Department of Higher Education and Training Funding for ...

Department of Higher Education and Training

Funding for Infrastructure Development at PSET Institutions

Colloquium on Funding Higher Education

Portfolio Committee on Higher Education, Science and Technology

6 November 2019

• TVET infrastructure programme– Base-line funding for TVET infrastructure for the

College Infrastructure and Efficiency Grant (CIEG)– TVET campus development programme

• University infrastructure programme– Infrastructure and Efficiency programme– New universities development programme

• Student Housing Infrastructure Programme (SHIP)

Presentation Overview

2

TVET Infrastructure Programme

3

Challenges: • Poor condition of TVET facilities related to repair and maintenance,

due to lack of funding• Increased access required for students

2018 MTEF CIEG Allocation: R7.9 billion• For the first time TVET Colleges have an allocation in the baseline for

infrastructure through a Capital Infrastructure and Efficiency Grant (CIEG)

MTEF Allocations

4

Baseline Funding for TVET Infrastructure

2018/19 R'000

2019/20 R'000

2020/21 R'000

2022/23 R'000

2023/24R'000

Total R’000

1,300,000 1,484,000 1,647,000 1,737,585 1,820,989 7,989,574

Conditions attached to the CIEG Funding:

• CIEG Funding is transferred as conditional grants• Each college must open a separate interest bearing bank account• These funds are exclusively appropriated for repairs and

maintenance for TVET Infrastructure• Colleges must report on a quarterly basis on the Grant expenditure

in the format determined by the Department• Each college is required to appoint a Project Manager or a Service

Provider at Assistant Director salary level nine (9) who will be paid from the Grant to manage the project

• Funding are for priority areas: Bulk Services, Statutory Compliance,Sanitation, Building repairs and Student Accommodation repairs

5


The CIEG funding models are as follows:

• 2018/19 – Equal allocations were made to TVET Colleges: Due to new Conditional Grant Systems and processes being established Colleges trained on Asset Management Standards and

maintenance planning

• 2019/20 – 80/20 funding model applied: 80% on TVET college planned student enrolments 20% on costed maintenance plans submitted In future, the funding model will gradually move to maintenance

plans only as TVET colleges mature on the processes of maintenance planning and execution

6


The CIEG funding models are as follows:

7

2019/20 TVET CIEG Budgets vs Expenditure Q2

• DHET approved maintenance work package approvals of R798 million – 54% of CIEG 2019/20 budget

• Actual performance of 12% vs. APP target of 50% for Q2 of 2019/20 by TVET Colleges

• Lower expenditure by TVET College due to:

Capacity constraints (only one approved Infrastructure Project Manager allowed)

Lack of experienced and qualified staff to deal with infrastructure maintenance planning and execution

Procurement for tenders (exceeding R500 000) takes time to initiate As soon as procurement challenges have been addressed, expenditure

at TVET colleges will increase substantially Main DHET objective: Ensure value for money and correct application of

CIEG funds by TVET colleges

8

2019/20 TVET CIEG Budgets vs Expenditure Q2

• DHET has rolled out extensive TVET college training on National Infrastructure Asset Management Standards and maintenance planning

• TVET colleges must submit work package applications to DHET for approval BEFORE expenditure is incurred. This is to ensure correct application of funding and value for money in all instances

• Once the Department has approved the maintenance plan, a cost item number will be issued on the work package, and the TVET college may start spending

• The Department approves the spending of the funds in line with the approved costed maintenance plan, considering priority and criticality of maintenance

• DHET supports struggling TVET colleges with technical assistance• Monitoring of TVET expenditure incurred on sample basis by DHET

teams as well as Internal Audit

9

2019/20 TVET CIEG Monitoring

TVET Campus Development Programme

The programme consists of• Construction of thirteen (13) new TVET college

campuses

• The refurbishment of three (3) existing college campuses

Total budget: • R2.5 billion

• Funded by National Skills Fund (NSF)

10

Sixteen (16) Campus Sites Identified for DevelopmentKwa-Zulu Natal Province TVET College Status

1 Greytown Campus Umgungundlovu TVET

College

Work in progress

2 Kwagqikazi Campus Mthashana TVET College Work in progress

3 Msinga Campus Umgungundlovu TVET

College

Work in progress

4 Nongoma Campus Mthashana TVET College Work in progress

15 Umzimkhulu Campus Esayidi TVET College Work in progress

6 Nkandla A Campus Umfolozi TVET College In close out phase

7 Bhambanani Campus Umfolozi TVET College In close out phase

8 Vryheid Campus Mthashana TVET College The project to be implemented by the CollegeAt the planning stage.

9 Nkandla B Umfolozi TVET College The project to be implemented by the CollegeAt the planning stage.

11

Sixteen (16) Campus Sites Identified for DevelopmentEastern Cape Province TVET College Status

1O Aliwal North Ikhala TVET College Work in progress

11 Graaff-Reinet Campus Eastcape Midlands TVET

College

Work in progress

12 Ngqungqushe Campus Ingwe TVET College Work in progress

13 Sterkspruit Campus Ikhala TVET College Work in progress

Mpumalanga Province TVET College Status

14 Balfour Campus Gert Sibande TVET College In process of site

establishment

Handover on the 11 Oct 2019

Limpopo Province TVET College Status

15 Thabazimbi Campus Waterberg TVET College Completed

16 Giyani Campus Letaba TVET College The project to be implemented by the CollegeAt the planning stage.

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Progress on Construction of Campuses

Thabazimbi has been completed

Nkandla A and Bhambanani phase 1 are at close-out stage

Balfour: contractor has been appointed; site handed over on the 11 October 2019

Current construction: Nine (9) sites

Giyani, Vryheid and Nkandla B have not been awarded and will be funded separately as per strategy approved by the Minister

13

Progress on Construction of Campuses

CURRENT NINE (9) SITES

UNDER CONSTRUCTION

CONTRACT

VALUE

CONTRACT

EXPENDITURE

Incl. Retention

%

COMPLETIO

N

ANTICIPATED

COMPLETION

DATES

EMPLOYMENTOF LOCAL LABOUR

F= FemaleM= MaleR` 000 R`000

NEW

CONSTRUCTION

REFURISH

MENTF + M

1 Graaff Reinet 108 111 72 904 85 20 February 2020 13 + 85

2 Aliwal North 116 928 68 565 50 20 February 2020 23 + 53

3 Sterkspruit 153 383 85 749 60 30 April 2020 20 + 120

4 Ngqungqushe 156 217 58 104 36 03 October 2019 15 + 62

5 Msinga 130 304 76 475 70 15 November 2019 31 + 94

6 Greytown 113 648 72 904 85 31 December 2019 4 + 12

7 Umzimkhulu 105 921 73 602 72 30 May 2020 14 + 90

8 Nongoma 125 872 43 345 37 20 February 2020 20 + 138

9 Kwaqikazi 113 648 20 050 22 17 February 200 10 + 15

TOTAL (F +M) 150 + 669

GRAND TOTAL(Incl.)

819

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Footprint

NO.SITE: TVET

College Campus

Offices

(approx.)

Classrooms

(approx.)

Computer

Labs

(approx.)

Seating

Capacity (per

Class)

(Average)

Total seats

1. Aliwal North 29 8 2 40 3202.

Graaff Reinet 29 8 2 40 3203. Ngqungqushe 29 8 2 40 3204. Sterkspruit 29 8 2 40 3205 Greytown 29 8 2 40 3206. Kwaqigkazi 29 8 2 40 3207. Msinga 29 8 2 40 3208.

Nongoma 29 8 2 40 3209. Umzimkhulu 29 8 2 40 320

TOTAL 261 72 18 2 88015

Challenges & Remedial Actions on Construction SitesNO Sites Challenges/Issues* Remedial action1. Graaff Reinet No challenges at this stage.

2. Aliwal North No challenges at this stage.3. Sterkspruit Obstruction of road by illegal housing

and waste water spillages from private septic tanks.

The Department political liaison to engage the municipality to solve the problem, as it is expatiated to trigger health and environmental issues.The engagement with the Municipality is ongoing.

4. Ngqungqushe No challenges at this stage.

5 Msinga No challenges at this stage.

6. Greytown No challenges at this stage.7. Umzimkhulu Site Shutdown by Harry Gwala

Business forum on the 29 August 2019

The Contractor to increase security on site. The Department political liaison is contacts with the forum and the stakeholders to defuse the situation.

8. Nongoma No challenges at this stage.

9. Kwagqikazi No challenges at this stage.

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Construction

ALIWAL NORTH SITE STERKSPRUIT SITE

17

Construction

UMZIMKHULU SITE NONGOMA SITE

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Construction

KWAGQIKAZI SITE

GREYTOWNSITE

GRAAFF-REINET NGQUNGQUSHE SITE

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University Infrastructure Programme

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Consists of two programmes:• Infrastructure and Efficiency Programme partially funded

through the Infrastructure and Efficiency Grant (IEG) Introduced in 2007/08 Provided to the 24 universities established before 2013 Implemented over five IEG funding cycles Co-funded with universities paying between 0% and 50% of the

cost of any project depending on their financial position and ability to raise funds

Includes student housing infrastructure funding

• New Universities Development Programme Introduced in 2011/12 to plan and build two new universities, one

in Mpumalanga and one in the Northern Cape Earmarked grant for the construction of UMP and SPU in line with

their 10 to 15 year spatial development frameworks

University Infrastructure Programme

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Infrastructure and Efficiency Programme Overview

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Infrastructure and Efficiency Grant: Overview Since Inception

• Infrastructure and Efficiency Grant (IEG) allocation between 2007/08 and2020/21: R28.665 billion

• Funding provided to all 24 universities• Initial focus (first 2 cycles) on government priorities: engineering, human

and animal health, physical and natural sciences, teacher education• In 3rd cycle the same priorities kept but added: student housing; African

languages; well founded laboratories; disability; collaborative projects;and HDI infrastructure backlog maintenance

• 4th cycle changed process – no Bids only allocations - focus on backlogmaintenance; student housing; selected priority projects

• 5th cycle (2018/19 – 2020/21) managed through the Macro InfrastructureFramework (MIF). Balance between university priorities, nationalpriorities and refurbishment/backlog maintenance

• All grants awarded with detailed conditions including annual reporting and audit certificates

Strategic Decisions on Infrastructure Funding

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• In the first three IEG funding cycles the process for distributing funds was based on government priorities. Institutions put in bids for funding

• Bids submitted in 3rd cycle – approximately 4x the funding available; all institutions competing for the funds and individual needs not necessarily catered for

• In 2014/15 a strategic decision was made to develop a Macro Infrastructure Plan for the university system, which would be used to prioritise infrastructure investment over the next cycles

• All institutions submitted macro campus plans, disability audits; and maintenance audits (condition assessments and cost of refurbishment) – varying quality and not useful for developing a system wide plan

• Macro Infrastructure Framework (MIF) developed for the university sector - to be used for improving infrastructure management, planning, reporting, monitoring and evaluation

Infrastructure and Efficiency Funding Cycles

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Fundingcycle

Total cost of Projects

(000)

IEGcontribution

(000)

University contribution

(000)Progress

2007/08 to 2009/10

4 197 676 3 628 000 569 676 100% complete

2010/11 to 2011/12

6 622 086 3 265 000 3 327 086 100%Complete

2012/13; 2014/15

8 241 968 6 000 000 2 241 968 82% complete

2015/16 to 2017/18

7 606 098 7 265 116 340 970 34.1% spent -various stages

2018/19 to2020/21

11 255 843 8 507 181 2 748 662 First tranche transferred in 2018/19; planning phase

Total over all cycles

37 923 671(100%)

28 665 297(75.6%)

9 258 374(24.4%)

Impact of IEG Programme

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• Book produced in 2014 to showcase infrastructure development across universities as part of celebrating 20 years of Democracy

• Improved infrastructure across all campuses

• R9.719 billion (34%) of total IEG allocated to 8 HDIs; proportion of system enrolments at HDIs 13.5% (redress funding)

• From 2012 R6.342 billion (22.1% of total IEG) allocated towards student housing development

Infrastructure funded through the IEG at universities

26

Teaching equipment

Infrastructure funded through the IEG at universities

27

More seats in lecture theatresand computer rooms

Infrastructure funded at universities through the IEG

28

Academic buildings

Infrastructure funded at universities through the IEG

29

More beds in residences

Key Challenges Identified

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• 2014 maintenance audits quantified the deferred/backlog maintenance for sector at R25 billion

• Very poor conditions in some student residences and lecture facilities – health and safety hazards

• Some institutions not budgeting effectively for routine maintenance, or deferring maintenance when budgets are under pressure

• Cases of overcrowding together with general poor governance and management at some institutions

• Huge discrepancies across the system in terms of quality of macro campus plans – some very poor, some excellent; many institutions without long term spatial development plans

• Different capability to manage infrastructure programmes at institutional level across universities

Key Challenges Identified

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• Procurement – some institutions in court contests and infrastructure funds tied up until disputes finalised; unqualified contractors procured; corrupt elements within Councils and institutions (conflict of interest and self enrichment); poor procurement policies

• Contracts management and client delivery management problems at some institutions leading to abandoned projects and poor quality infrastructure delivery

• Heritage issues at some institutions leading to funds being tied up while permission is sought for refurbishment/renew old buildings

• Slow start up of infrastructure projects – planning to implementation –results in slow spending patterns of transferred IEG funds at some institutions

• Bulk infrastructure problems linked to municipal services, especially in rural towns (e.g. Makhanda; Alice; Thohoyandou; Umlazi)

• Need to develop local contractors, especially in remote areas

• In 2017 the Department put in place a Macro Infrastructure Framework(MIF) for universities to help address these challenges

• The MIF consists of:– A 30 page infrastructure management guide providing principles and

norms and standards for managing, operating and maintaininguniversity infrastructure

– A cloud-based IT platform with repositories of information related toinfrastructure at each university; applications forms for funding requests;reporting forms for reporting progress against allocated funding; as wellas information about good practice

– The cloud-based platform was used to manage funding applications forthe 2018-2021 IEG funding cycle and universities are uploading theirquarterly and annual reports onto the platform

• DHET funding of university infrastructure is linked to universities providing plans to improve their management of infrastructure – must provide information on progress towards meeting 17 infrastructure management milestones detailed in the Guide

Macro Infrastructure Framework

32

MIF Platform – Screen Shot

33

MIF Monitoring and Oversight

34


• Since the introduction of the MIF Institutions are visited by a monitoring team of subject matter experts to check progress and physically inspect construction sites

• Each institution is rated against the following indicators Level of expenditure on projects funded from previous funding cycles Quality of construction work on projects under construction Degree to which projects have been completed on time and within budget Quality and appropriateness of designs of buildings Meeting the 17 MIF norms and standards Progress with projects funded from the new cycle Visible level of maintenance and cleanliness of campuses

• Dashboard of progress in relation to the indicators is in place and updated after each oversight visit

• Results of the monitoring used to identify the infrastructure development support required at the institutional level

Dashboard: overview of universities progress

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Rating % (no) of universities at rating for quality of infrastructure management

% (no) of universities at rating for quality of work

% (no) of universities at rating for completion on time and within budget

% (no) of universities at rating for quality of designs

% (no) of universities at rating for maintenance and cleanliness

Green -good 42% (10) 70% (16) 43% (10) 70% (16) 61% (14)

Yellow -fair 29% (7) 17% (4) 35% (8) 30% (7) 30% (7)

Red -poor 29% (7) 13% (3) 22% (5) 0% (0) 9%(2)

Total 100% (24) 100% (24) 100% (24) 100% (24) 100% (24)

Summary: key indicators from the dashboard of monitoring visit results

Combination of close monitoring; development support; and sanctions (through directives to Council from the Minister) will lead to improvement in outcomes

Infrastructure Development Support Programme

36


• Three levels of support provided to universities depending on the assessment of their infrastructure delivery and openness of universities to accept support and their willingness to improve: Advice and information (provided to all universities; e.g. training

workshops on the MIF platform; workshops on procurement; seminars on spatial development planning)

Proactive technical support (provided on request; e.g. assessment of defects and advice on how to correct; assistance with development of procurement policies; thus far provided to 7 institutions on request)

Intensive development support to institutions facing major challenges in implementing their infrastructure programmes(currently being provided to 2 institutions; but two more have requested assistance)

• Aim to improve quality of infrastructure management, governance and delivery and achieve improved value for money invested

Infrastructure Development Support Programme

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• Intensive development support involves: Carrying out comprehensive diagnostic of state of infrastructure

management, together with university management Developing comprehensive plan for improving infrastructure

management, together with university management (plan must be approved by Vice Chancellor)

Providing continuous and intensive advice and support to implement the plan, typically over a period of several years

• Covers spatial planning, infrastructure planning, infrastructure procurement, delivery management, asset management and maintenance capacity, systems and outcomes

• University retains full authority, accountability and responsibility • MoUs to govern support and quarterly support programme steering

committee meetings

New Universities Development Programme

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• University of Mpumalanga and Sol Plaatje University established in August 2013 as comprehensive universities

• Opened doors in the 2014 academic year • UMP and SPU developed through the acquisition and refurbishment of

existing buildings and construction of new facilities. • Each university has a 15 year spatial development plan• Plan: SPU to grow to about 7 500 students; and UMP to 18 000 (15 000 in

Mbombela; 3 000 in Siyabuswa)• Plan to accommodate 80% of SPU students in university managed residences

(6 000 beds). 2018 beds = 1 341• Plan to accommodate 60% of UMP student in university managed residences

(10 800). 2018 beds = 1 330 (830 at Mbombela and 500 at Siyabuswa)• Quarterly monitoring/oversight visits to assess progress• Quarterly development meetings with executive management • Infrastructure development being rolled out in line with plan; few delays strong

infrastructure management teams in place

New Universities Development Programme Funding

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University of Mpumalanga

MTEF 2014/15 –2015/16R’000

2017/18 –2019/20R’000

Total allocation R’000

Enrolments & Projects

CapitalGrant 1 576 215 1 929 008 3 505 223

77% spent8 new buildings completed,

3 under constructionOperational Grant 390 089 912 860 1 302 949

Enrolments: 135 in 2014 2 492 in 2018

Staff 2018: 46310 UG and 2 PG qualifications

Sol Plaatje UniversityCapitalGrant 898 521 1 094 381 1 992 902

71% spent6 new buildings completed,

6 under constructionOperational Grant

225 654 683 604 909 258

Enrolments: 125 in 2014 1 560 in 2018

Staff 2018: 1907 UG and 3 PG qualifications

University of Mpumalanga

40


Sol Plaatje University

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Student Housing Infrastructure Programme (SHIP)

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• The 2012 Ministerial Review of Student housing at universities showed that in 2010, the university sector had 107 598 beds for students which was at that time was 18% of the contact student population and only 5% of the 1st year student population housed were in residences

• The review also highlighted the very poor conditions of student residences at some universities

• Following the review the Department made student housing a national priority, and provided funds for institutions to build and improve their student housing. A focus was put on student living an learning environments in line with the recommendations of the review

• In 2015, a policy with minimum norms and standards for both institutional and private student housing at universities was published. These provide standards for student housing to support dignified living and learning environments

• Funding for student housing through the IEG, while supporting universities to refurbish and build new beds, is too little to solve the shortage of residence spaces – estimated at 200 000 additional beds

Student Housing ‐ Background

43

• The SHIP will support the development of large scale student villages to ensure lower costs per bed and accelerate the provision of affordable housing for students at universities and TVET colleges

• The SHIP aims to provide 300 000 new beds over 10 years – 200 000 for university students and 100 000 for TVET College students

• This goal means that the number of beds provided every year for 10 years must increase tenfold from the present average of 3 000 to 30 000 new beds a year

• This will cost upwards of R60 billion - Government and universities cannot achieve this target alone

• Other stakeholders, including the private sector and Development Finance Institutions (DFIs), are required to make the programme a success

• The SHIP is being implemented in collaboration with the Development Bank of Southern Africa (DBSA), National Treasury and the Infrastructure Investment Programme for South Africa (IIPSA)

Student Housing Infrastructure Programme (SHIP)

44

• The SHIP is built on three pillars that take into consideration financing, policy interventions and execution capacity

• Substantial additional funding has been provided to implement the SHIP by IIPSA (grant funding), National Treasury (through the Budget Facility for Infrastructure) and the DBSA (R6 billion loan facility)

• The Department is also working with other stakeholders including the Department of Public Works, Department of Human Settlements, Gauteng Department of Infrastructure Development and Transnet to identify possible government land and buildings for student housing

• Thus far two Transnet properties have been transferred to universities (one to Sol Plaatje University, and the other to the University of Zululand, Richards Bay) and one further property is in the process of being purchased (Durban University of Technology, Imbali, Pietermaritzburg)

• The first large scale projects in the university sector are at various stages of development: some at the feasibility study phase, others at the procurement stage, and some are being implemented

SHIP Partners and Progress

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Implementation of SHIP Projects

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• Large projects comprising of 7 273 new beds are currently being developed and are at various stages of implementation:

• Nelson Mandela University – 2 000 beds• University of Fort Hare – 1 437 beds• Sefako Makgatho Health Sciences University – 2 000 beds• Vaal University of Technology - 1 836 beds

• The next set of projects, for which feasibility studies have already been done, that will provide 12 480 new beds are:

• North West University – 1 728 beds• University of Limpopo – 3 500 beds• University of the Western Cape – 2 700 beds• University of Zululand – 3 500 beds• King Hintsa TVET College – 1 000 beds

Implementation of SHIP Projects

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• Further projects in the pipeline, where feasibility studies will be undertaken in 2019/20, are:

• Cape Peninsula University of Technology – 2 150 beds• Central University of Technology – 1 000 beds• University of Johannesburg – 2 000 beds• Walter Sisulu University – 3 000 beds• Lephalale TVET College – 1 200 beds• Northlink TVET College – 1 500 beds

• From 2020/21 onwards, the Student Housing Infrastructure Programme Management Office (SHIP MO) will prepare a pipeline of projects each year

• A SHIP MO is being set up to oversee the development under a memorandum of agreement signed between the Department, DBSA and National Treasury

Thank You

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