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13 June 2001

Presentation by the National Department of Public Works NATIONAL COUNCIL OF PROVINCES NCOP. Mr A Sangqu Mr M D Mokotedi Ms L Bici. 13 June 2001. INDEX. 1. Budget Vote Information 2. Programme 2 3. Organogram 4. Source of Funds 5. Project Status Codes 6. Client Services

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13 June 2001

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  1. Presentation by the National Department of Public Works NATIONAL COUNCIL OF PROVINCES NCOP Mr A Sangqu Mr M D Mokotedi Ms L Bici 13 June 2001

  2. INDEX 1. Budget Vote Information 2. Programme 2 3. Organogram 4. Source of Funds 5. Project Status Codes 6. Client Services 7. Development Operations 8. Property and Facilities Management 9 State Property Holdings 10. Leasing 11. Municipal Expenses 12. Information Services 13. State Property Agency 14. NPWP 15. CBPWP 16. CIDP

  3. 1.1 Total Vote : Per Programme 2000/01 R’000 2001/02 R’000 Prog 1: Administration 120 070 160 448 Prog 2: Provision of Land and Accommodation 3 921 717 3 052 572 Prog 3: National Public Works Programme 400 000 299 575 Prog 4: Auxiliary and Associated Service 10 422 8 992 Total for Vote 30 4 452 209 3 521 587

  4. 1.2 Total Vote : Per Standard Item 2000/01 R’000 2001/02 R’000 Personnel 305 763 332 125 Admin 42 811 47 403 Inventories 19 803 19 803 Equipment 20 282 18 988 Land & Buildings 833 000 1 135 754 Prof & Spes 3 206 154 1 940 602 Transfers 18 831 25 786 Miscellaneous 5 565 1 126 Total 4 452 209 3 521 587

  5. 2.1 Details of Programme 2 2000/01 R’000 2001/02 R’000 Provision of Land & Accommodation R3 921 717 000 R3 052 572 000 Capital works (Public Works) 1 013 915 000 76 145 000 Maintenance 566 152 000 536 556 000 Planned 340 952 000 337 054 261 Unplanned 175 200 000 159 501 739 Workshops 50 000 000 40 000 000 Building Promotion Industry 4 900 000 3 296 000 Total Accommodation R1 584 967 000 R615 997 000

  6. 2.1 Details of Programme 2 (cont.) 2000/01 R’000 2001/02 R’000 Leasing 832 600 000 760 440 000 Cleaning building and tending gardens 113 000 000 110 300 000 Municipal Services 665 000 000 675 900 000 Rates on State Properties 554 000 000 594 779 000 Other 6 150 000 7 150 000 Total State Property Holdings R2 148 583 000 R2 170 750 000 Administration Programme 2 R166 000 000 R288 006 000

  7. 2.2 Complexity of Programme 2 2000/01 R’000 2001/02 R’000 Planned maintenance 340 952 000 R337 054 261 Capital works 1 013 915 000 76 145 000 Rollovers: Capital works 221 564 000 562 127 000 Planned Maintenance 70 000 000 56 777 000 Voted to Client Departments 0 924 153 002 Total source of funds for Capital Works and Planned Maintenance 1 646 431 000 R1 956 256 263

  8. 4. Source of funds: National: Capital Works and Planned Maintenance NATIONAL TOTAL (R ‘000) 1 956 256 263 100 % • ALLOCATION 1 956 256 263 100 % • Capital Works 1 562 425 002 80 % • Planned Maintenance 393 831 261 20 % • ROLL-OVER (included in above) 618 904 000 • Capital Works 562 127 000 • Planned Maintenance 56 777 000

  9. 4. Source of funds: National: Capital Works Allocation (Roll-over included) NATIONAL TOTAL (R ‘000) 1 562 425 002 562 127 000 Department Allocation Roll-over (incl) • Correctional Services 713 384 000 278 330 000 • Justice 203 459 000 54 659 000 • South African Police Services 195 678 000 39 950 000 • Public Works 76 145 000 Nil • Defence 70 826 000 19 272 000 • Agriculture 36 965 000 22 851 000 • Arts, Culture, Science and Tech 33 004 000 953 000 • Education 2 000 000 2 000 000 • Environmental Affairs 4 658 000 Nil • Foreign Affairs 9 614 000 9 614 000 • Home Affairs 55 548 000 38 131 000 • Labour 65 603 000 36 390 000 • Land Affairs 12 617 000 3 253 000 • National Health 38 201 000 22 001 000 • NIDS 29 723 000 29 723 000 • Trade and Industry 15 000 000 5 000 000

  10. 4. Source of funds: National: Planned Maintenance Allocation (Roll-over included) NATIONAL TOTAL (R ‘000) 393 831 261 56 777 000 Department Allocation Roll-over (incl) • South African Police Services 120 979 085 17 944 048 • Defence 79 287 560 Nil • Correctional Services 66 009 555 Nil • Public Works 57 555 335 33 318 125 • Justice 36 607 776 5 514 827 • Agriculture 10 083 284 Nil • Arts, Culture, Science and Tech 9 072 018 Nil • Environmental Affairs 337 443 Nil • Finance 6 143 045 Nil • Foreign Affairs 1 164 331 Nil • Home Affairs 386 125 Nil • Labour 3 191 162 Nil • Land Affairs 39 302 Nil • National Health 8 933 Nil • State Expenditure 2 966 306 Nil

  11. 4. Extract of the 5 Departments with the highest Budget Allocation

  12. 5. Extract of the 5 Departments with the highest Budget Allocation

  13. 5. Departmental expenditure to date for 2001/2002

  14. 6. Client Services OBJECTIVES • To oversee the efficient facilitation and co-ordination of accommodation for D&O, CPJ and FA&P • To ensure professional support to client services, internal service providers and national client departments with regard to town planning, investment analysis, building standards development and heritage asset management • Interaction with clients and service providers • Building programme management • System development and subsequent updating • To ensure the efficient and effective management of generic management tasks within the chief directorate: client services • Conceptualisation and development of strategic initiatives

  15. 6. Client Services (cont.) CHALLENGES: Under Expenditure: Capital Works - R532 million for 2000/2001 Reasons for under-expenditure: • Planning time frames on projects (12-18 months) • Transfer of excessive funds by client departments • Reprioritisation of building program by clients • Discrepancy between estimates and tender amounts • Contractual disputes (Litigation) • Insufficient in-house expertise

  16. 6. Client Services (cont.) Proactive steps taken to achieve high expenditure levels: • High level of project management firms to assist Regional Managers • All existing projects have been revisited • Full allocation of available funds have been assigned to approved projects • Targeting pre-selected bidders • Training of Regional Project and Client Services Managers • 49% of allocation under construction • 20% of allocated funds in tender recommendation stage 2001/2002 • 31% of allocated funds in design phase

  17. 6. Client Services (cont.) Rendering assistance in devolution of budgets to clients and subsequent assistance with cost recovery by virtue of agreements between NDPW and clients

  18. 7. Development Operations 1. STRATEGIC OBJECTIVES • 1.1 GLOBAL PURPOSE OF CHIEF DIRECTORATE: • To execute Planning Instructions, received from Client Services, for Capital and Planned Maintenance Projects within time, cost, quality and socio-economic objectives and to provide professional support, inter alia with reference to relevant legislation.

  19. 7. Development Operations (cont.) • 1.2 PURPOSE OF THE DIRECTORATE: MAJOR PROJECTS • To execute Planning Instructions, received from Client Services, for Capital and Planned Maintenance Projects within time, cost, quality and social-economic objectives. • 1.3 PURPOSE OF THE DIRECTORATE: PROFESSIONAL • ADVISORY SERVICES • To provide construction related professional advice to Project Managers in the Department, aimed at the creation of projects, which are technically acceptable, easy in their maintenance, of high quality, effective in their purpose and affordable in terms of space norms and cost limits.

  20. 7. Development Operations (cont.) • 1. 4 PURPOSE OF DIRECTORATE: RISK MANAGEMENT • To manage the risk to the Department (State), posed to, and by its facilities and properties by the provision of quality support, advisory and information services in terms of risk related issues pertaining mainly to Occupational Health and Safety aspects.

  21. 7. Development Operations (cont.) CHALLENGES AND PRO-ACTIVE STEPS TAKEN AT CURRENT TO ADDRESS THESE: • To make full use of allocated budgets in order to convince Treasury that more funds are required to address backlogs • Shorter planning cycles • Skills shortages in terms of project management • To minimize changes in project briefs as result of Clients revising their needs during planning phase

  22. 7. Development Operations (cont.) • Reduction of period of payment to Service Providers (Contractors and Consultants) • Increased economic involvement of black business in the procurement muscle of the Department (Black Economic Empowerment) • Management of properties on problematic soil conditions (reduce risk of loss of property)

  23. Challenges Delivery of quality capital works on time and within budget Cumbersome tender procedures Procurement reform in line with the disbandment of the STB Correction perception amongst Senior Government officials that too much work is outsourced to consultants Address backlog in the renewal of leases Backlog in maintenance. Facilities maintenance projects implemented with the aim of addressing 25% of backlog within 3 years 8. Property and Facilities Management

  24. Programme for accelerated project delivery implemented October 2000 All regional offices have empowered through special approval obtained from STB to assume the same powers as that of head office DPW to develop all tender procedures delegations, allocation of powers, etc. Policy to be adopted in DPW to distinguish between management consultants and professional service providers NB - Transfer of risk to professionals who take full responsibility for design of bridges, roads, buildings, etc. Leasing project implemented RAMP projects initiated to the value of approximately R 500 million 8. Property and Facilities Management (cont.)

  25. Establishment of State Property Agency that operates effectively and efficiently Disbandment of the STB and the formulation of tender procedures and procurement practices that would meet the objectives of SPA/DPW Refinement of procedures, delegations, etc. to suit SPA model The continued use of consultants as a variable resource will be continued into the SPA and the rate of appointment will depend on the number of projects Adopt best practice asset management principles (key account management) Roll-out facilities maintenance in SPA Targeted Procurement process are applied to ensure involvement of ABE’s and APSP and are constantly monitored. 8. Property and Facilities Management (cont.)

  26. 8. Apointment of Affirmable Business Enterprises

  27. 9. State Property Holdings and Asset Management OBJECTIVES • FORMULATION OF POLICY AND ASSET MANAGEMENT STRATEGIES • COMPILATION OF FOREIGN ASSET REGISTER • ESTABLISHMENT OF PROPERTY ECONOMY RESEARCH AND SERVICES UNIT • DISPOSAL OF SUPERFLUOUS STATE LAND AND FIXED PROPERTY • REVIEW AND FORMULATE LEGISLATION WITH REGARD TO PROPERTY RIGHTS

  28. 9. State Property Holdings and Asset Management (cont.) CHALLENGES • VERIFY AND IMPROVE DATA ENTEGRITY ON THE ASSET REGISTER • FORMALISE AND IMPLEMENT A STRATEGIC ASSET MANAGEMENT FRAMEWORK • ESTABLISH BENCHMARKS TO MEASURE THE PERFORMANCE OF THE STATE’S PROPERTY PORTFOLIO • EFFECTIVE AND EFFICIENT DISPOSAL OF SUPERFLUOUS STATE OWNED PROPERTY

  29. 9. State Property Holdings and Asset Management (cont.) PRO-ACTIVE MEASURES • DEDICATED STAFF IDENTIFIED TO VERIFY AND UPDATE DATA ON THE ASSET REGISTER • TENDER DOCUMENTATION HAS BEEN FINALISED FOR THE APPOINTMENT OF CONSULTANTS TO DEVELOP A STRATEGIC ASSET MANAGEMENT FRAMEWORK • OFFICIALS HAVE BEEN APPOINTED TO COMMENCE WITH THE ESTABLISHMENT OF BENCHMARKS TO MEASURE THE PERFORMANCE OF THE STATE’S PROPERTY PORTFOLIO • A DETAILED DISPOSAL PROGRAMME HAS BEEN COMPILED AND IMPLEMENTED

  30. 10. Leasing Portfolio Statistics • 4801 Leases at 31 March 2001 • Property types • Land • Offices • Quarters • Quantity Analysis • Value of Quantities

  31. 10. Portfolio Statistics (cont.)

  32. 10. Leasing Budget NATIONAL TOTAL (R ‘000) 753 716 717 100 % • Pretoria 283 420 223 39 % • Johannesburg 105 431 694 14 % • Cape Town 81 022 000 10 % • Durban 75 955 000 10 % • Port Elizabeth 59 125 000 7 % • Nelspruit 41 028 000 5 % • Bloemfontein 38 898 600 5 % • Mmabatho 28 966 800 3 % • Pietersburg 27 825 000 3 % • Kimberley 12 044 400 1 %

  33. 10. Leasing Budget (cont.)

  34. 10. Properties Leased from the Private Sector • National distribution per property type • Land 321 • Offices 1 963 • Quarters 2 517

  35. 10. Properties Leased from the Private Sector (cont.)

  36. 10. Properties Leased from the Private Sector (cont.)

  37. 10. Leasing Project • Achievements • Visited all properties within leasing portfolio • Uncovered over R20 million in fruitless expenditure • Stopped monthly lease payments in access of R1 million • Built capacity within portfolio • Further objectives • Renewal and revising of leases • Continued building capacity

  38. 11. Municipal Expenses 1 April 2001 - 25 May 2002

  39. 12. Information Services OBJECTIVES • To provide information to serve as a critical tool for management decision-making through aligning of the systems to the business processes. • To provide information services that enable the organisation to deliver service quickly and accurately. • Integrate the current Information systems. • Implement a new network that address the information flow needs of the department. • Create a structure that is in line with the needs of the department.

  40. 12. Information Services (cont.) KEY CHALLENGES • Lack of resources • Unintegrated systems CHALLENGE RESOLUTION STEPS • HR has been asked to be more flexible on hiring practices, e.g. allowance of usage of constructors. • A new, more realistic budget has been submitted to Finance.

  41. National Department of Public Works State Property Agency (SPA) 13. Role of DPW and State Property Agency Mandate • To regulate the build environment • To transform the construction industry - CIDB • To define the policy framework that shapes the use of government owned properties • To address rural poverty through projects related to the build environment • To facilitate the delivery of government service through delivery of the asset and accommodation requirements in accordance with the prescribed legal frameworks

  42. National Department of Public Works State Property Agency (SPA) 13.Role of DPW and State Property Agency • Ensure that government is meeting its accommodation requirements in a cost effective manner while addressing social objective • Streamline service delivery by reducing the bureaucracy and leveraging best-of-breed skills and systems • Provide value-added advisory services to ensure that accommodations improve government’s service delivery • Ensure that the build environment is effectively regulated to the benefit of the South African public • Ensure that equity and empowerment occur in the construction industry • Provide a clear and transparent environment in which land issues are redressed • Leverage governments influence to impact the lives of the rural poor Value proposition

  43. State Property Agency Asset management Project management Lease supply management Information rich, strong financial controls Vendor management and commercial capabilities Client focused 13. SPA will have three pillars of excellence supported by three organisational attributes Pillars of excellence Supporting foundation

  44. ILLUSTRATIVE 13. Overall SPA Charter • The SPA will provide the Government of South Africa with its core facilities and accommodation needs through • Cost-effective, value-adding management and maintenance of its owned portfolio • Structuring of leases with private sector owners • Construction of on-spec, on-time, on budget new facilities • Maximise the value of the property portfolio and minimise risk to the State • It will meet its mandate with a customer focused, information rich, commercially capable organisation that makes effective use of private sector capabilities

  45. 13. Business Model

  46. Prepare transition • Develop model • SPA design • PreP-pare • Design new approach, processes • Improve DPW • Implementation • Implementation • Implementation • Quick wins • Buildingmomentum • Internal and external communication 13. High-level plan over next 12-18 months leading to successful creation of an effective and efficient SPA • June 2001 • October 2001 • April 2002 • October 2002 • April 2003 • Refine and syndicate • SPA • Act • SPA Launch • Legislative process • Transition strategy concept • Detail

  47. 14. NPWP Total Budget

  48. 14. CD:CIDP Business Plan2001 - 2002 “Taking forward the process of construction industry development in South Africa”

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