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Briefing to the Portfolio Committee on Defe nce and Military Veterans on the State of Department of Defence (DOD) Facilities Lt Gen J.T. Nkonyane Chief Logistics March 2014. AIM.

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  1. Briefing to thePortfolio Committee on Defence and Military Veterans on the State of Department of Defence (DOD) Facilities Lt Gen J.T. Nkonyane Chief Logistics March 2014

  2. AIM To brief the Portfolio Committee on Defence and Military Veterans on the state of DOD facilities, challenges in the relationship between the DOD and the National Department of Public Works (NDPW) and an update of operations of the Defence Works Formation (DW FMN)

  3. SCOPE Regulatory Framework Minister of Defence and Military Veterans (MOD&MV) Initiatives MOD&MV / NDPW Initiatives State of DOD facilities Challenges in relationship (DOD & NDPW) Measures taken to address challenges Update on operations of the Defence Works Formation (DW FMN) Conclusion Discussion

  4. REGULATORY FRAMEWORK 4

  5. Constitution of the Republic of South Africa • According to schedule 6 (24) 1 of the Constitution of the Republic of South Africa, Act 108 of 1996, section 239 (4) of the previous constitution continue in force as if the previous Constitution had not been repealed, subject to the amendments to those sections as set out in Annexure D to schedule 6 • According to Annexure D (7), subsection (4) of section 239 is amendment by replacing subsection (4) with the following subsection: • ‘(4) Subject to and in accordance with any applicable law, the assets, rights, duties and liabilities of all forces referred to in section 224 (2) shall devolve upon the National Defence Force in accordance with the directions of the Minister of Defence. • Organs of state must perform their functions in a manner that does not encroach on the functional integrity of government in another sphere (Section 41(1)(g)) 5

  6. Public Finance Management Act, Act 1 of 1999 • Accounting Officer of department is responsible for the effective, efficient, economical and transparent use of the resources and management, including the safeguarding and the maintenance of the assets of the department (Section 38(1) (b) and (d)) • Defence Act, Act 42 of 2000 • The Minister may acquire, hire, construct and maintain defence works, ranges, buildings, training areas and land required for defence purposes (Section 26(2)(a)) • The Minster may sell, let or otherwise dispose of any land or building which is no longer required for defence purposes (Section 26(2)(e)) • Treasury Framework • The Treasury approved “Framework for the Devolution of Budgets and Introduction of Accommodation Charges” dated 18 December 2005 provides the option (in clause 6.3) to departments to use DPW as a service provider for their functional accommodation or to do it themselves. Military facilities are specifically mentioned in this regard 6

  7. Government Immovable Asset Management Act, Act 19 of 2007 • According to GIAMA, the Minister of Public Works may assign (Section 18(1)) any or all of his or her powers, duties and responsibilities as a Custodian in terms of this Act to any organ of stateor designate (Section 19(1)) an organ of state as the Custodian of an immovable asset • Section 4 of Government Immovable Asset Management Act, Act 19 of 2007 provides that the Minister of N DPW has custodial rights and powers over all immovable assets that vest in national and provincial governments • Custodial rights under GIAMA not granted iro ‘cases where custodial functions were assigned to other Ministers by virtue of legislation before the commencement of this act’ • Therefore GIAMA excludes custodial rights over the DEP portfolio due to 1922 legislation 7

  8. Defence Endowment Property and Account Act, Act 33 of 1922 • Defence Endowment Property is transferred to the RSA (‘Union’) for the exclusive use and benefit of the DOD (‘War Department’) and the DOD is the appointed custodian of this portfolio 8

  9. MOD&MV INITIATIVES 9

  10. At the DOD Workshop on 26 March 2008 the Secretary for Defence instructed that Chief Logistics take immediate steps to create an internal DOD facility management capability and to migrate away from reliance on NDPW A draft Strategic Plan to migrate the management of DOD facilities from NDPW was compiled based on: Research of best practice, Inputs and guidelines from: stakeholders within DOD (AOS and Works Regiment) the Security Cluster Facilities Workgroup, and National Treasury 10

  11. Ministerial Agreement • To give effect to the restoration of the custodianship and handover of the functions and reduce risks, the following need to be resolved: • Legal arrangements to formalise devolvement of custodianship • Agreement on effective date of devolvement of custodianship • Agreement on the timeframe for handover of functions • Process to facilitate handover of functions • Agreement on handover principles • Agreement on financial arrangements • Commitment and co-operation of both Department’s resources towards the handover period • Formation of a Project to manage the migration process 11

  12. MOD&MV / NDPW INITIATIVES 12

  13. The Secretary for Defence was tasked with implementing the intent of the restoration of the custodianship to a MOU draft status DOD and NDPW independently obtained legal advise and confirmed legal / regulatory basis for intended restoration of the Defence Endowment Property portfolio 13

  14. Developments/agreements at Secretary for Defence level: Meeting between the Secretary for Defence and the DG of NDPW on 8 October 2013 agreeing to the following: MOU to address the restoration of Defence Endowment Property and co-management of GIAMA properties Restoration of Endowment Properties and co-chaired by DOD and NDPW with the following guidelines that the NDPW co-chair develop the Implementation Plan for the restoration of Endowment Property custodianship and functions Establishment of a forum for the management of capital and refurbishment projects headed by NDPW (co-management of GIAMA properties) 14

  15. STATE OF DEFENCE FACILITIES 15

  16. T 16

  17. T 17

  18. The backlog in the maintenance and repair of DOD facilities was estimated at a figure of Rb8 in 2011 and the situation today has worsened The condition of DOD facilities will continue to deteriorate if action is not taken due to the following facts: Accommodation Charges. Over the past three financial years, the DOD has paid over an amount of Rb3.3 to NDPW for accommodation charges of which only Rb1.9 was used for rates and taxes, day-to-day and planned maintenance on DOD facilities. The balance of Rb1.4 was used by NDPW for other purposes 18

  19. The condition of DOD facilities will continue to deteriorate if action is not taken due to the following facts (continued): Refurbishment / Capital Projects. Over the past five financial years the DOD has allocated Rb3.1 to these projects but NDPW has been able to spend approximately Rb1.5 thereof The DOD is forced to spend the balance of the funds in an unplanned manner or surrender it Leases. Over the past five financial years, the DOD has paid over an amount of Rb1 to NDPW for the leasing of facilities with a continuous increase in the lease amount rendering the DOD dependant on the private sector 19

  20. Value not received 20

  21. CONCLUSION – STATE OF DOD FACILITIES The SANDF’s ability to effectively deliver its constitutional responsibility is severely impacted by the following: Significant negative impact on the morale of soldiers due to poor living and working conditions Non compliance to OHS and other Environmental legislative requirements leading to closure of the units A negative impact on the image of the SANDF due to its state of facilities 21

  22. CHALLENGES IN THE RELATIONSHIP 22

  23. PLANNING AND CO-ORDINATION Lack of integrated planning and execution process that is essential to accomplish the diverse objectives of the departments, and spelling out of accountability Poor or no synchronisation of strategic priorities resulting from different mandates that result in misallocation of resources especially in maintenance projects Inadequate capacity to address maintenance backlog 23

  24. PLANNING AND CO-ORDINATION (cont) Continuous short term changes in construction / maintenance plans eg. Refurbishment projects abruptly terminated Absence of monitoring and performance evaluation mechanisms and processes – primary purpose of bilaterals 24

  25. COMMUNICATION Present institutional mechanisms for managing common roles and responsibilities not effective nor aligned, due to the absence of a common strategic plan to manage – this results in bilateral meetings culminating into grievance communication platforms Common processes or channels within the departments to manage facility related tasks not adequate or responsive enough to address emerging challenges. Its characterized by fragmentation, and layers of bureaucracy that add little or no value to the ultimate service rendered 25

  26. CONCLUSION – CHALLENGES Working relations are non-productive and border on dysfunctional practices with the DOD accountability and image severely suffering Operational readiness of the SANDF at high risk due to non-compliance of our facilities to regulations, and their demoralizing effect to the combatants, and promotion of behaviours that are not consistent with military culture 26

  27. MEASURES TAKEN TO ADDRESS THE CHALLENGES 27

  28. STRATEGIC LEVEL – ESTABLISH THE DEFENCE WORKS FORMATION Reduce and address the capacity challenges in NDPW and prevent the escalating deterioration by establishing SANDF own maintenance capability 28

  29. OPERATIONAL LEVEL Appointment of Consultant Team DOD proposal to manage individual critical projects Establishment of Interdepartmental Forums 29

  30. UPDATE OF STATUS OF DEFENCE WORKS FORMATION (DW FMN) 30

  31. MANDATE OF THE DW FMN Rationale for devolvement and handover • To provide the DOD with the following capabilities to manage its facilities: • Facility Management • Real Estate Management • Maintenance and Repair • Construction • Military Integrated Environmental Management • Facility Integrated Skills Development • Staff Support Services 31

  32. STATUS OF THE DW FMN Rationale for devolvement and handover • DW FMN is better placed to do less complex tasks such as refurbishment and maintenance directly as opposed to NDPW who outsource all work at a high cost • DW FMN can also be able in the short term (2 years) to take over a larger and more complex range of tasks and save the DOD up to Rb1 per year provided the following is addressed internally: • Mandate and delegations • People and Structures (laborers, artisans, technicians and professionals) • Information Systems • Policy and processes (eg procurement) 32

  33. STATE OF READINESS Rationale for devolvement and handover DW FMN has a pool of trained artisans (350+), trained site supervisors (90) and project managers (20+) in 9 Regional Units who are doing smaller refurbishment tasks independent of NDPW DW FMN also has a small pool of qualified professionals (engineers, architects etc) who are used to supervise and manage less complex contracts in the short term DW FMN is slowly procuring multi purpose construction equipment and vehicles 33

  34. DISCUSSION 34

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