DEPARTMENT OF PUBLIC WORKS Annual Report

1 Annual Report2016/17 DEPARTMENT OF PUBLIC WORKS2016/17 Annual ReportMr Nkosinathi Nhleko (MP) PUBLIC WORKS MinisterI have the honour of submitting the Annual Report of the DEPARTMENT of PUBLIC WORKS forthe period 1 April 2016 to 31 March 2017Mr M DlabantuDirector-General29 September 2017 DEPARTMENT of PUBLIC WORKS Annual Report 2016/171 CONTENTSList of abbreviations 3 CHAPTER 1: General information Foreword by the Minister Statement by the Deputy Minister Report by the Accounting Officer Overview of the financial results Future plans of the DEPARTMENT Entities reporting to the Minister 37 CHAPTER 2: Performance information Overview of departmental performance 41 Part A: DEPARTMENT of PUBLIC WORKS (main vote) Performance information of the DPW 46 Part B: Property Management Trading Entity Performance information of the Property Management Trading Entity Strategy to overcome areas of underperformance Transfer payments to PUBLIC entities Conditional grants Capital investment 80 CHAPTER 3: Governance Introduction Risk management Fraud and corruption 84 Table Minimising conflict of interest Code of conduct Health, safety and environmental issues Portfolio committees Prior modifications to audit reports Internal Control Unit Internal Audit and Audit committees Audit Committee Report 94 CHAPTER 4.

2 Human Resource Management Introduction Personnel-related expenditure Employment and vacancies Job evaluation Employment changes Employment equity Performance rewards Foreign workers Leave utilisation HIV/AIDS and health promotion programmes Labour relations Skills development Injury on duty 116 CHAPTER 5: Financial information 117 Part A: DEPARTMENT of PUBLIC WORKS (main vote) Report of the Auditor-General to Parliament on Vote No. 11: DEPARTMENT of PUBLIC WORKS Annual financial statements 124 Part B: Property Management Trading Entity Report of the Auditor-General to Parliament on the Property Management Trading Entity Annual financial statements 234 CHAPTER 3: Governance (continued) DEPARTMENT of PUBLIC WORKS Annual Report 2016/173 List of abbreviations Full descriptionAcronymAuditor-General South Africa AGSAAgr ment South AfricaASAA nnual Performance PlanAPPA ccelerated Schools Infrastructure DeliveryASIDB uilt Environment ProfessionalsBEPB asic Accounting SystemBASB road-based Black Economic EmpowermentB-BBEEB uilt Environment ProfessionBEPB uilt Environment Professional CouncilBEPCC ustodian Asset Management PlanCAMPC ouncil for Built EnvironmentCBEC ommunity-based organisationCBOC onstruction Education and Training AuthorityCETAC hief Financial OfficerCFOC onstruction Industry Development BoardCIDBC onstruction Quality Assessment System for General Building WORKS CONQUAS SACustomer National Operations CentreCNOCC ustomised Performance IndicatorCPIC onstruction Register ServicesCRSC entral Supplier DatabaseCSDC ommunity WORKS ProgrammeCWPD epartment of Agriculture.

3 Forestry and FisheriesDAFFD epartment of Cooperative GovernanceDCoGDepartment of Correctional ServicesDCSD eputy Director-GeneralDDGD epartment of Home AffairsDHAD epartment of Higher Education and TrainingDHETD epartment of Human SettlementsDHSD epartment of DefenceDODD epartment of Justice and Constitutional DevelopmentDoJ&CDDepartment of LabourDOLD epartment of Performance Monitoring and EvaluationDPMED epartment of PUBLIC Service and AdministrationDPSAD epartment of PUBLIC WorksDPWD epartment of Rural Development and Land ReformDRDLRD ivision of Revenue Act DORAE stimates of National Expenditure ENEE xpanded PUBLIC WORKS ProgrammeEPWPE xpanded PUBLIC WORKS Programme Reporting SystemEPWP-RSEnterprise Resource PlanningERPE xecutive Management Committee EXCOFull-time EquivalentFTED epartment of PUBLIC WORKS Annual Report 2016/174 Full descriptionAcronymGross Domestic ProductGDPG overnment Employees Medical SchemeGEMSGIAMA) Implementation Technical CommitteeGITCG enerally Recognised Accounting PracticeGRAPG eographical Information SystemGISG overnment Immovable Asset Management ActGIAMAHome Owners AllowanceHOAH uman ResourcesHRHeating.

4 Ventilation and air conditioningHVACI mmovable Asset RegisterIARI nformation communication and technologyICTI ntegrated Development PlanIDPI nfrastructure Delivery Management SystemIDMSI nternational Monetary FundIMFI ndependent Development TrustIDTI ndustrial Policy Action PlanIPAPI nfrastructure Programme Implementation PlanIPIPI nfrastructure Programme Management PlanIPMPKey Performance AreaKPAM ember of the Executive CommitteeMECM unicipal Finance Management ActMFMAM unicipal Infrastructure GrantMIGM inister s and MEC s ForumMinMECM unicipal Infrastructural Support AgencyMISAM emorandum of AgreementMOAM emorandum of UnderstandingMOUM anagement Practice Assessment ToolMPATM edium-term Budget Policy Statement MTBPSM edium-term Expenditure FrameworkMTEFM edium-term Strategic FrameworkMTSFN ational Anti-Corruption Hotline NACHN ational and Provincial Planning, Monitoring and Evaluation Forum NAPROVN ational Bid Adjudication CommitteeNBACN ational Council of ProvincesNCOPN ational Development PlanNDPNon-governmental Organisations NGOsNon-profit Organisations NPOsNational Contractor Development ProgrammeNCDPN ational Intergovernmental Task TeamNIGTTN ational Infrastructure Maintenance StrategyNIMSN ational Revenue FundNRFO ccupational-Specific Dispensation OSDD epartment of PUBLIC WORKS Annual Report 2016/175 Full descriptionAcronymOccupational Health and Safety OHSP rovincial Offices and Contractor DevelopmentPCDP rovincial Construction Development ForumPCDFP rocurement and Delivery ManagementPDMP ublic Employment ProgrammePEPP ublic Finance Management ActPFMAP lanned Maintenance Implementation ProgrammePMIPP roject Management OfficePMOP ublic Service Coordinating Bargaining CouncilPSCBCP roperty Incubator ProgrammePIPP roperty Management Information SystemPMISP roperty Management Trading EntityPMTEP ublic Service CommissionPSCR egister

5 Of Contractors RoCRegister of ProjectsRoPRisk Management CommitteeRMCS outh African Local Government AssociationSALGAS outh African National Accreditation SystemSANASS outh African National Defence ForceSANDFS outh African Property Owners AssociationSAPOAS outh African Police ServiceSAPSS outh African Social Security AgencySASSAS upply Chain ManagementSCMS tanding Committee on PUBLIC AccountsSCOPAS patial Development FrameworkSDFS patial Development Infrastructure FrameworkSDIFS ervice Delivery ModelSDMS ervice Delivery Improvement Programme SDIPS patial And Economic Development FrameworkSEDFS cience, engineering and technologySETS ector Education and Training AuthoritySETAS tandards for Infrastructure Procurement and Delivery Management SIPDMS pecial Investigating UnitSIUS mall and Medium EnterpriseSMES mall, Medium and Micro EnterpriseSMMES enior Management ServicesSMSS tate of the Nation Address SONAS tandards of PracticeSOPS exually Transmitted InfectionSTIUser Asset Management PlanUAMPU niversity of Cape TownUCTU niversity of the WitwatersrandWitsWorkplace Skills PlanWSPD epartment of PUBLIC WORKS Annual Report 2016/176 GENERAL INFORMATIONCHAPTER 1 DEPARTMENT of PUBLIC WORKS Annual Report 2016 FOREWORD BY THE MINISTERMr Nkosinathi Nhleko (MP)Minister of PUBLIC WorksThe 2016/17 financial year marked a difficult and challenging period in our country, in which we were faced with low economic growth.

6 This put a strain on employment creation. While there are clear policy directives as a country aligned to the National Development Plan (NDP), the recent political changes during the financial year called for a tightening of policy and delivery mechanisms to meet the long-term objectives of government. These political and socio-economic changes had an impact on how we do business, which affected the speed at which infrastructure projects were delivered across the country. Such external factors meant that we had to find ways to weather the economic storms and maximise delivery with limited resources. The focus therefore turned to strengthening the internal controls as part of Phase 2 of the Turnaround Plan efficiency enhancement. This phase is mainly driven by improvements in internal control, management practices and systems. The seven-year Turnaround Plan is anchored in stabilisation, efficiency enhancement, growth and sustainability. The 2016/17 financial year marks the end of the fifth year of the seven-year plan.

7 The next two financial years will be crucial for the sustainability and growth of PUBLIC WORKS . The DEPARTMENT of PUBLIC WORKS (DPW) is guided by its mandate, with a focus on the provision of strategic leadership to the South African construction and property industries, the management of state-owned and leased-in immovable assets, and contributing to the national goals of job creation and poverty alleviation through PUBLIC WORKS programmes. Working together with other national and provincial departments, we had a responsibility to support an efficient, effective, service-oriented PUBLIC service and an empowered, fair and inclusive citizenship. To redress the racial spatial imbalances and integrate government infrastructure planning to create efficiencies, balance the leased portfolio, save costs and ensure more accessible services to the PUBLIC , various accommodation solutions within identified government precincts were developed in collaboration with municipalities and sector DEPARTMENT is expected to increase state-led infrastructure investment in order to massively improve the socio- economic infrastructure within the country, with an emphasis on the use of local content and local companies.

8 Furthermore, the DEPARTMENT also needs to consider strategies to support the industrial policy through labour-intensive absorption initiatives and maintenance, and the construction of critical government assets. In addition, the DEPARTMENT developed, together with client departments, user needs and demands for accommodation. This approach formed the basis of improved and informed planning in the provision of efficient and effective accommodation to government departments. I am pleased to present the progress of the DEPARTMENT and its achievements for the period under review. In terms of infrastructure projects, the DEPARTMENT completed a number of infrastructure projects in the year under review. All of these projects were completed in various provinces throughout the country and had a profound effect on accessibility and service delivery to the South African PUBLIC . We saw an increase in the number of police stations and magistrates courts in areas that had never been serviced before.

9 The upgrading of border posts spread across the provinces adjoining other countries ensured much better control and improved service. The importance of the DEPARTMENT DEPARTMENT of PUBLIC WORKS Annual Report 2016/178taking a lead in infrastructure projects is crucial in developing a sustainable economy and state infrastructure that will progressively improve the quality of life of all South Africans. Efforts in addressing backlogs in lease accommodation proved fruitful. Strategies have been put in place to improve the provisioning of accommodation to other government departments. While it is acknowledged that some of the state buildings are not in a suitable condition, efforts are underway to address these matters, such as the development of a sustained financial model. In addition, discussions on the transformation of the property sector have ensued. This will be done in line with the revised Preferential Procurement Regulations. The DEPARTMENT contributes to government s Operation Phakisa Project through the development of small habours and coastline areas.

10 This programme, while attracting investment for further development, continues to administer and provide facilities management services to all proclaimed and non-proclaimed small harbours. This function includes the management of state-owned coastal properties, including the admiralty reserves along the South African coastline. We are already starting to see the fruits of some of our initiatives in the Operation Phakisa Project through the Small Harbours and Coastal Properties programme. These initiatives have contributed to addressing poverty and creating employment in rural communities, together with the intergovernmental policy and regulation, the DEPARTMENT embarked on the review of the 1997 and 1999 PUBLIC WORKS White Paper with the aim of addressing infrastructure backlogs, improving service delivery, creating employment and eradicating poverty. The completion of this process will provide clarity on the DEPARTMENT s role in oversight and performance management in the PUBLIC WORKS sector, with specific reference to the mandate and functions of the national DPW, as well as the provincial departments, and the concurrent nature of the PUBLIC WORKS function (as reflected in Schedule 4, Part A of the Constitution, 1996).