Date: 13/04/2005
Source: Ministry of Public Works
Title: Sigcau: Public Works Dept Budget Vote 2005/2006


The Minister of Public Works, Ms Stella Sigcau, MP, delivers her Budget Vote Speech, Venue: National Assembly, Parliament, Cape Town

* Honourable Madam Speaker
* The Honourable Deputy Minister of Public Works, Mr Ntopile Kganyago
* The Honourable Chairperson of the Public Works Portfolio Committee, Mr Fezile Bhengu
* Honourable Members
* Senior Managers from the Department
* Distinguished Guests
* Ladies and Gentlemen

INTRODUCTION

The Department of Public Works plays an important enabling role in service delivery. As a custodian of state property it makes important contributions to the governance of the country by acting as the custodian of workplace-related immovable assets on behalf of the State; by putting in place policies to govern the management of the physical work environment of the public service; and by facilitating the transformation and development of the construction and property industries. In addition, it has been allocated responsibility to lead government’s efforts to put in place a range of public works programmes to alleviate poverty and unemployment.

MAJOR ACHIEVEMENTS IN 2004/2005

One of the key programmes to be launched by government is the Expanded Public Works Programme (EPWP) which is operational in all the nine provinces. In the first nine months of the programme, two point four billion rand (R2.4 billion) was spent on one thousand and eight hundred and ninety (1 890) projects to create one hundred and forty four thousand and fifty six (144 056) gross job opportunities. This exceeds the target of one hundred and thirty thousand (130 000) opportunities for the first year of the programme. Forty six percent (46%) of the beneficiaries were women. We are confident that, with the cooperation of all departments in all spheres of government, the EPWP can exceed its employment creation targets, and make a significant contribution to alleviating unemployment and promoting ‘a nation at work’. The Business Trust has committed one hundred million rand (R100 million) to provide programme management support to all levels of government; to ensure that lack of capacity is not an impediment to implementing the EPWP.

Through expanding Limpopo’s Gundo Lashu labour-intensive roads programme, more than 1,500 learnerships involving the training of over five hundred specialist labour intensive contractors and their supervisory staff are now being implemented around the country. Each of these contractors will employ a number of trained supervisors and approximately one hundred workers at any one time, as they implement labour-intensive provincial and municipal infrastructure projects. A further one hundred and seventy (170) venture learnerships are being implemented under the economic sector of the programme, in partnership with the Construction SETA (CETA) and various provincial government departments. These learnerships will make an important contribution to broad based BEE.

Madam Speaker, during the past financial year my Ministry has challenged big business through their corporate social investment budgets in support of our efforts to promote development through the EPWP. Both Siemens and Anglo American have responded in a manner that will move the process forward.

During the past few weeks, Siemens Telecommunications and I have formulated an agreement that will be “BRIDGING THE DIGITAL DIVIDE” in rural South Africa. In the next few days a pilot project will be launched in collaboration with the Department of Communications with the following objectives:

* Creating sustainable community participation
* Bridging the information and digital divide (Access to facilities)
* Building an information Web
* Linking communities
* Enhancement and conservation of knowledge within marginalised areas, and the
* Development of skills

Initially ten people will be trained at the Siemens training centre in Pretoria for a period of one year. Students will be trained to build computers (Hardware) from used computers and be trained in the necessary software packages. Students will during this period be deployed to municipalities and government departments as determined by Siemens in consultation with my Department for practical training. This will be part of the students internship programme. SALGA will be consulted to help this project by seconding some of the students who graduated from the training school and are currently employed by the Municipalities.

The Chief Executive of Anglo American, Lazarus Zim and I have set out the way forward for his company to “Adopt a Village”. The process envisages getting the buy-in of the community and municipality, to develop what is needed and required in terms of infrastructure, to train personnel on these projects, fund these projects and hold regular meetings with the community.

Credit goes to the Independent Development Trust (IDT) who assisted my Office with the mobilisation process as we engaged big businesses. Mandated by Parliament through the Ministry of Public Works to manage the implementation of government development programmes, the IDT supports all spheres of government in meeting their development targets.

In 2004/05, the IDT set up over three hundred and forty four (344) new community structures and also project managed among others the construction of one hundred and forty one (141) schools in the Eastern Cape and other one hundred and twenty four (124) infrastructure projects in Gauteng under the Zivuseni Poverty Alleviation Programme. Their experience and expertise is invaluable to the Expanded Public Works Programme.

With regard to its function of providing for the accommodation needs of national government departments, the Department spent approximately R3 billion on various capital works projects during the past financial year. By the end of the financial year, the Department had fully spent its capital budgets for eleven out of twelve client departments, and fully spent its own capital and maintenance budgets.

The Department also made a number of other achievements in its efforts to improve its efficiency and effectiveness during the last financial year. For the first time, the Department submitted comprehensive maintenance plans for all workplace-related national government assets to the budgeting process. A vigorous recruitment programme was implemented, resulting in a substantial drop in vacancy levels in skilled posts.

BUDGETS AND FOCUS AREAS FOR 2005/2006

In 2005/06, the National Department of Public Works will manage the expenditure of seven point five billion rand (R7.5 billion), which is made up of its own budget of five point five billion rand (R5.5 billion), and two billion rand worth of projects funded from the budgets of its client departments. The Department’s own budget is comprised of leasing (R1.28 billion), municipal services (R1.08 billion), property rates (R947 million), maintenance (R927 million), capital works (R372 million) and personnel & administration (R946 million).

Although the Department is aware of the many demands on the fiscus, it is necessary to point out that the budget allocated to Public Works is not adequate for it to carry out its functions fully, to the satisfaction of its client departments.

In 2004, the Department estimated that, as a result of decades of under-funding for maintenance, a maintenance backlog of approximately twelve point five billion rand (R12.5 billion) worth of repairs currently exists for the national government’s property portfolio for which the department is responsible. In addition to this amount, there is an annual requirement of two point five billion rand (R2.5 billion) for ongoing maintenance to prevent an additional maintenance backlog from arising. The maintenance budget allocated for 2005/06 is insufficient to meet the ongoing maintenance needs, let alone addressing the backlogs. The allocated budgets allows for maintenance expenditure of less than R10 000 per building per annum.

The amount allocated for leases is also insufficient to meet all the leasing requirements of client departments, including those of the SAPS, which has increasing requirements due to the expansion of the police force.

BUILDING PROGRAMME FOR 2005/2006

Some of the highlights of the department’s building programme for 2005/06 include the construction of three new embassies, in Ethiopia, Lesotho, and Nigeria; and the construction of four New Generation Prisons in Kimberley, Klerksdorp, Nigel and Leeuwkop. The total cost of these prisons is estimated to be more than one billion rand.

In response to the President’s call, we shall intensify our communication with our client departments to plan early and prioritise for the delivery of at least two community courts per province as well as to find alternative accommodation for the children currently in custody particularly in KwaZulu-Natal, Western Cape and Gauteng.

INITIATIVES TO IMPROVE SERVICE DELIVERY IN 2005/06

The Department is embracing the President’s call to “turn every public servant into an activist for social delivery”. Internally, the Department has launched a Management Charter known as the DPW Leadership Way with the aim of introducing a new management ethos in the Department, and to address problems such as low staff morale, poor management practices, lack of urgency and lack of customer focus. Integrity, urgency, client focus and team-work are some of the values ingrained in the Leadership Way. Deviations will be met with full might of our disciplinary machinery.

The Department is also implementing a large-scale Service Delivery Improvement Programme as part of its strategic drive to improve customer service and offer value for money to clients. This programme includes setting service delivery standards, introducing more business-like management methods, and entering into service level agreements with client departments. Problems of capacity are also receiving attention through the recruitment of learners, interns and young professionals onto mentorship programmes in the Department.

CONTRIBUTION TO BLACK ECONOMIC EMPOWERMENT IN 2005/06

In order to come out with a winning strategy, the department carried out reviews of some of its existing programmes, including the Repair and Maintenance Programme (RAMP) and the Emerging Contractor Development Programme (ECDP), to assess their contribution to BEE. One of the improvements resulting from these reviews is the Department’s new Contractor Incubator Programme, under which a group of 50 medium-sized black contractors have been selected for mentoring and training with the aim of providing them with the opportunity to become successful large contractors. Our mentorship programme has the development of business management expertise as its core focus.

Approximately 40% of the value of work on the four New Generations Prisons will be executed by the contractors on the Contractor Incubator Programme. Challenges related to tendering that were previously identified are currently being addressed through the alignment of our systems to the Preferential Procurement Policy Framework Act. The outcomes will entail more transparency, simplicity, standardisation of procurement procedures across the public sector as well as the alignment with the Black Economic Empowerment legislation.

To eradicate the scourge of fronting, we are tightening our procurement procedures in particular with regard to where preference points are being claimed. We have also appointed a service provider to screen and verify credentials given in the supplier register. Stern measures will be taken against anybody misrepresenting facts with a purpose to deceive.

CONSTRUCTION AND PROPERTY INDUSTRY TRANSFORMATION CHARTERS

Current efforts to develop and transform the construction and property industries include the processes to produce Transformation Charters. A target has been set for both of these charters to be finalised and launched in September 2005.

EXPEDITING PUBLIC INFRASTRUCTURE DELIVERY PROCESSES

The President raised serious concerns about the capacity of the public service to implement programmes aimed at addressing the infrastructure backlogs inherited from the past. For example, he mentioned weaknesses in the governance system which results in the school building programme unfolding at a much slower pace than envisaged and delays with the allocation of infrastructure grants.

Together with its counterparts at provincial level, the Department is working on a number of programmes aimed at addressing these concerns. The Infrastructure Delivery Improvement Programme, which we are implementing together with the Construction Industry Development Board, National Treasury, and the DBSA, involves working with provinces and municipalities to improve the management of infrastructure programmes, from project planning through to procurement, project delivery and maintenance.

Another important programme in this regard is the implementation of the Contractors’ and Projects’ registers by the Construction Industry Development Board (CIDB), as required by the CIDB Act. The main aim of the Contractor’s register is to make the construction industry more sustainable. The implementation of this register will result in a reduction in the number of contracts which have to be cancelled due to poor performance by contractors. It will also provide a framework for the development of contractors, and will provide incentives for construction companies to improve their compliance to minimum governance standards, including occupational health and safety. Over the past year the Contractors’ register has been piloted in some provinces, and the CIDB has set a target of implementing the register on a nation-wide basis by the end of 2005.

PROPOSED LEGISLATION FOR 2005/06

The Department has produced a Government-wide Immovable Asset Management policy and is currently drafting a Bill to table in Parliament during the course of this year. The aim of the Bill will be to establish uniformity and ensure the application of minimum norms and standards in the management of immovable assets across all spheres of government.

The Expropriation Act, 1975 was last amended in 1994, and the department has engaged the services of external legal experts to work on the amendments. The Department also intends to bring these amendments to Parliament during the course of this year.

TARGETS FOR THE EXPANDED PUBLIC WORKS PROGRAMME IN 2005/06

The Department will continue to promote the use of labour-intensive methods on public infrastructure projects, and will build on work which is already being done in this regard with the departments of Transport, Housing, Transnet and some Water Service Authorities. Having successfully expanded Limpopo’s Gundo Lashu labour intensive road rehabilitation programme, the Department is now turning its attention to expanding KwaZulu-Natal’s successful Zibambele labour intensive routine road maintenance programme.

There is great potential for training unemployed people for sustainable employment in the social sector, particularly in the area of early childhood development. Public Works has started to work with the Departments of Social Development, Education, Health and National Treasury to put in place a comprehensive plan for the expansion of the EPWP in the social sector.

IMPROVING THE PHYSICAL WORK ENVIRONMENT OF THE PUBLIC SERVICE

The 2005 Programme of Action requires the Departments of Public Works and Public Service & Administration (DPSA) to develop a framework to improve the physical work environment. Some of the elements of this framework are already being put into place, including the proposed Government-wide Immovable Asset Management policy, the Infrastructure Delivery Improvement Programme and the Department’s Service Delivery Improvement Programme.

This year, the Department will also issue revised space and planning norms for workplace-related accommodation in the public service, as another element of this framework. The revised norms will establish common standards for accommodation, and will be aimed at modernising the workplace through promoting open-plan offices and building designs which allow for flexible space planning, which are accessible to all, and which make better use of renewable energy.

Together with the Demand Side Management unit of ESKOM, the Department will also be implementing an energy saving programme on various government facilities such as prisons, magistrate’s courts, police stations and office buildings. The aim of the programme is to optimise the utilisation of electricity on the identified facilities.

CONCLUSION

Despite the constraints of a budget which is limited in comparison to the backlogs, the Department of Public Works is focused on delivering on its mandates and on improving the quality of services to its client departments. The various departmental programmes and initiatives which I have described will increasingly lead to improved audit reports, better customer-service, and improved service delivery to the public.

It would be a failure on my part if I did not convey the sense of loss that we felt as a Department at the passing away of the former Chairperson of the Public Works Portfolio Committee, Inkosi Hlengwa. A remarkable leader, with whom we achieved a lot working together. In poverty alleviation and rural development, there was more uniting us than our divergent political backgrounds. I take this opportunity to convey on behalf of the Department, our condolences to his family, colleagues and compatriots.

I thank you

Issued by: Ministry of Public Works
13 April 2005