The Performance of the Department of Public Works and PMTE (3 rd Quarter 2015/16)

1. South Africa Works because of Public Works The Performance of the Department of Public Works and PMTE (3rd Quarter 2015/16) PRESENTATION TO THE PORTFOLIO ON PUBLIC WORKS PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA CAPE TOWN OFFICE OF THE DIRECTOR-GENERAL

2. Contents To • Purpose • 5 Year Strategic Goals and Outcomes • Summary of Performance Information (Programme Performance) • Performance Challenges • Financial Information (DPW and PMTE)

3. Purpose • Purpose of the Presentation by the Department of Public Works • To reflect on the 2nd and 3rd Quarter Performance and Financial information of the Department of Public Works and PMTE in the financial year 2015/16 in order for the Portfolio Committee to advise on improving performance • Objective of the Portfolio Committee on Public Works • To have an understanding and measure the 2nd and 3rd Quarter Performance and Financial performance of the Department for the financial year 2015/16.

4. 5 year Strategic Goals & Outcomes Vision - A service oriented Public Works Department delivering value and contributing to the national agenda for social and economic development Strategic Goals and contributions to Government Outcomes

5. Setting the Scene • The Minister’s Policy Statement identified five strategic priorities for the five year period of this Administration: • The creation of 6 million work opportunities through the EPWP; • Operationalisation of the PMTE (Property Management Trading Entity) to manage the core business of Public Works – custodianship of state immovable assets and provision of accommodation to government; • Operationalisation of the Governance Risk and Compliance Branch – to strengthen the fight against fraud and corruption, as well as to spearhead the Efficiency Enhancement phase of the Turnaround - using the tools of strategic planning, Service Delivery Model processes and risk and performance management. • The Policy Review – working with all stakeholders, particularly the provinces, to develop a new Public Works White Paper culminating in the tabling of a Public Works Act to codify and clarify the mandate of Public Works; • The Transformation of the Built Environment – so that ownership, control and the composition of the professions better reflects the demographics of South Africa • All these priorities are embedded in the Programmes of the DPW and PMTE

6. Cont.… These priorities set a different thinking around the delivery mechanisms and targets for the Department and PMTE particularly moving from Phase 1 of the Turnaround (Stabilisation) to Phase 2 – Efficiency Enhancement

7. SUMMARY OF PERFORMANCE INFORMATION Please Refer to the Detailed Q3 Reports Attached – DPW and PMTE

8. Programmes of the DPW and PMTE

9. Please Refer to the Q3 Reports Attached – DPW and PMTE for Detail Discussion

10. Summary of Performance Information • The performance of the Department and PMTE has slightly improved (Although a slight decline in DPW) • The reasons for a decline are mainly in the challenges in procurement processes • The combined performance (Average) of DPW and PMTE is • Q2 = 46% • Q3 = 52% • Overall the Department is performing slightly above average at 52% in Q3 compared to 46% in Q2 – despite the challenges experienced

11. Performance Challenges • Appointment of service providers – delays are still experienced in the process to appoint service providers that will provide services in in areas where certain scarce skills are required. This then contributes to delays in achieving the set targets or under-performance • In areas where there are dependencies from external stakeholders or client departments , delays or non corporation is often a challenge resulting in non-achievements of targets. This is largely applicable to Policy and legislation related matters • Capacity and Budget constraints in some areas continue to be a hindrance to performance. An example include the facilities management contracts . This is also exacerbated by the constrained fiscus • Energy & Water Efficiencies and Waste Management - Efforts are being made to reach the set goals across government as part of the Green Building Programme • The Department is continually reviewing its business model and the operationalisation of the IDMS as a delivery model for Infrastructure. This will address fragmentation and duplications. Although this financial year, the Department is starting to experience some degree of coordinated activities

12. DPW FINANCIAL INFORMATION

13. Summary Expenditure per Economic Classification Summary Expenditure Report per economic classification – for the month ended 31 December 2015

14. Summary expenditure per economic classification for the month ended 31 December 2015 Transfers and subsidies make up 86% of the total budget

15. Notes to Expenditure Summary per economic classification

16. Notes to Expenditure Summary Transfers and subsidies relates to:

17. Summary Expenditure per Programme Summary Expenditure per Programme for the period ended December 2015

18. Summary expenditure per programme for the month ended 31 December 2015

19. Budget Allocation per Programme Chart - 2015/16

20. PMTE FINANCIAL INFORMATION

21. PMTE

22. PMTE Budget and Expenditure Report as at 31 December 2015 Guideline: 75%

23. Financial Performance of the PMTE

24. Summary Expenditure per Economic Classification Overall expenditure in line with Q3 expectations of 75%

25. Summary Expenditure per Objective

26. Summary Expenditure per Objective

27. DPW/PMTE Capital Infrastructure Budget DPW Capital budget has been transferred to PMTE as a result of Transfer of Function. The overall expenditure is very low at 56% with expenditure of only R 397.3 million out of R 713 million. The expenditure against Departmental and Prestige will increase significantly during the last quarter when strategic acquisitions are finalised. An amount of R60m has been identified against the Land Port of Entry budget which will not be spent by the Department. Agreement has been reached between the department, Home Affairs and National Treasury that this amount will be spent by the Border Management Agency and claimed from the department. Full expenditure on the this budget is dependant on the claims to be submitted.

28. PMTE Revenue Management Report

29. Debtors Age Analysis

30. INTERVENTIONS TO ADDRESS LONG OUTSTANDING DEBT The operating model that is being utilized by the PMTE dictates that the entity should be operating an approved overdraft of at least R800 million, In essence the PMTE is providing interest free bridging finance to clients. • Clients have reported a number of reasons for not paying • Disputes on occupation periods • Unavailability of funds for previous years claims • Lack of supporting documents (lease agreements) • Amounts paid to Landlords is not in line with lease agreements • The following interventions have been implemented: • Meetings with clients departments has been held to follow up on outstanding debt • Letters of demand are written to clients • National Treasury intervention • Cleaned lease database • Complete the physical verification, confirm occupation with clients and update the system • Provide copies of lease agreements to clients • Billing in advance

31. Thank You National Department of Public Works (NDPW) Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate BagX65Pretoria0001 Website: http://www.publicworks.gov.za