Hospital Revitalisation Grant: 2010/11 Financial Year

Presentation to the Select

Committee on Finance

October 2010

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Background• The Hospital Revitilisation Grant is utilised to replace and revitalise current

hospitals in the Province. Prioritization of the projects is done as per the Departmental Service Transformation Plan.

• The following projects have been prioritised in the allocation:

– Mental Health Hospital;

– Upington Hospital;

– De Aar Hospital;

– Prof ZK Matthews Hospital;

– Kimberley Hospital;

– Kuruman Hospital

– Postmasburg Hospital

• The Department of Roads and Public Works serves as the implementing agent on all infrastructure development projects;

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Financial Information

Department of Health

Project NameBudget

Allocated1st Qrt

Spending%

Spending2nd Qrt

Spending

Total Spending at 30 Sept

% Spending Varience

Projected Spending - 31 March

Project Over/Under Expenditure

R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000Mental Health Hospital 69,800 3,558 5% 103 3,661 5% 66,139 66,139 Upington Hospital 220,000 54,716 25% 59,694 114,410 52% 105,590 161,590 -56,000 De Aar Hospital 103,068 8 0% 157 165 0.2% 102,903 29,835 73,068 Prof ZK Matthews Hospital 1,000 2,066 207% 510 2,576 258% -1,576 500 -2,076 Kimberley Hospital 200 - 0% - 0% 200 200 Kuruman Hospital 150 - 0% - 0% 150 150 Postmasburg Hospital 20,000 - 0% 5 5 0% 19,995 4950 15,045 Grant Management 6,000 322 5% 1,010 1,332 22% 4,668 4,668 -

420,218 60,348 14% 60,469 120,817 29% 298,069 201,543 96,526

2010/11 FINANCIAL YEAR

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Mental Health HospitalPurpose Provision of Mental Health Services

Commencement Date 2006

Projected Completion Date 2008

Initial Project Costs R290 million

Expenditure to date R360 million

Cause of delay Slow delivery by the contractor on site

Current Status Matter with the Court of Law

Remedial measures Appointment of CIDB graded contractors

Additional costs to complete project

R380 million

Total estimated cost R740 million

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Upington Hospital

Purpose Provision of Level Two Services

Commencement Date 2009

Completion Date 2012

Initial Project Costs R836 million (construction, organizational development, health technology & quality assurance, excluding escalations)

Expenditure to date R278 million

Cause of delay None

Current Status 50%

Total project costs R836 million

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De Aar Hospital

Purpose Provision of Level Two Services

Commencement Date 2010 (Phase 1)

Completion Date 2012

Initial Project Costs R400 million (construction, organizational development, health technology & quality assurance, excluding escalations)

Expenditure to date R25 million (earth works)

Causes of Delay Change of services package

Current Status Site establishment for staff accommodation, reservoir & fencing

Projected project costs R400 million

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Prof ZK Matthews

Purpose Provision of Level One Services

Commencement Date 2006

Completion Date 2008 (additional work commenced in 2009)

Initial Project Costs R80 million

Expenditure to date

Causes of Delay None

Current Status 98% additional work complete

Projected project costs

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Kimberley Hospital

Purpose Provision of Tertiary Services

Commencement Date 2013

Completion Date 2018

Initial Project Costs R1,600 billion

Expenditure to date None

Causes of Delay None

Current Status Development of business case

Projected project costs R1,600

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Kuruman Hospital

Purpose Provision of Level Two Services

Commencement Date 2013

Completion Date 2016

Initial Project Costs R900 million

Expenditure to date None

Causes of Delay None

Current Status Development of business case

Projected project costs R900 million

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Postmasburg Hospital

Purpose Provision of Level One Services

Commencement Date 2011

Completion Date 2013

Initial Project Costs R200 million

Expenditure to date R0

Causes of Delay Approval of the business case by the NDoH

Current Status Development of Project Brief

Projected project costs R200 million

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Performance & Monitoring (DoH & Public Works)

• Each project has the initial Project Implementation Plan to outline the activities and time frames;

• The project deliverables are measured on quarterly basis;

• The Project Implementation Plan is developed on annual basis but with quarterly targets for reviews;

• Monthly financial reports are submitted to NDoH;

• A representative of PDoH participate in the site meetings;

• Monthly progress meetings between the implementing agent and the client take place;

• The National Treasury Infrastructure Reporting Model and In Year Monitoring report are used to monitor expenditure;

• Reports are also presented to the Project Management Forums.

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Co-ordination of the HRP Project

• Prioritisation was done through the Service Transformation Plan

• The following table presents the HRP projects implementation plan up to 2016/17 financial year:

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Co-ordination of HRP Project (cont)HOSPITAL REVITALIZATION PROGRAMME 2010 UP TO 2016 BUDGET BID

Project 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017

Barkly West Hospital R 9,000 R 1,000 R 0 R 0 R 0 R 0 R 0 R 0

Mental Health Facility R 155,967 R 69,800 R 10,000 R 0 R 0 R 0 R 0 R 0

Upington Hospital R 140,000 R 220,000 R 240,000 R 197,000 R 20,000 R 0 R 0 R 0

De Aar Hospital R 18,307 R 103,068 R 130,000 R 120,000 R 10,000 R 0 R 0 R 0

Postmasburg Hospital R 6,000 R 20,000 R 20,000 R 107,572 R 65,436 R 0 R 0 R 0

Kuruman Hospital R 0 R 150 R 2,500 R 0 R 140,000 R 200,000 R 200,000 R 250,000

Kimberley Hospital R 6,000 R 200 R 2,392 R 1,482 R 170,000 R 250,000 R 250,000 R 250,000

Hartswater Hospital R 0 R 0 R 500 R 200 R 49,243 R 30,379 R 15,742 R 15,742

Kakamas Hospital R 0 R 0 R 0 R 0 R 500 R 1,500 R 47,000 R 28,124

Springbok Hospital R 0 R 0 R 0 R 0 R 500 R 1,500 R 0 R 0

Grand Management R 5,000 R 6,000 R 5,500 R 5,500 R 6,000 R 6,000 R 6,000 R 6,000

Total Allocation R 340,274 R 420,218 R 410,892 R 431,754 R 461,679 R 489,379 R 518,742 R 549,866

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Performance of Contractors and Consultants

• Contractors are unable to meet the monthly deliverables as per their set

programmes due to insufficient capacity in their companies;

• Their respective under- performance subsequently leads to underspending on the

project;

• Poor coordination between the Contractors/Consultants and implementing agent

leads to further delays on the project.

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Capacity to implement the Hospital Revitilisation Programme

• The Dept of Public Works is responsible for the implementation of the

programme;

• The Department of Health is only responsible for planning(development of

business case, project brief and supervision of designs), reporting and

monitoring of projects;

• Due to limited capacity at Public Works, there is no proper monitoring on projects,

hence mental health hospital.

ConclusionConclusion• Projects are planned timeously, with the necessary inputs from all Projects are planned timeously, with the necessary inputs from all

stakeholders;stakeholders;

• Challenges are often experiences, with the service providers either not Challenges are often experiences, with the service providers either not meeting their deadlines, or not being able to complete the project;meeting their deadlines, or not being able to complete the project;

• Remedial measures include:Remedial measures include: Termination at the earliest confirmed inability to complete the contract;Termination at the earliest confirmed inability to complete the contract;

Regular monitoring meetings are held, in order to assess progress;Regular monitoring meetings are held, in order to assess progress;

Regular report-backs to management and recommendations on how to prepare for Regular report-backs to management and recommendations on how to prepare for the take-over of the project, once completed;the take-over of the project, once completed;

Ensuring that there is value-for-money is attained.Ensuring that there is value-for-money is attained.

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