Empowering SMMEs in Engineering Industry: Challenges & Achievements

1. BRIEFING TO THE PORTFOLIO COMMITTEE FOR SMALL BUSINESS DEVELOPMENT ONTHE STRATEGY FOR SMMEs AND COOPERATIVES Presented by: Mr. Mpho Mofokeng CFO: Water Trading Entity (WTE) Date: 11 MARCH 2015 PRESENTATION TITLE Presented by: Name Surname Directorate Date

2. Presentation Outline • Purpose. • Seven elements of empowerment • Enablers • Initiative to Bridge the Gap in the Engineering Industry • Current Achievement. • Challenges . • Socio – Economic Development Plans for major projects. • Goods and Services to be procured for the major projects.

3. Purpose The purpose of this presentation is to brief the Portfolio Committee for Small Business Development on the Department of Water and Sanitation’s BBBEE Policy.

4. Management Control – Measures the EFFECTIVE control of DWS and its Entities by Black People. Employment Equity – Measures the INITIATIVES intended to achieve EQUITY in the workplace under the Act, and the Employment Equity Act. Skills Development – measures the EXTENT to which employers carry out INITIATIVES designed to develop the competencies of Black Employees. Preferential Procurement – measures the EXTENT to which enterprises BUY goods and services from suppliers with STRONG B-BBEE Procurement Recognition level. Enterprise Development – measures the EXTENT to which Enterprises carry out INITIATIVES intended to assist and accelerate the development and sustainability of other enterprises. Socio-Economic Development – measures the EXTENT to which enterprises carry out INITIATIVES that contribute towards Socio-Economic Development or Sector-Specific initiatives that promote access to the economy for Black People. The Seven Elements of Empowerment 4

5. Enablers • Approved BBBEE Policy which sets the tone from top. • Establishment of a supplier database which accommodates the SMME. The department advertises for applicants twice a year to ensure that the newly established companies do not have to wait for a year to be registered on a departmental supplier database • The PPPFA is applied to purchases above R 30 000 in that the department ensure participation of SMME where they are given an opportunity to participate in the economical stream of the country.

6. Initiative to Bridge the Gap in the Engineering Industry • The Department has established a panel of 45 of • multi-disciplinary professional service providers in • the engineering field i.e civil, structural, mechanical, • electrical engineering, architectural and project management. • Companies with the lower CIDB grading i.e grade 2 have been paired with companies with a higher CIDB grading i.e grade 9 when allocated work in order to ensure that there is development which will in turn produce 9 CIDB grading from small companies in this field. • The department encourages joint venture and monitors them for the duration of contract and the work allocation to ensure that you build technical capacity . 6

7. Current Achievements • Procurement worth R75m has been spent on • SMMEs as at end of • December 2014

8. Current Achievements continued

9. Challenges • The BEE Certificate does not provide the break down in respect of the women, youth and people with disabilities. • SMMEs’ ability to honour contracts and deliver due to lack of sufficient funding. • Many of the SMME companies find it difficult to comply with administrative compliance.

10. Socio – Economic Development Plans for major projects • 1. Raising of Clanwilliam Dam and other capital projects • Employment of 60% workforce from local communities (West Coast District). • Anticipated value of all procurement is R 671,4 m • (excluding VAT). • Category I and II identified for local SMMEs. • Promotion of Joint Venture partnerships (above 25%) • with Black-owned and managed enterprises. • Procurement system developed to operationalise the • Plan by specifying functionality for evaluation criteria • (locality; women-owned; youth-owned; local production • of goods; formation of corporatives etc). • Skills Development: Long-term development of a viable engineering and construction skills base to support future projects. Budget 0.25%

11. Goods and Services to be procured

12. Socio – Economic Development Plans for major projects (Conti…) • 2. Raising of Hazelmere Dam: • Employment of 60% workforce from local communities (eThekwini Metro and iLembe District). • Anticipated value of procurement is R 498.1 m • (excluding VAT). • Two (2) Nominated Enterprise Development Beneficiaries • (NEDBs who are SMMEs) from KwaZulu-Natal. • Focus of development: increased annual turnover and • CIDB grading of NEDBs. • Skills Development: Development of a viable • engineering and construction skills base for workforce • and NEDBs. • Budget 0.25% of the contract price.

13. Goods and Services to be procured

14. Socio – Economic Development Plans to be developed • uMzimvubu Water Project • Greater Letaba Project

15. Socio – Economic Development Plans for major projects (Conti…) • 3. ORWRDP BDS: • Targets for employment: 100% of unskilled workers from local communities, targets for youth, women, PwDs and military veterans. • Anticipated value of construction contract is R 3.5 b (excluding VAT). • Three (3) Nominated Enterprise Development Beneficiaries (NEDBs who are SMMEs) from Limpopo. • Focus of development: increased annual turnover and CIDB grading of NEDBs. • Skills Development: Development of a viable engineering and construction skills through skills programmes; learnerships; internships; mentorship and bursaries. • Budget R12,4m.

16. Thank you