EPWP Progress Report Public Works Select Committee 23 February 2005

1. EPWP Progress Report Public Works Select Committee 23 February 2005

2. BACKGROUND • Wide range of programmes established post-1994 (eg Zibambele, Zivuseni, W f W, Gundo Lashu) • Code of Good Practice for Special PWPs gazetted in 2002 • Cabinet review of Special Poverty Relief Allocation in 2003

3. DESIGN OF THE EPWP • Must allow for wide diversity of programmes • Expand best-practice existing programmes • To be sustainable, the EPWP must not be ‘make-work’ – must be ‘economically efficient’ • Emphasis on labour-intensive delivery of cost-effective quality services • To avoid displacement, the EPWP should take place in growing sectors of the economy

4. WHAT IS AN EPWP PROJECT? • Deliberate attempt by the public sector body to use its expenditure on goods and services to create additional work opportunities for the unemployed • Workers usually employed on a temporary basis (either by government, by contractors, or by other non-governmental organisations), under EPWP or learnership employment conditions • Workers provided with a combination of work experience and training • Public sector body attempts to define and facilitate exit strategies for workers when they leave the programme – more potential for exit strategies in some sectors than others

5. FUNDING • No special fund for EPWP projects • Emphasis is on changing the way in which normal expenditure occurs: • Reduces opportunity costs • EPWP projects are identified and prioritised using standard processes • Mainstreaming labour intensity • Government bodies do not get involved in poverty relief projects outside their core functional areas, BUT • National programme with highly decentralised implementation creates challenges for implementation

6. Progress to date Institutional Structures are in place: • DG Steering Committee • Sector Coordinating Committees • EPWP Unit in DPW • Provincial Steering Committees • Communication committee with GCIS

7. Training programmes • Training programme for workers being implemented with Dept of Labour funding • Training of engineers and contractors for labour intensive construction, with Construction SETA (CETA) • Training of officials to implement the EPWP, with Local Government and Construction SETA’s • Contractor learnership programme with CETA and Provinces/ Municipalities • Learnership programmes for social sector programmes with relevant SETA’s are being finalised • Venture learnerships for economic sector

8. Infrastructure Sector • Funding for projects is provided via infrastructure grants directly to provinces and municipalities • Projects are identified planned and implemented by provinces and municipalities in accordance with their Integrated Development Plans (IDP’s) • Role of Department of Public Works: • Set the conditions on the grants: use EPWP Tender and Design Guidelines • Training programmes for workers, officials, contractors, engineers, supervisors • Lobby infrastructure players to participate (provinces, municipalities, water authorities,Transnet, Housing, Eskom, etc) • Support to municipalities and provinces • Monitor, evaluate and report

9. Infrastructure Sector: Provinces Department of Public Works National Treasury Support to province Provinces report indicators Equitable Share Province Other Provincial Expenditure Provincial Infrastructure Grant earmarked for the EPWP through the Division of Revenue Act and Audited by the Auditor General Infrastructure Budget from Equitable Share Provincial Infrastructure Budget

10. Infrastructure Sector: Municipalities National Treasury Public Works Reporting DPLG Support to municipality Rates, Levies and Taxes Municipality Other municipal Expenditure Municipal Infrastructure Grant earmarked for the EPWP through the Division of Revenue Act and Audited by the Auditor General Infrastructure Budget from Rates, levies and Taxes Municipal Infrastructure Budget

11. Significance of EPWP Guidelines • Use of EPWP Guidelines is a requirement in the Division of Revenue Act when MIG or PIG funds are used • Provide guidance and contract conditions for municipalities to tender EPWP projects • Endorsed by SALGA, NT and DBSA • Makes the use of labour intensive methods a contractual obligation of contractors • Auditor General audits provinces and municipalities to assess compliance • If municipalities and provinces do not use the Guidelines, EPWP targets will not be reached

13. Use of EPWP Guidelines • Provinces: • Audit of all provinces done and AG is compiling report • Compliance is poor • Many provinces are doing some labour intensive work already, but EPWP is about intensifying this • Municipalities: • Audit not yet started • Compliance expected to be poor for 2004-2005. This was compounded by introduction of MIG with new procedures

14. Labour Intensive Contractor Learnership Programme • 1 contractor + 2 supervisors • Initial plan was for 500 learnerships • Due to interest from public bodies was increased to 750 • Application to from CETA to DOL-NSF to increase the number further to 1500 • Current commitment stands at 950 learnerships and increasing, approx 30 provincial departments and municipalities participating

15. LI CONTRACTOR DEVELOPMENT PROGRAMME: ROLES AND RESPONSIBILITIES IDT CETA DPW DOL Mentors for training providers Trainers of trainers Programme Management support Community Facilitation Support Training providers for learnerships Province / municipality Mentors for learners Training projects Training providers for workers Access to credit Learner contractor 2 learner supervisors ABSA Unemployed EPWP beneficiaries

16. The learnership takes approximately 2 years, each learner contractor employs approx 10 workers • Learners graduate with NQF qualifications, able to tender for LI projects issued in terms of EPWP tender and design guidelines • First group of learners in Ethekwini has completed their first project • Ethekwini, Coega, Klipfontein, Nkangala and Mpumalanga learners are on site

17. Significance of Labour Intensive Contractor Learnership Programme • Aims to develop 500 sustainable contractors and 1000 highly skilled site supervisors, specialised in labour intensive construction • As part of their learnerships they will implement 1500 EPWP Projects to the value of R1.5 billion • During the implementation of these projects they will employ approximately 100 000 people • These 1500 individuals will continue to execute a large share of EPWP projects after they complete their learnerships, by winning tenders

18. Relationships between Provinces and Municipalities • Varies from Province to Province • In Limpopo for instance the province has taken the lead to mobilise all municipalities to participate in the EPWP Contractor learnership programme • However in provinces with large municipalities or Metro’s they act independently • The Provincial Departments of Local Government play a role in implementing the MIG and can therefore also put pressure on municipalities to implement EPWP through the EPWP Guidelines

19. Other infrastructure bodies • Housing • Transnet • Water Boards • Mining companies

20. Training • Officials: • LGW SETA is funding training of local government officials, DPW also carried out training of officials • Consulting Engineers: • Have responded well, with professional bodies supporting the initiative. More than 500 engineers have been trained to date • Contractors: • Major contractors have not responded well and are being engaged through professional bodies • Emerging contractors are eager but lack funds. DOL-NSF-CETA being approached to assist

21. Training for beneficiaries • Training programmes in place and training providers appointed • First training programmes have been implemented on some EPWP projects , challenge is to have them implemented on all projects

22. Infrastructure: Five Year Targets • Provinces • Total Provincial Infrastructure Grant : Approx: R 20 billion • Targeted expenditure on EPWP projects: Approx R 6.7 billion • Targeted EPWP Job Creation: Approx 335 000 • Municipalities • Municipal Infrastructure Grant: Approx R 25 billion • Targeted expenditure on EPWP projects: Approx R 8.3 billion • Targeted EPWP Job Creation: Approx 415 000 • Totals: • EPWP Expenditure: R 15 billion • Job Creation: 750 000

23. Infrastructure sector challenges • Many public bodies do not believe they can increase the amount of work they do labour intensively beyond what they are already doing • Wide-spread prejudices against the use of labour-intensive methods in infrastructure • Wide-spread implementation of the EPWP tender and design guidelines would result in a huge increase in employment creation, programme would exceed targets

24. Social sector • Initial focus on ECD and HCBC • Challenge is to create a framework to enable the social sector to grow: • Still largely in planning and preparatory phase • Agreement on a common system of remuneration • Improve programme management and reporting systems • Put in place all the required unit standards, qualifications and learnerships • Need convincing motivation for increased funding, with implementation models and expansion plans • Need to mobilise for more rapid expansion: • Most highly labour intensive sector • High potential for sustainable job creation (200 000 in ECD) • Emphasized in 2005 SONA

25. Social Sector model

26. Environment and Economic Sectors Progress • Environmental sector performing well • Challenge is to expand programme into new areas, eg waste management at municipal level • Economic sector: • DTI working on economic sector plan • DoL and DPW finalising venture learnerships with Services SETA • DPW lobbying government bodies for roll out of venture learnerships, based on models such as Limpopo Sakhasonke

27. Monitoring Results (2nd Quarter) Quantitative reports for the first two quarters of 2004: *Excludes social sector and municipalities due to absence of reports

29. Progress: involvement of business • Business Trust providing support: • Funding of targeted assistance to national departments • Funding of private sector field teams to support and assist provinces and municipalities to implement their projects in terms of the EPWP

30. Challenges (1) • Many public bodies do not believe they can increase the amount of work they do labour intensively beyond what they are already doing • Wide-spread implementation of the EPWP tender and design guidelines would result in a huge increase in employment creation

31. Challenges (2) Challenge: • Audits indicate that not all provinces and municipalities are complying with the Division of Revenue Act conditions requiring that projects be tendered as labour intensive projects according to the EPWP Guidelines Recommendation: • Provincial and municipal political leadership to be mobilised to instruct officials to use the EPWP guidelines when tendering suitable infrastructure projects

32. Challenges (3) • Social sector: • Challenges: • Early Childhood Development (ECD) expansion dependent on finalisation of overall ECD policy • More work required for finalisation of Home and Community Based Care (HCBC) enabling framework • Existing budgets do not accommodate large-scale expansion • Recommendations: • Priority to be given expanding these sectors as stated by the President to address basic needs and absorb large numbers of less skilled workers

33. Conclusions • Data for the first two quarters of 2004 indicate that the EPWP will meet its published targets for the year. • The EPWP will exceed its targets and expectations if provinces and municipalities can be mobilised to use the EPWP tendering guidelines for suitable infrastructure projects, and if there is a large scale expansion of ECD and HCBC programmes in the social sector.