PRESENTATION TO THE SELECT COMMITTEE ON PUBLIC SERVICES

1. PRESENTATION TO THE SELECT COMMITTEE ON PUBLIC SERVICES STRATEGIC PLANNING AND BUDGET PRESENTATION 07 May 2008

2. Context of the Presentation • The department’s strategic plan is premised on the Government’s pledge in SONA “to work together to realise the core aspiration of our people to attain a better life for all” • Consequently, in response to the President’s call for “business unusual” the presentation attempts to sketch out the department’s response and role towards the achievement of the Government’s set out objectives.

3. Format of the Presentation • The presentation will expose the Committee on the department’s role on the roll-out of the Apex Priorities • A high level Government policy issues relating to the interventions towards the transformation of the sectors falling under the department’s responsibilities • A high level discussion of the department’s programmes in general

4. Policy Unit Objectives of the Policy Unit “To provide strategic leadership for sustainable growth, development and transformation of the property and construction industries”

5. Key Performance Areas 2008-2009 In pursuance of DPW’s mandate and broader government objectives, the Policy Unit will continue to - • provide strategic leadership for the growth, development and transformation of the construction- & property industries; • regulate the construction- & property industries and related professions; • promote best practice in the management of state immovable assets through roll out of the implementation of Government Immovable Asset Management Act (GIAMA) • contribute to the National Public Works Programmes and the Government’s Programme of Action; and • undertake a series of research to determine points of policy intervention to promote growth, development and transformation of both sectors

6. Transformation of the Property and Industry • As contribution to the transformation of the property sector, the department will establish a Property Incubator model to create an enabling environment to promote sustainable emerging enterprises in all the property activities of the department; • Emerging enterprises, selected through a pre-approved criteria, to be in the Incubator Programme for a limited number of years; • Work opportunities to be provided through selective procurement process as well as supply-side support such as access to finance, training, mentorship, enterprise development, etc. • Targets to be set taking into account the baseline. • These property activities include: Facilities Management, lease broking, leasing, disposals.

7. …Transformation of the Property and Industry contd • Quick wins to be identified: - lease broking; - property services such as cleaning, garden services with specific focus to promote women- and youth-owned enterprises (ensuring job security and quality); - disposal of under and or unutilised buildings and small pieces especially residential properties; - release of land for land reform and low cost housing; etc. • Department will target high levels of participation of emerging enterprises and individuals in these areas to get close to Cabinet’s target of 85%.

8. Transformation of the Construction and Industry • Together with provincial departments of Public Works, the department will roll out the implementation of the National Contractor Development Programme (NCDP) supported by CIDB: - targeting emerging enterprises at all levels of the CIDP Register,-- support programmes to be structured in line with capacity requirements of the enterprises; • Strategic co-operation to be established with different public and private entities. • Department will also roll-out the implementation of its Skills Development Strategy focusing on improvements through out the skills pipeline.

9. Regulation of the property and construction industries • Recognising the developments in the property and construction industries, the department will conduct extensive reviews in the following policies and legislation; - its White Papers and Public Works and Construction industry; - legislation establishing the State Enterprises reporting to Public Works; - Review of Expropriation Act and CBE and Professional Councils Legislation is underway. • Conduct research on: - different pieces of legislation administered in different spheres of government that impact on property development; - different legislation administered in different spheres of government that regulate to construction industry. Appropriate action to be taken depending on the outcome.

10. Best practice and uniformity in state immovable asset management • In driving the implementation of GIAMA throughout national and provincial government departments, the department will: - finalise development of and publicise comprehensive guidelines on GIAMA for users and custodians; - assist provincial custodians to ensure state of readiness for implementation by ensuring that: > asset registers are updated to meet the NT minimum requirements; > vesting of state land; > adequate capacity is developed to implement GIAMA; > development of uniform policies for property and asset management.

11. Contribution to National Public Works Programme (NPWP) and job creation • Department will conduct research to assess current government initiatives that contributed to the principles of NPWP with recommendations on appropriate interventions; • Appoint at least 10 interns during this current year.

12. Research • A Research Coordinating Committee will be established comprising all relevant units of the department to establish research agenda and coordinate all research. • Based on this a series of research will be undertaken to determine areas of intervention by the department. • Releasing of publications on critical economic information about the state of the industries

13. EPWP Objectives of EPWP “Contribute towards the eradication of poverty through the creation of temporal work opportunities, income generation, skills development and exit opportunities where it is possible. ”

14. Key performance areas Strategic Review - 2008 FOCUS AREA 1: ENHANCING EPWP INTERNAL CAPACITY AND PERFORMANCE Enhance internal EPWP capacity Positive EPWP public profile Improve EPWP reporting/verification/integrity EPWP performance evaluation and action plan to improve qualitative performance FOCUS AREA 2: ENHANCING DELIVERY OF THE EPWP Enhance Municipal EPWP delivery capacity Enhance Provincial EPWP delivery capacity Enhance National DPW EPWP delivery capacity as implementer FOCUS ARE 3: EXPANDING AND IMPROVING BENEFICIARY SELF SUFFICIENCY Expand and improve beneficiary training Facilitate the implementation of the exit strategy approach FOCUS AREA 4: DEVELOPING A LONG TERM STRATEGY OF THE EPWP Develop and secure agreement for the long term strategy of the EPWP Identification of new areas for expansion [including Environmental Sector] 14

15. KPA 1: Enhance internal EPWP capacity

16. KPA 3:. Improve EPWP reporting/ verification/ integrity KPA 4:EPWP performance evaluation and action plan to improve qualitative performance

17. Focus Area 2 : Enhancing delivery of the EPWP KPA 5 :Enhance Municipal EPWP delivery capacity

18. Focus Area 2 : Enhancing delivery of the EPWP KPA 6 :Enhance provincial EPWP delivery capacity

19. Focus Area 2 : Enhancing delivery of the EPWP KPA 7 :Enhance National DPW EPWP delivery capacity as implementer

20. Focus Area 3: Expanding and improving beneficiary self sufficiency KPA 9 : Facilitate the implementation of the exit strategy approach KPA 10 : Develop and secure agreement for the long term strategy of the EPWP

21. Focus Area 4 : Expanding and developing a long term strategy of the EPWP KPA 11 :Identification of new areas for expansion

22. ASSET MANAGEMENT Objectives of Asset Management “Unit’s specific purpose is to ensure that immovable asset owned and/or utilised for delivering various government services yields functional, economic and social benefits to the State for improved service delivery”

23. Key Performance Areas2008 -2009 • Provide efficient and effective Asset Management • Implementing GIAMA-contribution to poverty alleviation and job creation, improving service delivery, complying with corporate governance requirements • Promoting BEE and contributing to the transformation of the construction and property industries • Supporting Expanding Public Works Programme • Accelerated and Shared Growth Initiative and (ASGISA) Joint Initiative for Priority Skills Acquisition (JIPSA) • Implementation plan for the Turnaround Strategy

24. National Infrastructure Maintenance Strategy • Cabinet has recognized the importance of infrastructure maintenance within government and the role that effective maintenance will play in support of ASGISA. • To this end cabinet has approved the National Infrastructure Maintenance Strategy (NIMS) and the Department of Public Works has been tasked with leading the implementation of the programme to deliver on the strategy. • Implementation of the strategy requires significant coordination within government, in order to ensure that all the organs of state plan effectively for and implement maintenance of their strategic infrastructure. • Infrastructure, in the form of public buildings, roads, water and sewerage systems, electricity and other services, supports quality of life and is the foundation of a healthy economy. • NIMS is going to be formally launched before June 2008

25. Asset Management Plans and GIAMA Implementation • Are assessed in relation to their performance, suitability, condition and the effect of the condition on service delivery ability; and • Assets are decommissioned in line with assessment recommendations. • Asset management has completed the first set of User Immovable Asset Management Plans (UAMPs) and embarked on the second phase. • Guidelines for the Custodian Immovable Asset Management Plans (CAMPs) will be completed by 30 July 2008 and the actual CAMP will be in place during the 2008/09 fiscal year.

26. Access for People with Disabilities (AMs APEX Priority 1) • Government has an obligation to make its buildings and facilities accessible to all its citizens, including people with disabilities. • The following categories of people are affected, include but not limited to physically disabled (minor to quadriplegia), ambulatory problems (from temporary to problems due to age & infirmity), blind and partially sighted, hearing impaired, speech impaired, intellectually challenged and minors and the aged. • Although an amount of R 63 million was to be prioritised from the maintenance budget, it has since been resolved that the operations branch make access for people with disabilities mandatory in all new buildings specifications. • The old buildings will have to be prioritised from respective client departments’ capital budget.

27. Rehabilitation of Unutilised State Buildings (AMs APEX Priority 2) • With a view of enhancing the value of State immovable assets and improving service delivery to clients, the department will embark on the rehabilitation of State-buildings primarily for use by government departments. • Priority will be given to properties that are strategically located to support the functions of the client departments. • Also, the properties that would stimulate economic development in all regions in the country will be given a priority. • An amount of R 233 million is required for 2008/09, of which R 90 million from the Trading account augmentation has already been set aside.

28. Energy Efficiency Code • The Energy Code of conduct will, in essence, stand as a commitment between the Department of Public Works and its users to support specific objectives of the National Energy Efficiency Strategy as far as they relate to the buildings and facilities which are used by the DPW itself as well as those that are under its custodianship. • Hence, in January 2008, the National Electricity Response Team comprising relevant national government departments, metropolitan municipalities and their agencies, Eskom and relevant regulatory bodies in order to align themselves with the goals set for improving energy efficiency and conserving power. • To this end, the department of Public Works has established short, medium and long term interventions to be implemented with a major element of this intervention as the commitment of the Government immovable assets users and DPW lessors to implement initiatives that improves energy efficiency.

29. Prioritisation of Capital and Maintenance • The department annually embarks on prioritisation of maintenance and capital budgets with a view to compile an annual implementation programme. • The department is currently developing policy and strategy for maintenance to facilitate development of maintenance planning for every fiscal year. • Summarised below is the short-term prioritization criteria: • Statutory compliance with respect to the following legislation OHSA, PFMA, PPPFA, other Land, Environmental and Safety Legislation; Security measures e.g. prevention of escapes and safe-keeping of firearms. • MTEF Prioritisation has an added criteria viz. EPWP, Project consolidate, ASGISA, APEX

30. Border Control Operational Co-ordination Committee (BCOCC) • The BCOCC portfolio aims to integrate, coordinate, plan and programme manage all physical infrastructure and ICT developments on land, air, sea and the rail ports of entry (the Border-line) on behalf of numerous departments (like SAPS, SARS, Home Affairs, Agriculture, Health and NIA). • DPW has been mandated to chair the BCOCC Infrastructure Committee. • Budget allocations for the 2008/2009 stand at R478 820 000. 2010 Infrastructure Projects (Ports of Entry) include; Lebombo Port of Entry: Redevelopment (RSA / Mozambique), Golela Port of Entry: Redevelopment (RSA / Swaziland) and Skilpadshek Port of Entry: Redevelopment (RSA / Botswana)

31. Asset Register Enhancement • A more co-coordinated approach is implemented to accelerate improvement of the asset register. • The asset register enhancement project in 2005/06, was put in place in order to improve data integrity of the department’s asset register, service delivery and to facilitate asset and property management in the department. • Phases 1 and 2 entail the collection, research and verification of property information as well as the capturing of new and missing verified • Continuous identification of assets yet to be accounted for. • The interoperability of Information Systems (PMIS and WCS)

32. Condition Surveys • The unit has embarked on the Condition Audits of the State owned properties that would establish the status quo for each building and facility has to be as well as all those buildings that are found, (via the status quo reports) to be in need of upgrade. • Funds and manpower are being procured for investment to effect the required improvements. • The completion of this exercise is expected to be 31 March 2009.

33. Valuations • The department is also researching affordable system for property valuations that comply with accounting standards, in particular GAAP in a Trading account environment. • Valuation standards and methodology which encompasses three valuation templates, namely: depreciated replacement cost, income capitalisation and comparative sales method, have been submitted for approval by the National Treasury. • This unit is on track with the completion of all residential portfolio and 30% remaining assets. • For 2008/07, this is being done in-house as the budget allocation kicks off in the fiscal year 2009/10 with R 30 million.

34. Client Value Proposition (CVP) • During 2007/08 DPW signed 90% of the MOUs with respective client departments • Once the signing of all SLAs is complete, the Department will develop Client Value Propositions (CVPs) for all clients. • CVPs will be constructed after finalisation of SLA where service delivery standards will be articulated and other products and services, that the department offers, will be clearly defined. • It has to be noted however, that the capacity within KAM will need to be enhanced in order to handle the sophisticated expectations of the CVP.

35. …Budget Allocation 2008/9

36. Other Departments

37. BUDGET ALLOCATION SUMMARY

38. PROGRAMME 1. ADMINISTRATION • Over the MTEF period the budget of the Administration programme rises by an average of 9.2% mainly as a result of the department’s relocation costs as well as additional allocations for accommodation costs.

39. PROGRAMME 2. PROVISION OF LAND AND ACCOMMODATION • Over the MTEF period the budget of the programme rises by an average of 11% as a result of growth in the allocations for -Provincial Property Rates -Asset Management Projects -Augmentation of the PMTE

40. PROGRAMME 3. NATIONAL PUBLIC WORKS PROGRAMME • The budget of programme 3 grows by an average of 19.1% over the MTEF period owing mainly to sizeable increases in the budget of the Expanded Public Works Programme, which grows by - R30 million 2008/09 - R 50 million 2009/10 - R 80 million 2010/11

41. PROGRAMME 4.AUXILIARY AND ASSOCIATED SERVICES • This programme sees a modest increase of 5.9% mainly to cater for inflation. From - R25.9 million in 2008/09 to - R28.9 million in 2010/11

42. ECONOMIC CLASSIFICATION

43. ECONOMIC CLASSIFICATION • In the 2008/09-2010/11 MTEF period the budget of the department sees the biggest growth in Capital expenditure in line with the broader government programme of the intensification of infrastructure development. • Analysed by economic classification the budget grows as follows: - 11 % Current Payments - 9%Transfers and Subsidies - 14 % Payments for Capital Assets

44. MAJOR INFRASTRUCTURE ALLOCATIONS • The following amounts have been allocated for both DPW and the Border Control Operational Co-ordinating Committee (BCOCC’s) infrastructure budgets over the MTEF period • R1 billion 2008/09 • R1.2 billion 2009/10 • R1.3 billion 2010/11 BCOCC funds are utilised to improve border post facilities in part to facilitate preparations for the 2009 FIFA Confederations Cup and the 2010 FIFA World Cup.

45. MAJOR INFRASTRUCTURE ALLOCATIONS • A number of assets will be acquired/upgraded for the Re kgabisa Tshwane project which aims to keep national government head offices within the inner city of Pretoria. These assets include the • HG de Wit Building (R66 million) • Old TPA Building for DFA (R250 million) • Agrivaal Building for GCIS (R200 million) Around R1 billion will be spent on the upgrading, maintenance and improvement of immovable assets of the state.

46. The End Thank you