07 APRIL 2005

National Department of Public WorksRepublic of South Africa


07 APRIL 2005

JAMES MASEKODIRECTOR-GENERAL

BUDGET PREVIEW PRESENTATIONTO THE SELECT COMMITTEE ON

PUBLIC SERVICES



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Presentation Outline

AchievementsValue Plan and strategic driversExpanded Public Works

ProgrammeThe budget trendsChallenges



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Achievements 2004/05 (Cont…) Process instituted to clean up Asset register and speed

up the vesting process

Identification of unutilized properties for disposal – cost implications re rates and taxes

Evaluation and review of ECDP and RAMP to enable improved future design and planning

Development of a holistic maintenance plan

Recruitment process of young graduates underway

Launch of EPWP and meeting of targets



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DPW strategic objectives/drivers

Grouped into three main objectives

Asset Management

Service

Capacity



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Value Plan & Strategic Drivers

CAPACITY

1. People

2. Business Systems/processes

3. Budget

ASSET MANAGEMENT

SERVICE 1. Service Delivery Improvement Programme

2. Transformation

3. Leadership way

1. Asset management information system

2. Asset lifecycle management/return on investment

3. Policy

•Custodian of National Government’s fixed property assets•Provide accommodation & facilities to National Government

•Coordinate EPWP•Regulate construction & property industry



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Asset Management



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Asset Management (Cont..)

Holistic maintenance plan – this is a plan for all state assets costing about R12,5 BN to repair assets to operational efficiency.

Private-Public-Partnership – to facilitate PPP transactions.

PICP – in partnership with Tshwane Municipality - provide accommodation for all government departments downtown.

Client service level agreements and clients specific value proposition.



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Asset Management (Cont..)

Government wide immovable asset management Act will be tabled which requires every accounting officer to prepare asset management plans annually

Performance standards – space and cost norms for buildings under review to improve service delivery.

Improving quality of data in the Immovable Asset Register – to improve data integrity of asset register and enhance property management function.

Risk management plan for immovable assets being drafted.



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Service



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Service The key initiative is the launch of the service delivery improvement

programme, SDIP and Leadership Way initiative It has the following components;

Customer relationship management

Management of core facilities management services

Project and contract management

Core facilities management services



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Service - The leadership Way

Leadership Way is a new initiative aimed at implementing Batho Pele

It focuses on issues such as

Defining minimum standards of behavior for staff and managers

Defines the preferred management styleDisciplinary action against non performanceSeeks to align DPW to Batho Pele initiativeAll staff to sign and recommit themselves Will be included in the performance

contracts for managers



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Transformation

Industry transformation will be dominated by the finalisation of BEE Charters for the Construction and Property industries

DPW is expected to develop construction industry strategy to be incorporated into MERS (January Cabinet Lekgotla)

Transforming the DPW culture to a more service and client oriented culture



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Capacity



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Capacity -People

An internal skills and competencies audit has been conducted and completed

Skills shortages experienced in the asset management and built environment skills-Graduates initiative launched

DPW needs a comprehensive HR strategy to address capacity shortages (Recruitment, training and development, retention

HRD Director has just been appointed

The CBE is assisting HR to establish strategic partnerships with tertiary institutions and Technikons to procure built environment skills



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Capacity- Systems and Business Processes

Systems

Public Works systems to be integrated to enable seamless delivery under the auspices of SITA and National Treasury

Business Processes

Public Works re-engineering business processes

The reengineered processes are meant to define the “To-be” business process architecture of Public Works



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Budget



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Budgeting Programmes

Programme 1: Administration

- Overall management of the National Department of Public Works – for example, policy development, implementation strategies, and providing support services

Programme 2: Provision of Land and Accommodation- Provision of Land and development, management

and maintenance of accommodation to ensure that national departments and institutions have a built environment that meets their financial, social, and technical requirement



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Budget Programmes (continued)

Programme 3: National Public Works

Programme- Promotion of sustainable growth of

Construction and Property Industries whilst fast-tracking their transformation and development;

- Custodial function of national state property portfolio under NDPW; and

- Address poverty and unemployment through EPWP



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Budget Programmes (continued)

Programme 4: Auxiliary and Associated ServicesProvision for various services, including:- Losses incurred in State housing guarantee

scheme;- Maintenance of war graves & national memorials;- Decorations for public functions such as State

funerals and inaugurations;- Acquisition of vehicles for Departmental use;- Skills Development Act levies; and - Financial assistance to Parliamentary Villages

Management Board



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KEY FOCAL AREAS

The Department’s budgetary allocation is inadequate to fund the Department’s critical programmes as would be demonstrated

This is demonstrated by the Over-expenditure trend which amounted to R34m in 2001/02 and increased to R227 million in the 2002/03 financial year, decreased to R30 million in 2003/4

Capacity to spend has been built and is no longer a concern

In order to curb of overspending, the department had to stop certain services e.g. maintenance

Much stricter measures were implemented in the financial year (2004/2005) to ensure that the department does not exceed the approved allocation.



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Programme 2005/6 2006/7 2007/8

1 Administration 272 002 330 631 344 816

2 Provisioning of land and Accommodation

5 181 343 5 523 625 6 122 040

3 National Public Works Programme

82 610 85 629 89 860

4 Auxilliary and associated Services

18 096 19 895 20 890

5 Total 5 554 051 5 959 780 6 577 606

2004/5 5 513 909



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Allocations

Capital5%

Leases31%

Maintenance15%

Municipal Services

26%

Rates & Taxes23%



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COMPARISON OF REQUESTED BUDGET WITH APPROVED ALLOCATION AT PROGRAMME LEVEL

AMOUNT REQUESTED FOR 2005/06 FINANCIAL R millions

AMOUNT ALLOCATED

FOR 2005/06R millions

DIFFERENCER millions

1Programme 1: Administration

262, 427 272, 002 9, 575

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Programme 2: Provision of Land and Accommodation

6, 824, 448 5, 181, 343 -1, 643, 105

3

Programme 3: National Public Works Programme

93, 939 82, 610 -11, 329

4Programme 4: Auxiliary and Associated

18, 096 18, 096 0

TOTAL 7, 198, 910 5, 554, 051(1, 644,

859)



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ENE allocation comparison 04/5 vs 05/06

ENE Allocation

R 0.00

R 200,000.00

R 400,000.00

R 600,000.00

R 800,000.00

R 1,000,000.00

R 1,200,000.00

R 1,400,000.00

R 1,600,000.00

capital leases rates and taxes maintenance municipal services

2004-2005

2005-2006



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Cost of maintenance backlog

Maintenance backlog is estimated at R12,5b

NDPW has a budget of R949m to maintain 100 972 facilities around the country, translating to about R9400,00 per building per annum

We require funding levels at R2.5 Billion a year for maintenance

This leaves us with a funding deficit of R1.5 Billion for recurrent maintenance per annum



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IMPLICATIONS

The implications of under-funding as they relate to the main cost Items are:

- Leasing: We will not be able to meet the accommodation needs of our clients e.g. SAPS requires more accomodation for the new recruits

- Rates on State Property and Municipal Services: Services have to be paid to prevent termination which could have catastrophic results to public facilities like hospitals etc. In addition, this sphere of Government’s service delivery efforts will be greatly compromised

- Maintenance: May result to non compliance with Occupational Health and Safety Act as some buildings are already in dilapidated state.



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EPWP

As a co-coordinator, our responsibility is as follows:

Create a supportive and enabling environment for the implementation of EPWP

Coordinate activities of public bodies involved in the programme

Facilitate learning between the various stakeholders

Monitoring, evaluating and reporting on the EPWP

Assist with the identification of opportunities to implement EPWP projects



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Challenges

Co-ordination of the EPWP

Implementation of the Leadership way

Repair and maintenance of public buildings

Improving service delivery

Clarifying our role



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President’s state of the nation/POA

Improving working spaces for government

Implementing the EPWPSupporting provinces to better

implement the classroom building programme

Improving service delivery



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THANK YOU

07 APRIL 2005

Documents

Transcript of 07 APRIL 2005