A Strategic Overview of the 2005-08 Business Plan

1. A Strategic Overview of the 2005-08 Business Plan Presentation to: Public Hearings on Housing Budget Vote No 28 12 - 14 April 2005 Presented By: Laura Msimang Communications Manager

2. Key Points of Corporate Plan Two-Stage Repositioning Strategy Short Term Specific interventions – commencing immediately • Maximum impact on the new plan • Identified priority interventions (low-hanging fruit) • Broad-based and diverse approach • Leverage off current skills and capacity

3. Key Points of Corporate Plan Two-Stage Repositioning Strategy Medium Term Fully repositioned by 1 April 2006 • Total transformation and repositioning of Thubelisha • Establish a Government agency to implement specific affordable housing projects • Implemented in parallel with short term initiatives

4. Key Points of Corporate Plan • Upgrading of informal settlements • Social and community facilities • Social (medium density) housing • Job creation • Appropriate technology • Delivery enhancing interventions Strategic Interest in 6 elements of “Comprehensive Plan”

5. Key Points of Corporate Plan Resuscitating “slow moving” or “blocked” projects Source : National DoH – October 2004

6. Key Points of Corporate Plan • Entirely new business model, with no more “rightsizing” for Servcon clients • Decentralised structure with Head Office plus six provincial offices by March 2006 • Strong emphasis on partnerships with Provinces & Local Authorities • Trade out of current contractual commitments by 31 March 2006 • Primary outputs will be houses constructed & stands serviced

7. Services Provided • Project & construction management • Subsidy administration • Beneficiary relocations • Support Organisation for “managed” PHP projects • Community liaison • Contractor development & skills transfer

8. Measurable Outputs • Serviced stands • Completed top structures

9. Major Clients • National DoH • Provincial DoH’s • Local Authorities • Ministry of Housing Note : No more Servcon

10. Key Operating Assumptions • Provinces and LA’s will recognise the “value added” by Thubelisha • Provinces and LA’s will not dump all their “lemons” and then expect miracles • Competent management and staff will be able to be recruited and retained • Provinces will accept that additional costs are necessary to ‘unblock’ some projects

11. Key Financial Assumptions • P1-P5 progress payments on current projects • T1-T3 tranche payments for all new interventions • Operating costs to be covered by annual NDoH grant, from 1 April 2006 • R20m NHFC loan repaid on 31 March 2006 • Remain a VAT vendor

12. Key Financial Assumptions cont. • Revenue recognised in two stages; stand serviced and house completed • 10% margin on current projects • Zero margin on interventions, with 5% contingency to be utilized • All underclaims on current projects converted to debtors and collected by 31 March 2008

13. Key Financial Assumptions cont.

14. Critical Success Factors • Controls must not be compromised • IT systems must be timeously developed • Brand awareness must be enhanced • Our ‘prospecting’ skills must be improved • Relationships with provinces and LA’s must be strengthened

15. Summary