Hon Chairperson, hon Members of Cabinet, hon MECs, hon Chairperson and members of the portfolio committee, hon Members of Parliament, let me also recognise in the gallery the presence of the chairpersons and senior management of the public entities, the director- general and senior management of the department, representatives from the Department of Public Works, the Young Professionals Training Scheme, bene?ciaries of the Expanded Public Works Programme, the members of my family, in particular my wife, welcome to you all.
In the time available, I want to present the Budget Vote for the 2013-2014 financial year, account for what we have done as a department over the last year and, most importantly, convince this House that the Department of Public Works is serious about turning itself around, and that we have a plan to take it forward.
The departmental budget allocation has been reduced by 20% from R7,7 billion in 2012-13 to R6,2 billion in 2013-14. The decrease is attributable to the following: the phasing out of the devolution of the property rates grant to provinces; Cabinet-approved budget reductions of R1,5 billion over the Medium-Term Expenditure Framework, MTEF, period; and the shifting of R290 million to the Department of Home Affairs for border management, in line with the devolution of budgets to line departments. The department's budget reflects the government's priorities and the department's efforts to address, in particular, Outcomes 4, 8 and 12.
In relation to the National Development Plan, NDP, my department and its branches are currently aligning their activities to support many of the identified goals of the NDP.
The EPWP remains an effective part of the government's response to the triple challenge of poverty, unemployment and inequality. Our initial target in the second phase of the EPWP for the period 2009 to 2014 was to create 4,5 million work opportunities. This has now been increased to nearly 5 million new work opportunities, with special emphasis on unemployed young people and women. As part of this, approximately 8 000 youths will be recruited for artisan training to enable them to be employed by the national and provincial Departments of Public Works.
The EPWP programme is making a real difference in people's lives. Indeed, earlier this week, together with the Deputy Minister, Jeremy Cronin, I visited the Lentegeur Police Station in Mitchells Plain - a state-of-the- art project of Public Works. We were thronged by community members who impressed upon us the positive impact of the EPWP on individuals and the community.
I am pleased to announce that the problem of underspending on the EPWP incentive grant, which amounted to R358 million in 2011-2012, has been eliminated in the 2012-2013 financial year. None of this would have been possible without the active partnership, co-ordination and participation of municipalities, provinces and nonpro?t nongovernmental organisations, NGOs, community-based and faith-based organisations.
As we move into phase three of the EPWP, we have to ensure that all these stakeholders are on board, that they are supported where necessary and that, collectively, we further upscale the EPWP programme. Amongst others, we need to investigate an expanded role for the EPWP in the roll-out of the strategic infrastructure project, SIP, and to ensure that collectively, as government departments and state-owned enterprises, we utilise the EPWP and labour-intensive methodologies to maximise job creation.
With regard to capital projects, in the course of 2012-2013, some 214 projects were completed. These included high-profile projects for the Departments of Justice and Correctional Services, as well as the SA Police Service, SAPS, and the SA National Defence Force, SANDF.
Capital projects created approximately 18 815 jobs during 2012-2013. The target for the 2013-2014 financial year is approximately 40 000 jobs. Some 300 capital projects will be completed by the end of March 2014. This includes the Matola Raid Monument in Mozambique.
The erosion of the core professional services of the department has impacted negatively on our ability to deliver on the mandate. The following mitigating measures have been adopted: The department has secured a budget appropriation of R66 million to fill 88 of the 219 vacant and unfunded core professional positions.
Joint professional teams have been created to support smaller regional offices and to work with major clients. And we are currently reviewing training programmes for young professionals, technicians and artisans as part of our vision to rebuild state capacity in the built environment.
Working through the EPWP, together with the Eastern Cape provincial department of public works and roads, and the department of defence, we are rolling out low-cost bridges, initially in the Eastern Cape, before extending the programme to other provinces. These bridges, as well as providing safe river crossings during rainy seasons, especially for schoolchildren, also improve access and social and economic mobility for entire communities.
With regard to Asset Investment Management, the department's long-term infrastructure plan comprises three key elements: firstly, new buildings to ensure service delivery to clients and the public from the appropriate buildings; secondly, maintenance and repairs to safeguard the assets we have; and thirdly, rehabilitation, renovation and refurbishment.
The conservation of state buildings is central to the Inner-City Regeneration Strategy, as well as our strategic goal of shifting the larger percentage of government accommodation away from leases to occupation of our own buildings.
Concrete achievements and plans include the following: 11 buildings were rehabilitated in 2012-2013, with a further 15 earmarked for the current year in order to accommodate user departments. As part of the Accessibility Programme, 42 buildings were made more accessible for people with disabilities last year, with a further 146 buildings prioritised for the current year.
In implementing the Green Building Programme, a number of pilot projects in water efficiency, waste management, energy efficiency and eco-labelling of construction materials are being rolled out. Key amongst these is the current baseline study on energy efficiency in public buildings. The pilot project will target 1 000 buildings and contribute to the creation of green jobs.
We have taken firm control of Prestige by centralising it, implementing a new structure and creating a direct reporting line to the director-general. This has already resulted in the cancellation of a number of high-priced projects. All Prestige projects are now undergoing investigation. The process is complete with regard to Pretoria. We have now extended the investigation to Cape Town, where R100 million was spent on renovating 11 houses.
Similarly, many of the problems surrounding the security upgrade at Nkandla are rooted in the failure of supply chain management processes, poor management and the lack of accountability. As a department, we have completed our preliminary internal investigation at the beginning of the year. We have referred our findings to the Special Investigating Unit, SIU, for further investigating. We are also co- operating with the Public Protector's investigation. Parliament is planning to discuss our report and the Auditor-General has undertaken to audit Prestige projects. I can assure hon members that no stone is being left unturned. I have given an undertaking that as a department, we will act against any official where evidence of wrongdoing exists.
We have revived the parliamentary village boards. Our priority now is to deal with unauthorised and illegal residents, to introduce an access card system and to review all the aspects of security.
Additionally, policy proposals on norms and standards will be presented to the executive for a decision by 30 June. These measures will be underpinned by the deployment of additional resources in Cape Town and Pretoria. The new systems will be fully operational within the next six months.
I also need to mention that we have completed an audit of heritage buildings, and drawn up a detailed inventory of moveable assets with photos and valuation certificates. This greatly assists in safeguarding these important heritage items. It also provides a baseline for decision-making on the future care of heritage sites. In this respect, I need to point out that the maintenance of heritage buildings is an expensive business.
With regard to the policy of transforming the built environment, the Department of Public Works remains responsible for the regulation and transformation of the construction and property sectors. Skewed property ownership patterns need to be addressed, and the construction industry has to create an environment where emerging contractors graduate into sustainable businesses.
The following processes were finalised last year: The Construction Sector Charter Council was registered as a section 21 company; the National Contractor Development Programme, driven by the Construction Industry Development Board, CIDB, was launched in December 2012; and a National Contractor Development Forum, NCDPF, comprising the Department of Public Works and other national infrastructure development departments, has been established to co-ordinate contractor development. The NCDP is also being rolled out in municipalities, in partnership with the Department of Co- operative Governance and Traditional Affairs, Cogta, and the SA Local Government Association, Salga.
On the legislative front, this year the department will be tabling in Parliament the Expropriation Bill, as well as a Bill to establish Agrment SA as a public entity. Deputy Minister Cronin is driving these processes and will provide further details. Having recently rebranded themselves as leaders of the anti-apartheid struggle, I have no doubt that the DA will lend their full support to the Expropriation Bill.
With regard to the department's public entities, I need to mention the important work done by these entities that report to the Minister of Public Works. With regard to Agrment SA, the Department of Public Works has utilised Agrment SA's certi?cated products in the construction of new schools in the Eastern Cape and North West provinces.
The outputs of the Construction Industry Development Board, CIDB, include developing standards for government tenders, maintaining a national Register of Projects, as well as the contractor registration and the grading system, which are both a risk management tool for clients and a development tool for emerging contractors. The Council for the Built Environment, CBE, ensures that only registered and competent professionals are allowed to practice. It remains a major concern that only a quarter of registered professionals in the built environment are black. Last year, the CBE established a candidacy programme to help remove bottlenecks and assist young black graduates to attain professional registration. Meanwhile, the CBE bursary scheme produced its first batch of eight graduates last year, one of whom is in the audience today. [Applause.]
The Independent Development Trust, IDT, supports the DPW to fulfil its mandate, as well as in providing project management services to other national and provincial departments. As part of SIP 13, the IDT has been appointed as one of the implementing agencies for the national schools beautification programme.
The DPW is currently working with the IDT to develop a new business case to review the organisation's mandate, funding model and institutional form, to ensure the long-term sustainability of the organisation.
With regard to the Turnaround Strategy: Rebuilding Public Works, the department's past performance has been characterised by corruption and mismanagement. This is a large and complex organisation where all too often there is misalignment between the mandate and the structure of the organisation. We are currently addressing the challenge of organisational structure with the assistance of the Department of Public Service and Administration, DPSA.
I want to assure this House that the turnaround project to rebuild the Department of Public Works is now well under way. We have the funding from National Treasury. The core of the turnaround team is in place under the office of the director-general and not in the Ministry, so that if the Minister is recalled tomorrow it will not derail the whole turnaround. The planning processes are well advanced, with annual, three-year and seven- year plans in place, developed in consultation with National Treasury. Many of the DPW's problems can be traced to a long period of unsustainable, unstable and constantly changing leadership. I have also said that any turnaround strategy needs to be led from the top. I believe we have now stabilised the leadership with the appointment of the director-general and chief financial officer, CFO, and other changes at leadership level.
Our key strategic focus has been on taking control of five key areas: In combating fraud and corruption, we have worked closely with the SIU to investigate irregular leases and projects. There are approximately 40 investigations in total, of which 23 have been completed. This has resulted in successful disciplinary actions, the suspension of six officials and the dismissal of some of them, including one deputy director-general, DDG. We have instituted court actions to recover monies wrongly paid by the department. We are also awaiting reports from disciplinary hearings involving a further two senior officials.
Arising from the completed investigation into Prestige in Pretoria, the SIU has recommended that we suspend and discipline the responsible officials. We have started implementing this as late as last week. [Applause.]
SIU investigations, taken together with recent findings of the Competition Commission, tell the same story of overpricing and collusion between some officials and sections of the construction industry. This is a timely reminder that it takes two to tango and that corruption and greed in the private and public sectors are mutually reinforcing.
In the light of this, we have started to enhance the investigation capacity within the department. Internal Audit was empowered to commission forensic investigations. Approximately 19 investigations have been completed. We are also establishing an internal Compliance and Enforcement Unit, as advised by the SA Revenue Service, Sars, as part of a separate Risk Management Branch that we are creating and, looking forward, we are establishing a separate Supply Chain Management branch. In this regard we are working closely with the National Treasury to review and strengthen supply chain processes.
Our broad approach can be characterised as follows: We will investigate and prosecute cases of fraud and corruption, but it is equally important to put in place robust systems - and here I am quoting our Sars colleagues - with the intent "to make it easy for weak people to do the right thing, and difficult for bad people to do the wrong thing".
With regard to the Immovable Register, the state land reconciliation with Deeds Office records has been substantially completed. This exercise involved scrutinising the records of some 180 000 land parcels, ascribing custodianship to the responsible department or level of government, and commencing the vetting processes where necessary - a very complex process involving numerous stakeholders. The figures we now have will form the basis of a physical verification process, due to commence in July 2013.
The national department still has to allocate custodianship to some 4 500 land parcels, and approximately 24 000 land parcels need to be vetted, a lengthy process that will take until March 2016 to complete. My main point is that although this is a lengthy exercise, I am very confident that we are on track with the creation of the Asset Register that will, for the first time ever, accurately reflect the state's assets.
Let me make the further point that this is a real game changer. With a sustainable register of the state's immoveable assets in place, we will have at our disposal the tools to leverage this massive property portfolio for economic development. This will also assist us to drive the transformation of the property sector in South Africa.
With regard to the audit of leases, the department at present manages a portfolio of 2 788 leased properties across the Republic. In his 2012 Budget speech, the Minister of Finance announced Treasury's support for a national audit of leases by the DPW, a timely response to the numerous lease scandals at the time.
To date, 100% of these leases have been reviewed. A total of 1 316 of these leases required attention, revision or renewal. These we regard as backlog leases. A total of 365 of these leases have already been addressed. Recommendations for the remaining 951 leases will be in place by the end of June 2013.
With regard to improving the audit outcomes, the Clean Audit project was initiated in December 2012 to address audit queries, and includes a consortium of specialist service providers which have been deployed across the department's headquarters and in the 11 regions. I am pleased to announce that the department has appointed 64 unemployed commerce graduates as part of this initiative. [Applause.] Indeed, this is working out so well that the department is considering employing an additional 100 unemployed commerce graduates. [Applause.] Skills development of finance and property staff is a secondary but vitally important output of this project.
A key area of focus is the reduction of late payments and compliance with the President's instruction to pay suppliers within 30 days. As part of this project, the DG and I are visiting the regions to meet with service providers and to work with officials to address complaints.
Irregular expenditure is also a key focus of the Clean Audit project. This involves the inspection of every transaction in terms of compliance with supply chain management policy. I am pleased to confirm that all transactions for the department and the Property Management Trading Entity, PMTE, will be fully tested for the 2013-2014 financial year in order to eliminate irregular expenditure going forward.
We are also operationalising the PMTE. We have appointed the right professionals. I wish to assure this House that the turnaround is proceeding, in consultation with labour. They are on board with all the issues.
I would like to conclude by thanking the following people. I want to thank the President for entrusting to me this difficult Public Works portfolio ... [Applause.] ... the Auditor-General, Public Protector and Members of Parliament for their constructive criticism; members of the SIU for arming us in the fight against corruption; the Treasury and the Technical Assistance Unit, TAU, for their assistance and support in developing and implementing a turnaround strategy; the DPSA for assisting us to address human resource challenges; the director-general and senior management of the department, as well as the previous acting director-general, Ms Mandisa, who has kept the ship afloat, even as we try to turn it around; the entities of Public Works that have contributed their personnel and their knowledge to assist in the turnaround. I particularly want to thank all those officials of the department who are actively assisting in the process of rebuilding.
My message to them and to hon members is: Whilst we must never, ever underestimate the magnitude and scope of the task we face, even so, we have stabilised the department. [Applause.] We are making real progress in tackling the immediate and systemic challenges. We have put in place the building blocks. We have a plan to rebuild Public Works. Together we can make Public Works work. I thank you. [Applause.]