200607 DPW Annual Report Presentation to the Portfolio Committee

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2006/07 DPW Annual ReportPresentation to the
Portfolio Committee

• 17 October 2007

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Table of Contents

• Introduction
• Strategic Overview
• Programme Performance
• Asset Management
• Operations
• Re-Kgabisa Tshwane
• NPWP and Policy
• Expanded Public Works Programme
• Financial Management
• Human Resources Management
• Strategic Corrective Measures
• Conclusion.

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Introduction

• For the first time in the 2006/07 the Department
  reported on two sets of financial statements
  including the Trading Account
• Performance audit was carried out on main
  programmes of the Department and these programmes
  will form the core of this presentation
• This report is for the period of 01/04/06 to
  31/03/07

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Strategic Overview

• Refocusing DPW from coordination to leadership
  and implementation roles
• Capacitating the EPWP Unit for the massification
  of the EPWP roll-out
• Strong intergovernmental relationship and close
  cooperation with provinces and Public Entities
  (DWINIF, HOD Forums)
• Presentation and Gazetting of the Construction
  charter to the Minister of Trade and Industry
• DPW Lekgotla and adoption of key strategic
  imperatives
• Increasing DPW contribution to ASGISA / JIPSA,
  (NIMS, NYS, Professional skills audit and Cuban
  experience)
• Budget Devolution in line with the PFMA ethos of
  transparency and accountability.
• Maximizing the performance of our assets in
  relation to their value to service delivery

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Programme PerformanceAsset Management
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Draft Turn-Around Strategy

• Revenue generation and cost reduction measures
• Financing and restructuring
• Integrated approach to decommissioned and/or
  un-utilised assets
• Value enhancement
• Institutional reform and
• Implementation plan (to be finalised in 2007/08)

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Pan African Parliament (PAP)

• Completion of the options analysis and
  identification of Randjesfontein, Midrand as the
  preferred location for PAP
• Options analysis skills transfer to the
  department through the options analysis process
  by the private sector
• Approval of the procurement option and budget for
  the PAP by the IMC.
• Approval of the jury members and technical team
  structures by the IMC
• The website address is www.papcompetition.co.za .

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National Infrastructure Maintenance Strategy
(NIMS)

• This strategy was approved by Cabinet and DPW
  appointed as a lead department and
• Covers infrastructure owned by State SOE, and
  Municipalities
• The following institutional structure to manage
  the implementation of the strategy was proposed
• An institutional framework for the management of
  NIMS comprising political oversight function and
  
• A steering committee up whereby key
  infrastructure departments are represented was
  also proposed.

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Prioritized Capital Works and Planned Maintenance
2006/07

• For the second consecutive year, DPW rolled out
  prioritized capital works and planned maintenance
  over the MTEF period as opposed to year on year.
• Also the determining principles and factors in
  the prioritisation of maintenance were reviewed
  in order to make a significant socio-economic
  impact on governments programmes such as
• EPWP ( Must ask - Why is a Project not linked to
  EPWP?)
• NYS
• Project Consolidate
• ASGISA
• For monitoring and evaluation purposes, a Planned
  Maintenance Budget Committee (PMBC) was
  established

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User Asset Management Plans (UAMP)

• Match the service delivery objectives with
  accommodation
• Verify the accommodation occupied by the user.
• Determine functional performance of
  accommodation
• Determine utilization of accommodation
• Conduct a gap analysis
• Determine new accommodation requirements
• Determine the need for refurbishment or
  reconfiguration of existing accommodation
• Determine surplus accommodation to be
  relinquished
• Determine repairs that need to be conducted and
• Prepare a budget for accommodation occupied by
  the user.

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Investment Analysis Framework

• To be used in the evaluation of clients
  proposals for fixed property acquisitions,
  refurbishments, exchanges, demolitions and
  disposals
• To implement the options analysis process that
  has been developed by the department and the
  National Treasury
• To provide relevant stakeholders with information
  required for investment analysis process and
• To provide a clear picture of existing business
  processes.

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Service Delivery Standards (SDS)

• The production of the SLAs require the definition
  of SDS. DPW has developed more than 300 SDS that
  serve as a base for the conclusion of the SLAs
  with client departments. These SDS are split into
  head office service standard performance and
  regional offices service standard performance
  include but not limited to
• Acquisition of fixed property (buying and
  leasing)
• Disposal of State Owned Property
• Facilities management
• Property payments and
• Utilisation and contracts.

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Border Control Operational Coordinating Committee
(BCOCC)

• DPW Chairs the BCOCC Development Committee whose
  value of work is R4bn
• 43 of the 54 Land Ports of Entry were under
  various repair and maintenance programmes
  including the construction of residential
  accommodation at certain bases
• ICT Upgrading worth R204 million was spent at
  certain sea, land, and air ports of entry in
  2006/07

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Conclusion Asset Management

• In compliance with GIAMA and Strategic Asset
  Management Life Cycle, DPW continuously
  implement
• NIMS
• Draft Turnaround Strategy On-Going
  Consultations
• UAMP
• AREP (Phase II)
• SDS (300)
• PAP 2010.
• All of these initiatives have been done for the
  first time in managing State immovable property
  portfolio.

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Operations
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Purpose and Objectives

• Execute all operational activities related to
  provision and management of state owned property
  on behalf of government and its
  departments/institutions
• Align and utilize expenditure to promote BEE and
  influence ownership partners in the property and
  construction industries.
• Coordinate Service Delivery Improvement Programme
  (Zimisele Give it Your Best programme).
• Achieve Expanded Public Works Programme goals
  using capital and maintenance budgets.
• Comply with regulatory and statutory requirements.

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Achievements

• Debt reduction by regional offices is improving.
  The outstanding debt was 24 million and has been
  reduced to date to 6 million rands.
• The design and tender documentation for the
  Foreign Affairs embassies in Addis Ababa, Lesotho
  and Nigeria was completed in January 2006 and
  November 2006 respectively and is in an advanced
  stage of commencement with construction.
• Draft property management strategy for BEE,
  Poverty alleviation and job creation has been
  developed.
• The Zimisele call centre for unplanned
  maintenance was implemented in March 2007 at 3
  pilot sites (PE, KBLY, JHB).

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Achievements

• In Kimberley the R 35 million pipeline contract
  was completed, using EPWP guidelines.
• In Mmabatho 6 projects were identified for CIP
  and the contractor moved on site.

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Challenges

• BEE participation in the construction and
  property sector.
• Skills shortage in the built environment
  industry.
• Registration of professionals in the built
  environment industry.

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Challenges Legislation/Regulation

• Special attention must be given to the
  requirement to ensure that all DPW owned
  buildings are complying with the National
  Building Regulations and Building Standards Act,
  regarding facilities for the disabled.
• The cost to make the DPW buildings compliant is
  roughly estimated at R600 million as it involves
  the installation of lifts in some buildings.

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Re-Kgabisa Tshwane Programme
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Purpose and objectives

• Development of a conceptual framework for long
  term accommodation solutions for government in
  partnership with the city of Tshwane.
• Improving the standard of physical accommodation
  of national departments head offices in the
  inner city of Tshwane
• Integrating the RKTP with the City of Tshwane
  Metropolitan Municipality (CTMM) inner city
  development strategies in order to assist CTMM to
  improve the urban environment around government
  accommodation
• Cost management and quality improvement
• Promoting governments socio-economic goals
  including BEE

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Achievements

• 13 departments needs, location and procument
  strategies have been generated and approved by
  the clients departments.
• Developed a draft multimodal transport strategy.
  A study tour to South America by CTMM to
  benchmark the Bus Rapid Transit models within the
  RKTP was taken in January 2007.
• A database of the status of land and building
  management within the inner city was developed
  and has been finalised.

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Achievements

• Land identified for the 13 departments is to the
  value of 120 million mainly from propnet
  properties within the inner city.
• The RKTP branding has grown and became part of
  the citys landscape a tangible proof of the
  growing stature of the programme.
• Four projects initiated through RKTP are at
  implementation stage by our operations branch.

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Challenges

• Capacity problems both in the Department and
  external consultants to understand and implement
  Options Analysis processes have confounded the
  need for structural changes like the creation of
  fully staffed entity to drive the Programme.
• The viability of the RKTP affects other
  portfolios and therefore there is a growing need
  to involve other Ministries of Transport, Local
  and Provincial Government, Housing and Foreign
  affairs.
• In turn, the viability of the Programme is
  impacted upon, among others, by the complex and
  slow site acquisition processes as well as the
  ability of the Municipality to fast track
  municipal town planning processes. Also the
  availability of sites around the preferred nodal
  areas remains a key challenge.
• In line with the precinct development, it is
  advisable that another precinct be considered
  around Marabastad area.

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NPWP Policy
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Purpose and Objective

• Management and regulation of the property and
  construction sectors for transformation, growth
  and development
• Promotion of good governance in the management of
  public immovable assets - GIAMA.

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Highlights

• Draft Charters were submitted to the Minister of
  Trade and Industry for gazetting Construction
  Charter was gazetted in February 2007.
• Successful facilitation between the private
  sector and graduates of the departmental Military
  Skills Development Programme, for placement and
  academic scholarships.
• Successful hosting and implementation of the
  maiden annual National Construction Industry
  Development Week campaign August 2006.
• GIAMA passed by National Assembly 30 March 2007
• SADC Forum of Public Works Ministers
  successfully launched and hosted April 2006.

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Challenges

• With the gazetting of transformation Charters,
  the department needs to align its procurement
  processes to BEE contained in and stipulated by
  Charters.
• There is a need to establish a value-chain of
  bursary management processes and alignment to
  successfully absorb relevant bursary requests and
  graduates of the Military Skills Development
  Programme.
• The continued effective functioning of the SADC,
  DPW Forum Need to resuscitate Forum

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Expanded Public Works Programme
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Purpose and Objective

• The EPWP is to create work opportunities (coupled
  with training) for a minimum of one million
  people so that the unemployed and marginalized
  can gain productive employment and work
  experience.

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Highlights

• Shift from Co-ordination to strategic leadership
  New Structure approved by the Minister
• Alignment of EPWP Guidelines to DPW Maintenance
  and Capital Works Programmes
• Vukuphile Programme Additional allocation to
  roll-out Programme to meet overall target of 3
  000 learnerships
• More Departments/Public Bodies are now
  participating in the EPWP Created more work
  Opportunities
• Kamoso Awards launched in February In
  recognition of best performing Public Bodies
• Additional R4.2bn and R3.2bn to upscale Social
  Sector and access roads, respectively.

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Highlight

• Total wages paid amounted to at least R917m
• At least 6 290 person-years of training and 85
  700 person-years of work had been completed and
  created on EPWP projects
• 320 694 gross work opportunities (i.e. at least
  316 814 net work opportunities) were created for
  the period under review
• Approved Plans to initiate NYS.

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Challenges

• Improve the quality of data and reporting by
  public bodies
• Increase the labour intensity of the projects
• Improve the training and exit opportunities
• Mobilize more public bodies to implement the
  programme.

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Financial Management
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Expenditure Report DPW

• The department was allocated R5.63 billion
• R99 million remained unspent by year-end due to
  delays in site acquisitions of the properties
  identified for the RKTP projects, R68M of which
  has been rolled over with Treasury approval

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Revenue and Expenditure report of the Trading
Account

• R3.9 billion revenue generated through the agency
  work of the Trading Account
• Actual expenditure amounted to R4, 095 billion
  resulting in the deficit of R165 million the
  deficit is as a result of services rendered by
  3rd parties and paid for by the Trading Account,
  but were subsequently recovered from clients
  after year-end

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Budget Devolution Results

• For the first time, DPW Annual report, contained
  audited financial statements of the Trading
  Account
• The Trading Account obtained an unqualified audit
  report from the AG a positive sign of the
  departments stewardship on the funds of its
  clients.

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Significant Audit Issues

• Asset Management Furniture Equipment
• Property register
• Completeness
• Valuations
• Vesting
• Rental Debtor Management
• Classification of Maintenance Expenditure
• Failure to pay service providers within 30 days.

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Human Resources Management
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DPW Employment Profile

• Overall vacancy Rate throughout DPW including
  regions 17 (995)
• Among critical professional occupations including
  SMS 39 (220)
• Women (all) 45 (Men 55)
• African 69
• Whites (all) 14, (SMS-25 )
• Coloureds 15
• Indians 2
• Disability - 1 (29)
• Learnership programmes on various occupational
  classes.

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Strategic Corrective Measures

• Addressing audit concerns and other matters of
  emphasis through a comprehensive action plan
• Implementing turn around strategy refocusing the
  mandate and functions of the department
• Capacitating the organization for increasing
  contribution to ASGISA, JIPSA and service
  delivery
• Vacancy rates- reduced from gt900 in April to lt400
  currently (DDGs Operations and Corporate
  Services)
• Cuban experience- replenishing professional
  skills
• External bursaries launched and internship
  programme in place
• Built environment and industry related skills
  improvement drive
• NIMS operationalised and EPWP up scaled
• Transformation charters

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Strategic Corrective Measures

• Improving corporate governance
• Anti fraud and corruption measures-known cases
• Cooperation with Public Entities, Provinces and
  Public Representative bodies
• Devolution of budgets and Trading Account
• GIAMA implementation
• Audit and Risk Management committee

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Conclusion

• Audit opinion on DPW a concern, Trading Account a
  positive start
• EPWP exceeding targets
• Asset register- work in progress, end in sight
  (intersite and servcon)
• Alignment of RKTP and Operations
• HR Retention strategy
• Property Transformation Charter- gazetted.