[ Home ] [ Speeches & statements ]

7 June 2007

Madam Speaker of the Mpumalanga Legislature, Honourable Mrs Yvonne Phosa
The Premier of Mpumalanga, the Honourable Mr Thabang Makwetla
The Deputy Speaker of the Mpumalanga Legislature, the Honourable Mr BJ Nobunga
Members of the Executive Council
Honourable Members of the Mpumalanga Legislature
Chairperson of the Portfolio Committee on Public Works, Roads and Transport
Members of Parliament and the National Council of Provinces
The Chairperson of the House of Traditional Leaders in Mpumalanga, Inkosi Mthethwa
Your Excellencies, the royalty of our province, Amakhosi, le Magosi
Honourable Mayors,
Speakers and Councillors
Heads of departments and parastatals
Distinguished guests, friends and citizens of this province

We are halfway through the third term of a democratic government that has committed to work together with the people in a contract to make their lives better; a term at the three-quarter mark of our journey towards 2014, where we are all expected, that through our sweat, the millennium goals to halve poverty and unemployment, are expected to be a reality. When we began the journey in 2004, we made a commitment to enter into a contract to create jobs and fight poverty. As we walk this journey, we are always guided by these objectives.

We will walk the last mile of the road together with our people to ensure that, when we glance back in 2009, we will do so with a great sense of pride and say loudly that indeed the road that we have travelled, has been challenging but successful. We shall take our further steps cautiously, conscious that we are moving a nation that was in darkness into light, from shame to pride, from hate to love and most importantly, from hunger to abundance and from despair to hope.

Our democracy can only be enjoyed by people who have homes, who have water and electricity, who have jobs and the skills that enhances their performance to compete in the harsh global labour market. The objective of our budget is therefore about building a sense of pride, hope, and a sense of belonging derived from right and ability to exercise freedom of movement and of choice, of which knowledge, skills, and clean bill of health and wellness is a complement.

Through this journey we have learned and experienced, grown and matured in the midst of various serious social challenges facing our communities. In this journey, indeed, not of the faint-hearted; we are often saved and at times assisted by our inspiration towards achieving our strategic goal of creating a democratic and prosperous nation. President Thabo Mbeki in his State of the Nation Address said, and I quote: "None of the great social problems we have to solve is capable of resolution outside the context of the creation of jobs and the alleviation and eradication of poverty." Our budget therefore, Madam Speaker, is about growth, social development and transformation of our society. It is a budget for job creation, poverty eradication, capacity building and infrastructural development and sustenance; a commitment we made in our manifesto that we shall roll out a massive infrastructure programme as part of the means to "stimulate economic growth, social development and transformation" as Thoko Didiza, the national Minister of Public Works reconfirmed in her budget and policy speech of 28 March 2007.

Earlier this year, Finance Minister Trevor Manuel also reminded us of this commitment when he emphasised that the Gross Fixed Capital Formation (GFCF) must rise from 16% in 2004 to 25% of Gross Domestic Product (GDP) if this country intends to achieve economic growth of six percent by 2014. For us, this means that construction investment countrywide must rise to about eight percent of GDP. We are all working hard to make this a reality, while recognising the many challenges that we need to tackle in the province in order to unlock infrastructure bottlenecks that hinders creation of jobs, development of skills, promotion and development of the small, medium and micro enterprise (SMME) business sector facilitation of Broad-Based Black Economic Empowerment (BBBEE) and broadening participation of youth, women and people with disabilities in all provincial programmes and in the infrastructure delivery and management of the province. It is during this last mile that we must and will continue to intensify our efforts aimed at honouring our contractual obligations with the people.

Madam Speaker, we shall all recall that the Premier in his budget speech pronounced our commitment to stimulate growth, social development and prosperity through the "Big 5." In this "Big 5," he demonstrated how we seek to stimulate economic growth and development to create jobs and eradicate poverty through corridor development and enhancing of tourism, how we are going to restore human dignity through ensuring access to clean water, as well as promotion and acknowledgement of our proud human and ecological heritage as part of the growing of our tourism.

All said and done, within the "Big 5" is the acknowledgement of capacity challenges and the need for programmes to respond to them. Madam Speaker and the house, our understanding is that for this to happen, we will need an educated, skilled and healthy citizen. We will need technicians, health practitioners, managers and innovative and dynamic leaders in our society and these do not grow on trees, but are produced in a classroom. It is Public Works' responsibility to ensure that quality classrooms are produced that will enable the Department of Education to ensure quality learning. A healthy nation can only be possible if there are health, laboratory and research facilities in place.

The Departments of Health and Social Services again deal with the content, while the delivery of quality facilities is the function of Public Works. Innovative and dynamic managers and leaders are produced through education and are recruited through the administrative processes of government. However, as for the provision of appropriate buildings, accommodation and offices, such is the function of Public Works. If there are any weaknesses in this regard, we are saying, as such we are guilty as charged.

The Mpumalanga Department of Public Works this year celebrates its third year as the new stand alone, dedicated public building infrastructure delivery arm in the province. Members shall recall that this department was also given the task of ensuring that government institutions plan and implement programmes in a labour intensive manner that provide for cushioning job opportunities for the ones living in abject poverty, while allowing for training to take place in the process and promoting the participation of women, youth and people with physical disabilities through expanded public works.

It has been three years of achievement for this department, but also three years of challenges to transform the face of this province's infrastructure and property sectors. We are proud that through our development efforts within the public sector we have not only laid the basis for shared growth but have created assets that will contribute towards improving the physical environment for our clients. It is in this context that we commit once again to our standing motto: "Help Mpumalanga Work" because we would have created an enabling environment for all those who utilise our assets.

On providing educational infrastructure

The policy and budget speech for Education has been presented and we all have been made alive to the direction that the department wants to take, the programmes put in place and the challenges it faces. Amongst them is the issue of the way in which infrastructure delivery is planned for, the speed at which it is delivered, its quality and the capacity to monitor and ensure quality.
Indeed issues of planning have been a challenge. However, we need to acknowledge the progress that has been made in this regard that has resulted in an increase in the spending on educational infrastructure.

There has been an increase from 30% in 2004/05, to 67% in 2006/07, (which in itself showed a drastic increase of 44% from the slump figure of 23% in 2005/06). We are hard at work to put in place a system that will bring us to a satisfactory performance of 100% expenditure on educational infrastructure. It is for this reason that for this financial year, we are targeting a 100% expenditure record in the budgeted 188 projects, worth R400 million. However, a few steps into the year, reality is dawning. Lack of capacity and skills remain one of the most serious challenges this department has to deal with. We will exert ourselves in a manner that will see us, under a worse scenario, to at least maintain our growth in the expenditure to be a minimum of 80%, given that we are at 67% in this financial year. We are aiming also to clear all uncompleted and unclosed projects by the end of the year.

We must thank the intervention of the Premier in establishing a special Executive Committee to look at what can be done to improve our infrastructure delivery. Our gratitude goes also to Treasury, who initiated the
Infrastructure Delivery Improvement Programme (IDIP) that is improving our planning capacity tremendously. MEC Masango, in his policy and budget speech last Friday, 1 June 2007, hinted at his concern over the nature of design that continues to perpetuate apartheid school infrastructure delivery. To this we would like to say to the MEC, members and the community at large, that the appeal did not fall on deaf ears. This year we will also embark on changing the appearance of schools with a new architectural concept for all the new schools that we think there is room to still pilot from this financial year onwards. We will be consulting with Education on this important matter.

On health infrastructure

With regard to health infrastructure, the trend has been different in that spending has ranged from overspending of 127% in 2004/5, to 100% in 2006/07 on the infrastructure grant, while equitable share spending was down at 38% in 2004/05 and up again to 100% in 2006/07. It is for this reason that for this year we are targeting a 100% expenditure record on the budgeted 32 projects worth R155 million for this year. These projects will include forensic mortuaries for Ermelo and Evander Hospitals and offices for Social Services, which were identified as new projects by the Department of Health and Social Services. Public Works will manage the planning and implementation of these projects.

On other infrastructure projects

The department continued to facilitate and supervise the delivery of infrastructure by other departments, excluding Local Government and Housing and Roads and Transport. In the year 2006/07 we facilitated the design and land identification for the Provincial Archive building and the Disaster Management Centre on behalf of the Department of Culture, Sports and Recreation and Department of Local Government and Housing respectively.

In 2007/2008, the department will continue with the implementation of the Provincial Archive building and the Provincial Disaster Management Centre. One of the fascinating projects we completed in the financial year, was the upgrading of the Samora Machel Memorial site, in the Mbuzini area. The department was the implementing agent for the construction of the new amphitheatre, museum building, ablution facilities, physical security and the supply of electricity and water that is also supplied to the nearby community. What makes this fascinating is that beyond the fact that the entire project was completed in record time, it was the innovation that was involved in trying to achieve the almost impossibly tight deadline that was there.

Members would recall that it had to be done before the day planned for the commemoration of the Samora Machel disaster, which was to be attended by both the Presidents of South Africa and Mozambique. The weather did not help the situation.

Towards improving infrastructure delivery mechanisms

The role of Public Works is critical to overcome a range of potential capacity constraints including the planning, procuring and maintaining of infrastructure. In this context, I am pleased to report that significant results have been achieved. Notably, provincial public infrastructure spending has improved last year as a result of multi-faceted interventions and partnerships. Over the past two years we have directed a great deal of effort towards the critical goal of developing and transforming the construction industry. One of these interventions has been the implementation of the Construction Industry Development Board's (CIDB's) Register of Contractors among all government departments and entities in all three spheres of government in this province.

The introduction of the CIDB Register of Contractors has not been a smooth and easy process, but we have remained firm in our resolve to regulate the sector for improved equity and quality, and to create a firm foundation for development and transformation of the industry in the province. It is worth noting that there has definitely been a deepening of capacity in the Mpumalanga construction industry over the past year with many of our contractors improving their grading status and of these a high percentage are black-owned small and medium sized enterprises.

The quality of contractor's work has also improved as the number of contractors registered on higher levels increased. For example, in December 2005 there were only 36 contractors registered above level three. By the end of May 2007, that figure already stood at 392. The implementation of the CIDB register has therefore also seen the department slowly weeding out "fly by night" players, whose failure rate has undermined delivery.

Our experience with the register has shown that many emerging contractors still do not have access to the mainstream of the construction industry. For this reason, the department will develop a framework through which the grading of contractors will be improved from the middle to higher levels. An ideal vehicle for the implementation of this framework is the departmental emerging contractor development programme, the Sakh'abakhi Programme, which was formally launched in March 2007. Fifty-two contractors who were appointed under the Sakh'abakhi programme last year will be further developed and capacitated to complete their two-year contract, while an additional thirty contractors will join the programme, bringing the total contractors on the Sakh'abakhi programme to 82.

The first intake on the project had already completed four school projects, while new infrastructure projects have been identified on which they will receive on-the-job training in this financial year. Two of the challenges which we experienced in the previous financial year, the lack of bridging finance for the contractors to start their projects and credit for acquiring material were addressed during this financial year. One supplier of material Build It and a financing company, Nurcha Financing Company have agreed to assist our contractors in this regard, thereby setting an example that we hope other private sector companies will follow. The Sakh'abakhi programme had already created work for 535 workers from local communities just in this past financial year alone.

We believe that the training and capacity building provided by the Sakh'abakhi programme will add to the growth of sustainable enterprises in this province enterprise that will become the employers and infrastructure developers of the future.

On property and facility management

The young people in the provincial Vukuphile Learnership Programme under the EPWP have given us confidence that it is possible to build a contractor and a contractor supervisor programme in a period of two years. I wish to commend the Municipalities who have used their Municipal Infrastructure Grant as part of the Vukuphile Learnership Programme. In particular, I would like to commend the Nkangala District Municipality for its pioneering efforts in this regard.

The provincial Vukuphile Learnership Programme has now produced its first 34 qualified contractors at NQF level two as well as 64 qualified contracting supervisors at NQF Level four, who will graduate soon.

Additional service improvement initiatives

We have met and interacted with contractors and consultants through our Departmental Outreach Programme. We have offered them a platform and an opportunity to express their views, frustrations and appreciation and furthermore, to influence our policies and programmes. We intend to continue with these interactions during 2007/08 to unblock issues that are hampering progress in the implementation of our BBBEE policies as well as empowerment of targeted groups, namely youth, women, and people with disabilities. In particular, the department will host a number of construction summits where we will come to an agreement with stakeholders as to how to address such problems. The first Youth in Construction Summit will be held later this month, while we are planning Women in Construction Summit for August and will end the year with a final Construction Summit.

Many of those employed, will need to be skilled. The department will continue to work with all stakeholders such as the Department of Labour, the Construction Education and Training Authority (CETA), the province's learning institutions such as the Further Education and Training (FET) Colleges, the Mpumalanga Regional Training Trust (MRTT) and Construction Industry Development Board (CIDB) to ensure that we overcome bottlenecks in the development of critical skills.

The Public Sector property portfolio in our province remains one of the largest in the form of land and buildings. Some of these are and will continue to be used for the accommodation needs of government departments and public entities. The property portfolio therefore requires that we do not only pride ourselves as being a dominant player but rather we should also concern ourselves about the return on the investment for the provincial government as it relates to these assets. We also want to begin to look at our properties and see if we cannot use our procurement procedures to accelerate the transformation of that sector.

On the Expanded Public Works Programme (EPWP)

Another critical component of our service delivery mandate is the Expanded Public Works Programme that establishes a bridge between the first and second economies, enabling job and skills opportunities, an essential foothold for those historically marginalised from economic participation. Our department's function has been the co-ordination of the creation of job opportunities within the province through the EPWP across four sectors, namely Infrastructure, Social, Economic, Environment and Cultural. I am happy to announce that in 2005/ 06, a target of 20 000 job opportunities was set. This target was increased to the creation of 25 000 job opportunities in 2006/07.

I am proud to report that through the Expanded Public Works Programme, we have succeeded in alleviating poverty among our people while simultaneously providing them with work experience and skills. This has added impetus to our journey of success, thus creating hope as part of our people's contract. A total of 19 150 job opportunities were created for the 2005/06 financial year against the target of 20 000 (by 31 March 2006 as per the National Department of Public Works report) and 9 892 job opportunities were created by the end of September 2006 against the target of 25 000 for the 2006/07 financial year.

The 43 206 job opportunities created against a target of 42 500 over two and a half years, shows that the province is exceeding its targets and is therefore well on the way to reaching the 100 000 job opportunities that must be created in this province over a period of five years. In 2007/08 the EPWP areas identified for the massification of the programme are access roads and the social sector's Home Community Based Care and Early Childhood Development projects. Currently identified and verified projects targeted for the creation of 25 000 job opportunities for this year stand at 323 with a total value of R 433,7 million. The projects are spread over the four sectors as follows: 115 projects in the infrastructure sector to the value of R355,6 million; 42 projects in the economic sector to the value of R41,1million; and 161 social sector projects to the value of R33,9 million.

There are also five projects in the environmental sector to the value of R3 million. We would like to thank all client departments and municipalities that have contributed these projects. May I also take this opportunity to remind members of this house and the community out there that these projects are located and funded within different departments with monitoring and co-ordination of the implementation by Public Works. Additional to this, the department of Public Works itself is clearing the six projects funded through the previous extended Public Works to a tune of R8 million, in which basic community infrastructure such as pension pay points are built.

We want to indicate that this will be the last time that we will be budgeting for the building of such infrastructure as a department. Either the Department of Health and Social Services or municipalities will have to take care of it, as we will be returning to our core business as defined earlier on. We are also of the view that there are still more untapped areas that can be activated and be made compliant with the required framework of the EPWP. We have just recently had our quarterly MEC and municipalities (MUNMEC), where this was confirmed. In order to improve skills development, the National Skills Fund (NSF) has allocated funding to the province for EPWP training.

The number of learnership programmes will also increase in this financial year. We would like to thank Nkangala District Municipality for leading the pack in the implementation of the EPWP amongst the municipalities and for initiating their own new learnership programme. Thembisile Municipality has also joined, while other municipalities are joining the race to increase the roll-out of the EPWP. We hope that through these efforts we can add to the eight EPWP learnership programmes already in place in the province.

On 15 February 2007 the national Department of Public Works held the maiden EPWP Recognition Awards as an annual event in recognition of the men, women, and youth who give the Expanded Public Works Programme their best. We would like to take this moment and congratulate the Home Based Care Givers of Nkomazi at Tonga, community access road builders of Embalenhle near Secunda, to the first Sakh'abakhi contractors at Malekutu. To the rest who participated in other projects we also want to say: You are winners in the business of busting poverty.

I am aware of the criticisms levelled against the short term nature of the jobs created through EPWP. Nevertheless, as they say in Afrikaans: 'Bietjie, bietjie maak meer or 'Half a loaf is better than nothing.'

On infrastructure for administrative purposes

In the previous financial year, we set aside some money to establish new offices, as a means to save costs on rentals. The construction of the new district offices at Elukwatini in the Gert Sibande Region is nearing completion. In 2007/08, some of the projects will include the construction of a community hall at Manzini, the renovation of a women's craft market building at Malekutu and the installation of lifts at the KwaMhlanga Government Complex. All these projects will further contribute to the EPWP cause in the province as they incorporate EPWP principles in all tender documents.

The department is also managing the implementation of various projects for the Mpumalanga Legislature that includes, amongst others, a video conferencing room and the refurbishment of the Legislature, projects that will continue in this financial year. By changing from an analogue to a digital system, the Legislature will now be able to link directly with other legislatures across the country and therefore improve access to government.

On property management

One of our main priorities for the 2006/07 financial year was to complete the asset verification process through which we intended to compile a comprehensive list of all government immovable properties both land and buildings. During the process, we also intended to identify all properties that still needed to be vested in the province. The verification process is complete and the provincial government immovable asset register now contains 5 553 properties (or land) and 8 000 buildings or structures, to name but a few. The verification process has also pointed out several aspects that will need more attention in this financial year. They include improving control over property leases by updating outdated lease agreements, investigating the alleged illegal sale of properties, registering an additional 250 properties found during the process and addressing vandalism at vacant properties. The department will also continue with the vesting of outstanding properties.

On the national policy front, the national Department of Public Works has started with the implementation of the Government-wide Immovable Asset Management Act, better known as Government-wide Immovable Asset Management (GIAMA). GIAMA provides for improved planning for immovable assets, which in turn will result in more efficient and effective use of these resources.

In this financial year, once the Act is proclaimed, all provincial government departments and entities will be required to compile User Immovable Asset Management Plans (UAMPs) as part of the strategic plans which they will annually submit to Treasury. These plans should indicate how assets are being planned and managed in terms of established asset management principles, based on the fundamental principle that the contribution of immovable assets to service delivery must be optimized. As a result of this improved planning, the fiscus will benefit from a reduction in the overall cost of service delivery coupled with reduced demand for new immovable assets.

Infrastructure maintenance

Honourable Speaker and members, the Regional Services of the department are responsible for maintenance of the building infrastructure of the Provincial Government and therefore serves all the other departments of
Mpumalanga. However, the regions receive thousands of emergency day-to-day maintenance requests. Amongst others, the regions attended to and completed a total of 19 219 emergency maintenance requests, provided steam at 15 hospitals and managed preventative maintenance projects on behalf of client departments. This number is increasing exponentially due to the lack of preventative maintenance because of inadequate funding. The department also continued the servicing and maintenance of life support and radio communication network equipment for client departments.

We must indicate, however, that the Department of Public Works does not necessarily budget for all maintenance and that it is supposed to be built into the budget allocated to institutions. Currently, we think that institutions are not budgeting enough for this function, thus leave government property in a state of serious disrepair. In order to address the backlog, this department, in collaboration with the Department of Health and Social Services, launched Project Facelift in 2006/2007, which targeted clinics per region where maintenance could be done with the limited staff available in the department. Project Lungisa is another of such joint initiatives with the Department of Health that has remarkably changed the outlook of the wards in Themba Hospital despite its humble beginnings.

In the long term, to avoid weaknesses observed with regard to the maintenance of government infrastructure, the department will, as guided by the National Infrastructure Management Strategy, submit to the Executive Council the maintenance framework for all public building infrastructures before the end of the financial year. The framework, once approved, will oblige all departments to budget for the maintenance of these facilities. No longer shall it be that a government facility can only be distinguished from private sector properties by its state of dilapidation and poor maintenance. As part of value adding to our work and ensuring that public officials and servants take ownership of and pride in their workplace, we shall initiate the process of renaming our building and we will take into account all the recommendations that this house has made.

National Youth Service (NYS)

In an ongoing effort to upscale the scope and the impact of the EPWP, government has announced the launch of the National Youth Service a joint initiative with the Umsobomvu Youth Fund, Department of Labour and provincial departments of Public Works. Our department has moved fast to ensure a solid contribution to the NYS in response to President Thabo Mbeki's call during the State of the Nation Address in February this year.

As announced by the Premier in his State of the Province Address in February 2007, the department's contribution will include the recruitment and built environment skills training of no less than 500 unemployed youth and graduates. So far the Mpumalanga Department of Public Works has identified renovation projects in each of its three regions to kick-start the NYS in the province. This includes renovations to the Batho Pele building in Ermelo, landscaping at the KwaMhlanga Government Complex and maintenance of Pilgrim's Rest, amongst others.

The youth identified for these projects will be trained as artisans and we hope to see 20% of them exiting the year-long programme as entrepreneurs - with funding assistance from the Umsombovu Youth Fund, while some 85% to be available for employment in the built environment. We also hope to absorb 10% of the participants in this programme in formal government employment. The participants have already completed an induction programme and are about to start on their training programme. As mentioned before, we will hold a Youth in Construction Summit during Youth Month that will culminate in the official launch of the Provincial Youth Service Programme. Furthermore, we have intensified our learnership and internship programmes with a view to provide them with relevant skills that will enable them to secure gainful employment and have new hope in life.

Internal capacity building

After thorough analysis of our challenges and after interaction with people in the industry, it became evident that there is a need to build internal capacity to ensure qualitative delivery of infrastructure. To this end the department has just completed some improvements in the organogram to respond to this. A Workplace Skills Plan was developed and finalised to ensure a more structured approach to human resource development. Some 870 officials received skills development training according to this plan. In the past financial year, the department also appointed 30 interns in scarce skill areas and 48 learnerships were implemented in Information Technology, Public Administration and Project Management.

Another 342 officials are currently attending Adult Based Education and Training (ABET) classes as we continue our efforts to empower staff members at the lower salary levels. We would also like to thank MRTT for preparing many of our experienced officials to receive their first official qualification as artisans.

Madam Speaker, honoured guests, it is now my pleasure to present to you the Strategic Plan, Implementation Plan and the Policy and Budget Speech for Vote 8 Public Works for the 2007/2008 financial year, distributed into three programmes as follows:

Programme 1: Administration: R54 792 million (fifty four million, seven hundred and ninety two thousand)
Programme 2: Public Works Building and Property Management: R278 113 million (two hundred and seventy eight million one hundred and thirteen thousand)
Programme 3: Expanded Public Works Programme: R22 165 million. (twenty two million, one hundred sixty five thousand).

If you compare this budget with that of the previous financial year, you will note that the department has once again concentrated its limited funds on the department's two main functions, Public Works Building and Property Management and the co-ordination of the Provincial Expanded Public Works Programme, which will include initiating the National Youth Service.

Conclusion

In conclusion, let me take this opportunity to thank the Office of the Auditor-General, Provincial Internal Audit, Provincial Treasury, the Standing Committee on Public Accounts and the Audit Committee for pointing out areas of weakness that needed improvement. This has aided us in improving service delivery through improved financial management. I would also like to thank the Honourable Premier Thabang Makwetla, Members of the Executive Council, Members of the Legislature and the Portfolio Committee on Public Works, Roads and Transport for their guidance and the oversight and advisory role they played in relation to our department.

I wish to thank the Head of Department, Ms Priscilla Nkwinika, all senior managers as well as staff of the department for their assistance in putting together such a goal directed budget. I would also like to extend my gratitude to the members of my office for their unwavering support at all times during a challenging 2006/07 financial year. My hope is that 2007/08 will be a year of delivery for this department and for government as a whole as we build on the foundations of our Age of Hope.

I thank you!

Issued by: Department of Public Works, Mpumalanga Provincial Government
7 June 2007
Source: Mpumalanga Provincial Government (http://www.mpumalanga.gov.za)