PRESENTATION TO THE SELECT COMMITTEE ON PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENTECONOMIC AND BUSINESS DEVELOPMENT

ONON

2014-2019 STRATEGIC PLAN AND 2014/15 ANNUAL 2014-2019 STRATEGIC PLAN AND 2014/15 ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF PERFORMANCE PLAN OF THE DEPARTMENT OF

PUBLIC WORKSPUBLIC WORKS

Director-GeneralDepartment of Public Works

15 July 2014

No Item Slide

1. Regulatory requirements for Strategic Plans and Annual Performance Plans 3-4

2. Part A: Strategic overview, overall performance and outlook

•Legislative and other mandates

•Introduction and strategic context

•Planned policy initiatives

•Performance environment

•Organisational environment

5-17

3. Part B: Strategic objectives and programme plans

•PROGRAMME 1: ADMINISTRATION

•PROGRAMME 2: IMMOVABLE ASSET INVESTMENT MANAGEMENT

•PROGRAMME 3: EXPANDED PUBLIC WORKS PROGRAMME (EPWP)

•PROGRAMME 4: CONSTRUCTION AND PROPERTY POLICY REGULATION

•PROGRAMME 5: AUXILIARY AND ASSOCIATED SERVICES

•PUBLIC ENTITIES

18-22

4. Part C: Long Term Infrastructure Plan

•DPW infrastructure budget

•PMTE infrastructure budget - planned maintenance

23-25

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1 Regulatory requirements for Strategic Plans and Annual Performance Plans

This section provides context to the regulatory requirements in accordance with the National Treasury Framework for Strategic Plans and Annual Performance Plans

• The Framework for Strategic Plans and Annual Performance Plans, issued in September 2010, provides a new format and revised timeframes for the compilation of the Strategic Plan and Annual Performance Plan.

• National Treasury issued an Instruction Note (No. 33) in July 2011 on the full compliance to the mandatory requirements of the Framework for Strategic Plans and Annual Performance Plans.

• A Strategic Plan covers a period of at least five years ideally from the first planning cycle following an election linked to the identified outcomes of the Presidency.

• A Strategic Plan may be changed during the five year period it covers. However, such changes should be limited to revisions related to significant policy shifts or changes in the service delivery environment

• The Annual Performance Plan sets out what the institution intends doing in the upcoming financial year and during the MTEF to implement its Strategic Plan.

• The format of the APP (including the tables) is prescribed by the National Treasury Framework for Strategic Plans and Annual Performance Plans and aims is to link the plans, budget and performance of the Department.

• Annual targets are broken up into quarterly targets where possible to ensure effective monitoring of performance on a quarterly basis

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2 PART A: Strategic overview, overall performance and outlook

This section specifies the vision, mission, values and the goals that the Department aims to achieve over a five-year period.(SP Pages 15 - 58 and APP Pages 16-50)

Constitutional mandate:The Constitutional mandate is provided for in Schedule 4, Part A, of the Constitution of the Republic of South Africa: Functional Areas of Concurrent National and Provincial Legislative Competence.

Legislative mandateThe legislative mandate is primarily governed by the Government Immovable Asset Management Act, 2007.

The Department regulates the construction industry and built environment through the Construction Industry Development Board Act, 2000 (Act No. 38 of 2000) and the six Professional Council Acts that regulate the six Built Environment Professions (BEPs), and through the Council for the Built Environment Act (Act No. 43 of 2000)

Policy mandates•DPW White Paper: Public Works, Towards the 21st Century, 1997•DPW White Paper: Creating an Enabling Environment for Reconstruction, Growth and

Development in the Construction Industry, 1999•Construction Sector Transformation Charter, 2006•Property Sector Transformation Charter, 2007•DPW Broad-based Black Economic Empowerment Strategy, 2006•Property Management Strategy on BBBEE, Job Creation and Poverty Alleviation, 2007•Green Building Framework, 2011 6

Vision

A service oriented Public Works Department delivering value and contributing to the national agenda for social and economic development. Mission•Provide quality accommodation and related services to our clients,

•efficiently and effectively manage the immovable assets in our custodianship,

•actively contribute to the national goals of job creation and poverty alleviation through the Expanded Public Works Programme,

•provide expert built-environment advice to our stakeholders,

•provide strategic leadership to the South African Construction and Property Industries.

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The following Government priorities form the basis of the Strategic Plan informed by the ruling party manifesto and National Development Plan (NDP) translated into the Medium Term Strategic Framework (MTSF):

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Key policy priorities 2014/15 Budget

Outcome 4 (Chapter 3 of the NDP) - Decent employment through inclusive economic growth – The EPWP will continue to be an effective cushion for the poor and unemployed. Phase 3 of the EPWP which covers the period 2014/15 to 2018/19 aims to create 6 million work opportunities. (Detailed budget on slide 9)

R1.951 bil

Outcome 6 (Chapter 4 of the NDP) – An efficient, competitive and responsive infrastructure network – The Department will continue prioritising infrastructure requirements at the Land Ports of Entry (LPOE) to facilitate cross border trade and strengthen socio-economic development.

National Infrastructure Maintenance Strategy (NIMS) is a coordinated programme of action being led by the Department and supported by the Construction Industry Development Board (cidb) to deal with infrastructure maintenance for different sectors.

R233 mil

R3 mil

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2013/14 (R’000)

2014/15 (R’000)

2015/16 (R’000)

2016/17 (R’000)

2017/18 (R’000)

EPWP Integrated grant to provinces - Infrastructure and environment and Culture

356 915 348 947 356 574 411 798 432 388

EPWP Social Sector Incentive grant 257 564 257 972 267 529 374 662 393 395

EPWP Integrated grant to municipalities - Infrastructure, Environment & Culture and Social Sector

611 274 594 575 618 966 705 997 741 297

Non-profit institutions 438 281 477 481 484 816 600 257 630 270

Total 1 664 034 1 678 975 1 727 885 2 092 714 2 197 350

Detailed budget linked to Outcome 4

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Key policy priorities 2014/15Budget

Outcome 7 (Chapter 6 of the NDP) - Comprehensive rural development – The Department will be collaborating with sector departments and rural municipalities to coordinate infrastructure planning and ensure maximum impact in rural areas.

R2 mil

Outcome 12 (Chapter 13 of the NDP) - An efficient and effective development-oriented Public Service – Through strategic planning instruments (U-AMP and C-AMP) the Department provides accommodation to user departments that promotes integration, accessibility, sustainability, environmental sensitivity, economic growth and social empowerment.

R510 mil

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Key policy priorities 2014/15Budget

Outcome 1 (Chapter 9 of the NDP) - Quality Basic Education – The Department in collaboration with DBE will be replacing inappropriate structures at 36 schools and making aesthetic improvements to 915 schools.

-

Outcome 5 (Chapter 9 of the NDP) – Skilled and capable workforce to support an inclusive growth path. The Department has a number of development programmes such as the young professionals programme, internship programme, learnership programme and artisan programme providing valuable on the job experience.

R3 mil

CETA funding - R50 mil

Outcome 8 (Chapter 8 of the NDP) – Sustainable human settlements and improved quality of household life. The Department will release well located land and properties for development purposed to the Department of Human Settlements.

-

In addition the following priorities has also been considered as significant to the Strategic Plan:

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Key policy priorities 2014/15Budget

Outcome 10 (Chapter 5 of the NDP) – Protect and enhance our environment assets and natural resources. The Department will continue implementing the Green Building Framework in line with Government’s transition to a low carbon economy.

-

Outcome 14 (Chapter 15 of the NDP) – Nation building and social cohesion – The Department in partnership with the City of Tshwane will create a more functional and aesthetically pleasing inner city.

R107 mil

Strategic goals Goal statement

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1. An efficient, competitive and responsive accommodation infrastructure network

Manage the life cycle of immovable assets under the custodianship of the Department effectively and efficiently.

2. Strategic leadership and regulation of the construction and property sectors to promote economic empowerment and skills development

Provide leadership to the South African construction and property sectors whilst ensuring transformation and regulation thereof through the development of legislation and best practice guidelines.

3. Good corporate governance to support effective and efficient service delivery

Provide strategic leadership in ensuring effective governance, sound resource management and integrity of the operations of the Department.

4. Decent employment through inclusive economic growth

Lead and coordinate the creation of additional employment opportunities through labour intensive delivery methods and skills programmes for the participation of the unemployed in delivering needed services and creation of assets.

5. Contribute towards comprehensive rural development

Improved land administration and spatial planning for integrated development in urban and rural areas.

The Department will review and/or develop the following policies and legislation:

•Review of the Department’s White Papers: “Public Works towards the 21st century, 1997; and Creating an Enabling Environment for Reconstruction, Growth and Development in the Construction Industry, 1999” towards the development of an enabling legislation

•establish Agrément South Africa (ASA) as a public entity mandated to assess non-standardised and/or unconventional construction products, materials and systems fit for purpose,

•develop a draft Built Environment Professions (BEP) Policy towards possible amendments to the legislative framework governing the BEPs,

•promulgation of a new Expropriation Act (repealing the Expropriation Act 63 of 1975) to ensure consistency with the Constitution and uniformity in the expropriation of property by all expropriating authorities,

•develop legislation to establish the Independent Development Trust (IDT) as a public entity to support the State in the delivery of social infrastructure,

•develop a Green Building Policy and Strategy for the Department to give effect to Government’s green economy initiatives.

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Turnaround Strategy:

•The Department launched a Turnaround Strategy in 2012 to address multiple issues of underperformance that ultimately resulted in progressively negative audit reports by the Auditor-General

•For reasons of impact and strategic importance, 10 projects have been conceptualised from the 23 key stabilisation projects, as essential drivers of Phase 2 for the rebuilding the Department. These projects are:

1. The development of a Service Delivery Framework

2. Operationalisation of Property Management Trading Entity and establishment of the Government Component

3. Developing a complete and credible register of State immovable assets

4. Conducting a comprehensive audit of leased properties and the establishment of a leasing management framework

5. Restructuring of Supply Chain Management (SCM) to better meet business requirements

6. Improving internal efficiencies to meet the service delivery requirements of Prestige clients

7. Developing an Information Technology strategy, architecture and platform as a key enabler

8. Improving infrastructure delivery through the application of best practice in terms of processes, structures and systems (IDMS)

9. Actively combating fraud and corruption, both within the Department and in the construction and property sectors, holding transgressors accountable for their actions

10. Development and implementation of an effective change management strategy that enables a performance driven culture

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Turnaround Strategy Budget:

Programme 

Project description 

2014 / 15 2015 / 16 2016/17

 R`000 R`000 R`000Programme 1: Administration 

  

Business Model Project 1 000 - - Fraud Investigations 30 690 6 138 6 463 Internal Audit Support 10 800 5 040 5 307 Core Turn Around Support Team 7 990 8 805 9 311 Clean Audit 64 291 15 000 10 000 Supply Chain Management Review   7 900 12 636 Irregular Expenditure Project 36 481 9 121 9 604        Total: Programme 1 143 262 43 199 44 010

         Programme 2: Immovable Asset Management  

Lease review 39 000 4 100  Immovable Asset Register 24 771 27 070 28 505

Total: Programme 2 63 771 31 170 28 505   Overall Total 207 033 74 369 72 515

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• The Department has reviewed the organisational structure which will be approved and implemented over the MTEF.

• The Department has an approved establishment of 6 818 posts of which 5 560 are filled.

• An integrated Human Resource Plan has been developed to respond to Government’s priorities and to align the Department’s workforce with the mission, vision, strategic goals and financial resources of the Department.

• The Department is experiencing challenges in producing the wide range of skills required in the construction and engineering fields, in order to meet longer-term infrastructure delivery objectives.

• The Department will therefore continue to implement its strategy to bring in skilled graduate professionals through development programmes.

• Targeted human resource interventions in place include the recruitment of technical and professional staff to overcome short term challenges

• For the 2014/15 financial year the Department has an allocation R1.660 billion for compensation of employees to deliver on its key priorities.

• Additional funding (estimated R3 bil shortfall) will be required in implementing the new structure over the MTEF.

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3 PART B: Strategic objectives and programme budget

This section specifies strategic objectives and their resource implications that need to be managed over the MTEF(SP Pages 59 - 97 and APP Pages 51 - 125)

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Programme Strategic Objective(s) Budget

Administration • Promote sound corporate governance practices within DPW.

• Ensure effective and sound financial resource and corporate resource management.

The Bulk of the Programme budget goes towards Office Accommodation and Corporate Services functions. The budget allocation for the Programme is R1.175 billion for 2014/15.

Immovable Asset Management

• Effective life cycle asset management of immovable assets under the custodianship of the Department.

• Improved land administration and spatial planning for integrated development in urban and rural areas

The spending focus for the Programme includes the infrastructure, immovable asset register and the lease review as part of the Turnaround Strategy. The budget allocation for the Programme is R2.861 billion for 2014/15.

Expanded Public Works Programme

• Co-ordinate, monitor and evaluate the creation of work opportunities and income support to the poor and unemployed, so as to contribute to national goal of job creation poverty alleviation

The bulk of the programme’s budget goes towards the payment of performance based incentives to eligible Provinces, Municipalities and Non-Profit Organisations. The budget allocation for the Programme is R1.951 billion for 2014/15.

Property and Construction Industry Policy Regulations

• Promote growth and transformation of and competition in the construction and property industries.

• Promote uniformity and best practice in construction and immovable asset management in the public sector.

The spending focus for the Programme will be on tabling the Expropriation Bill and the Agrément South Africa Bill in Parliament . The budget allocation for the Programme is R41 million for 2014/15.

Auxiliary and Associated Services

• Render auxiliary services for state functions and meet financial commitments on compensation for losses, preservations of national memorials, training and skills development

The bulk of spending in this programme goes towards goods and services and transfers and subsidies for the State functions and Assistance to Organisations for Preservation of National Memorials. The budget allocation for the Programme is R92 million for 2014/15.

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Programmes 2013/14 2014/15 2015/16 2016/17

Previous year

Current year MTEF MTEF

Administration 1 158 162 1 175 346 1 133 293 1 191 463

Immovable Asset Management 2 981 770 2 861 387 3 308 139 3 450 040

Expanded Public Works Programme 1 947 969 1 951 295 2 006 840 2 395 237

Property and Construction Industry Policy Regulations 36 682 41 473 43 381 45 872

Auxiliary and Associated Services 50 678 91 819 53 689 56 593

Total for Programmes 6 175 261 6 121 320 6 545 342 7 139 205

To deliver on the Department’s strategic goals and objectives, a budget of R6.121 billion is allocated across various Programmes:

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Economic classifications 2013/14 2014/15 2015/16 2016/17Previous

yearCurrent year MTEF MTEF

Current payments 2 853 020 2 962 023 2 956 367 3 139 563 Compensation of employees 1 473 467 1 659 885 1 753 457 1 870 541 Goods and services 1 379 553 1 302 138 1 202 910 1 269 022

Transfers and subsidies 2 543 889 2 563 353 2 654 170 3 017 922 Provinces and municipalities 1 225 778 1 201 520 1 243 096 1 492 486 Departmental agencies and accounts 803 694 802 761 843 363 890 769 Foreign governments and international organisations 20 510 21 741 22 741 23 946 Public corporations and private enterprises 50 000 50 000 50 000 - Non-profit institutions 438 281 477 481 484 816 600 257 Households 5 626 9 850 10 154 10 464

Payments for capital assets 778 352 595 944 934 805 981 720 Buildings and other fixed structures 676 206 510 369 844 005 885 153 Machinery and equipment 91 162 79 232 84 165 89 580 Software and other intangible assets 10 984 6 343 6 635 6 987

Total economic classification 6 175 261 6 121 320 6 545 342 7 139 205

There are four Public Entities reporting to the Department of Public Works. The Entities serve as an extension of and assist the Department in delivering on its mandate.

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Name of Public Entity 2014/15

Budget

Construction Industry Development Board (cidb): The cidb supports the Department by providing strategic direction and developing effective partnerships for growth, reform and improvement of the construction sector;

R77 mil

Council for Built Environment (CBE): The CBE implements projects and programmes that address the built environment issues and add value to the built environment professions, Government and the general public;

R42 mil

Independent Development Trust (IDT): The IDT supports the Department in contributing to Government’s priorities of job creation, sector skills development, green buildings initiatives and eradication of social infrastructure backlogs.

R50 mil

Agrément SA (ASA): ASA supports the Department by technically assessing innovative construction technologies and promoting their use to stimulate the creation of sustainable short and long-term work opportunities;

R11 mil

Property Management Trading Entity (PMTE): Optimal utilisation of State property to meet the service delivery objectives of Government

R673 mil

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4 PART C: Long term infrastructure plan

This section considers the long term infrastructure plans

(SP Pages 98 - 107 and APP Pages 126 - 135)

SUB-PROGRAMME: INFRASTRUCTURE (DPW CAPITAL BUDGET)The acquisition of infrastructure for DPW’s own accommodation needs as well as for the prestige portfolio, land ports of

entry, dolomite risk management, inner city regeneration programmes and accessibility programmes in terms of the disability policy is funded from the Infrastructure (Public Works) allocation.

1. New, replacement, upgrade and additions

No of projects

Infrastructure Programme Type

Outcome Main appropriation

Adjusted Appropriation

Revised Estimate

Medium Term Estimates

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000

95 Departmental 261,201 285,294 228,106 227,000 - 227,000 86,000 158,000 204,066

119 Accessibility 18,978 11,386 4,992 25,000 - 25,000 11,369 9,005 9,482

37Dolomite Risk Management 11,861 32,167 32,355 54,000 - 54,000 17,000 141,000 148,473

110Land Ports of Entry 372,000 274,626 233,892 202,206 - 202,206 233,000 285,000 277,239

17Inner City Regeneration 145,389 42,059 94,838 55,000 - 55,000 107,000 101,000 106,353

60 Prestige 446,445 365,876 118,820 113,000 - 113,000 56,000 150,000 139,540

Total 1 255 874 1 011 408 713 003 676 206 - 676 206 510 369 510 369 844 005

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2. Maintenance and repairs (PMTE - Current)

The maintenance and repair of existing state accommodation as funded by the PMTE through accommodation charges received from user departments

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No of projects

Infrastructure Programme Type

Outcome Main appropriation

Adjusted Appropriation

Revised Estimate

Medium Term Estimates

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000

2088Planned maintenance (current)

1 710 400 1 398 391 1 630 271 1 492 480 - 1 492 480 1 600 127 1 589 879 2 007 856

3. Rehabilitation, renovations and refurbishment (PMTE - Capital)

Major renovations and refurbishment of state accommodation funded by PMTE through accommodation charges received from user departments and augmentation received from National Treasury

No of projects

Infrastructure Programme Type

Outcome Main appropriation

Adjusted Appropriation

Revised Estimate

Medium Term Estimates

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000 R`000

1241Planned maintenance (capital) 303 799 721 245 718 712 947 593 - 947 593 1 098 444 1 451 070 1 577 982

National Department of Public Works (NDPW)Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate Bag X65Pretoria0001Website: http://www.publicworks.gov.za

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