Parliamentary Media Briefing Week, 8 February 2000

Colleagues, ladies and gentlemen

Our job in Public Works is to ensure, among others, that government departments are enabled to continue with effective service delivery. We do this by ensuring that they have appropriate accommodation within which to do their work. We are also the custodians of state fixed property - managing it in order to realise best value for the state. Through our National Public Works Programme we also promote the development of the construction industry as well as development of rural infrastructure through our Community Based Public Works Programme.

Fixed property assets
At the core of our mandate lies the fixed property assets of the State - in excess of 243 000 properties within the RSA, with a conservative locked value of R120 billion. In addition, the State owns property abroad, the value of which still needs to be determined. These properties have to "work" for the State.

Now that the Asset Register for domestic state property has been finalised, we will embark on the compilation of an asset register for the state property outside the borders of South Africa as from April 2000. It is very important that we have a comprehensive knowledge of government property domestically and abroad in order to achieve the best value for the state.

Disposal of State fixed property assets
Unlocking the value of State-owned property by identifying and disposing of redundant property - progressively increasing the properties to be disposed of over the next five years.

The first phase of this project is the disposal of all redundant State-owned houses by mid 2000, many of which are being vandalised or illegally occupied. We have identified 82 State-owned houses and 352 residential erven under the control of the national Department of Public Works as superfluous to the needs of the State that will be offered for sale.

Large tracks of redundant state land that have the potential to unlock value from the property portfolio are also being identified for disposal. The disposal of five large properties are currently being dealt with:

* Midrand: 150 hectares, by inviting development proposals, to commence from April 2000 to January 2001
* Waterkloof Extension 7: 98 hectares, by inviting development proposals, to commence from June 2000 to March 2001
* Silvermine in Cape Town: 183,6 hectares, by inviting development proposals, to commence from April 2000 to January 2001
* Pietermaritzburg, on College Road: 11 148m2 in extent, by invitation of proposal calls, to commence at least from August 2000 to May 2001
* Brookshill, Port Elizabeth: 7 000m2 in extent, by invitation of proposal calls, to commence at least from August 2000 to May 2001

Research and development of a framework for the disposal of redundant military bases will be finalised at the end of July 2000. A programme for the disposal of the bases will be drawn up during August 2000, based on the results of the development frameworks.

Introducing a Property Bill
Currently there are inconsistencies, duplication and a lack of guidelines with regard to acquisition and disposal of state property. To correct this unacceptable situation, and to provide leadership in this sector, we will introduce in the second half of 2000, an overarching Property Bill, which will regulate the acquisition and disposal of State property.

Further refining policy and operations in property management and leasing, to deracialise the construction and property industries and promote black economic empowerment through emerging contractors among others, whilst endeavouring to break barriers of access to finance through discussion with the Industrial Development Corporation, Ntsika, Khula and other partners.

Dedicated, targeted procurement
Almost 88% of the annual Public Work's budget is spent on capital works, leasing, maintenance and management in respect of this portfolio. It thus makes business sense to ensure that the expenditure itself is leveraged to obtain the maximum return on investment. Not only in terms of physical cost, time and quality, but also in delivering the required socio-economic returns such as job creation, black economic empowerment, capacity building, small, medium and micro enterprise development.

Our achievement lies in ensuring that this asset is made fully operative in generating economic activity to contribute to the overall GDP.

Addressing the maintenance backlog
In addressing the maintenance backlog on government buildings, we will explore all possible innovative financing options involving the private sector - given the R10 billion backlog. Over the next five years, we will reduce the maintenance backlog by some 25%. This will convert the locked job creation potential to create thousands of new jobs.

A new approach, namely dedicated maintenance contracts, has been devised to improve maintenance standards in the property portfolio. Approval was given to 'test' this model on eight (8) pilot projects (all correctional facilities) at a total cost of ~R60 million over the next three (3) years of which just more than R52 million will be expended in the course of 2000/2001. The pilot projects are:

* Baviaanspoort Prison R13 893 095.00
* Zonderwater Prison R12 125 681.00
* Johannesburg Diepkloof Prison R 2 412 562.00
* Sandton: Leeuwkop Prison R 8 988 000.00
* Thaba Tswane: Atteridgeville Prison R 3 575 000.00
* Odi Prison R 4 290 000.00
* Brits: Losperfontein Prison R 5 694 000 00
* Mafikeng: Rooigrond Prison R 8 936 500.00

The dedicated maintenance contracts referred to, a targeted incremental approach and improved budgeting systems coupled with innovative financing options will form the basis of the plan to address overall maintenance.

Public Private Partnerships (PPPs)
Beyond the public sector, both the property and construction industries are co-operating in transformation to become more inclusive, in particular of emerging entrepreneurs, to adjust to a broader clientele base, to revise ownership patterns and to engage in innovative Public/Private Partnerships. A range of public/ private sector partnerships are critical to both delivery and maintenance of infrastructure. In his budget speech (1998) the Minister of Finance estimated that public/ private partnerships mobilise R5 for every R1 of public funding. Appropriately structured procurement by our Department has demonstrated that employee training and empowerment, as well as equity and affirmative policy can be effectively built into public/ private partnerships, for example as our Asset Procurement and Operating Partnership Systems (APOPS) for design, build, finance and operation options illustrates.

Acceleration of efforts to transform and develop the construction industry
We will soon introduce to parliament legislation to establish a Construction Industry Development Board (CIDB). This Bill will be an important milestone towards strengthening our efforts to transform and further develop our construction industry. The CIDB will implement comprehensive development strategy published in our White Paper last year, and will address:

* Improved delivery and performance by industry and the public sector
* Growth of the Construction Industry
* Empowerment and consolidation of the emerging sector
* Sustainable employment as the basis for
* Skills training and career path development in the industry.

The draft published legislation closed for public comment on 28 January 2000 and we are currently processing the comments.

We have also inherited a number of government buildings whose image still reflect apartheid South Africa and therefore out of place in the new and democratic South Africa. We will embark on a re-imaging programme to ensure consistency of such buildings with the values of the modern South Africa. Prominent buildings that will be re-imaged include, but are not limited to, the Union Buildings, the Palace of Justice, Vlakplaas, Constitutional Hill (incorporating 'African Architectural' elements as from design stage), South Africa House in London, etc. I will be announcing a team of experts to embark on this project soon.

Black economic empowerment
To address black economic empowerment in the property industry, the persisting skewed property ownership and lack of participation in this industry by previously disadvantaged individuals will be attended to in the black economic empowerment policy which we are formulating. In the medium term when we acquire or dispose of property, or grant management contracts, we will ensure that at least 20% of the transactions will benefit the previously disadvantaged. This figure will increase substantially in the longer term.

We have made and continue to make significant contributions to black economic empowerment through championing the overall transformation of government procurement policies and procedures to ensure a broader participation of Previously Disadvantaged Individuals and Affirmable Business Enterprises (ABEs) in the mainstream economy (the Affirmative Procurement Programme. The new law on Procurement incorporates most of the aspects and experience we contributed from this pilot phase. Results obtained from the implementation of targeted procurement resource goal specifications are a 20% participation of ABEs as prime contractors on contracts between R1 million and R2 million. This is a major milestone where ABE participation before was mostly limited to supplier and subcontractor levels. Overall ABE participation has improved from an initial 4% in 1995 to between 25% and 30% at present.

The new Consultants Roster, developed in association with the South African Black Technical and Allied Careers Organisation (SABTACO) and the Alliance of Development Professionals (ADP) to obtain professional services and promote black economic empowerment in and through the work done by Public Works in the built environment, provides for the appointment of three types of professional services: Architectural, Quantity Surveying and Engineering, on a tariff basis. Through the use of this roster, work is distributed to consultants more fairly and historically disadvantaged firms are targeted in accordance with socio-economic objectives of government. The system removes subjectivity in the allocation of professional appointments and cannot be manipulated as it is impossible to predict who is in line for the next appointment. Apart from promoting good governance, it ensures transparency and fairness in the allocation of appointments. The system gives accelerated work opportunities to Affirmable Professional Service Providers (APSPs) as they rotate at a faster rate on the roster. Structured joint ventures between Affirmable Professional Service Providers and established practices are also rewarded as another black empowerment tool. Since implementation in October 1999, 54% of all appointments have been awarded to Affirmable Professional Service Providers.

Community Based Public Works Programme (CBPWP).
The CBPWP has a strong focus on poverty relief and alleviation programmes, addressing the plight of the poorest of the poor in rural areas by creating jobs while at the same time providing much-needed infrastructure.

Between August and December 1999 we have completed a total of 130 out of 340 projects in the three targeted provinces. Of these, 11 were in the Northern Province, 44 in KwaZulu-Natal and 75 in the Eastern Cape. These projects created a total of 23 808 jobs, of which 2 196 are sustainable.

We have now placed a stronger focus on sustainability of jobs and development, community facilitation and the rehabilitation of existing infrastructure to serve larger pockets of communities.

Our immediate implementation and delivery will focus on:

* Balancing temporary poverty alleviation efforts with long term sustainability of rural economies, infrastructure creation and service provision. In addition to access roads, as the President mentioned in his opening address to Parliament, we have to ensure that within the next ten years, the rural areas attain the internal capacity for integrated and sustainable economic and social development. Rural communities should be enabled to take charge of their destiny, eradicate poverty, participate in a viable rural economy, have social cohesion, effective local government capacity, infrastructure, safety and security as well as environmental protection. Our approach is one of creating economic nodes for the rural areas.

* Developing rural infrastructure to play a direct role in rural poverty alleviation.

We have now introduced Community Production Centres (CPCs), which rehabilitates existing infrastructure that have become dysfunctional. This concept is an attempt by the DPW to increase the short to long term impact of the anti-poverty intervention in the rural areas. It is acknowledged that the Integrated Rural Development Strategy (IRD) is the best approach to be adopted in the planning, design and implementation of the CPCs. This approach requires that there be effective co-ordination by relevant government departments, participating communities, private sector and service institutions. We have already begun to work on this integrated approach under the leadership of Deputy President Zuma.

This approach emphasises community empowerment and ownership, cost-effectiveness, sustainability and creation of a vibrant local economy (as economic node) that is linked to external markets.

We will accelerate the creation of Community Productive Centres for sustainable rural development, integrating functions and operations with the appropriate government departments and Cabinet clusters.

Implementation of Community Production Centres that will entail crop and food production, for example, serving 56 000 and 200 000 people respectively in Lambasi in the Eastern Cape and on the Makhatini Flats in KwaZulu-Natal as well as at Veeplaas in the Northern Province, has commenced. These centres will revitalise existing infrastructure and incorporate workshops, social services, training facilities and market outlets.

This concept is further linked to Multi-Purpose Community Centres, a one stop service and activity centre with multi-purpose facilities, close to the people in areas of natural social gravitation. For example, the idea is that apart from social cohesion facilities, specific service rendering facilities such as a post office, pension pay point, a crech%, library and clinic will be included.

Special projects by the Community Based Public Works Programme, such as the Youth Working towards Environmental Accessibility (Yowotea, commencing in March 2000), Clean and Green Campaign and others are progressing well.

The Community Based Public Works Programme has been and continues to be a direct attack on poverty. True impact in rural development will only be secured through an integrated strategy, to which we firmly contribute - working with our sister departments, provincial governments and local structures in addressing agricultural, transport, communication, service and trade infrastructure development. The recent confirmation by the MTEF of a future budget for the Community Based Public Works Programme enables us to further speed up on delivery of the infrastructure as planning can be done before the beginning of the financial year.