PRESENTATION TO PORTFOLIO COMMITTEE STRATEGIC OVERVIEW 13 MARCH 2006

1. PRESENTATION TO PORTFOLIO COMMITTEE STRATEGIC OVERVIEW 13 MARCH 2006

2. DPW Core Business Areas • Custodian of national government’s fixed property assets • Provide accommodation and facilities to national government • Coordinate EPWP • Regulate and transform the construction and property industries

3. SONA and ASGI-SA • Aspects of SONA and ASGI-SA for which DPW is directly responsible: • Scale up EPWP in infrastructure and social sectors • Pool EPWP resources to ensure maximum impact • Improve maintenance of public infrastructure • Prioritise the construction industry as a growth industry

4. Other aspects of SONA and ASGI-SA relevant to DPW: • Improve efficiency, effectiveness and alacrity of service delivery • Improve the capacity of the state to discharge its responsibilities • Ensure that capital budgets are spent without rollovers • Accelerate efforts to address poverty, underdevelopment, marginalisation • Improving employment equity • Address scarce skills issue (JIPSA) • Expand SMME sector with emphasis on BBBEE • Put in place programmes to develop women’s skills and women in business • Strengthen local government • NEPAD

5. DPW Responses to SONA and ASGI-SA • DPW ASGI-SA initiatives: • Plan produced to scale up EPWP in roads sector, with dedicated funding, in discussion with National Treasury • Working with DSD, Business Trust and Umsobomvu and provinces to scale up EPWP in social sector • Plan produced to assist public bodies to plan larger projects with more impact • Draft documents on possible national initiatives to improve maintenance across all three spheres developed with CIDB and CSIR, in discussion with National Treasury • DPW has obtained increased maintenance budgets for its portfolio • Document on positioning the construction industry as a growth industry in ASGI-SA developed with CIDB, now working with CIDB and DTI on an industrial strategy for the construction industry

6. Strategic DPW programmes aimed at improving service delivery: • Devolution of budgets, introduction of user charges and creation of trading entity • DPW Leadership Way • Zimisele Service Delivery Improvement Programme • Re Kgabisa Tshwane programme • Implementation of GIAMA • Disposal programme • Asset register improvement programme • HR programmes to increase skills (interns, young graduates, scarce skills allowance) • Anti-corruption and internal audit programme

7. DPW NEPAD initiatives: • Forum of SADC Public Works Departments • Developmental peace keeping programme • Involvement in DRC discussions • DPW BBBEE initiatives: • Charters for the property and construction industries • Realigned Emerging Contractor Development Programme (ECDP) and Contractor Incubator Programme (CIP) • EPWP programmes (Vuk’uphile and venture learnerships) • Disposal policy • Nascent programme to assist black people to enter the property industry (through the disposal and leasing programmes) • Release of state land for DLA land reform initiatives

8. DPW initiatives to develop women’s skills: • Dubai women project management training programme • Support for Women in Property, Women in Construction • Strong targets set for women’s participation in DPW BBBEE programmes • DPW initiatives to improve the infrastructure delivery capacity of the country: • CIDB contractors and projects registers • CIDB-driven construction-related procurement reform • Infrastructure Delivery Improvement Programme (IDIP) • Construction industry skills shortage study and related initiative to set up an ESDLA (skills development lead agency) to facilitate training • Construction Week • Construction Summit

9. Initiatives to strengthen local government: • DPW programme management and procurement support to Soccer World Cup • Training of municipal officials under the EPWP • DPW-facilitated Business Trust support programme to provinces and municipalities for the EPWP • Most of above initiatives will be covered in detail in other presentations • Key initiatives not covered in other presentations will be covered in this presentation: • Devolution of budgets and introduction of accommodation charges • Zimisele

10. Devolution of budgets and introduction of accommodation charges • Public Works White Paper said budgets would be devolved and user-charges introduced • Motivations: • Increase transparency of budgets • Introduce incentives for efficient use of immovable assets • Improve funding for maintenance of immovable assets • 2005 request from National Treasury to implement the Public Works White Paper • Detailed implementation plan drawn up

11. The following DPW budgets will be devolved from 1 April 2006: • Leases • Maintenance • Property rates • Municipal services • DPW will charge departments an accommodation charge, made up of: • An amount for leases (based on actual lease costs) • An amount for rental of state-owned property (rand per square metre of type of property occupied) • Departments will pay municipal services themselves, unless they specifically request DPW to do this for them, in which case DPW will charge a fee

12. Departments will be required to continue to use the services of DPW to enter into leases • DPW will use the income from the accommodation charge to: • Pay leases on behalf of departments • Carry out maintenance and refurbishments on state-owned buildings • Build up a reserve for capital works • DPW is creating a trading entity: • Trading entity will be established by 1 April 2007 • Interim mechanism • Draft business plan for trading entity • Treasury has provided substantial funds to capitalise the trading entity over the MTEF

13. Ministry DG COO Corporate services Op’s Asset Man. RKT EPWP Policy Finance and proc. Regional offices Current structure of DPW

14. Ministry Trading entity DG Head of TE COO Corporate services Op’s Asset Man. RKT EPWP Policy Finance and proc. Regional offices New structure of DPW with TE

15. Limited devolution of function • Some Departments have become increasingly vocal in requesting to take the management of their properties from DPW, particularly SAPS, Defence, and Correctional Services, due to perceptions of poor service delivery from DPW • These requests have been receiving a sympathetic hearing from National Treasury • DPW has taken the following policy positions on this issue: • To implement a turn-around / service delivery improvement programme • To offer to delegate custodial responsibilities for functional / specialised assets to one department

16. DPW, NT and SAPS have negotiated a gradual delegation of custodial responsibilities for managing police stations to SAPS, starting from 1 April 2006 • Letters are currently being sent to Ministers of Finance, Public Service and Safety and Security in this regard • Treasury agreement that SAPS will be a pilot, no devolution of functions to other departments in the interim

17. Service delivery improvement programme - Zimisele • Strategic response to reality and perceptions of poor service delivery by DPW • Three-year programme in partnership with private sector • Complementary to Batho Pele and the Leadership Way (practical implementation of these policies) • Aim is to turn DPW around so that Departments use DPW’s services because they want to – not because they have to

18. Focus of Zimisele is on making the Department more business-like: • Setting service levels standards for services offered to clients • Turn-around time, responsiveness • Quality of service • Introducing improved management methods: • Measuring and reporting on service output levels and costs of outputs • More efficient business processes • Improved productivity, turn-around times, better quality control • Increased responsiveness • Increased proactiveness • Instilling a culture of continuous improvement

19. See slides from Zimisele roadshow

20. Conclusions • Devolution of budgets and creation of trading entity will fundamentally change the department in the medium-term • Devolution of functions is a major risk facing DPW • DPW’s future role depends on the success of Zimisele and the other service delivery improvement initiatives • Strategic plan is currently at printers, will be tabled by 21 March as required