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17 February 2005

The Minister of Social Development, Zola Skweyiya
The Deputy Minister of Public Works, Ntopile Kganyago
Senior government officials
Ladies and Gentlemen of the Media

INTRODUCTION

Poverty has multiple causes and manifests itself in different ways, not least through the lack of access to any means of production and other economic opportunities. Unemployment and the absence of essential public services including inadequate infrastructure, accentuate poverty. Since 1994 the National Department of Public Works has been called upon to use its competencies such as infrastructure development, immovable property management and public works programme co-ordination, to alleviate poverty and create a better life for all.

EXPANDED PUBLIC WORKS PROGRAMME

In May 2004, the President committed government to a set of very specific targets for a range of programmes, to ensure progressive progress is made to reach the goal of halving poverty and unemployment by 2014. One of these targets was for the EPWP to create at least one million work opportunities coupled with training within the first five years of the programme.

To date, good progress has been made towards meeting that target. In the first six months of the programme (up to September 2004), at least R1, 5 billion was spent:

* To implement 1518 projects; and
* To create 82 200 gross work opportunities

The EPWP has been launched and is operational in all nine Provinces. The required training programmes have been put in place in the infrastructure and environment sectors of the Programme, and good progress is being made in putting in place the required skills programmes and learnerships in the social and economic sectors. Many contractors and engineers have been trained in labour-intensive technologies, and implementation guidelines are in place.

In the infrastructure sector, more than 950 emerging contractors and supervisory staff have been registered on learnerships to specialise in labour-intensive construction and maintenance works. These training programmes for contractors and supervisors are key to the successful implementation of EPWP infrastructure projects, because they must have the skills and capacity to implement projects labour-intensively, without sacrificing the quality or cost of the infrastructure being built or maintained.

EPWP - Priorities and Objectives for 2005/06

The EPWP is on track to achieve its target of at least 130 000 work opportunities in its first year. As we are about to celebrate the first anniversary of the EPWP in April 2005, the challenge is to ensure that we use the foundation laid in the first year of the EPWP to expand programmes in all sectors, ensure that local government is brought on stream and that we are able to steadily reach greater numbers of people. We are confident that this expansion will result in the creation of 300 000 EPWP work opportunities per annum by April 2007.

Our focus areas and associated objectives and priorities for the 2005/6 period, to ensure the required progress on the EPWP, will be as follows.

We will be improving our communications about the EPWP in partnership with GCIS. This will focus on increasing the understanding of the EPWP among government officials and the general public.

We will consolidate and where necessary increase, the capacity that we have created in our EPWP unit, so that the unit is well equipped to liaise with all of our stakeholders and to provide support on request to other departments, provinces and municipalities. We will also be reviewing and streamlining coordinating and implementing structures at national, sectoral, provincial and local government levels.

We have made good progress in putting in place a monitoring system, and will be commencing with evaluations of EPWP programmes and projects next year. We believe that our current job creation figures are understating the actual numbers of employment opportunities being created, because we are not yet obtaining reports from some government bodies. One of our focus areas will be to improve the general quality of monitoring reports and to ensure that all relevant bodies submit reports.

One of the areas in which we have made progress is to enter into a formal partnership with the Business Trust, which will be mobilising private sector support to assist departments, provinces and municipalities to implement the EPWP in various ways. These Business Trust support programmes will commence soon, and start to have an impact in the coming year. We have also entered into an agreement with the International Labour Organization (ILO) to make international expertise in the use of labour intensive methods available to government bodies participating in the programme. In addition, we have an agreement with the Centre for Public Service Innovation to establish an EPWP learning network, which will promote the expansion of best- practice labour-intensive programmes.

In the infrastructure sector of the programme, we will continue to focus on mobilising all government bodies to adopt labour-intensive methods on their infrastructure projects where technically and economically feasible, and to use the approved tendering guidelines for EPWP projects. We will also continue to work with provinces and municipalities to recruit emerging contractors and supervisory staff onto the special labour-intensive contractor learnership programme which I mentioned earlier, with the aim of having 1500 learners on this programme by the end of the 2005/06 financial year. We will also be engaging with major State Owned Enterprises to assess their potential for contributing to the programme through their infrastructure programmes.

As indicated by the President, there will be a focus on introducing or further strengthening some additional social sector programmes under the EPWP in 2005, particularly in the areas of Early Childhood Development and Home Community Based Care. We will be working with the relevant social sector departments and National Treasury to accelerate the preparatory work, which has already started in this regard. The model which we will be promoting is one in which unemployed people enter these areas as EPWP workers on a stipend for an initial two year period, during which they obtain a combination of work experience and SETA-accredited training, and after which they graduate into longer-term employment with a formal qualification.

The EPWP is an ambitious undertaking, and all the different stakeholders – communities, individuals, local, provincial and national government, public representatives, community and sectoral organisations, parastatals, business and labour – must all play their different and complementary roles to ensure that we are able to reach the target of a million work opportunities within its first five years.

CAPITAL PROJECTS AS CATALYSTS OF SERVICE DELIVERY AND POVERTY REDUCTION

The Department of Public Works contributes to poverty alleviation among other things, by acquiring and managing public infrastructure suited to service delivery and contribution to fixed domestic investment.

In 2004/05, the Department earmarked approximately R3 billion to undertake capital works projects including maintenance on national government assets utilised and occupied by national departments and their agencies.

Some of the projects we have successfully delivered to date include the R76 million Kinshasa Diplomatic Village and the R115 million Berlin Embassy on behalf of Foreign Affairs.

During the current financial year, the department commenced the design and construction process of two embassies, one in Addis Ababa (Ethiopia) and another one in Maseru (Lesotho). The total cost of the two embassies is estimated at R60 million. Plans are at an advanced stage to build an embassy in Abuja, Nigeria.

Also R55,7 million SAPS and R171 million Justice projects were personally handed over to respective user departments (See attached Ministerial Public Appearance Programme for 2004 which is in your pack).

As we begin 2005 we have already embarked on an intensive construction programme of four New Generation Prisons in Kimberely (Northern Cape), Klerksdorp (North West), Nigel and Leeuwkop (both in Gauteng). The department is working closely with the client, Correctional Services, in the planning and the procurement of the programme.

The total programme cost is estimated at R1 billion. The construction of earthworks and civil infrastructure has already commenced in three of the four prisons at an estimated amount of R100 million. The construction of buildings and support facilities will commence in mid 2005.

The construction of these prisons will also serve as a new model for executing Black Economic Empowerment in Public Works through the implementation of the DPW’s Contractor Incubator Programme (CIP).

Each of the four prisons will cost more than R350 million and the Department has innovatively split the work into various subcontracts ranging from R1 million to R20 million each to allow emerging contractors to participate based on their capacity and capabilities. Approximately 40% of the value work in these prisons will be executed by the CIP contractors.

The CIP is one of the cornerstones of BEE Policy and Strategy in the DPW. Already, 50 black owned contractors have been pre-selected by the department assisted by independent panel of experts from the CSIR and the Construction Industry Development Board (CIDB)

In addition the DPW will construct the New National Archive in Pretoria at an estimated cost of R800 million over a period of at least 5 years. In the pipeline, are plans to repair and maintain the Civitas Building, recently vacated by the departments of Home Affairs and Health. The estimated cost of work in Civitas is R175 million.

Construction at the Jane Furse and Sekgosese Police Stations in Limpopo will cost approximately R12 million each.

We will carry out upgrading and refurbishment work on the Phalaborwa and Polokwane Magistrate’s courts at a total cost of just over R10 million.

We will also this year be completing renovations to the Forensic Science Laboratory on behalf of the South African Police Services at a cost of R40 million and the Union Buildings at an estimated R28million.

In the Western Cape we will see the completion of several projects including the following: 90 Plein Street Cape Town (R104 million), 18 New Staff Quarters at Palace Hill in Simonstown (R18 million), New Naval Base head office in Simonstown (R60 million) and the Hout Bay Police Station for R12.5 million. Last week you bore witness to the official handover of the Parliamentary Media Centres that we undertook on behalf of GCIS at a cost of R29.5 million.

In the Eastern Cape we will see the construction of the South African Police Service office block in Mdantsane for R23 million and the one stop justice centre at Motherwell near Port Elizabeth for R24 million. In Middelsdrift we will construct a R20 million facility on behalf of Correctional Services and a police station at Sterkspruit for R15 million. Projects in Kakamas (R10.7 million) and Colesberg (R16 million) will be carried out on behalf of the SAPS and Justice, respectively.

In the North West, the NDPW will launch several projects including the construction of guard posts for Correctional Services (R14 million) and the new police station at Ditsobotla, which will be handed over to the client this year.

BLACK ECONOMIC EMPOWERMENT

BEE is a cornerstone of government policy intended to expedite the access of the majority of South Africans into the mainstream economic activity of the country. Given the nature of its core business, the Department is poised to contribute significantly to BEE in 2005. To this end, we have instituted reviews into our existing programmes including Repair and Maintenance (RAMP) and Emerging Contractor Development Programme (ECDP), to gauge to what extent they can be improved to increase their impact on, and contribution to BEE.

As already mentioned, we have launched the Incubator Programme to identify and select a group of 50 promising contractors, with potential, to catapult them into a sustainable streak of becoming fully fledged contractors capable of expertly executing multi million rand building contracts. The construction of the four (4) New Generations Prisons in 2005 should provide a launch pad for these aspirant entrepreneurs.

The department also continuously identifies opportunities for emerging property owners to participate actively in its property leasing programme to accommodate various national departments across the country.

This is all part of levelling the playing field and further promoting the development, growth and transformation of both the construction and property industries, as enshrined in their Transformation Charters due to be launched in the second half of this year. The process for the drafting of these Charters was inaugurated in October and November 2004.

EXPEDITING PUBLIC INFRASTRUCTURE DELIVERY PROCESSES

The growing investment in fixed assets (infrastructure) development should be both encouraged and supported. Many initiatives of government such as the Housing momentum, School and Health Building Programmes as well as the preparations for the 2010 World Soccer Cup depend on a competent construction industry and the able public sector to meet the infrastructure demands and expedite capital expenditure budgets, respectively.

The President raised serious concerns about the capacity of the public service to implement programmes aimed at addressing the infrastructure backlogs inherited from the past. For example, he mentioned weaknesses in the governance system which results in the school building programme unfolding at a much slower pace than envisaged and delays with the allocation of infrastructure grants.

My Department is currently working on a number of programmes aimed at addressing these concerns, and over the next year I will be working closely with my counterparts at provincial level to ensure that the management of infrastructure delivery programmes is improved.

One of our programmes to address this issue is the Infrastructure Delivery Improvement Programme, which we are implementing together with the Construction Industry Development Board and National Treasury. This involves working with provinces and municipalities to put in place improved systems for the management of infrastructure programmes, from project planning through to procurement, project delivery and maintenance.

Another important programme in this regard is the roll out of the Contractors’ register and Projects’ register by the Construction Industry Development Board. These registers will facilitate quicker and more reliable procurement of construction services by government bodies. The registers are currently being piloted in my department and in several provincial departments and municipalities, and will be rolled out on a wider-scale in the coming year.

We are also finalising a government-wide immovable asset management framework, which will facilitate the uniform management of public infrastructure according to minimum standards, across the public sector. We will be bringing a White Paper and a Bill on this issue to Parliament during 2005.

Furthermore, my department will be implementing an internal service delivery improvement programme from April 2005, with the aim of making our internal operations more business-like, and improving our efficiency, effectiveness, and alacrity. Again, I will be working with my provincial counterparts to ensure that similar improvement programmes are put in place in all provincial public works departments. Some provinces have already put in place such programmes, which have resulted in marked improvements in infrastructure service delivery, including Limpopo’s “RE A SHOMA” programme and Gauteng’s “POTLAKA” programme.

In line with previous targets set by the President, DPW is also leading a process of improving office accommodation for national government departments, and we intend to complete plans in this regard and start implementing improvement projects during 2005. Improving office accommodation will play a part in improving the general efficiency and effectiveness of the public service.

CONSTRUCTION AND PROPERTY INDUSTRY TRANSFORMATION CHARTERS

Current efforts to develop and transform the construction industry include the process to draft a Transformation Charter for launch later this year. Unless its transformation is prioritised and its capacity doubled in the short to medium term, the industry runs the risk of being overwhelmed by the delivery requirements of the future, including meeting some of the infrastructure demands associated with the country’s hosting of the Soccer World Cup in 2010. The CIDB’s Registers of Contractors and Projects, which I mentioned earlier, will also create a more streamlined approach to industry quality delivery. A process is also in place to draft a Transformation Charter for the property industry, and we have set a target for both these charters to be in place by the end of June this year.

CONTRIBUTING TO LAND REFORM IMPERATIVES AS PART OF POVERTY ALLEVIATION

Managing the state’s immovable assets includes elements of planning, acquisition, maintenance and disposal. In the past decade the Department as a custodian of state’s fixed properties including vacant land, has been releasing land in support of land reform initiatives. Between 1 April 2004 and 31 January 2005, the Department transferred 18 627 hectare of land to the beneficiary communities, to the local government for the development of low-cost housing and other related municipal infrastructure and to other organs of government including the 848 ha to the Airport Company of South Africa (ACSA) in terms of its founding legislation.

In 2005/06, the Department has identified 26 properties in extent 55 399 ha for disposal mainly in the Eastern Cape (17 properties=3407 ha), Limpopo Province (4 properties=28 755), Northern Cape (4 properties=22 490 ha) and Western Cape (1 property=748 ha).

In addition to contributing to the socio-economic expectations of government, these disposals are important in lessening handling costs of government immovable assets particularly in cases where such properties are underutilised or unused and the Department has identified them as superfluous to the future needs of government.

CONCLUSION

The Department is ready to embrace the President’s call to “turn every public servant into an activist for social delivery”. Internally, the Department has launched a Management Charter known as the DPW Leadership Way with the aim of introducing a new management ethos in the Department, and to address problems such as low staff morale, poor management practices, lack of urgency and lack of customer focus. This has been agreed to by all senior management and is being driven by the Director-General.

With the initiatives, which I have mentioned above, I believe that the Department will be in a position to meet the new challenges announced by the President including:

* providing SAPS with the infrastructure required for improved Border Control and Security at Ports of entry;
* expanding community courts and sexual offences courts
* setting up at least two community courts per province
* finding alternative accommodation for the children in police and prison custody

Thank You.

Issued by: Department of Public Works
17 February 2005
Source: Department of Public Works (http://www.publicworks.gov.za)