Transformation Programme Towards Operational Efficiency PORTFOLIO COMMITTEE 13 NOVEMBER 2001.

Transformation Programme

Towards Operational Efficiency

PORTFOLIO COMMITTEE13 NOVEMBER 2001


BackgroundPoor Service Delivery

– Under- expenditure– Inefficient Processes– Inefficient Financial Management– Capacity and Skills

Budget Reform – Business Model


Poor Service Delivery Under Expenditure Process Analysis Skills Impact Leasing

– Proliferation of lease contracts within government


Under - Expenditure History of under expenditure Late confirmation of roll-overs Reprioritisation of needs by departments. Budget requests that are more than what

the department can spend. Allocation of budgets without projects


Process Analysis No. of Process Steps No. of documents

required Average time to tender No. of planning steps No. of handoffs No. of decision points No. of decision makers

65 40 non – recurring

25 recurring 75-95 weeks 35 19 13 6


Skills Impact Capacity skills of

project managers

Level of skill of project managers

Ratio of Project Managers to Projects– 1-10 Project

(Private sector depending on complexity)

– 1-30 Projects(DPW)


Budget Reform Distinguish between ownership vs occupancy

roles Requirement of PFMA Capital expenditure and maintenance reside

on client departments budgets Client departments service level agreements

with DPW


BUSINESS MODEL

State Accommodation Advisory ServicesTransversal Policies

Custodian of State’s Fixed AssetLandlord role – Asset Register(B/S), Rates and Taxes, Acquisition and Disposal, Ensuring Compliance, Maintenance and Construction Planning, Lease Brokering and Lease Management

Monitoring and Benchmarking

Optional

Municipal ServicesManagementLease Management

Promoter of Construction IndustryPromoter of Public Works Program

NDPW/SPMC CLIENT DEPARTMENTS

Option Evaluation


Current Initiatives Asset Management Strategic Partner

– Broad Portfolio Analysis, Classification and Strategy Formulation

– Develop adequate and appropriate information systems

– Establish building blocks for user pays– Training of asset management staff– Advise the department on asset management plan– Formulate the Asset Management Framework


Current Initiatives RAMP (Repair and Maintenance Programme)

– Risk transferred to private sector contractors– Multi year budgeting– Assessment of the state of disrepair – true life cycle

costing– Predetermined cost of future maintenance Correctional Services

– Enhance safe custody – Improved humane incarceration– Improved state of readiness– 97 Contracts awarded or recommended – Total

Value R910 million


Current Initiatives Department of Defense

– Improved state of readiness– Fixed leakages of jet fuel pipes that minimised fuel

losses Lifts Programme

– Improved the functionality of buildings– Improved compliance with safety legislation– Instituted a call center for lifts(24hrs)– 720 lifts nationally– 27 contracts awarded – Total value R66 million


Current Initiatives PACE

Comparative Expenditure as at end of October

2000-2001: R362 530 2001-2002: R700 756 For the whole of 2000-2001 we had spent

R698 042


Current Initiatives Leasing

Negotiation and renewal of lease agreements

80% completed and the remaining to be finalised by 30 December 2001.

Savings from the leasing project is R20 million as at the end of October 2001


Rationale for SPMC• Formation of a responsive vehicle• Separation of the policy making and regulatory

role from the delivery function• Unlocking the value of the State’s Property

portfolio• Separation of commercial and non-commercial

components of State Property• Considered application of commercial principles


Role of DPW and SPMCNational Department of Public Works

State Property Management Company(SPMC)

ValueProposition

Ensure that the built environment is effectively regulated to the benefit of the South African publicEnsure that equity and empowerment occur in the construction industryProvide a clear and transparent environment in which land issues are redressedLeverage governments influence to impact the lives of the rural poor

Ensure that government is meeting its accommodation requirements in a cost effective manner while addressing social objectiveStreamline 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


Role of DPW and SPMCNational Department of Public Works

State Property ManagementCompany(SPMC)

Mandate •To regulate the built environment•To transform the construction industry - CIDB•To create jobs, provide infrastructure, develop HR and empower communities through implementation of the Ilima/Letsima programme

•To facilitate the delivery of government service through delivery of the asset and accommodation requirements in accordance with the prescribed legal frameworks


Customer Focus

Information Sytems, Human Resources and Financial Management

STATE PROPERTY MANAGEMENT COMPANY

Accelerated Service Delivery Vehicle

Ministry of Public Works

FUTURE NATIONAL DEPARTMENT OF PUBLIC WORKS

NDPW

CBPWP, CIDP, ECDPPolicy Formulation, Monitoring

& Evaluation


Overall SPMC CharterThe SPMC will provide the Government of South Africa with its core facilities and accommodation needs throughCost-effective, value-adding management

and maintenance of its owned portfolioStructuring of leases with private sector

owners Construction of on-spec, on-time, on

budget new facilitiesMaximise the value of the property

portfolio and minimise risk to the StateIt will meet its mandate with a customer focused, information rich, commercially capable organisation that makes effective use of private sector capabilities


SPMC To be established as a 100%

government owned company Possible alternatives

Fully funded entity An entity that will be self sufficient

after a monopoly period


GovernanceMinister

SPMC

Board of Directors(SPMC)

NDPW

Board of Directors(CIDB)

CIDB

IDT,CBE,etc


A continuum of legal entitiesDepart-

mentSchedule

3ASchedule

3BSchedule

2Company

• Fully adheres to government objectives

• Over regulated

• Rigid remuneration

• Internally focused

• Regulated by PFMA

• Established in terms of National legislation

• No borrowing power

• Mainly funded by NRF


• Functions in accordance with ordinary business principles

• Limited bridging finance

• Mainly funded by means other than NRF


• Commercially driven principles

• Mainly self funded


• 100 percent owned by government

• Autonomous

• Commercial principles

• Free from policy constraints

• Self funding

• Tends to ignore government’s broad social objectives

• Regulated by Companies Act


Core Functions of the SPMC Asset Management

Key Account Management Principles Project Management Leasing Management Services Property and Facilities

Management Alternative Forms of Delivery


SPMC Organisational Arrangements

Key AccountManager

Center of Expertise

ProjectManagement

Center of ExpertiseP& FM

Center of ExpertiseLeasing

Asset Management

Matrix ManagementSingle Point Accountability


Core Functions of NDPW

NationalDepartment of Public Works

Monitoring and Evaluation

Poverty Alleviation

Programme CBPWP

Policy Formulation - SPA and NPWP


Major MilestonesRoad Map

Framework

SPMC Act

B/CaseSPMC Act

Transition

Launch

15 Oct

November

29 Oct

Apr 2002

Dec 2001

Oct 2002


Benefits SPMC creates a sharply focused organisation SPMC can be designed from a clean base SPMC provides new degrees of freedom

People, Systems, Organisation, Compensation Policy formation within NDPW separated from

execution SPMC will be accountable and transparent NDPW - Policy focused organisation Proper Monitoring and Evaluation by NDPW


THANK YOU

Transformation Programme Towards Operational Efficiency PORTFOLIO COMMITTEE 13 NOVEMBER 2001.

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Transcript of Transformation Programme Towards Operational Efficiency PORTFOLIO COMMITTEE 13 NOVEMBER 2001.