are bigger, accommodating between 800 and 1 200 learners.

The schools we build also come standard with green energy technologies such as solar, storm and waste water recycling facilities, multi-purpose sporting facilities, including soccer-rugby fields, and combo courts for basketball, netball, and tennis. Most of our schools are delivered on the turn-key model, with science laboratories, libraries and furniture included in the costs; by the time our contractors leave site, they leave behind a complete school, ready to be used the very next day.

Other factors that contribute to what may appear to be slightly higher prices are market realities such as high material costs, geo-technical conditions unique to Gauteng and to every construction site.

However, we must add our voice to those concerned with unscrupulous practices in the construction industry, such as the revelations of large scale price collusion and other cartel behaviour. The R323 million penalty imposed by the Competition Commission on one of the big construction industry players a few days ago, provides a glimpse into an industry riddled with price collusion. Working with other arms of government, we are weighing our options about pursuing this matter further.

Provincial flagship projects:

Magaliesburg boarding facility and school

Magaliesburg boarding school will be completed in the second quarter of this fiscal year, and will be ready in time for the start of the school year in January 2014.

Fochville boarding facility and school

Design and planning of the Fochville facility is at an advanced stage, and construction will start in the second quarter of begin in the next few months.

Heritage projects

I am pleased to announce that in spite of the challenges, we are on track to complete the June 16 memorial in Soweto, in time for this year’s Youth day commemorations.

Completion of the Boipatong heritage site is on track. Design and prototypes of the women’s monument are complete and the client is satisfied. We are in the process of finalising processes to do with the geological conditions of the site and for procurement to start.

Our work also includes building driver licensing and testing centres, and in this regard the Kliptown Driver Testing and Licensing centre is now completed. In this fiscal year, similar projects will be rolled out to townships such as Mamelodi, Mabopane, Kagiso and Tembisa.

We will also see to the completion of the Father Smangaliso Mkhatshwa secure care centre, a project that is long overdue, as well as the Kagiso old age home in the second quarter of this fiscal year.

Contract management

In addition to improving project management capacity, we are also beefing up our monitoring and control to ensure that service providers perform to agreed standards. Consequently, our legal division has recently commenced with audit of the numerous contracts that the department entered into in order to identify loopholes and shortcomings that open the department to risks. The objective is to make necessary recommendations on necessary interventions to minimise such exposure.

The audit also includes a review of the department’s management of litigation. The interim report of the audit reveals that in the majority of cases, the basis of litigation between the department and third parties emanates from disputes over contracts entered into.

Henceforth, all contracts will include explicitly stated performance milestones and penalties for non-performance. The days of a laissez-faire approach to managing contractor performance are gone, never to return.

Supply chain management

Honourable Speaker and members, in order to align our procurement processes with our stated developmental outcomes, while at the same time ensuring value for every cent of taxpayer’s money we spend, our supply chain management (SCM) processes are also being reviewed. In the past financial year we reconfigured our bid committees, to ensure fairness of the procurement process.

Bid Committees have been reviewed, with Bid Specification Committees and Evaluation Committees now being appointed on a project by project basis, while the Bid Adjudication Committees are appointed per financial year furthermore, we have made permanent appointments at senior management within SCM as stated earlier. We in the processes of recruiting more skilled personnel to strengthen the Unit. In the second quarter SCM will be implementing the electronic supplier database which will be localised with more emphasis on cooperatives, youth, women, people living with disability, quotation management as well as contract management. We are also reviewing SCM policy, business processes, charters and delegations in order to improve turnaround times.

Measures we have implemented to curb fraud and corruption include the compilation of compile a risk register and identifying possible areas where these risks may occur.

Taking the lead in managing property entrusted to the state

Honourable Speaker, we have allocated a total budget of R667 million for this vital function of our department. This allocation includes R295 million we’ve set aside for property rates and a further R141 million for GPG head office or precinct leases.

Our commitment is to finally move this department to a point where it has a complete, up to date and credible asset register with quality data on the location, state, occupancy status and use of all government assets. The process of contracting a service provider to produce a definitive asset register is at an advanced stage in our supply chain management processes. A budget allocation of R30 million will go towards meeting our asset management imperatives.

We will in this financial year, also intensify work to ensure that the use of the GPG property portfolio is to the optimum benefit of all citizens, with an emphasis on maximising access, utilisation and value. Emphasis will also be on better and cost effective space planning, as well as improved facilities management.

Market related rentals

From 1 June, we will act unapologetically against non-compliant occupants of state residential and commercial properties, starting with the more than 50 DID officials, and hundreds of Gauteng Provincial Government officials, living in state properties and not paying market related rentals. Our immediate actions will include naming and shaming such government officials, as well as instituting legal action to evict them from these properties. Only those GPG employees whose conditions of service include accommodation in state housing will be exempt from this action. And to strengthen our hand, treasury is in the process of amending regulations currently used as a loophole by those free-loaders within government, who do not want to pay market related rentals.

Similarly stern action will be taken against occupants of commercial space in government facilities such as hospitals, and illegal occupants of recreational and conservation facilities such as Roodeplaat dam.

Developing strategic properties within the DID asset base

Further commercial properties are currently being considered for various revenue generating options while partnering with government and private sector stakeholders. Examples of such are a vacant site on the banks of the Vaal Dam measuring about 453 hectares, commercial property in the Edenvale area, Roodeplaat Dam as well as property in northern Johannesburg near Fourways.

Consideration of these includes engaging with relevant government departments and private sector stakeholders to ensure:

• availability of these properties for envisaged developments,
• compliance with environmental impact assessment requirements
• possible sources of revenue for world class developments.

To ensure the above we will be presenting the Property Strategy to EXCO which once approved will give direction on the disposal of non strategic properties to generate necessary funding for upgrading and developing our asset base to world standards.

Community Based Programmes

Honourable Speaker and members, in the 2013/14 financial year we will continue to leverage our infrastructure spend to stimulate the economy by among others ensuring the empowerment of emerging enterprises through preferential procurement that prioritises women, people with disabilities and youth, in the construction sector. R224 Million has been allocated for Community Based Programmes.

Expanded Public Works Programme

R130 Million will be dedicated to the revamped Expanded Public Works Programme, particularly to the provision of training and creation of jobs for the targeted groups where infrastructure projects are rolled out. Through implementation of EPWP, we created in the past financial year 121 643 work opportunities, of which 80 284 beneficiaries were women, 20 266 were youth and 82 people with disabilities.

For the 2013/14 financial year our target is to create 118 581 employment opportunities at provincial level, and 77 289 at municipal level, through the revamped EPWP. Of those, we are targeting 65 220 women beneficiaries, 47 432 youth beneficiaries and 2 372 people with disabilities.

As part of our EPWP initiatives, we will this year enrol 20 emerging contractor companies on our Contractor Incubation Programme. Of the 20 contractor companies, 10 are women owned, five owned by youth, two owned by people with disabilities and 3 by military veterans. We are in the process of finalising a memorandum of understanding with the national department of public works, for coordination and implementation of the programme. We’ve set aside R 840 000 for the implementation of the Contractor Incubation Programme, and plan to set aside programmes to the value of R 500 000 for emerging companies in this programme.

National Youth Service

In the past financial year DID coordinated 2 500 National Youth Service (NYS) learners across the province, including at municipal level. 227 youth were engaged in maintenance related projects as an exit strategy from the NYS. We will again be taking 2 500 young people through the National Youth Service.

We have earmarked R59 Million for the provincial roll out of the NYS. As government we must be humble enough to admit where we’ve erred or where there have been weaknesses. I must, Honourable Speaker and members, extend an apology to the participants of the National Youth Service for some of the design and administrative challenges that the programme has encountered in the past.
One of our key priorities is to address the genuine grievances raised by NYS learners, including the issue of a concrete exit strategy.

Conclusion

Madame Speaker our aim is to finish strong, to ensure that post-2014, the new administration has a solid foundation already laid, and the work of properly setting up systems to reposition the department is completed. This will ensure that the positive impact of DID is felt by every Gauteng citizen at the onset of the third decade of democracy.

We remain focused and steadfast in our commitment to transforming DID to be the premier construction and project management organisation of the Gauteng Provincial Government, which holds its own against players in the private sector, in terms of efficiency, effectiveness, and innovation. As we embark on this final mile of our political term, we do so with renewed zeal, motivated by the desire to do all we can, as best as we can to touch and improve the lives of our citizens.

The successes we’ve registered would not have been possible without a formidable team, rallied around the vision of DID that performs optimally.

“My model for leadership is the Beatles. They were the four guys who kept each other’s kind of negative tendencies in check. They balanced each other and the total was greater than the sum of the parts. That’s how I see leadership. Great things in leadership are never done by one person. They’re done by a team of people.

I would like to express my profound gratitude to the Premier for her support and leadership. To my colleagues in the executive council thank you for your sound advice and counsel. The chair of the portfolio committee and members from all parties I thank you immensely. My sincere appreciation to the ANC for their unwavering support.

To those I lead, thank you for your tolerance, understanding, resilience and cooperation at all times. If i have pushed hard then it is because in the words of Steve Jobs “ my job is not to be easy on people, my job is to make them better”. A special welcome to the new HOD and all the new senior managers.

I am deeply indebted to my family for their love and encouragement through prayer and constructive criticism. I would like to acknowledge the sacrifice and understanding of my beloved children who stood by me in times of difficulties and endured occasional long absences.

I thank you.