Infrastructure Committee Briefing: Facilities Management

1. PORTFOLIO COMMITTEE BRIEFING ON INFRASTRUCTURE04 NOVEMBER 2014 FACILITIES MANAGEMENT COURT SERVICES BRANCH

2. OUTLINE • Vision, Mission, Principles and Values • Purpose of the Briefing • Legal Framework • Giama • Principles and guidelines • DOJ&CD Property Portfolio • Facilities Management MTEF-Budget Allocations • Infrastructure Management • Maintenance Programme • Mobile Units • Disability Programme • Leased Portfolio • Challenges • Proposed Solutions

3. VISION, MISSION, PRINCIPLES AND VALUES Vision: A transformed and accessible system that promotes and protects social justice and the rule of law. Mission: To provide a transparent, responsive and accountable justice service for all. Principles and Values: • Commitment to constitutional values and a culture of human rights • Promotion of the rule of law • Batho Pele • Good governance • Ubuntu • Professionalism and continuous improvement • Transparency

4. PURPOSE • The Chief Directorate Facilities Management exists to support service delivery and enhance access to justice to all by providing habitable buildings that respond to the needs of the justice system. • The presentation will respond directly to questions and concerns raised by the Members of the Portfolio Committee pertaining to capital projects, maintenance of buildings and the related budget and expenditure patterns • A broad overview of the suite of services offered by the Chief Directorate will also be articulated to provide a holistic picture, coupled with challenges experienced and proposed solutions to improve the quality of services offered.

5. LEGAL FRAMEWORK The following laws, inter alia, govern and guides in the provisioning and management of state immovable assets: • Constitution of the Republic South Africa, Act No 108 of 1996 • Government Immovable Asset Management Act, Act No. 19 of 2007 [GIAMA]. • Devolution of Budget Framework • State Land Disposal Act No. 48 of 1961 (as amended) • Public Finance Management Act, Act No. 1 of 1999 • Treasury Regulations, 2000 • Occupational Health and Safety Act, 1993 • Rental Housing Act 50 of 1999 • National Building Regulations 1995 • Municipality By-laws • Expropriation Act 63 of 1975 • National Key Points Act, Act 102 of 1980.

6. GIAMA This is the main statute the governs state assets • National Cabinet mandated the Minister of Public Works to develop a policy framework that will govern immovable assets throughout the state and to implement that policy by means of legislation. • As a consequence thereof, the Cabinet approved Government-Wide Immovable Asset Management Bill in 2005. • In 2007, the Government Immovable Asset Management Act (GIAMA) was promulgated. The proclamation of GIAMA was signed into law by the State President on the 4th April 2009.

7. PRINCIPLES & GUIDELINES • The Act makes clear distinction of rules and responsibilities that must be carried out by User Department and a Custodian, and they are summarized hereunder as follows;

8. DOJ&CD PROPERTY PORTFOLIO PORTFOLIO COMPOSITION • DOJ&CD is accommodated in 672 State-owned and 120 leased buildings in South Africa and the pie chart below reflects details in that regard.

9. FACILITIES MANAGEMENT MTEF BUDGET ALLOCATION • .

10. INFRASTRUCTURE MANAGEMENT CAPITAL WORKS

11. INFRASTRUCTURE MANAGEMENT:NEW BUILDINGS The Department has registered various projects with DPW , however the following projects have been prioritized for 2014/15 financial year:

12. INFRASTRUCTURE MANAGEMENT: NEW BUILDINGS New Building

13. INFRASTRUCTURE MANAGEMENT: NEW BUILDINGS

14. INFRASTRUCTURE MANAGEMENT: BURNT BUILDINGS

15. INFRASTRUCTURE MANAGEMENT: R&R / ADDITIONAL

16. INFRASTRUCTURE MANAGEMENT: R&R / ADDITIONAL

17. CAPITAL WORKS • IDT was given project allocation of R872 741 086.46, and to date R146 065 552.16 has been spent. *NB: • There is projected commitment of R356 million for the period ending March 2015 for IDT projects, this amount will be used settle outstanding invoices for R203 million for period up to November and R153 million for the period up to March 2015 for new Polokwane High Court and new Mpumalanga High Court. • There is projected commitment of R94 million for the period ending March 2015 for various DPW projects.

18. HISTORICAL EXPENDITURE TREND • The following table depicts expenditure over the past three financial years. • In 2012/13 the initial budget allocation was R833 441 000, with the final appropriation of R621 206 000. • It is anticipated that there will be under-expenditure at the end of the financial year (-R347 607,000)

19. CHALLENGES ON INFRASTRUCTURE • The reasons behind under expenditure on infrastructure budget can be attributed to the following; • Delays in the site clearance ( Most Projects still on planning phase when they should be on implementation due to mostly Town Planning issues and acquisition of land) • Poor performance by contractors leading to non-attainmnentof projected expenditure. • Delays as a result of revision of needs (client problem). • Delays in the appointment of consultants which leads to projects not commencing as planned. • Delays in the finalization of appointment of contractors after closing of tender (tender validities expires and projects have to be re-advertised). • Poor communication between DPW head office and Regional offices leading to Project Management System not being updated (this leads to poor decision making when allocations of budgets are made).

20. MAINTENANCE • The planned maintenance of state owned properties is carried out by DPW through their budget. • DOJ&CD is responsible for day-to-day maintenance with a threshold of R100 000.00. • DPW is currently reviewing their maintenance strategy that will devolve more delegation to client departments. • Previously DPW could undertake minor capital works under RAMP. • RAMP has since been abolished by DPW, with the result that minor capital works are no longer done. • In our recent discussion with DPW, it was agreed that DOJ&CD will submit a list of minor works items that be executed by the client department. This will allow us the space to handle minor works.

21. MAINTENANCE • The planned maintenance of state owned properties is carried out by DPW through their budget. • DOJ&CD is responsible for day-to-day maintenance with a threshold of R100 000.00. • DPW is currently reviewing their maintenance strategy that will devolve more delegation to client departments. • Previously DPW could undertake minor capital works under RAMP. • RAMP has since been abolished by DPW, with the result that minor capital works are no longer done. • In our recent discussion with DPW, it was agreed that DOJ&CD will submit a list of minor works items that be executed by the client department. This will allow us to handle minor works.

22. BUDGET ALLOCATION ON PLANNED MAINTENANCE

23. MOBILE UNITS

24. PROCUMENT OF MOBILE UNITS In an attempt to alleviate immediate or emergency accommodation requirements, it has become inevitable to provide temporary in the form of mobile units. An amount of R57 084 000.00 has been transferred to Regions for procurement of such mobile through a transversal contract. We have submitted a list of needs for mobile units including sizes to assists DPW in obtaining “special site clearances”. The Department is vigorously engaging with DPW to resolve this matter. Regional Heads are also approaching respective municipalities to obtain their concurrence in issuing of site clearances.

25. PROCUREMENT OF MOBILES: REGIONAL ALLOCATION

26. ACCESS OF FACILITIES TO PERSON(S) WITH DISABILITIES DISABILITY PROGRAM

27. ACCESS OF FACILITIES TO PERSON(S) WITH DISABILITIES The Department would like to ensure that all its facilities are accessible to people with disabilities, taking into account the historical and current disadvantages that they had to endure and the need to comply with the constitutional imperatives of promoting and respecting their human rights and dignity. Some of the disability programs was divided into two phases; PHASE 1. The project commenced in 2003, and the expenditure for Phase 1 was R120 million for projects done by IDT and DPW was allocated R10 million annually. • All court building be made accessible to people with disability by building ramps and rails. • There will be at least one court made to accessible as aforesaid • There will be at least one bathroom accessible to people with disability. • Phase 1 could not be taken to its logical conclusion because of legal dispute between DPW and private service provider.

28. ACCESS OF FACILITIES TO PERSON(S) WITH DISABILITIES DISABILITY PROGRAM: PHASE 2 Phase 2 is different from Phase 1 as it will be more comprehensive in addressing the needs of people with disabilities. This will include, amongst others, provision of: • Lifts for vertical movements (braille and electronic voice system). • More ablution facilities • Additional ramps and rails • Modification of witness boxes • More court rooms. • Parking for disabled. • Stair lift chairs, etc.

29. ACCESS OF FACILITIES TO PERSON(S) WITH DISABILITIES An audit was conducted and 531 building we identified for this program, as others were outside the scope of the work e.g mobile unit, periodical courts, courts in police station etc. A total of 279 buildings were modified by IDT and were only completed in 2010 at a cost of R120 million. • A total of 252 buildings were modified by DPW. 135 were funded by DOJ&CD, 56 funded by DPW and 46 projects were transferred to other DPW initiative/projects such as RAMP or Refurbishment & Renovation. • To date DPW managed to complete 116 projects, and the outstanding 136 are planned to be completed in the ensuing years. This will bring closure to Phase 1 of the program(252 courts)

30. PRELIMINARY PROJECT EXECUTION PLAN: PHASE 1 & 2 • DOJ&CD has submitted a list of 187 prioritized projects for implementation with the following estimated time frames.

31. PRELIMINARY PROJECT EXECUTION PLAN: PHASE 1 & 2 • The estimated time frames for the project execution plans may change as a results of tender processes. • The delays may also have an effect of escalating construction costs.

32. PROPERTY MANAGEMENT LEASED PORTFOLIO

33. PROPERTY MANAGEMENT: LEASES The department is leasing 120 office buildings from Private Landlord. To date 85 leases are valid, 35 are still in the process of being renewed and finalised by DPW.

34. BUDGET ALLOCATION • MTEF BUDGET AND EXPENDITURE AS 28 OCTOBER 2014

35. BUDGET DEFICITS • The allocation for leases has not kept pace with annual escalation rate on rentals. • As a results of that, we are getting less office accommodation with the money that we have. (See figure below).

36. MUNICIPAL SERVICES • The budget for municipal services is sufficient, However it can be affected by municipal surcharges , and escalation on Eskom tariffs and increase in leased building. See figure below).

37. CHALLENGES ON LEASES • Delays in renewal of expired leases.(DPW dealing with backlog on expired leases), there is a risk that some offices may be shut down by the landlords. • Short term leases. (All renewals limited to 3 years as per DPW). This has an adverse effect on relocation costs, disruptions in providing services, theft and damages of movable assets. • All leases to be advertised on open tender after the initial 3 years. (At most 5 year lease period). • Landlords are reluctant of refurbishing buildings and contributing towards Tenant Installation(Department must bear cost of branding, office layout configuration, signage etc.) • DPW implement new procurement processes without client department (s) being officially consulted, and without being afforded an opportunity to make inputs. • Adjustment and escalations on rental higher than increment on annual budget. • Budget constrains vis-à-vis Organisational expansion resulting in inadequate leased buildings.

38. CHALLENGES ON DISABILITY PROGRAM • The individual contracts at regional level are normally small and attract the lowest ranked contractors. This in some cases results in poor tenders being received and subsequently results in a re-tender process that delays project up to six (6) months at a time. • The procurement process and regulations by DPW to implement projects are quite lengthy, in some cases it may take up to minimum 9 months from planning stage up to when construction starts. • The legal dispute that was raised in 2012 regarding the legality of the appointment of the consultant /service provider slowed down the progress drastically. The legal dispute has been resolved only now in mid July 2014. • Heritage buildings are subjected to long approval processes by the relevant Heritage Councils. • The element of budget constraints to implement the projects cannot be over emphasized.

39. PROPOSED SOLUTIONS • Regularly engage DPW to fast-track the appointment of contractor once tenders have closed (standing CFO’s meetings as well as project review meetings) • Plan properly on your needs in order to avoid constant scope revision by clients. • Identify functional buildings currently being leased and request DPW to commence with the process of purchasing those buildings. • Explore alternative funding options (Off-Budget Fundinge,g PPP, B.O.T. • Explore possibilities of employing other Implementing Agencies. • Explore the possibility of exercising option in terms of Clause 6.3 of Devolution of Budget Framework which state that; “DPW should delegate or assign some custodial functions (excluding powers of decision-making over disposal) for functional accommodation (e.g.police stations, courts, military facilities, prisons) to Departments that wish to exercise optionality over time”.

40. PROPOSED SOLUTIONS • Long-term leases to leverage better rental offer against the long lease period, and to further solicit substantial contribution from landlords towards Tenant Installation. • DPW to appraise client departments of their “Turn-Around Strategy” to enable client departments to be responsive to their demands. • DOJ&CD to ensure timeous compilation ofUser Asset Management Plan (U-AMP ) for 2016 -2019 budget cycle and prepares UAMP for the 2015/16 FY. • Regular engagement with DPW though client liaison forums as part of project review meetings. • DPW to determine the ratio of utilisation of leased building versus state owned building. • Capacitation – DOJ&CD is currently restructuring to create in-house Professional Services capacity to improve planning at National and Regional Offices.(See the slide below).

41. UAMP PROPERTY PLANNING MONITORING & EVALUATION PROP INVESTMENT ANALYSIS POLICY DEVELOPMENT PROPERTY MANAGEMENT (Leasing / Letting) MAINTENANCE (Planned, Minor Works) INFRASTRUCTURE MANAGEMENT (Construction of new premises) PROP PAYMENTS (Private leases, Mun. services Acommodation Charges, Upgrade of Infrastructure) ASSET MANAGEMENT CLEANING & GARDENING DISPOSAL CAPACITATION • KEY CONSIDERATIONS. • The Facilities Management structure should be aligned to the requirements of GIAMA by streamlining functions holistically at H/O and R/O taking cognisance of the following mandatory responsibilities that must be rendered by the Chief Directorate;

42. FACILITIES MANAGEMENT THANK YOU