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TABLE OF CONTENTSTABLE OF CONTENTS

1. Second Quarter Financial Performance of the Department

2. Legislative Plan

Agrèment South Africa Expropriation Bill Extension of the application of GIAMA to the Local Government

Sphere: Built Environment Professions Bill

3. Progress on Construction and Property Charters: Construction Sector Charter Property Sector Transformation Charter

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TOTAL DEPARTMENT: FINANCIAL PERFORMANCE TOTAL DEPARTMENT: FINANCIAL PERFORMANCE AS AT THE 30 SEPTEMBER 2010AS AT THE 30 SEPTEMBER 2010

Economic classification

Adjusted Budget

Exp as 30 Sep 2010

% Spent

NT Benchmark

% Spent

Q1

R'000 R'000

Compensation of employees

1 121 432 527 225 47% 39% 23%

Goods and services 570 314 253 673 44% 50% 17%

Office Accommodation 351 027 102 647 29% 50% 8%

Transfers and subsidies 3 029 610 1 550 668 51% 58% 34%

Infrastructure 1 303 945 327 308 25% 28% 12%

Machinery and equipment

69 997 18 222 28% 26% 8%

Total 6 446 325 2 779 744 43% 47% 25%

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Financial Performance per Programme –Financial Performance per Programme –(Linear Benchmark 50%)(Linear Benchmark 50%)

ProgrammeAdjusted budget

Exp as 30 Sept

% Spent

Q2

% Spent

Q1

R'000 R'000

Prog 1. Administration 663 129 270 324 41% 16%

Prog 2. Immovable Asset Management 4 250 680 2 060 630 48% 28%

Prog 3. Expanded Public Works Programme

1 479 110 406 472 27% 18%

Prog 4. Property and Construction Industry Policy Regulation

31 539 19 630 62% 35%

Prog 5. Auxiliary and Associated Services

21 867 22 688 104 104%

Total 6 446 325 2 779 744 43% 25%

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Budget and Expenditure per branches Budget and Expenditure per branches and Regional officesand Regional offices

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Expenditure Analysis- Earmarked FundsExpenditure Analysis- Earmarked Funds

FunctionBudgetR‘000

ExpenditureR‘000

% SpentQ2

%Spent Q1

Office Accommodation 351 027 102 609 29% 8 %

DPW Infrastructure 1 303 945 327 308 25% 12 %

CIDB 63 665 31 833 50% 0 %

CBE 25 527 12 764 50% 0 %

Agrement Board 8 982 8 982 100 % 100 %

Boundary Fencing 7 000 6 300 90% 0%

Aug of PMTE 612 967 306 484 50% 50%

Property Rates – Conditional Grants 1 096 192 862 266 79% 42%

EPWP Incentives to Provinces 331 004 45 025 14% 14%

EPWP Incentives to Municipalities 622 996 108 789 17% 16%

IDT Intermediaries 10 515 10 515 100% 0%

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Expenditure Analysis- Earmarked Funds Cont.Expenditure Analysis- Earmarked Funds Cont.

FunctionBudgetR‘000

ExpenditureR’000

% SpentQ2

% Spent Q1

EPWP – Non State Sector 179 811 93 985 52% 0%

EPWP – Non State Sector (Province) 56 537 56 537 100% 0%

CETA (HR) 2 341 0 0 % 0 %

Parliamentary Villages 6 982 6 982 100 % 100 %

Energy Efficiency (PPM) 75 000 - 0% 0%

Audit fee 29 166 23 055 79% 38%

Compensation for Losses 1 945 - 0% 0%

State Function 5 112 8 824 173 % 172 %

Common Wealth War Graves 17 467 13 863 79% 79%

Household 1 167 147 13% 21%

Distress relief 1 0 0% 0%

Loskop Settlement 1 0 0% 0%

Total 4 819 305 2 026 268 42 % 26 %

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PROPERTY MANAGEMENT TRADING PROPERTY MANAGEMENT TRADING ENTITY (PMTE)ENTITY (PMTE)

Financial Performance Financial Performance

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Financial Performance of the PMTEFinancial Performance of the PMTE

Budget Claimed for 2 Quarters

Actual

R’000 R’000 R’000

Revenue 6,385,212 3,776,423 2,326,371

State Accommodation 2,946,105 2,205,829* 1,277,929

Private Accommodation charges 2,727,994 1,230,931 727,392

Management Fees (Municipal) 98,146 33,179 14,566

Augmentation 612,967 306,484 306,484

Expenditure 2,882,740

Cleaning & Gardening 84,444

Private Leases 1,334,511

Rehabilitation, Repair and Maintenance 1,199,790

Property Rates 256,006

Arrear Municipal Services 3,406

Other 4,583

Deficit as at 30 September 2010 (556,369)

PMTE Bank Balance (Overdraft) (R 2,3 billion)

*Amount claimed for 3 quarters

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Expenditure analysis of the PMTEExpenditure analysis of the PMTE

AllocationR’000

ExpR’000

% Exp

% Exp 09/10

ProjectionR’000

Projected under /

over Exp

TOTAL 6 385 212 2 882 741 45% 52% 6 426 579 - 41 368

Cleaning and Gardening 155 714 84 444 54% 51% 168 888 - 13 174

Leasing (Private owned) 2 727 994 1 334 511 49% 59% 2 669 022 58 972

Maintenance 2 864 462 1 199 790 42% 44% 2 940 969 - 76 507

Planned 1 907 033 723 776 38% 44% 1 916 414 - 9 381

Rehabilitation 354 648 111 603 31% 43% 295 734 58 914

Day-to-Day 602 781 364 411 60% 44% 728 822 - 126 041

Municipal Services arrears 0 3 406 3 406 - 3 406

Property Rates 592 460 256 006 43% 66% 599 712 - 7 252

Current 590 647 248 754 42% 83% 590 647 0

Arrears 1 814 7 252 400% 0% 9 066 - 7 252

Other 44 582 4 583 10% 0% 44 582 0

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DPW Top Ten ProjectsDPW Top Ten Projects

• The DPW Capital budget consists of 430 projects making up the total allocation of R 1,4 billion

• The top ten projects in terms of total cost account for R 370 million of this allocation (26%). Only 32% of the funds allocated to these projects have been spent.

• All the projects on the list are in status 5B (Construction stage)

• Expenditure indicators are low at this stage

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Analysis of the Capital BudgetAnalysis of the Capital Budget

AllocationR’000

ExpenditureR’000

% Exp

% Exp 09/1

0 Projection

Projected under / over Expenditure

Departmental 102 300 44 215 43% 38% 103 738 - 1 438

Accessibility (Disabled) 22 300 10 829 49% 6% 16 246 6 054

Dolomite Risk Mngmnt 115 000 5 578 5% 8% 21 265 93 735

Land ports of Entry (BCOCC) 545 452 186 450 34% 50% 407 765 137 687

Prestige 487 930 133 657 27% 77% 464 897 23 034

ICR 140 000 3 516 3% 5% 39 227 100 773

TOTAL 1 412 982 384 246 27% 42% 1 053 138 359 844

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Client Capital BudgetClient Capital Budget

Total Budget R2,23 bil Spent to date R1,08 bil

Expenditure % 48 %

– Projections to 31 Mar 2010 R2,59 bil– Projected over exp R356 mil

Re-alignment of budgets done during September 2010. Meetings with Clients concluded. Waiting for final sign-off from some of the client departments.

Funding against the Justice budget very limited.

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Analysis of Client Capital budgetAnalysis of Client Capital budget

AllocationR’000

ExpenditureR’000 % Exp

% Exp 09/10

ProjectionR’000

Projected under/over Expenditure

Agriculture, Forestry and Fishing 9 381 867 9% 31% 12 526 - 3 145

Arts & Culture 179 315 36 004 20% 45% 118 988 60 3275

Correctional Services 640 380 228 636 36% 46% 648 702 - 8 322

Defence and Military Veterans 217 431 112 964 52% 91% 199 134 18 296

Health 8 505 5 708 67% 38% 7 426 1 079

Home Affairs 42 383 16 346 39% 25% 45 237 - 2 855

Justice 381 505 237 042 62% 46% 572 566 - 191 061

Labour 25 651 7 809 30% 21% 18 642 7 009

Rural Development 8 025 1 067 13% 15% 4 677 3 348

SA Police Service 717 230 429 113 60% 52% 957 509 - 240 279

TOTAL 2 229 805 1 075 556 48% 49% 2 585 408 - 355 603

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CLIENT TOP TEN PROJECTSCLIENT TOP TEN PROJECTS

• The Client Capital budget consists of 610 allocated projects making up the total allocation of R 2,230 billion

• The top ten projects in terms of total cost account for R 888 million of this allocation (40%)

• All the projects on the list are in status 5B (Construction stage)

• These projects are being executed on behalf of DCS, Justice, Defence and Police – Highest value projects are in Cape Town

• Currently, 57% of the budget allocated to these 10 projects have been spent. This is a good indication that all funds will be spend by the end of the financial year.

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LEGISLATIVE PLANLEGISLATIVE PLAN

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1. Legislative Plan1. Legislative Plan

1.1 Agrèment South Africa (ASA):

• Agrèment SA was established through a delegated authority by the then Minister of Public Works in 1969.

• Since its establishment ASA has been integrated into and reliant on CSIR to manage its Technical Agency.

• The Department has began a process of reviewing the governance of ASA as well as its performance and effectiveness.

• The review revealed that ASA’s lack of legal status as well as its reporting to two Ministers (Public Works and Science and Technology) has hampered its effectiveness in the discharge of its mandate.

• After extensive consultation, the Department together with stakeholders came to the conclusion that it was imperative to extend the mandate of ASA and develop a Business Case for the establishment of ASA as an independent legal entity.

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… … Legislative PlanLegislative Plan cont… cont…

Agrèment South Africa (ASA) cont…

• After approval by the Public Works Minister, the Business Case will be submitted to the Joint Committee of the Ministries of Public Service and Administration and Finance (the JEC) for establishment of Agrèment as a Schedule 3 entity.

• After approval by the JEC, the Business Case will be submitted to National Treasury for approval for the creation of a Public Entity.

• After approval by Treasury, a Bill will be drafted.

• The normal legislative process will then be followed.

• It is envisaged that the draft Bill will be submitted to Parliament during the second half of 2011.

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1.2 Expropriation Bill:• In 2007/2008 the Department undertook a policy review process to inform the

review of the Expropriation Act, 1975.

• This process included the publication of the policy document and workshops thereon with identified stakeholders in 2007/2008.

• The Expropriation Bill [B16-2008] was tabled in Parliament in March 2008.

• Parliament hosted extensive public hearings on the Bill during May/June 2008.

• The Bill was withdrawn from Parliament in September 2008, for further consultation.

• The essence of the review of the Act, 1975 is to: align the Act to the relevant provisions of the Constitution; and prescribe uniform procedures in the way all three spheres of Government

expropriate property.

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Expropriation Bill cont…

• The Department is currently undertaking the requisite Regulatory Impact Assessment (RIA) on the review of the Expropriation Act.

• Upon completion of the RIA, a draft Bill will be submitted to the relevant D-G Cluster, Cabinet Committee and Cabinet for approval for the draft Bill to be: published for public comment; and submitted to NEDLAC for comment.

• A finalised draft Bill will thereafter be submitted to the D-G Cluster, Cabinet Committee and Cabinet for approval to table the draft Bill in Parliament.

• It is envisaged that the Expropriation Bill, duly certified by the Chief State Law Adviser, will be tabled in Parliament by mid 2011.

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1.3 Extension of the application of GIAMA to the Local Government Sphere:

Background:

• The Constitution mandates the National Government to pass legislation for all spheres of government with the purpose of establishing uniformity and setting minimum norms and standards with regard to service delivery.

• In 2003, Cabinet mandated the Min of Public Works to develop a policy framework to govern the management of immovable assets throughout Government and to implement that policy by means of legislation.

• In 2005, Cabinet approved the Government-wide Immovable Asset Management Policy and in 2007, the Government Immovable Asset Management Act (GIAMA) was promulgated, applicable to National and Provincial Government only.

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Extension of the application of GIAMA to the Local Government Sphere:

Fundamentals of GIAMA: National / Provincial Gov vs. Local Govt:

• The Government Immovable Asset Management Act, 2007 is structured around the following building blocks –

a) Role-players involved in the acquisition, operation and disposal (custodians) and the utilisation (users) of the State’s

immovable assets; and

b) Existing management processes of government.

• Whilst the management of all spheres of government stem from the same fundamental principles, the role-players involved in immovable asset management and the strategic management processes of local government differ significantly from national and provincial government.

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A) Role-players: National / Provincial Government

Users: Departments who use immovable assets in the performance of their functions.

Required to compile annual user asset management plan.

Custodians: Departments who perform “caretaker” functions in relation to immovable assets.

Required to (1) provide information on immovable assets allocated to or required by users, to inform the compilation of u-amps; and (2) compile annual custodian asset management plan.

A) Role-players:Local Government

No standard institutional delineation between users and custodians of immovable assets.

No separate accounting officers in various departments within a Municipality.

Policy Unit26 October 2010


Extension of the application of GIAMA to the Local Government Sphere:Fundamentals of GIAMA cont…

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B) Management Processes: National / Provincial Government

National / Provincial Departments (both users and custodians) are obliged to compile annual immovable asset management plan as part of the annual strategic planning process (prescribed in the Public Service Act, 1994 and PFMA, 1999).

User & Custodian asset management plans must be submitted to the relevant Treasury to inform annual budget allocations.

B) Management Processes: Local Government

In terms of Municipal Systems Act, 2000 are obliged to prepare an Integrated Development Plan (IDP) which serves as their principal “strategic management planning instrument”.

Municipalities are not required to prepare an annual strategic plan as are required by National / Provincial Departments.

Different budgetary process in Municipalities. IDPs not submitted to “Treasury”.

Policy Unit26 October 2010

… … Legislative PlanLegislative Plan cont… cont…Extension of the application of GIAMA to the Local Government Sphere:

Fundamentals of GIAMA cont…

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• Municipalities are governed by a specific body of legislation, of which the Local Government: Municipal Systems Act, 2000 (MSA) and the Municipal Finance Management Act, 2003 (MFMA) are most relevant to immovable asset management –

The principal strategic planning document of a Municipality is its Integrated Development Plan (IDP).

The MSA prescribes a specific process for the compilation of IDPs, which must also be aligned with provincial development plans and national

priorities.

The MSA also prescribes comprehensive consultation requirements in relation to the compilation of IDPs.

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• An IDP is an inclusive strategic plan for the development of a Municipality. In terms of the existing regulatory framework, an IDP may, as part of its financial strategy, contain an asset management strategy.

• The shortcomings in the existing IDP process are that – it does not detail an immovable asset management planning

process; and it does not make immovable asset management mandatory, as is

the case in the Government Immovable Asset Management Act, 2007.

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Need to extend structured immovable asset management to Municipalities:

• Due to key differences in the legal framework and organisational structure of local government (compared to national & provincial government) it would therefore be problematic to incorporate municipalities into GIAMA. A different approach must therefore be followed to apply the GIAMA principles to local government.

• Additions and/or amendments to the Local Government: Municipal Planning and Performance Management Regulations could be developed and issued by the Minister of Cooperative Governance & Traditional Affairs in terms of the Local Government: Municipal Systems Act, 2000 to remedy the shortcomings.

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Progress to date:• DPW engaged the then DPLG & National Treasury to explore

possibilities of extending application of GIAMA to Local Government.

DPW further assisted DPLG in developing a framework for aligning the Local Government Legislation to GIAMA.

With the advent of the new Administration in 2009, DPW engaged COGTA and they concur that the applicable regulations governing municipal planning should be harmonized with the principles embodied in GIAMA.

We are informed that they have since made recommendation to their Minister accordingly.

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Possible alternatives:

Given the above, there are possibly two options to extend GIAMA’s application to Local Govt:

- Option 1: Additions and/or amendments to the Local Govt: Municipal Planning and Performance Management Regulations could be developed and issued by the Minister of Cooperative Governance & Traditional Affairs in terms of the Local Govt: Municipal Systems Act, 2000 to remedy the shortcomings.

- Option 2: Specific legislation could be developed, based on the requirements, organisational structure and existing legal framework of local government.

Option 1 is recommended by the department.

The lengthy process in developing and enacting new legislation makes Option 2 unattractive.

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In conclusion:

• DPW will continue to actively engage the Dept of Cooperative Governance & Traditional Affairs and will keep the Portfolio Committee informed of progress in this regard.

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1.4 Built Environment Professions Bill:

• In 2008/2009 the Department undertook a policy review process to inform the review of the Built Environment Professions Acts.

• This process included the publication of the policy document and workshops thereon with identified stakeholders in 2008/2009.

• The Built Environment Bill was approved by Cabinet Committee in May 2008 and tabled in Parliament in June 2008.

• Parliament hosted extensive public hearings on the Bill.

• After approval by NA and tabling at NCOP, the Draft Bill was withdrawn from Parliament late in 2008.

• Macro-organisation of the State provided shared responsibility with HE on Bulti Environment profession

• Consultation with HE and establish joint working group

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Progress on Construction and Progress on Construction and Property ChartersProperty Charters

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2. Progress on Construction and 2. Progress on Construction and Property Charters Property Charters

2.1 Construction Sector Charter:

• The Construction Sector Charter was gazetted in terms of section 12 of the Broad-Based Black Economic Empowerment (BBBEE) Act in July 2006. The Charter document was signed by all the Founding Members as an industry commitment to support the transformation of the Construction Sector.

• The Construction Transformation Charter Group (CTCG) which is a stakeholder group representing the founding members, supported by the Minister of Public Works, proceeded to submit a Section 9(5) of the BBBEE Act of 2003 application to DTI for a sector charter.

• The Construction Sector Charter was subsequently gazetted in terms of section 9(5) of the BBBEE Act of 2003 in May 2009.

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… … Progress on Charters…contProgress on Charters…cont

2.1 Construction Sector Charter:

• In April 2010 the Construction Sector Constitution (draft) was developed and supported by all members and is to be approved at the next CTCG meeting scheduled for 3 November 2010.

• The founding members are currently in the process of nominating their representatives and alternate members to the Charter Council.

• Government will be represented by four members in the Council from the Departments of Public Works (lead department), Co-operative Governance and Traditional Affairs, Public Enterprises and Transport.

• Once all Council members have been identified, the Minister will appoint the Chairperson and launch the Council.

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2.2 Property Sector Transformation Charter:

• The Property Sector Transformation Charter was gazetted in terms of section 12 of the Broad-Based Black Economic Empowerment (BBBEE) Act in October 2007.

• A Charter Council was established as contemplated in Clause 4 of the Property Sector Charter. The Council oversees the implementation of the Charter with a view to promoting transformation and black economic empowerment within the property sector of the South African economy.

• The Council is represented by members from all constituent bodies and stakeholders in the Property Sector and is supported by an executive management team that have significant skills, expertise and direct experience in the Property Sector.

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Property Sector Transformation Charter:

• The members of the Charter Council are from the following groups: Government (represented by NDPW and Industry Associations, NEDLAC, the Regulators, Government (represented by NDPW).

• The affairs of the Council are managed by a Board which consists of 13 persons. In determining the composition of the Board, Council members ensured adequate representation in terms of Historically Disadvantaged Individuals.

• The Property Sector Transformation Charter Council supported by the Minister of Public Works submitted an application to the Minister of Trade and Industry requesting that the property charter be gazetted in terms of section 9(5) of the BBBEE Act of 2003. It has been gazetted in

October 2010 for comments.

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THANK YOU!THANK YOU!

table of contents

Documents

allocated projects

justice budget

total allocation of

quarter financial performance

mandate of asa

establishment asa

establishment of asa

projectsthe dpw capital