Portfolio Committees on Correctional Services and Public Works

1. Kimberley Correctional Centre 18 August 2010 Portfolio Committees on Correctional Services and Public Works

2. CONTENTS • Project Tender History • Form of Contract • Project Cost Analysis • Time Frames • Achievements • Challenges (Risks)

3. PROJECT TENDER HISTORY • September 2004 • Preliminary estimate (R 287, 8 million) • Desk top estimate based on high level needs assessments received from User Department; • Estimate based on concept/blueprint (at this stage design, documentation, Bills of Quantities not started) • Estimate excluded site-specific elements such as bulk earthworks, foundations including surface beds, external works (all site works, soil- and storm water drainage, water supply), municipal expenses (traffic lights, storm water connection, etc), on-going changes to security installation and professional fees; • This estimate only takes into consideration building costs (provision not made for CPAP and unforeseen expenditure); • Provision in estimate not made to unknown details w.r.t. specialised security installations and equipment. • March 2005 • Pre-tender estimate (R 540 million) • The first estimate based on a complete set of documents and information • April 2005 (1st invitation of tenders) • Tenders closed on 20 April 2005.

4. PROJECT TENDER HISTORY(CONTINUE) • May 2005 • Tender recommended – R499,4 million; • Following Departmental processes DCS was requested to confirm availability of funds to award bid; • Confirmation of funds not received; tender could therefore not be awarded; • DCS commissioned an investigation into tender prices received in relation to the pre-tender estimate; • Outcome of investigation not provided; in mean time tender validity lapsed; • Instruction received from DCS to re-invite tenders. • July 2006 (Fourteen Months after closing of first bid) • Revised pre-tender estimate R 638,2 million. • July 2006 (2nd invitation of tenders) • Tenders closed for a second time on 19 July 2006; • Tender recommended – R662,3 million • Funding approval was received from User Department to proceed with awarding of bids. • November 2006 • Bid awarded to GRINAKER-LTA / KEREN KULA JV on 14 November 2006.

5. PROJECT COST ANALYSIS

6. PROJECT COST ANALYSIS

7. PROJECT COST ANALYSIS

8. PROJECT COST ANALYSIS • The project was financed from the DCS Capital Works budget. • Tender awarded: R662 343 119 (November 2006) • Funds spent on construction as at 30 July 2010: R822 738 765. • Final construction cost: R824 180 737 (Draft Final Account) • Contract instructions due to essential scope changes and requests: R46 260 000

10. FORM OF CONTRACT • JBCC (The Joint Building Construction Committee) contract used on this project. • Main features of the contract:- • Contractor provides construction program and cash flow. • Contractor is entitled to extension of time under certain circumstances such as: • Rain (Vis-Major)– extension without cost • Extra work – extension with cost • Delays caused by the client - extension with cost • Delays caused by the contractor – no extension • Contractor entitled to escalation [Base month: July 2006] (Haylett Formula with BER indices generally known as CPAP) • Contractual clause to compensated contractor for inflation • Based on Haylett Formula • Indices provided by Stats SA per workgroup • Contract divided into workgroups e.g. earthworks, concrete, metalwork (approx. 32 workgroups) • CPAP calculated per workgroup (lnflation differs per workgroup)

11. FORM OF CONTRACT(Special Requirements of the Contract) • Defects liability period: • 6 months on building construction work. • 12 months on security equipment, electrical and mechanical equipment. • Contract Participation Goal (value of work to be subcontracted to HDI subcontractor companies) - 29,79%. • Local procurement of material.

12. TIME FRAMES • Contract commencement date: 14th Nov 2006 • Contractual completion date: 14 Nov 2008 • Actual Practical completion date: 30 October 2009 • DCS occupation of facility: Early December 2009 • Works completion date: 15 February 2010 • Final inspections of “retention defects”: In process • Extension of time awarded in terms of JBCC (11 Months & 2 weeks) • Rain (Vis-Major) • Unavailability of municipal services • Shortage of material • Additional work requested by DCS • Discrepancies in procurement documentation • Delay in approval of funds for additions requested by DCS

13. ACHIEVEMENTS • Job Creation • 1168 Work opportunities created for local unemployed. • Ex-offenders (137) and woman (96) on site • Skills Development/ Transfer • 86 of the 100 NYS students successfully completed program. • Empowerment of Emerging Contractors (subcontracts) • 14 HDI subcontractors appointed • Saving of R76 354 750 as a result of re-measuring of work done

14. CHALLENGES (RISKS) Unavoidable Risks • Excessive inclement weather. • Country wide steel shortages (steel price escalate with +/- 60%). • Country wide power shortage / load shedding. • Shortage of qualified artisans. • Price escalation determined by BER indices.

15. Questions posed during oversight visit • Why, despite the delays in construction, the centre has to date still not been completed? • Practical completion was taken on 30 October 2009 • Works completion was taken on 28 April 2010. • A breakdown of the total cost of the project as well as reasons for the reported escalation; • Breakdown was provided in the presentation. • A comprehensive list of all construction still in progress; • All construction has been completed.

16. Questions posed during oversight visit • Copies of the IT procurement contracts; • N/A • A list of all the suppliers/service providers responsible for the substandard infrastructure reported; • Suppliers/service providers appointed by DPW were not responsible for substandard work • Plans for the installation of toilets in all the hospital wards; • Generic design did not make allowance for toilets in the hospital wards – discussions in process between two Departments to address this requirement

17. Questions posed during oversight visit • The centre’s maintenance plan; • DPW in process to compile facilities contract/s. • How inmates were selected/screened for incarceration at the centre; • N/A • Update on the investigation into the 3 August incident and the events that had led to the riot; • N/A • Measures to be put in place to prevent re-occurrence of the riot; • N/A • Measures put in place to address gang-activity at the centre; • N/A

18. Thank You