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27 March 2006

Honourable Speaker and Deputy Speaker;
Honourable Premier, Ms Beatrice Marshoff;
Colleagues of the Executive and the Legislature;
Chairperson of the Portfolio Committee, Honourable Nketu;
Mayors and other representatives of Local Government;
Head of the Department and officials;
Distinguished stakeholders;
Honoured guests:

Introduction and Context

This year’s budget vote is very important in many respects. It happens on the second year of the second decade of freedom. That leaves us with eight years in our monumental task of halving unemployment and poverty by the year 2014. Government’s Programme of Action for this second decade is largely dominated by economic activities and thus infrastructure has been identified as a key driver for economic growth and development, to fight poverty and create work.

Infrastructure development can play an important role in economic growth and development and therefore set our provincial economy on a trajectory of much higher growth rates. Such a trajectory must reduce poverty and create sustainable employment. This is not only desirable but possible. It is therefore no exaggeration to assert, as President Thabo Mbeki retorted in the State of the Nation Address, that in deed we have entered an Age of Hope.

Our economy has experienced some relatively higher growth rates in the recent period. Our system of democratic governance is maturing and growing rapidly towards a true people’s and developmental state. A developmental state that intervenes in the economy for and on behalf of the people. The high level confidence that people have shown on our democratic system has been further confirmed by the recent Local Government Elections.

The construction industry has also made its own contribution while it has also grown. Benefits accrued to consumers arising from the current economic growth have led to a boom in the motor vehicle sales. This resulted in increased traffic volumes on our roads, and thus posing a challenge to maintain and upgrade our road network and transport infrastructure.

Intensified efforts have to be made to bring about higher growth rates in the province in a manner that will help reduce unemployment and fight poverty. It is against this background that Accelerated Shared Growth of South Africa (AsgiSA) has to be welcomed.

The Free State Provincial Growth and Development Strategy (FSPGDS) is cardinal in pointing out priorities and drivers for the sustainable development of the province. It sets the policy context for developing and growing the provincial economy.

The Provincial Intergovernmental Infrastructure Summit, which was successfully hosted last year (2005) in November, is instructive on our approach and set of priorities with regard to infrastructure development in the Province. The resolutions of this summit will therefore be inspiring to our infrastructure roll out planning. These resolutions mainly focused on six key areas, namely:

1. Land and Human Settlements;
2. Social Infrastructure;
3. Information, Communication and Technology Infrastructure;
4. Economic Infrastructure;
5. Roads and Transport (Road and Air Transport);
6. Engineering Services.

The hosting of the Infrastructure Summit was indeed watershed and therefore was a fulfilment of the dictum the Premier had made in the State of the Province Address amplifying the imperative of an integrated infrastructure development which compels us to develop a comprehensive Provincial Integrated Infrastructure Plan. The development of the plan is well on course.

Successes and Challenges

Honourable speaker

The past financial year posed challenges and equally registered significant successes that include amongst others, the following:

* Accelerating implementation and improving co-ordination of the Expanded Public Works Programme (EPWP);
* The first province to align and implement the Construction Industry Development Board (CIDB) Regulations;
* The first province in issuing route-based operating licences as part of the Taxi Recapitalisation Programme;
* Enhanced management of Government fleet enabling the reduction tariffs;
* The EPWP skills development component has registered learner-ship programmes having reached 146 learners.
* Adopting, implementing and populating an organisational structure designed towards accelerated service delivery.

Despite the successes registered the Department is still confronted with some challenges encompassing the following:

* The ability to implement an accelerated broad-based black economic empowerment (BBBEE) in a targeted, biased and sustainable manner;
* To provide a road and transport infrastructure system that will inspire an enabling environment for socio-economic development;
* The promotion and integration of rail in our transport system;
* Sustainable and transformed property portfolio;
* Enhanced service delivery to client departments;
* Traffic management system that promotes law enforcement, visibility and preservation of road infrastructure;
* Security management that promotes the safeguarding of state assets.

Mr Speaker

We will use this occasion of the budget vote to reflect on progress made on the commitments made last year and to set priorities for the new financial year. This exercise will underscore the theme of infrastructure development as a key driver of economic growth and development. As the lead department in infrastructure delivery, the Department of Public Works, Roads and Transport, has a duty and active role to play in giving a practical and concrete meaning to this theme.

The 2006/07 Budget

Honourable Speaker, I’m honoured to table our Department’s appropriation of R1,06 billion. This represents a 19% increase compared to last year’s budget. However, it should be noted that pressures are still experienced relating to the roads infrastructure and the recent torrential rains have increased this backlog. This increase in our budget has been largely inspired by the strategic emphasis placed by Government on infrastructure development through public expenditure as encapsulated in the AsgiSA and the FSPGDS.

Whilst the increase is welcomed, we must hasten to indicate that the budgeted amount is still inadequate for meeting our infrastructure needs arising from poor and racially inspired development planning of the past. The increased traffic volumes that pass through our province due to its central location have significantly contributed to the rapid deterioration of our roads infrastructure.

In an attempt to ensure that we receive value for money, we are employing prudent measures in spending our limited resources. Our bias in deploying our resources will be in areas that contribute to infrastructure development.

Administration and Service Delivery

During this financial year we will advance the process of reorganisation and improving our capacity even further. We will enhance our capacity in all our components; both line function and support service functions. We have already filled the majority of strategic posts for fulfilling our mandate of leading infrastructure development and efficiently delivering the important services we render. We will accordingly continue filling important positions in our new structure.

During the past financial year, we filled critical vacant posts in an endeavour to reinforce our capacity and improve service delivery. It is also pleasing to note that 53% of those recruited last year were females. Gender and disability mainstreaming will be reflected not only in our vision, policies and programme; but also in our composition. A restatement of this tenet of our democracy is profound in this year of the 50th anniversary of the Women’s March to the Union Building.

The capacity improvements and reorganisation we are effecting to the department are all aimed at enabling the Department to execute its mandate, which we articulate through our eight key strategic thrusts, namely:

* To improve the image of the Department

The Department will dedicate R15.3 million in 2006/07 towards skills development. We will, in conjunction with Free State Training and development institute, further education and training (FET) colleges and other institutions of higher learning, skill our employees for improved and accelerated service delivery. R1.6 million will be dedicated to skills development for improving services at registration centres, in line with Batho-Pele standards R2 million will be invested in scarce skills to provide for the efficient delivery of infrastructure.

R4.7 million will be invested in construction-related training, inclusive of adult basic education and training (ABET). R2.4 million is earmarked for the re-training and re-skilling of law enforcement officers at the Lengau Traffic Training College in Bloemfontein.

* Effective implementation of EPWP;
* Ensure the effective provision integrated infrastructure development;
* Good governance and people development;
* Ensure the provision of integrated public transport;
* Improving service delivery;
* Effective asset and property management and investment;
* To promote economic development through co-operative governance and Public Works.

Honourable Speaker, Public Works serves as a catalyst in achieving the goals and objectives as enshrined in the FSGDPS. Key in this will be the Department’s effectiveness in driving economic growth through infrastructure development.

To reinforce and consolidate our capacity as an infrastructure service delivery arm of Government, we are improving our capacity particularly in the following competencies: planning (architects), civil, electrical and mechanical engineering, works inspectors, project management and quantity surveying. The strengthening of in house capacity will enhance returns on investment as savings could be utilised for capital projects.

In partnership with the Provincial Treasury, we will implement the Infrastructure Delivery Improvement Programme (IDIP), which is a change programme established to help create capacity for improved and fast-tracked infrastructure service delivery. This programme seeks to address inadequate delivery capacity and skills, while simultaneously deploying best practices and methodologies through flexible tools that can be adapted to and are project specific.

We are engaged in efforts aimed at improving our planning and execution cycle for all infrastructure projects. For 2006/07, we will ensure that our services to client departments and communities are improved and accelerated by embracing and implementing IDIP principles and strategies in developing, implementing and monitoring our service delivery plans. The Department seeks to render uncompromisingly improved services towards the construction and revitalisation of hospital projects, school building and maintenance projects, libraries, upgrading of museums, one stop child justice centres and renovations and upgrading of resorts as identified by client departments in their various budget votes. Our on-going engagements and consultations with client departments are on course and various implementable service level agreements have been reached. Speedy access to social infrastructure is what our communities are yearning for. And the Department commits itself to respond with the much needed urgency to this clarion call.

Speaker, we have set-aside 40% of maintenance, upgrading and capital budget for the promotion of the BBBEE objectives and all the identified projects will be EPWP compliant. The implementation of an incubator strategy to promote the development of sustainable contracting enterprises owned and controlled by Historically Disadvantaged Individuals (HDIs) with particular bias to women, youth and people with disabilities will be meticulously implemented.

The purpose of the incubator programme is to create an enabling environment within which selected existing contracting enterprises can develop into sustainable contracting enterprises. Preference will be applied in the accessing of work so that enterprises owned and controlled by one or more HDIs are advanced. Women, youth and the disabled as well as geographic spread will receive a bias. The bulk of public works projects range between R1 million to R5 million and this leverage will enable us to implement the incubator programme though where possible will extend to higher values.

The enabling environment should comprise of two elements:

* Steady access to work opportunities achieved through sourcing suppliers on Incubator-designated projects from the Incubator Supplier Register. This will also be achieved to some extent by concentrating development efforts on a level of contracting enterprise that can operate in the sustainable R1 million to R30 million range market identified (categories). The number of players in the market place can be expected to be in line with the number of opportunities.

* Supply side measures for the support of growing enterprises through a structured mentorship-centred enterprise development programme with improved alignment of institutional support structures.

The Construction Empowerment Charter, which was signed on 17 March 2006, constitutes an important tool and framework for the transformation of the industry to address the following BBBEE elements: ownership, control, employment equity, skills development, procurement, enterprise development and corporate social investment. We will therefore drive and monitor the implementation of this important Charter in the province.

The Provincial Land Administration Act obliges the Department to diligently manage and safe-guard all state properties entrusted upon the Department. During this financial year, the Department will train and re-skill all the security staff to ensure that they are adequately equipped for this mammoth task in the endeavour to curb theft and break-ins. In partnership with the Department of Public Safety, Security and Liaison we will upgrade and activate all access and security networks to our Government buildings, particularly Lebohang, Provincial Government Building, control rooms and the official residences of public office bearers.

Roads Infrastructure

Honourable Speaker, Roads represent the single largest increased allocation of this budget vote. This is partly due to huge backlogs and the potential roads posses in contributing to building an efficiently operating economy. This is also informed by the FSPGDS priorities and the infrastructure summit directives. Roads network is the live wire of the provincial economy. We have also sought to strengthen our co-ordination with South African Roads Agency Limited so as to complement one another better.

The recent floods have also exacerbated the relatively poor state of our roads and negatively affected our communities in various ways and thus underscore the need to invest more in the construction and maintenance of our roads. We have redirected our maintenance budget for emergency interventions following these recent floods.

Construction of the following projects will be executed during the 2006/07 financial year:

* The repair of the Bridge over the Orange River at Sterkspruit;
* The construction of access roads to the Dome at Vredefort;
* Upgrade of Springfontein to Bethulie;
* The construction of access road Trompsburg to Jagersfontein;
* Upgrade and construction of the Memel Verkerkerskop;
* Koppies access road.

All our road maintenance contracts will be in accordance to the EPWP guidelines and 50% of the road maintenance budget will be targeted at small emerging contractors and job creation in the area of the project.

As part of the exit strategy for the Vukuphile Learnership Programme, the 56 roads learners who have completed their training will be given preference when these maintenance contracts are awarded to ensure that road users travel in safety as well as to ensure effective mobility within district municipalities the following maintenance activities of surfaced and un-surfaced roads will be executed:
* 56,300 km blading of gravel roads;
* the maintenance of the paved routes, this includes pothole repair, shoulder repair and the milling of sections of the road which cannot be maintained labour intensive.

We are growing our employment of EPWP principles in the construction of roads. More needs to be done, and not only in terms of access roads and small projects. It is important that we execute a significant shift towards labour intensive methods within the overall public spending on infrastructure.

Expanded Public Works Programme (EPWP)

Honourable Speaker, we are encouraged that the EPWP has registered positive results in the province. This includes both the capacity to co-ordinate and implement that has been strengthened and the actual performance with regard to job creation, skills development and small, medium and micro enterprise (SMME) development. EPWP remains one of the many important programmes with regard to fighting poverty and job creation.

In the State of the Province Address, the honourable Premier stated “Already 10 034 jobs have been created in this programme throughout the province. We intend to improve on this figure through better coordination and monitoring.” She further remarked “…all of the economic developmental initiatives we have mentioned so far would by the end of this year created in excess of 50 000 jobs.”

In partnership with our sister-departments we will work tirelessly to achieve this target. We will seek to massify the labour intensiveness of all our projects in an attempt to achieve the targets of long and short term jobs.

We have established coordination mechanisms in each of the four EPWP sectors, namely: infrastructure, social, environmental and economic sectors. Four Sector Co-ordination Committees, each comprising of relevant departments, have been established. Progress has already been registered in the implementation by these sector committees. An EPWP Provincial Business Plan and the Sector Implementation Plan were also drawn up and implemented after submission to the Executive Council.

Through closer working relations with the Department of Local Government and Housing we will further strengthen our coordination with municipalities in implementing EPWP in the Municipal Infrastructure Grants (MIG). The implementation of the Infrastructure Contractor Learnership Programme is one area of mutual involvement with local government. This learnership is being implemented in the following municipalities:

* Letsemeng Local Municipality;
* Mohokare Local Municipality;
* Mangaung Local Municipality;
* Moqhaka Local Municipality, and
* Setsoto Local Municipality.

With regard to adherence to EPWP guidelines, we take comfort to place on record that through our sections of EPWP, Roads and Public Works, we have realigned all departmental contract documentation for civil and building works in accordance with the Construction Industry Development Board (CIDB) Standard for Uniformity in Construction Procurement Documentation and the EPWP Guidelines for Labour Intensive Construction Projects. This met the policy requirement made in the previous year’s commitment that “all procedures and processes that relate to the execution of projects are being reworked to meet the EPWP Guidelines”. This is also aimed at massification of the impact of EPWP through large scale projects.

Property Management

Honourable Speaker, historically, property was viewed as a right only for certain sections of the population whilst black people were denied access through the Native Land Act of 1913 and the subsequent discriminatory policies and legislation. Black people continue to be significantly underrepresented in ownership of property, whilst administrative and financial constrains restrict the ability of black people to participate in the property market, with black women and youth being the worst.

The adoption of the Property Charter two weeks ago was, certainly, a defining moment in the process of transforming the property sector to serve all. It has therefore created a framework within which thorough going transformation of this sector has to unfold. As government we continue to play a catalytic and decisive role in the unfolding transformation of the sector. This we do utilising our property portfolio. In the past financial year we gradually increased the number of office accommodation rented from black people.

We employed service providers to establish a Credible Asset Register. Information for the compilation of the Asset Register has been obtained and verified with Deeds Office. Mention should be made that the number of properties that the Provincial Government has on its records has substantially increased after the verification process.

The national land disposal framework is currently under consideration. This policy framework once adopted will go a long way in the transformation of the property industry. As the province we would take solace from the much awaited tool to change the property patterns.

Mr Speaker, in line with the transformatory agenda espoused by the property charter, the Department will direct 30% of our rental budget and 50% of our disposable immovable property to the historically disadvantaged giving impetus to the objectives of the charter.

Public Transport

Honourable Speaker, the subsidised bus contract of Interstate Bus Lines in the Motheo area has been extended for five years with a two year renewal option. The conditionality of empowerment will see the inclusion of taxi operators and small bus operators in the terms of the extension. A task team comprising of the Department and the national Department of Transport will develop a roll-out plan.

The Maluti Bus Service in the Thabo Mofutsanyane area was conditionally extended for two years. This extension will allow the department to implement the decision taken in 2002 to include small bus and minibus taxi operators in service provision. This process was confronted with some challenges which we are currently dealing with in the Department.

In compliance with the Taxi Recapitalisation Programme requirements, we successfully formalised the provincial taxi industry by registering all taxi operators as well as local associations. This programme has effectively reduced the number of conditionally registered associations from 79 to 49, making it more manageable and enables effective co-operation and co-ordination. We will continue to engage all to understand the significance of the government programme. I wish to commend the provincial South African National Taxi Council (SANTACO) for providing leadership in this regard.

Whilst the province has made remarkable progress in the taxi recapitalisation process, the conversion period has been extended to 31 May 2006 to ensure that all participate in the process without exclusion. The Department will be conducting workshops for taxi operators in all five districts in the Province.

A restructured business plan was submitted to the (national) Department of Transport for the construction of the inter-modal facility in Bloemfontein. This facility will represent an important development in the transport infrastructure in the province and also position the Province better for the 2010 World Cup.

Honourable Speaker, the October Transport Month we had last year sought to put at the centre of public discourse the imperative of a reliable, safe, affordable and efficient public transport in our country. In this way we intended to asses, together with all stakeholders and the broad public, the progress and challenges towards the realisation of our vision of public transport. We were able to highlight the necessity to champion the speedy development of public transport services and infrastructure. We contributed in raising awareness about the important role and benefits of public transport in the economy and in society. Together with the municipalities we will accordingly declare public load and off-load facilities in keeping with the public transport infrastructure demands.

Traffic Management

Honourable Speaker, in our quest to ensure safety of our road users, we successfully recruited and trained 179 new law enforcement officers. This has gone a long way in increasing our presence on the roads and has already borne some positive results in the reduction of fatalities on our roads, particularly this past festive season, as part of the Arrive Alive Campaign.

Our added staff complement has registered progress with regards to the reduction of long waiting periods for learners and drivers licences which impact negatively on the employability of job seekers. Despite interventions made, there is still room for significant improvements and we will endeavour to increase working hours and days to ensure that the job seekers and all potential drivers are assisted timeously.

We will accelerate the process of multi-skilling of our traffic officers to facilitate increased law enforcement amongst others to weed out overloading, eradicate un-roadworthy vehicles, increase and improve revenue collection, road safety and traffic control systems. Our renewed emphasis in partnership with the department of education will be focused on the scholar patrol and road safety for learners. This, Mr Speaker, will help to inculcate a culture of safety and tolerance on our roads. I must warn all truckers who intentionally and deliberately do not use the trucking facilities as provided. Failing which drastic law enforcement measures will be invoked.

We will intensify our fight to uproot fraudulent and corrupt practices within the system by officers and members of the public. These actions not only undermine our efforts for quality service delivery but perpetuate accidents and fatalities on our roads.

In conclusion, we do recognise the speed with which we have to implement the programmes we have highlighted in this budget vote. We remain convinced that such an implementation will make a major contribution in improving the conditions of our people, particularly the poor in both the urban and rural areas of our province.

Honourable Speaker, I wish to commit the Department to the following without fail:

* Improve and accelerated payments to contractors and service providers within stipulated time frames;
* The implementation of the BBBEE principles and objectives are not negotiable and the Department will soon announce our reviewed measurable targets;
* The robust implementation of a sustainable Incubator Strategy;
* Accelerated and sustainable transformation in the Property and Construction Industries;
* Efficient, effective and quality delivery of integrated infrastructure;
* Enhanced co-operation and consultations with client departments and other stakeholders;
* Increased focus on revenue collection and generation initiatives;
* The development and implementation of an integrated transport system in the province.

Honourable Speaker, Budget Vote 9 for the financial year 2006/07 is hereby tabled.

I thank you.

Issued by: Department of Public Works, Roads and Transport, Free State Provincial Government
27 March 2006
Source: Free State Provincial Government (http://www.freetrans.gov.za)