1 portfolio committee briefing on infrastructure 04 november 2014 facilities management court...

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PORTFOLIO COMMITTEE BRIEFING ON

INFRASTRUCTURE

04 NOVEMBER 2014

FACILITIES MANAGEMENTCOURT SERVICES BRANCH

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Vision, Mission, Principles and Values Purpose of the Briefing Legal Framework Giama Principles and guidelines DOJ&CD Property Portfolio Facilities Management MTEF-Budget Allocations Infrastructure Management Maintenance Programme Mobile Units Disability Programme Leased Portfolio Challenges Proposed Solutions

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OUTLINE

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Vision:A transformed and accessible system that promotes and protects social justice and the rule of law.Mission: To provide a transparent, responsive and accountable justice service for all. Principles and Values: Commitment to constitutional values and a culture of human rightsPromotion of the rule of lawBatho PeleGood governanceUbuntu Professionalism and continuous improvementTransparency

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VISION, MISSION, PRINCIPLES AND VALUES

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• The Chief Directorate Facilities Management exists to support service delivery and enhance access to justice to all by providing habitable buildings that respond to the needs of the justice system.

• The presentation will respond directly to questions and concerns raised by the Members of the Portfolio Committee pertaining to capital projects, maintenance of buildings and the related budget and expenditure patterns

• A broad overview of the suite of services offered by the Chief Directorate will also be articulated to provide a holistic picture, coupled with challenges experienced and proposed solutions to improve the quality of services offered.

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PURPOSE

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The following laws, inter alia, govern and guides in the provisioning and management of state immovable assets:•Constitution of the Republic South Africa, Act No 108 of 1996•Government Immovable Asset Management Act, Act No. 19 of 2007 [GIAMA].•Devolution of Budget Framework•State Land Disposal Act No. 48 of 1961 (as amended) •Public Finance Management Act, Act No. 1 of 1999•Treasury Regulations, 2000•Occupational Health and Safety Act, 1993•Rental Housing Act 50 of 1999•National Building Regulations 1995•Municipality By-laws•Expropriation Act 63 of 1975•National Key Points Act, Act 102 of 1980.

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LEGAL FRAMEWORK

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This is the main statute the governs state assets•National Cabinet mandated the Minister of Public Works to develop a policy framework that will govern immovable assets throughout the state and to implement that policy by means of legislation. •As a consequence thereof, the Cabinet approved Government-Wide Immovable Asset Management Bill in 2005.•In 2007, the Government Immovable Asset Management Act (GIAMA) was promulgated. The proclamation of GIAMA was signed into law by the State President on the 4th April 2009.

GIAMA

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• The Act makes clear distinction of rules and responsibilities that must be carried out by User Department and a Custodian, and they are summarized hereunder as follows;

PRINCIPLES & GUIDELINES

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Process User Asset Management Plans Custodian Asset Management Plan

1 Match service delivery objectives with

accommodation requirements

Compile portfolio profile

2 Verify accommodation occupied by users. Compile asset performance report

3 Determine functional performance and

utilization of accommodation

Compile asset lifecycle management plans

4 Determine utilization of accommodation. Conduct portfolio analysis

5 Conduct GAP analysis Develop Management plans for:

I. Capital acquisition

II. Leasing incl. new acquisitions

III. Maintenance

IV. Disposals

6 Determine new accommodation requirements

7 Determine the need for refurbishment or

reconfiguration of existing accommodation.

8 Determine surplus accommodation to be

relinquished

9 Determine repairs that need to be conducted.

10 Prepare budget for accommodation occupied

by user.

Develop budget

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PORTFOLIO COMPOSITION•DOJ&CD is accommodated in 672 State-owned and 120 leased buildings in South Africa and the pie chart below reflects details in that regard.

DOJ&CD PROPERTY PORTFOLIO

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FACILITIES MANAGEMENT MTEF BUDGET ALLOCATION

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2014/15 2015/16 2016/17 MTEF TOTAL

Capital Works R844 483 R784 114 R1 046 892

R2 265 489

Property Leases R326 107 R341 505 R414 925 R1 082 537

Municipality Services

R329 190 R344 636 R396 522 R1 070 348

Accommodation Charges

R331 401 R346 845 R365 018 R1 043 264

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CAPITAL WORKS

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INFRASTRUCTURE MANAGEMENT

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The Department has registered various projects with DPW , however the following projects have been prioritized for 2014/15 financial year:

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INFRASTRUCTURE MANAGEMENT:NEW BUILDINGS

Project Progress status Challenges & Mitigations

Limpopo High Court

(New Building)

The Project is 90% complete and practical completion expected in Jan 2015

Dispute over purchase price on acquisition on extra land for parking to comply with municipality-by laws (it is a necessary condition before issuing of occupational certificate).Finalization of site development plan with municipality.Submission of the building plan to municipality for approval.

DPW to enter in negotiation with the Municipality.IDT to submit all building plans for approval.IDT and DPW to resolve electricity supply and upgrade and widening of the road with Municipality.

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New Building

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INFRASTRUCTURE MANAGEMENT: NEW BUILDINGS


Mpumalanga High Court

(New Building)

Site was handed over on the 9th Sept 2013, and the project is 28% complete.

Practical completion is expected in September 2015.

No finality of permanent access road to the court (either through EFT College or through the Samora Machel freeway).

The municipality has not yet approved the Traffic Impact Assessment report.

Seemingly capacity of bulk services on site boundary is inadequate for the High Court.

DPW and IDT are in discussion with the issue of access road and bulk services.

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INFRASTRUCTURE MANAGEMENT: NEW BUILDINGS


Mamelodi MC.

(New Building)

Site handed over in June 2014. practical completion Dec 2015

Delays were caused by the unwillingness of the municipality to provide bulk infrastructure. Progress derailed due to conflict in the appointment of Community Liaison Officer (CLO).The appointment has been solved, and hopefully the project will proceed as planned.

Port Shepstone MC.(New Building)

The contractor has been recently appointed.

Delays in the acquisition of the land by DPW.Recommended contractor did not pass security clearance, and adjudication process had to start all over again to recommend another contractor. Site handover is expected in due course.

Plettenburg MC(New Building)

Sketch plans approved The municipality and DPW do not agree on the process of acquisition (land swap, donation or outright purchase). Discussion ongoing between DPW and Municipalities to resolve the mstter

Dimbaza MC(New Building)

At adjudication stage. Contractor to be appointed soon.

Delay was in the issuing of site clearance certificate by DPW as a results of revised needs by the client.Finalization of adjudication referred to DPW H/O for approval of the bid as it is above R/O delegation.Site handover is expected in due course.

Bityi MC(New Building)

Project under planning. Heritage council has approved demolishing of existing building

Delays in obtaining approval from Heritage Council. Issuing of Demolishing certificate. No site clearance certificate issued.Land still subjected to vesting processes.

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INFRASTRUCTURE MANAGEMENT: BURNT BUILDINGS


Polokwane M/C

(Burnt magistrate court)

Planning underway. Sketch Plan Committee to approve the drawings

It took time to conclude on the forensic audit report. DPW intend to request DOJ&CD to co-fund the restoration project because the forensic report is non-conclusive on the cause of fire.Some Regional Courts were taken to circuit in the province in Nebo, Ga-Matlala to make space for District Court at the high court. NPA and administration moved to leased building at Nedbank.

Pretoria M/C.


The tender was advertised and closed on the 4th March 2014.

The tender validity period for the project expired before finalization of adjudication process. DPW to re-advertise only after six months cooling off period, likely to be early 2015.

Simdlangetsa M/C


This is the branch court of Pongola, one side of the court burned down three months ago.

The court has since been relocated to Pongola Magistrate court. Still awaiting the forensic report.

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INFRASTRUCTURE MANAGEMENT: R&R / ADDITIONAL Project Progress status Challenges & Mitigations

South Gauteng High Court.

Refurbishment & Renovation).

Certain floors has been completed. Floor 1,3,4,8 remain outstanding

Due to noise and dust, work had be carried out after hours, weekend and during the recess.Further delays were created by Relocation of personnel to different floors. Additional work cropped up due to unforeseen compliance requirements on fire and safety regulations. This has led to variation order to be approved by DPW.

Mthata High Court.(Additional)

Project at planning stage. We have submitted additional requirements, therefore DPW needs a new site clearance certificate.

Durban High Court(Renovation & Additional)

Work is underway for renovation and is Phase 1 of the project.

Additional needs certified and submitted to DPW and will form part of Phase II.

PE High Court(Renovation & Additional)

Contractor busy with bulk earthworks and renovation on the main building.Project 14% complete. Completion date expected Feb 2016.

Project can be delayed by personnel not giving the contractor space to work as per agreement. Court management to adhere to agreed work schedule with the service provider.

Palace of Justice(Upgrade).

Site handover was in July 2014.Project proceeding well.

This project is mainly the upgrade of security.

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INFRASTRUCTURE MANAGEMENT: R&R / ADDITIONAL


Rustenburg MC(Renovations & Addition)

DOJ&CD has taken over the project for funding. Planning underway.

Tender validity period lapse, subsequently there was not funding from DPW. Scope was revised from R&R to capital. DOJ&CD is funding the project.DPW anticipate to go out on tender April 2015.

Mthata Magistrate Court.(Renovation & Additional).

Project at planning stage. Awaiting site clearance

The client added new needs that led to revision of site clearance that is the cause of the delays.

Justicia BuildingRefurbishment

Tender has been adjudicated

Submission referred to DPW H/O for approval

Richards Bay Magistrate Court.(New Building).

Project is at planning stage after it was stopped due to budget constrains

Delay was compounded by revision of needs. Await revised site clearance.

Pietermaritzburg (NPA).(Renovations & Additional)

At planning stage N/A

Innes Chambers (NPA).(Renovation)

Project progressing well at 95% complete.

Project is expected to be complete in January 2015.

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•IDT was given project allocation of R872 741 086.46, and to date R146 065 552.16 has been spent.

*NB: •There is projected commitment of R356 million for the period ending March 2015 for IDT projects, this amount will be used settle outstanding invoices for R203 million for period up to November and R153 million for the period up to March 2015 for new Polokwane High Court and new Mpumalanga High Court. •There is projected commitment of R94 million for the period ending March 2015 for various DPW projects.

CAPITAL WORKS

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2014/15 Total Budget R844’463’000.00

DPW expenditure R117 ‘961’000.00

IDT expenditure R233 429 000.16

Expenditure to date R351 390 000.00

Balance to date R510 235 000.40

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• The following table depicts expenditure over the past three financial years.

• In 2012/13 the initial budget allocation was R833 441 000, with the final appropriation of R621 206 000.

• It is anticipated that there will be under-expenditure at the end of the financial year (-R347 607,000)

HISTORICAL EXPENDITURE TREND

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2011/12 2012/13 2013/14

ALLOCATION R683 095 000 R621 206 000 R735 214 000

EXPENDITURE R683 095 000 R621 206 000 R387 607 000

VARIENCE - - -R347 607 000

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• The reasons behind under expenditure on infrastructure budget can be attributed to the following;

• Delays in the site clearance ( Most Projects still on planning phase when they should be on implementation due to mostly Town Planning issues and acquisition of land)

• Poor performance by contractors leading to non-attainmnent of projected expenditure.

• Delays as a result of revision of needs (client problem).• Delays in the appointment of consultants which leads to

projects not commencing as planned.• Delays in the finalization of appointment of contractors after

closing of tender (tender validities expires and projects have to be re-advertised).

• Poor communication between DPW head office and Regional offices leading to Project Management System not being updated (this leads to poor decision making when allocations of budgets are made).

CHALLENGES ON INFRASTRUCTURE

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• The planned maintenance of state owned properties is carried out by DPW through their budget.

• DOJ&CD is responsible for day-to-day maintenance with a threshold of R100 000.00.

• DPW is currently reviewing their maintenance strategy that will devolve more delegation to client departments.

• Previously DPW could undertake minor capital works under RAMP.

• RAMP has since been abolished by DPW, with the result that minor capital works are no longer done.

• In our recent discussion with DPW, it was agreed that DOJ&CD will submit a list of minor works items that be executed by the client department. This will allow us the space to handle minor works.

MAINTENANCE

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• The planned maintenance of state owned properties is carried out by DPW through their budget.

• DOJ&CD is responsible for day-to-day maintenance with a threshold of R100 000.00.

• DPW is currently reviewing their maintenance strategy that will devolve more delegation to client departments.

• Previously DPW could undertake minor capital works under RAMP.

• RAMP has since been abolished by DPW, with the result that minor capital works are no longer done.

• In our recent discussion with DPW, it was agreed that DOJ&CD will submit a list of minor works items that be executed by the client department. This will allow us to handle minor works.

MAINTENANCE

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22BUDGET ALLOCATION ON PLANNED MAINTENANCE

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CLIENT DEPT OFFICE ALLOCATION

EXPENDITUR

E BALANCE %

EXPENDITURE

TOTAL WCS PROJECTED

EXPENDITURE

WCS PROJECTED

UNDER/(OVER) EXPENDITURE

TOTAL STRAIGHT LINE

PROJECTION

STRAIGHT LINE PROJECTED

UNDER/(OVER) EXPENDITURE

JUSTICE AND CONSTITUTIONAL DEVELOPMENT368,091,259 106,046,555 262,044,704 29% 327,899,630 40,191,629 181,794,094 186,297,165BLOEMFONTEIN 4,324,496 0 4,324,496 0% 4,659,806 -335,310 0 4,324,496CAPE TOWN 56,684,099 20,613,828 36,070,271 36% 49,725,707 6,958,392 35,337,991 21,346,108DURBAN 83,007,535 24,296,815 58,710,720 29% 90,672,589 -7,665,054 41,651,684 41,355,851JOHANNESBURG 35,664,788 20,278,109 15,386,679 57% 32,043,546 3,621,242 34,762,473 902,315KAM 0 0 0 1,542,348 -1,542,348 0 0KIMBERLEY 5,900,076 895,677 5,004,399 15% 6,171,654 -271,578 1,535,446 4,364,630MMABATHO 7,726,721 6,932,603 794,118 90% 11,141,705 -3,414,984 11,884,462 -4,157,741NELSPRUIT 2,651,681 99,195 2,552,486 4% 4,145,009 -1,493,328 170,048 2,481,633POLOKWANE 1,505,885 0 1,505,885 0% 2,800,955 -1,295,070 0 1,505,885PORT ELIZABETH 47,288,263 26,484,554 20,803,709 56% 40,588,785 6,699,478 45,402,092 1,886,171PRETORIA 106,622,450 2,428,333 104,194,117 2% 36,895,357 69,727,093 4,162,857 102,459,593PROF SERV:TOWN PLANNING 6,230,849 906,243 5,324,606 15% 38,535,857 -32,305,008 1,553,560 4,677,289SPECIAL & MAJOR PROJECTS 0 0 0 576,691 -576,691 0 0UMTATA 10,484,416 3,111,198 7,373,218 30% 8,399,622 2,084,794 5,333,482 5,150,934

Grand Total 368,091,259 106,046,555 262,044,704 29% 327,899,630 40,191,629 181,794,094 186,297,165

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MOBILE UNITS

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In an attempt to alleviate immediate or emergency accommodation requirements, it has become inevitable to provide temporary in the form of mobile units.An amount of R57 084 000.00 has been transferred to Regions for procurement of such mobile through a transversal contract. We have submitted a list of needs for mobile units including sizes to assists DPW in obtaining “special site clearances”. The Department is vigorously engaging with DPW to resolve this matter.Regional Heads are also approaching respective municipalities to obtain their concurrence in issuing of site clearances.

PROCUMENT OF MOBILE UNITS

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25PROCUREMENT OF MOBILES: REGIONAL ALLOCATION

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NAME OF PROVINCE AMOUNT REQUESTED AMOUNT APPROVED

EC R3 319 860.00 R3 320 000.00

KZN R1 640 280.00 R1 641 000.00

MP R3 546 731.00 R3 547 000.00

GP R21 772 643.00 R21 772 643.00

LP R7 078 183.00 R7 078 183.00

WC R1 150 000.00 R1 150 000.00

FS R4 871 000.00 R4 871 000.00

NC R9 503 000.00 R9 503 000.00

NW R4 200 000.00 R4 200 000.00

TOTAL R57 081 697 .00 R57 082 826.00

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DISABILITY PROGRAM

ACCESS OF FACILITIES TO PERSON(S) WITH DISABILITIES

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The Department would like to ensure that all its facilities are accessible to people with disabilities, taking into account the historical and current disadvantages that they had to endure and the need to comply with the constitutional imperatives of promoting and respecting their human rights and dignity. Some of the disability programs was divided into two phases; PHASE 1.

The project commenced in 2003, and the expenditure for Phase 1 was R120 million for projects done by IDT and DPW was allocated R10 million annually.•All court building be made accessible to people with disability by building ramps and rails.•There will be at least one court made to accessible as aforesaid•There will be at least one bathroom accessible to people with disability.•Phase 1 could not be taken to its logical conclusion because of legal dispute between DPW and private service provider.


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DISABILITY PROGRAM: PHASE 2Phase 2 is different from Phase 1 as it will be more comprehensive in addressing the needs of people with disabilities. This will include, amongst others, provision of:•Lifts for vertical movements (braille and electronic voice system).•More ablution facilities •Additional ramps and rails •Modification of witness boxes•More court rooms.•Parking for disabled.•Stair lift chairs, etc.


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An audit was conducted and 531 building we identified for this program, as others were outside the scope of the work e.g mobile unit, periodical courts, courts in police station etc.A total of 279 buildings were modified by IDT and were only completed in 2010 at a cost of R120 million. •A total of 252 buildings were modified by DPW. 135 were funded by DOJ&CD, 56 funded by DPW and 46 projects were transferred to other DPW initiative/projects such as RAMP or Refurbishment & Renovation.•To date DPW managed to complete 116 projects, and the outstanding 136 are planned to be completed in the ensuing years. This will bring closure to Phase 1 of the program (252 courts)


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• DOJ&CD has submitted a list of 187 prioritized projects for implementation with the following estimated time frames.

PRELIMINARY PROJECT EXECUTION PLAN: PHASE 1 & 2

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Ref Work Scope Milestone Date

1. Completion of 83 Status Quo Report for Priority 2 scope of work November 2014

2. Finalisation of projects currently in construction stage November 2014

3. Construction of projects implemented with DPW Capital funds February 2016

4. Construction of 187 Priority 2 buildings February 2017

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• The estimated time frames for the project execution plans may change as a results of tender processes.

• The delays may also have an effect of escalating construction costs.

PRELIMINARY PROJECT EXECUTION PLAN: PHASE 1 & 2

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Financial Year 2014/2015 2015/2016 2016/2017

20% Expenditure

Estimate

45% Expenditure

Estimate

35% Expenditure

Estimate

DOJCD Capital estimated funds required R16,859,907.00 R37,934,792.00 R29,504,838.00

DPW Capital estimated funds required R4,388,500 R7,899,300.00 R6,143,900.00

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LEASED PORTFOLIO

PROPERTY MANAGEMENT

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The department is leasing 120 office buildings from Private Landlord. To date 85 leases are valid, 35 are still in the process of being renewed and finalised by DPW.

PROPERTY MANAGEMENT: LEASES

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PROVINCE NO. OF LEASES VALID/RUNNING LEASES UNDER REVIEW

Gauteng 28 18 10

KZN 11 11 0

Western Cape 24 18 6

Free State 9 3 6

Mpumalanga 4 0 4

Eastern Cape 28 21 7

Northern Cape 5 4 1

Limpopo 4 4 0

North West 7 6 1

TOTAL 120 85 35

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• MTEF BUDGET AND EXPENDITURE AS 28 OCTOBER 2014

BUDGET ALLOCATION

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Leasehold, Municipal Services, Accommodation Charges and Upgrading of Infrastructure as at 28 October 2014

Private Leases Mun. Services Accom. Charges Upgrading of Infrastructure

Baseline R326 107 000 R329 190 000 R331 401 000 57 191 000

Less Payments R200 409 075 R164 198 795 R248 550 750 R27 936 108

Current Balance R125 697 925 R164 991 205 R82 850 250 R29 258 892

Allocation 2014/15 2015/16 2016/17

Private leases R326 107 000 R341 605 000 R414 924 000

Municipal Services R329 190 000 R344 636 000 R396 522 000

Accommodation Charges R331 401 000 R346 845 000 R365 018 000

Upgrading of Infrastructure budget R57 191 000 R60 337 000 R63 595 000

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• The allocation for leases has not kept pace with annual escalation rate on rentals.

• As a results of that, we are getting less office accommodation with the money that we have. (See figure below).

BUDGET DEFICITS

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• The budget for municipal services is sufficient, However it can be affected by municipal surcharges , and escalation on Eskom tariffs and increase in leased building. See figure below).

MUNICIPAL SERVICES

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• Delays in renewal of expired leases.(DPW dealing with backlog on expired leases), there is a risk that some offices may be shut down by the landlords.

• Short term leases. (All renewals limited to 3 years as per DPW). This has an adverse effect on relocation costs, disruptions in providing services, theft and damages of movable assets.

• All leases to be advertised on open tender after the initial 3 years. (At most 5 year lease period).

• Landlords are reluctant of refurbishing buildings and contributing towards Tenant Installation(Department must bear cost of branding, office layout configuration, signage etc.)

• DPW implement new procurement processes without client department (s) being officially consulted, and without being afforded an opportunity to make inputs.

• Adjustment and escalations on rental higher than increment on annual budget.

• Budget constrains vis-à-vis Organisational expansion resulting in inadequate leased buildings.

CHALLENGES ON LEASES

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• The individual contracts at regional level are normally small and attract the lowest ranked contractors. This in some cases results in poor tenders being received and subsequently results in a re-tender process that delays project up to six (6) months at a time.

• The procurement process and regulations by DPW to implement projects are quite lengthy, in some cases it may take up to minimum 9 months from planning stage up to when construction starts.

• The legal dispute that was raised in 2012 regarding the legality of the appointment of the consultant /service provider slowed down the progress drastically. The legal dispute has been resolved only now in mid July 2014.

• Heritage buildings are subjected to long approval processes by the relevant Heritage Councils.

• The element of budget constraints to implement the projects cannot be over emphasized.

CHALLENGES ON DISABILITY PROGRAM

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• Regularly engage DPW to fast-track the appointment of contractor once tenders have closed (standing CFO’s meetings as well as project review meetings)

• Plan properly on your needs in order to avoid constant scope revision by clients.

• Identify functional buildings currently being leased and request DPW to commence with the process of purchasing those buildings.

• Explore alternative funding options (Off-Budget Funding e,g PPP, B.O.T.

• Explore possibilities of employing other Implementing Agencies.• Explore the possibility of exercising option in terms of Clause 6.3

of Devolution of Budget Framework which state that; “DPW should delegate or assign some custodial functions (excluding powers of decision-making over disposal) for functional accommodation (e.g. police stations, courts, military facilities, prisons) to Departments that wish to exercise optionality over time”.

PROPOSED SOLUTIONS

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• Long-term leases to leverage better rental offer against the long lease period, and to further solicit substantial contribution from landlords towards Tenant Installation.

• DPW to appraise client departments of their “Turn-Around Strategy” to enable client departments to be responsive to their demands.

• DOJ&CD to ensure timeous compilation of User Asset Management Plan (U-AMP ) for 2016 -2019 budget cycle and prepares UAMP for the 2015/16 FY.

• Regular engagement with DPW though client liaison forums as part of project review meetings.

• DPW to determine the ratio of utilisation of leased building versus state owned building.

• Capacitation – DOJ&CD is currently restructuring to create in-house Professional Services capacity to improve planning at National and Regional Offices.(See the slide below).

PROPOSED SOLUTIONS

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• KEY CONSIDERATIONS.• The Facilities Management structure should be aligned to the requirements of

GIAMA by streamlining functions holistically at H/O and R/O taking cognisance of the following mandatory responsibilities that must be rendered by the Chief Directorate;

CAPACITATION

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UAMP PROPERTYPLANNING

PROP INVESTMENT ANALYSIS

PROP PAYMENTS (Private leases, Mun. services

Acommodation Charges, Upgrade of Infrastructure)

INFRASTRUCTUREMANAGEMENT(Construction of

new premises)

ASSET MANAGEMENT

CLEANING & GARDENINGDISPOSAL

MONITORING &

EVALUATION

MAINTENANCE(Planned, Minor Works)

PROPERTYMANAGEMENT (Leasing / Letting)

POLICY DEVELOPMENT

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FACILITIES MANAGEMENT

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THANK YOU

1 portfolio committee briefing on infrastructure 04 november 2014 facilities management court...

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