EPWP Infrastructure sector overview presentation

to Infrastructure dialogues seminar18th November 201018 November 2010

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1.0 Introduction

• The objective of the EPWP infrastructure sector is to

promote the use of labour-intensive methods in the

construction and maintenance of Public

Infrastructure.

• Projects for the infrastructure sector are implemented

by all spheres of Government and State Owned

Enterprises. Enterprises.

• The infrastructure sector target for EPWP phase 2 is

2,374,000 work opportunities of the 4.5 million work

opportunities targeted for EPWP phase 2.

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2.0 Breakdown of targets for Infrastructure

sector in EPWP phase 2

Financial year

Municipal

sphere

Provincial

sphere

National Total

2009-10 176,820 121,412 1,768 300,000

2010-2011 201,574 138,410 2,016 342,000

2011-2012 239,335 178,071 2,593 440,0002011-2012 239,335 178,071 2,593 440,000

2012-2013 337,136 231,493 3,371 572,000

2012-2014 424,367 291,390 4,243 720,000

Total 1,399,233 960,776 13,991 2,374,000

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3.0 Funding mechanisms for projects in

the infrastructure sector

• Most of the funding for infrastructure projects will be from conditional grants at Municipal and Provincial level.

• Conditions have been attached to the Municipal Infrastructure Grant ( MIG) and Infrastructure Grant to Provinces (IGP) that require certain types of infrastructure to be implemently labour-intensively in line with the EPWP principles.

• Provincial Departments and Municipalities are also required to • Provincial Departments and Municipalities are also required to use their own infrastructure budgets not funded through IGP and MIG for EPWP.

• It is estimated that at least R 28 billion of the IGP and MIG will be used to fund EPWP projects in the infrastructure sector in EPWP phase 2.

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Infrastructure Sector: Provinces

National Treasury

Province

Equitable Share

Department of Public Works Support to

province

Provinces

report

indicators

Province

Provincial Infrastructure

Grant earmarked for the

EPWP through the

Division of Revenue Act

and Audited by the

Auditor General

Provincial

Infrastructure

Budget

Infrastructure Budget

from Equitable Share

Other Provincial

Expenditure

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Infrastructure Sector:

MunicipalitiesNational Treasury

Rates, Levies

and Taxes

Public Works

Support COGTA

Reporting

Municipality

Municipal Infrastructure

Grant earmarked for the

EPWP through the

Division of Revenue Act

and Audited by the

Auditor General

Municipal

Infrastructure

Budget

Infrastructure Budget

from Rates, levies and

Taxes

Other Provincial

Expenditure

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3.1 Incentive for infrastructure sector• EPWP incentive was introduced as part of Phase 2 to further enhance

the creation of EPWP Full Time Equivalent work opportunities by Public Bodies ( 1 Full Time Equivalent = 230 Person days ). This was after the realization that NDPW had limited authority in Phase 1 to make Public Bodies meet their targets.

• R4.1 billion has been allocated to DPW over the MTEF ( 9/10 to 11/12) to pay out the incentive to public bodies and this is expected to grow to at least R 5 billion in the 13/14 financial year.

• The incentive is paid to eligible public bodies that meet their thresholds and set targets.

• The incentive is an additional source of funds for Public bodies • The incentive is an additional source of funds for Public bodies implementing projects in the infrastructure sector.

• The fiscal incentive was applicable to infrastructure sector and non-state in the 09/10 financial year and has been rolled out to the social and environmental sectors from the 10/11 financial year.

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3.2 EPWP infrastructure sector incentive progress for 09/10financial year after the 3rd quarter of the 09/10 financial year

( paid in 4th quarter 09/10)

• 5 out of the 16 Provincial Departments have been paid incentive payments totaling R

53,633 million considering 3rd quarter payment reports. Total payment to Provincial

departments considering payments in previous quarters is R116.6 million out of an

allocation of R 151.4 million (77% of Provincial allocation).

• 47 of the 68 eligible municipalities have been paid their incentive payment of R 78.6 • 47 of the 68 eligible municipalities have been paid their incentive payment of R 78.6

million considering the 3rd quarter report of the 09/10 financial year. Total incentive

payment to municipalities after the 3rd quarter is R 114.17 million out an allocation of R

201.7 million ( 57% of Municipal allocation).

• Total incentive payment to Provincial Departments and Municipalities made for the

09/10 financial year totals R 230.8 million, out of the total allocation of

• R 352.1 million, representing expenditure of 66% of the allocation for the 09/10

financial year. 8

Province Incentive

allocation for the 09-10

financial year

(R’000)

Incentive payment after

3rd quarter 09-10

(R’000)

Incentive

payment for 3rd

quarter 09-10

( R’000)

Eastern Cape 29,992 17,457 15,381

Free State 23,008 0 0

Gauteng 500 0 0

Performance on the EPWP incentive grant by Provinces after 3rd Quarter 09/10 financial year ( paid in 4th quarter 09/10)

Gauteng 500 0 0

KwaZulu-Natal 84,180 84,854 35,100

Limpopo 500 0 0

Mpumalanga 5,047 0 0

Northern Cape 500 0 0

North West 7,192 0 0

Western Cape 500 14,269 3,152

Total 151,419 116,581 53,633

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Province Incentive

allocation for

the 09-10 financial year

(R’000)

Incentive

payment after 3rd quarter 09-10

(R’000)

Incentive

payment for 3rd

quarter 09-10

(R’000)

Eastern Cape 53,559 7,818 3,905

Free State 9,073 1,956 1,047

Performance on the EPWP incentive grant by municipalities after 3rd Quarter 09/10 financial year ( Paid in the 4th quarter of the 09/10 financial year).

Gauteng 34,881 59,875 51,038

KwaZulu-Natal 39,974 26,102 15,038

Limpopo 18,328 6,140 2,626

Mpumalanga 13,454 2,453 1,468

Northern Cape 15,496 5,769 960

North West 9,694 2,787 1,493

Western Cape 7,289 1,271 708

Total 201,748 114,170 78,64410

3.3 Performance on the EPWP infrastructure Incentive after the 4th quarter of the 09/10 financial year ( Paid in the 1st quarter of the 10/11 financial year)

• 8 out of the 16 Provincial Departments will be paid incentive payments totaling R

54.551 million considering EPWP 4th quarter report for the 09/10 financial year . Total

payment to Provincial departments considering payments in previous quarters is

R171.132 million out of the full incentive allocation of R 201.892 million for 09/10

reporting ( 85% of the full allocation). This payment includes 4th quarter payment paid in

the 10/11 financial year.

• 36 out of the 68 of the eligible municipalities will receive a total incentive payment of

R93.463 million considering the 4th quarter report for the 09/10 financial year.

• Considering the 4th quarter report ( 3rd quarter for municipalities) 56 of the eligible 68

municipalities will have accessed R 207.61 million out of the available R 302.383 million

available in the 09/10 municipal financial year ( 69% of the allocation for the municipal

financial year). This is comparable to the 75% of allocation expected to be paid after 3

of the 4 quarters in the municipal financial year. 11

• The EPWP incentive grant is beginning to have the

intended performance of encouraging Public bodies to

exceed their Full Time Equivalent ( FTE) work opportunity

targets. Provincial Departments in KZN, GP, WC and EC

have exceeded their targets and have paid extra incentive

amounts.

• 11 of the 68 eligible municipalities in GP,KZN, LP, NW

and WC have already exceeded their FTE targets by the

4th quarter of reporting ( 3rd quarter of municipalities) for 4th quarter of reporting ( 3rd quarter of municipalities) for

09/10.

• The number of Municipalities that will access the incentive

will increase to 126 municipalities in the 10/11 financial

year from the 68 municipalities in the 09/10 financial year.

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3.4 Progress of the Infrastructure sector incentivefor the 10/11 financial year

• For Provincial Departments, the incentive has been paid to 8 of the eligible departments in 5 provinces. R85.943 million will be paid out of the R330.67 million available for the 10/11 financial year considering 1st quarter reporting. This represents 26% of the Provincial allocation.

• For Municipalities, 56 of the eligible Municipalities have been paid the incentive in all the Provinces. R 200.259 million of the paid the incentive in all the Provinces. R 200.259 million of the R 622.996 million will be paid considering 1st quarter reporting. This represents 32% of the Municipal allocation for the 10/11 financial year.

• Provincial Departments in Gauteng, Mpumalanga, Western Cape, Northern Cape and North West reported in the 1st quarter 10/11 but did not exceed the threshold for incentive payment.

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Performance on the EPWP infrastructure incentive by Provinces after the 1st Quarter of the 10/11 financial year reporting

Province Infrastructure

Incentive allocation

for the 10/11 National

financial year (R’000)

1st Quarter

incentive

payment for

the 10-11

financial year

(R’000)

Total

incentive

disbursed

In the 10/11

financial

year (R’000)

Percentage

of the 10/11

incentive

disbursed

Eastern Cape 60,354 5,640 19,011 31

Free State 13,767 817 817 6Free State 13,767 817 817 6

Gauteng 38,821 0 2,498 6

Kwa-Zulu Natal 169,470 28,896 59,300 35

Limpopo 2,903 0 2,617 90

Mpumalanga 18,074 0 0 0

Northern Cape 1,167 0 0 0

North West 2,897 0 0 0

Western Cape 23,218 0 1,700 7

Total 330,671 35,352 85,943 26

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4.4 Performance on the EPWP infrastructure incentive by Municipalities after 1st quarter 10-11 reporting

Province Infrastructure

Incentive allocation

for the 10/11

National financial

year (R’000)

1st Quarter

incentive

payment for

the 10-11

financial

year

(R’000)

Total

incentive

disbursed

In the

10/11

financial

year

(R’000)

Percentage

of the

10/11

incentive

disbursed

Eastern Cape 97,806 6,844 16,182 17

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Eastern Cape 97,806 6,844 16,182 17

Free State 34,400 1,402 1,539 4

Gauteng 165,048 69,984 110,476 67

Kwa-Zulu Natal 123,613 18,056 42,526 34

Limpopo 55,355 4,955 16,195 29

Mpumalanga 37,288 568 602 2

Northern Cape 50,399 1,889 1,931 4

North West 36,049 1,887 9,400 26

Western Cape 26,038 823 1,408 5

Total 622,996 106,119 200,259 32

4. EPWP guidelines

• In order to help with the implementation of projects labour-intensively, Guidelines for implementation of projects in the projects in the infrastructure sector have been developed.

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Key requirements of the EPWP GuidelinesEPWP conditions have been included in the Division of Revenue Act (DORA) for the conditional provincial and municipal infrastructure grants (IGP and MIG):

� Certain types of infrastructure projects must be done labour-intensively projects, in accordance with DPW guidelines ( low volume roads, sidewalks, stormwater drains and projects with pre-dominantly trenching of less than 1.5m)

� DPW guidelines cover the identification, design, and production of tender documentation for labour-intensive projects

� Guidelines require provinces and municipalities to apply eligibility requirements for appointment of contractors and engineers on labour intensive projects (they must be qualified in the use of labour intensive methods)

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5.0 Programme focus areas of the infrastructure

sector

Five programme focus areas are focused

on in the infrastructure sector as follows:

• Municipal Technical support

• Provincial Roads programme

• Vuk’uphile Contractor Learnership programme

• National Youth Service programme• National Youth Service programme

• Large Projects programme

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5.2 Provincial Roads programme

• In the Provincial roads programme, assistance is provided to Provincial Roads Departments to help them implement projects and programmes labour-intensively. The support provided to Provincial roads departments is done in partnership with the National Department of Transport.

• The focus in the Provincial roads programme is on rural access roads.

• Construction and Maintenance programmes / projects are also supported to create EPWP work opportunities.

• A key focus of the Provincial roads programme is the replication of best practice programmes like the Zibambele maintenance programme that practice programmes like the Zibambele maintenance programme that is being implemented in KwaZulu-Natal in which households are given portions of a rural access road to maintain.

• Road designs and specifications amenable to labour-intensive methods of construction are focused on as well.

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5.1 Municipal Technical support programme

Support is provided to Municipalities to implement projects in the

infrastructure sector through this programme.

Key responsibilities of the technical support team are as follows:

• Identify suitable projects

• Set work opportunity targets for projects

• Assist with designs and contract documentation

• Extract project training needs

• Assist with procurement process• Assist with procurement process

• Create enabling conditions: wage rates, contractors trained etc

• Contract management

• Reporting

• Project evaluation

• EPWP Mainstreaming: Municipal policies and procedures

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5.3 Vuk’uphile Contractor learnership

programme• The Vuk’uphile learnership aims at training contractors and

supervisors in labour-intensive methods of construction. • A partnership has been formed with Construction Education

Training Authority ( CETA) and various public bodies to implement the Vuk’uphile learnership.

• Mentors and programme management support are provided by NDPW, CETA provides quality assurance of training done and the different Public bodies provide training projects.the different Public bodies provide training projects.

• 1,500 learners have recruited on the Vuk’uphile programme since the inception of the programme. Over 50,000 work opportunities and projects worth R 1.5 Billion have been implemented on the programme.

• Applications for a total of 1,500 learners have been made to DOL and CETA.

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5.4 Large Projects Programme

• The Large projects programme aims at providing support to Public

bodies ( Provincial Departments and Municipalities) to assist in the

implementation of projects with a value of greater than R 30 million

labour-intensively.

• Two approaches are used in the Large Projects programme as follows:

- Support is given to Public bodies to implement projects greater than R

30m labour-intensively.

- Support is given to Public bodies to ‘bundle’ projects together to a value

of over R30m.of over R30m.

• Support given to Public bodies includes; assistance with designs, use

of labour-intensive methods during construction, and reporting.

• Partnership of large contractors and emerging contractors can be used

during the large projects programme and can be used as an exit

strategy of the Vuk’uphile programme.

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5.5 National Youth Service programme

• The National Youth Service programme aims at recruiting youth ( 18-35 yrs) and training them on artisan trades in the built environment.

• The programme consists of one year of training, consisting of 6 months theoretical training and 6 months of practical training.

• The programme is currently being implemented by the National and Provincial Departments of Public Works on their capital and maintenance projects.maintenance projects.

• The department is implementing the project in partnership with the National Youth Development Agency.

• Over 17,000 youth have been recruited and trained on the programme since inception in April 2007.

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6.0 Conclusion

The implementation of the EPWP is contributing

towards the construction and maintenance of

infrastructure while promoting the creation of work

opportunities through the use of labour-intensive

methods.methods.

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EPWP Infrastructure sector contact

details

National Department of Public Works

Tel: 012 337 2651/2716

Fax: 012 324 6349Fax: 012 324 6349

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