Volume 12, No. 17, 9 May 2013

In this Issue: 2013 Higher Education and Training Budget speech delivered by SACP General Secretary and HET Minister, Dr Blade Nzimande 2013 Public Works Budget Vote delivered by SACP Deputy National Chairperson and Minister of Public Works, Cde Thulas Nxesi

Red Readers Corner 2013 Higher Education and Training Budget speech delivered by SACP General Secretary and Minister of Higher Education and Training, Dr Blade Nzimande

Introduction

This year 2013 marks the 60th Anniversary of the Bantu Education Act which introduced and systematised a racist system of education aimed at severely restricting the educational opportunities of blacks in this country. Most of our government's efforts with regard to education since 1994 have been aimed at overcoming this burdensome legacy together with the entire oppressive inheritance of colonialism and apartheid. Great progress has been made over the past 19 years in expanding access and success in post school education and training, but much still needs to be done. We must not forget the past, not because we want to use it as an excuse for our weaknesses or failures, but because it keeps at the forefront of our thoughts the redress that is still necessary in order to overcome the legacy.

Education at all levels remains a top priority of the South African government. The Department of Higher Education and Training is responsible for post school education and training in universities, colleges and adult education centres. We have been steadily building a single, coherent, differentiated and highly articulated post-school education and training system. This will contribute to overcoming the structural challenges facing our society by expanding access to education and training opportunities and increasing equity, as well as achieving high levels of excellence and innovation. For the 2013 MTEF the Department's budget (excluding direct charges) increases at an annual average rate of 7.8 per cent over the 3 years, from R31.6 billion in 2012/13 to R39.5 billion in 2015/16. The amount of R34.3 billion for 2013/14 is an increase of R2.7 billion (or 8.6 per cent) on the 2012/13 allocation, excluding funds from the skills levy. The skills levy, which is channelled through the Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF), is expected to increase at an annual average rate of 9.1 per cent over the 3 years from R11.4 billion in 2012/13 to R14.8 billion in 2015/16.

Approximately a million young people leave school every year, and should be absorbed into post school education or directly into the workforce if they are not to be unemployed. As you know, 3.5 million between the ages of 15 and 24 in the 1st quarter of 2013, were not absorbed into employment, education or training and many adults also find themselves in a similar predicament. One of the highest priorities of my Department is to ensure that the large numbers of these youth are given post-school education and training opportunities that will improve their employability. Policies to achieve our objectives will be set out in a White Paper on Post-School Education and Training which I expect to be ready in the next few months.

Colleges

Our top priority is to expand and improve the quality of further education and training colleges, soon to be renamed Technical and Vocational Education and Training (TVET) colleges. Our message to South Africans that FET Colleges should be institutions of choice is starting to bear fruit. For the 2012 academic year we set a target of 550 000 student headcount enrolments. However, a total of 657 690 was achieved representing an increase of 54% over the preceding year (2011). Over the 2013 MTEF period, we have allocated R17.4 billion to ensure that FET College enrolments continue on this expansion trajectory. This includes investment in FET College infrastructure in order to turn college campuses into learning, ICT, sports, entertainment and business incubation centres.

In 2012 we provided financial assistance through the National Student Financial Aid Scheme (NSFAS) to 187 497 FET College students, exceeding our projection of 180 826 students for that year. To cater for the expansion in student enrolments in FET Colleges, we have set aside R6.3 billion over the 2013 MTEF period, beginning with R1.988 billion in 2013 and culminating in R2.2 billion in 2015. This will enable us to ensure greater access to education and training opportunities for 702 430 poor and academically capable young people over the MTEF period.

Currently, post-school education and training institutions are unevenly distributed across the country, with rural areas being particularly poorly served. In order to correct this spatial distribution, the President last year announced the availability of R2.5 billion for infrastructure expansion and refurbishment. Last year I committed to establishing 12 new campuses. I am now pleased to report that construction of these campuses will start this year and the first student intake in the new campuses will be in 2014. In addition we are significantly upgrading two existing campuses. This represents the first phase of our FET College infrastructure expansion and should cater for up to 28 000 additional students next year. We have to progressively invest in building more FET College campuses and satellites.

The R2.5 billion for capacity building and programme expansion has been allocated to FET Colleges to focus on expansion of enrolments (R2 billion), building institutional capacity (R365.5m), and upgrading of equipment (R192m). The strategic significance of this investment cannot be overemphasized, as it will assist the colleges to better respond to their expanded mandate.

Building the institutional capacity of the colleges is essential and we are drawing on the expertise in professional councils to assist us. During 2012, we developed an FET College Turnaround Strategy which focussed on building college capacity in management, governance and leadership, financial management, human resource management, teaching and learning, as well as student support services. With the assistance of the South African Institute of Chartered Accountants (SAICA), we have appointed 48 Chartered Accountants as Chief Financial Officers at FET Colleges with the remaining two colleges to receive their appointments shortly. Also in partnership with SAICA, the Department has appointed 20 Human Resources Specialists to support clusters of colleges to set up Human Resource systems, procedures and policies to ensure smooth and effective human resource management and development in each college.

We have also agreed to a partnership with the Engineering Council of South Africa (ECSA) to improve the FET curriculum, make it more relevant to the world of work and facilitate articulation into higher education. In addition, the DHET is developing an FET College-based Mathematics and Science Foundation Programmes that will enable young people to take up university studies in the engineering, science and technology fields. We expect this programme to be piloted from next year.

During the 2013/14 financial year we will ensure that each college has structures that enable a learning institution to function optimally. This includes the filling of all vacant senior management posts, appointment of college councils and election of student leadership. These measures aim to create management, governance and leadership stability in FET Colleges.

An analysis of the current funding framework for FET Colleges and Public Adult Learning Centres has brought me to the conclusion that the framework is inconsistent with the vision of an integrated yet differentiated post-school education and training system. To remedy this anomaly, I shall set up a Ministerial Committee to advise me on how best to fund the TVET System (FET Colleges) and envisaged Community Colleges, both from the fiscus and levy funds.

At the beginning of this year, I published a notice in the Government Gazette which effectively transfers authority over FET College management staff from the Provincial Departments of Education to the Department of Higher Education and Training with effect from 1 April 2013. To finalise the migration process, during the course of 2013/14 parties in the Education Labour Relations Council (ELRC), General Public Service Sector Bargaining Council (GPSSBC) and Further Education and Training Colleges Bargaining Unit (FETCBU) will negotiate to finalise the Collective Agreements that will guide and manage the transfer of lecturers and support staff from the employ of the Colleges to the DHET.

Adult Education and Training

Census 2011 provides a sobering reminder of the need to pay attention to Adult Education and Training. The Census indicates that there are potentially 18 million adult learners that the education system should address. 8.6% of these are the target of the KhaRi Gude literacy campaign, while the rest is the focus of the post-school system. The current Public Adult Learning Centres are woefully inadequate, reaching only 300 000 learners.

The Further Education and Training Colleges Amendment Act, No. 1 of 2013 provides for the creation of a new institutional type, to be known as Community Education and Training (CET) Colleges. The present Public Adult Learning Centres will in time be absorbed into the CET Colleges, additional facilities and staff will be provided and the offerings will be extended to provide vocational or community oriented programmes.

I have published for public comment the report of a task team which made recommendations for the community colleges. During the course of this financial year, the DHET will identify selected centres to pilot the first Community Colleges in 2015.

Universities

I am pleased to report that there has been a 12% growth in the university enrolments from 837 779 in 2009 to 938 200 in 2011 which is in line with the aim to increase the total enrolments to 1.62 million by 2030 as envisaged by the National Development Plan. Overall the number of university graduates for this period has also increased by 11%.

The numbers of post graduates increased at a higher rate than the overall graduation rate which is important because it is on post-graduates that we depend for our future academics, researchers and other leaders in knowledge-intensive professions. Research Masters graduates increased by 26% and Doctoral graduates increased by 15% from 1 373 in 2009 to 1 576 in 2011. In my view though, this is quite insufficient to meet our needs and it is not really comparable to other leading developing countries, let alone developed ones. We need to aim at making it the norm for academics to have doctorates and we need to make a special effort to significantly expand the number of South Africans with higher degrees. To this end, my Department is exploring ways to accomplish this, including sending students to study at overseas universities where appropriate. Parenthetically, I should mention here my irritation at seeing universities awarding professorships to individuals who have virtually no previous academic experience and sometimes no higher degrees. I really wish that they would stop this, unless we want to lower standards.

Linked to the expansion of the university system is the establishment of the two new universities in Mpumalanga and the Northern Cape. Much preparatory work has been done and I now expect to establish the two institutions as legal entities in the next month. R2.1 billion has been earmarked for the development of the universities over the next three years. Both universities will open their doors in 2014 in selected academic programmes, using existing buildings. We will be having architectural competitions for the design of the main facilities and launching these sites for construction from September this year.

Progress has also been made in separating the Medunsa campus from the University of Limpopo and establishing a new university incorporating that campus. This will be a comprehensive university of health and allied sciences, including veterinarian science and dentistry. In the next few weeks I will publish my intention to establish this new university and invite public comments.

At the beginning of this year I successfully established a Central Application Clearing House (CACH) mechanism as a first phase towards the establishment of the Central Application System (CAS). The Deputy Minister will further elaborate on this in the closing address.

Last November I received a report from the Working Group on fee-free university education and I am studying its recommendations. I am preparing a submission to Cabinet to implement the ANC Manguang Conference resolution to phase in fee-free education.

With regard to funding more broadly, I have received a comprehensive report from the Ministerial Committee on the Review of Funding of Universities which will be published soon. We will model the various recommendations and develop a revised funding framework before the end of this financial year. The framework must ensure an effectively funded and strengthened university sector. Our aim is to ensure that all institutions, particularly those that service the poor, are able to offer quality higher education.

Teaching and learning are at the heart of our university system. An amount of R575 million has been allocated to all universities for teaching development grants to assist in improving graduate outputs and R205 million for foundation programmes to improve the success rates of students from disadvantaged educational backgrounds. A teaching development policy framework will be implemented. In the coming financial year, programmes will also be initiated to support the academic and professional development of lecturers in universities. In addition, R177 million for research development has been allocated to all 23 universities to develop the research capabilities of university staff, especially for those institutions with low numbers of staff with Masters and Doctorate degrees.

I am concerned about the allegations of "sex for marks" practices at our higher institutions which mainly affects our female students. I will be asking the Oversight Committee on the Transformation of South African Universities to investigate these allegations and provide me with recommendations.

My Department has continued to prioritise the expansion and strengthening of teacher education for all education sub-sectors, including pre-schooling, schooling and post-schooling. Additional resources have resulted in an increase from just under 6 000 new teacher graduates in 2008 to 10 361 in 2011, an increase of 73% in the number of new teachers that graduate annually. We expect to exceed 14 000 new teacher graduates by 2015.

Plans are progressing to open new teacher education college campuses under the jurisdiction of existing universities. The Siyabuswa Teacher Education campus was launched earlier this year. It is being managed as part of the University of Johannesburg but will later be transferred to the new university in Mpumalanga. Processes to establish new teacher education campuses in KwaZulu-Natal, Eastern Cape and Limpopo Province are continuing.

A Policy on the Professional Qualifications for Lecturers in Technical and Vocational Education and Training has been finalised and will be gazetted within the next month. This policy will for the first time establish a coherent set of qualifications for college lecturers.

I have extended the infrastructure grant to universities from two to three years, increasing the R3.8 billion to R6 billion over the period 2012/13 to 2014/15, including amounts aimed at overcoming backlogs in historically disadvantaged institutions. Through co-funding, institutions will contribute a further R2 billion over this period to bring the total investment in university infrastructure to R8 billion.

I have Gazetted for comment a draft Policy on Student Housing in Public Universities. This Policy will require universities to improve student housing in many areas such as governance, maintenance, admission for first years and also set minimum standards for a proper living and learning environment for students across the sector. For the period 2012/13 to 2014/15 I have allocated R1.652 billion for universities to build and refurbish student residences, with 86% of this funding allocated to historically disadvantaged institutions and campuses. While this funding is significant, it is insufficient to cover the need for student housing in the system. We have engaged with the Public Investment Corporation (PIC) and Development Bank of Southern Africa (DBSA) to make available additional funding for student accommodation.

Work on the establishment of a National Institute of Humanities and Social Sciences is progressing well and I expect it to be up and running by the end of this year. The work of my Advisory Panel on African languages is at an advanced stage. The panel is expected to submit its report on strengthening the study of African languages and developing them as languages of scholarship in line with the Constitutional requirement that their status be elevated and their use promoted.

Although our public university system as a whole is relatively stable I have been compelled to take action in some institutions to ensure their integrity and proper functioning in the face of corruption or maladministration. This has included putting universities under Administration. I refuse to be intimidated by those who say this violates university autonomy but ignore the need for universities to be publicly accountable.

National Student Financial Scheme (NSFAS)

The National Student Financial Aid Scheme (NSFAS) is our primary tool to ensure access for poor students to post-school education. Since 1991, It has assisted 1.4 million students and many NSFAS alumni now play important roles in our economy and society.

The Board and staff of NSFAS continue to implement the recommendations of the Ministerial Review Committee report of 2010 and have made significant progress in the turnaround process to enable the entity to deliver on its mandate.

The Department's allocation to NSFAS for 2013/14 amounts to R5.769 billion. This includes R3.693 billion for loans and bursaries to universities and R1.988 billion for bursaries for Further Education and Training (FET) Colleges.

Linking Education and the Labour Market

One of our priorities is linking the education and training institutions and the labour market. This is because workplace training is generally more effective if on-the-job training is combined with theoretical study and also because practical experience during training (or in some cased immediately afterwards) increases a student's chances of finding employment.

The DHET has now established a dedicated Unit on "Work Integrated Learning Partnerships and Innovation". The Unit engages with employers in both the private and public sector as well as with SETAs in order to promote and institutionalize work integrated learning. Government departments and agencies at national, provincial and local levels are now starting to step up their intake of young people for apprenticeships, learnerships and internships as are state owned companies which have a pivotal role to play in this regard. The private sector has great potential to step up training opportunities and some companies are already doing excellent work in this regard. We have declared this year as The Year of the Artisan.

Our new SETA Grant Regulations came into operation on 1 April 2013 and require SETAs to target funding towards structured workplace learning and experience, promoting partnerships between education and training institutions and employers. This will assist to institutionalise this very important work within the post school education and training system.

For the first time in its history, the NSF has reached a stage where its annual disbursements are on par with annual income. In addition, all of the Fund's R7 billion historic reserves have been earmarked for specific skills development projects of national priority. Most of the expenditure has been for improving infrastructure and programmes for expanding capacity and improving quality in the production of skills in engineering, medical and veterinary sciences, renewable energy, various trades and rural development.

Conclusion

My sincere gratitude goes to the President and Cabinet colleagues for their support, our Director-General, my Special Advisor, senior staff in the department and all of Team DHET including our institutions and public entities for their efforts to ensure that we realize our vision of a South Africa in which we have a differentiated and fully inclusive post-school system that allows all South Africans to access and succeed in relevant post-school education and training.

2013 Public Works Budget Vote Delivered By Sacp Deputy National Chairperson And Minister Of Public Works, Cde Thulas Nxesi

Welcome. In the time available I want to cover the following:

• To present the budget vote for 2013/2014, and to share with you what we intend to accomplish with the funding that is being availed;
• To account for what we have done as a Department over the last year - 2012/2013 - the successes and the challenges; and
• Most importantly to convince this House that the Department of Public Works is serious about turning itself around; that we have a plan to take us forward; and that we have put in place the building blocks to rebuild Public Works .

1. The budget vote

The Departmental budget allocation has been reduced by 20% from a total budget of R7.7billion in 2012/13 to R6.2 billion in 2013/14. Over the MTEF, the budget will increase at 6% per annum to provide for inflationary escalations. The 20% decrease in 2013/14 is attributable to the following:

• the phasing out of the devolution of the property rates grant to provinces which will constitute part of the provincial equitable share.
• reductions of the department's infrastructure budget over the MTEF period as follows:
  • Cabinet approved budget reductions of R1.5 billion over the MTEF.
  • Shifting of R290 million from the department's infrastructure budget to the Department of Home Affairs for border management in line with the devolution of budgets to line departments

Adjustments to the department's baseline to be effected over the medium term reflect the on-going reorganisation of the Department and new priorities:

• A reprioritisation of R827 million to the Administration and the Immovable Asset Management programmes to provide for the implementation of a turnaround programme in the department.
• A reprioritisation of R30 million to the Council for the Built Environment for the acceleration of transformation in the built environment sector.
• A reprioritisation of R150 million to the Independent Development Trust for the implementation of a transformation programme within the entity.
• Additional funds of R133 million provided for improved conditions of service in the Department as well as additional allocations to the Council for the Built Environment and the Construction Industry Development Board.
• A reprioritisation of R247 million from the EPWP Integrated Grant for Municipalities to the EPWP programme for the Non-state Sector to capitalise on the effectiveness of the Non-state Sector's programmes in the creation of work opportunities.

The Department's budget reflects government priorities and the Department's efforts to address the following outcomes:

• Outcome 4: Creating decent employment through inclusive economic growth
• Outcome 8: Sustainable human settlements and improved quality of household life, and
• Outcome 12: Creating an efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship.

My Department contributes to attaining the further two outcomes:

• Outcome 5: A skilled and capable workforce to support an inclusive citizenship, and
• Outcome 6: To create an efficient, competitive and responsive infrastructure network.

In relation to the National Development Plan, whilst my Department supports many of the identified goals, our emphasis is on the following:

• A social compact to reduce poverty and inequality, and raise employment and investment.
• A strategy to address poverty and its impacts by broadening access to employment, strengthening the social wage, improving public transport and raising rural incomes.
• Steps by the state to professionalise the public service, strengthen accountability, improve coordination and prosecute corruption.
• An education accountability chain, with lines of responsibility from state to classroom.
• Phase in national health insurance, with a focus on upgrading public health facilities, producing more health professionals and reducing the relative cost of private health care.
• Public infrastructure investment at 10% of gross domestic product (GDP), financed through tariffs, public-private partnerships, taxes and loans and focused on transport, energy and water.
• Interventions to ensure environmental sustainability and resilience to future shocks.
• New spatial norms and standards - densifying cities, improving transport, locating jobs where people live, upgrading informal settlements and fixing housing market gaps; and
• Reduce crime by strengthening criminal justice and improving community environments.

In addition to its core mandate as custodian and manager of the state's immovable assets, the Department of Public Works has a further mandate to create jobs and work opportunities and to address skills shortage, particularly in the Built Environment professions. All of these speak to the outcomes I highlighted earlier.

It is important to make the point, that despite serious flaws, major sections of the DPW remain productive - due to the commitment and hard work of officials. EPWP is a case in point.

2. Expanded Public Works Programme

EPWP is a flagship programme of this Department and of government - a successful and effective part of 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 2009-2014 - was to create 4.5 million work opportunities. We have made steady progress towards achieving our targets.

Indeed, in response to the President's call in the State of the National Address to increase efforts to combat unemployment, I am pleased to confirm that EPWP's target for the creation of new job opportunities in the current year - 2013/2014 - have been up-scaled from 1.2 million to 1.65 million. What this means, in real terms, is that an additional 450,000 job opportunities will be created this year - benefitting both unemployed individuals, and their families. This increase brings the new target for the period 2009-2014 to almost 5 million - with a special emphasis on unemployed youth and women. As part of this, some 8,000 youth will be recruited for artisan training to be employed by the national and provincial departments of public works.

Moreover, in our choice of projects we seek to improve the quality of life particularly of poor communities. Examples include:

• Construction and road maintenance projects.
• Working for Water projects involving removal of alien vegetation - which is a threat to water tables.
• Home Community Based Care projects in which caregivers are trained to look after sick patients in their homes.
• The Social Sector piloted the Community Safety Programme in four municipalities in 2012/2013. This project will be replicated in other provinces in the future.
• The Environment and Culture Sector has piloted the cemetery maintenance programme in rural municipalities.

Let me give a concrete example: Ms Happiness Notwane from North West province joined an EPWP project in 2010 to clean pavements and eradicate alien plants. She had this to say:

"Raising a child alone is not easy. The stipend from EPWP made sure I could take care of my child and I also managed to save money to buy a fridge."

The EPWP programme is making a real difference to people's lives. I was reminded of this earlier this week when, together with Deputy Minister Jeremy Cronin, I visited the Lentegeur Police Station in Mitchell's Plain - a state of the art project of Public Works. We were engaged by community members who impressed upon us the positive impact of EPWP for individuals and the community.

I am also pleased to announce that the problem of under-spending on the disbursement of the EPWP incentive grant - which amounted to R358 million in 2011/2012 - has been largely eliminated in financial year 2012/2013, as a result of revisions to the grant model.

None of this would have been possible without the active partnership, coordination and participation of municipalities, provinces and non-profit NGOs, Community Based and Faith Based Organisations.

As we move into Phase III of EPWP, we have to ensure that all these stakeholders are on board, that they are supported where necessary - and that, collectively, we further upscale EPWP programmes. Amongst others we need to do the following:

• to see how we can replicate the successful Zibambele model - employing local communities for road maintenance in KZN - in other spheres such as schools maintenance;
• to investigate an expanded role for EPWP in relation to the roll out of the SIPs; and
• to ensure that collectively as government departments and SOEs we all utilise EPWP and labour intensive methodology to maximise job creation.

3. Capital Projects

In the course of 2012/2013 some 214 projects were completed. These included:

For the SANDF:

• Upgrade of Boston Base Air Force Base
• Phase 2 runway upgrade at Waterkloof Air Force Base

For the Department of Justice:

• New magistrates court buildings in Katlehong
• Renovations to Bloemfontein Magistrates Court
• Refurbishment of Gelvandale Magistrates Court (Port Elizabeth)

For Correctional Services:

• Maintenance at Glencoe and Kroonstad prisons
• Upgrading of the power supply at Goedemoeg Prison
• Repairs at Tulbagh Prison

For SAPS:

• Renovation of buildings at Port St Johns, and
• Upgrade and new accommodation for Clocolan Police Station.

Capital projects created some 18,815 jobs during 2012/2013. The target for 2013/2014 is approximately 40,000 jobs - based on current and planned projects.

Currently 518 projects are in the construction phase, with 300 projected to be completed by end of March 2014. High profile projects to be completed this year include: 7 military projects, the Tzaneen prison, the Matola Raid Monument in Mozambique, the Skilpadhek Port of Entry; upgrading of 38 Church Street (National Treasury); and Golela Port of Entry Residential Complex.

Diagnostics undertaken as part of the turnaround process have revealed major capacity deficiencies within the professional services of the Department which, if not corrected, impact negatively on our ability to deliver on the Department's mandate, also resulting in under-spending on capital projects. The following mitigating measures have been adopted:

• The Department has secured a budget appropriation of R66 million to fill 88 out of 219 vacant and unfunded core professional positions.
• A joint professional team consisting of Architects, Engineers, and Quantity Surveyors has been established in April 2013 to provide professional and technical support to smaller regional offices which lacked capacity (Mthatha, Nelspruit, Polokwane, Mmabatho, and Kimberly).
• The Department is rearranging itself around Client Portfolio Structures with major clients afforded full-scale professional resources to manage the life cycle of infrastructure. Joint Teams of professionals have been appointed for key departments who constitute the highest proportion of infrastructure budget of the Public Works Capital Building Programme.
• We are currently reviewing training programmes within the Department for young professionals, technicians, and artisans - as part of our vision to rebuild state capacity in the complete value chain of the Built Environment.
• The Department has mapped out the roll-out program to resuscitate maintenance and minor works workshops with priority areas being Western Cape and Gauteng, to be operational in financial year 2014/2015.
• The Department will provide mentorship and training for 165 emerging contractors in grades 1 to 4 during the current year.

The Department confirms the importance of improving social infrastructure in rural villages. Working through EPWP, 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 Eastern Cape, before extending the programme to other provinces. These bridges, as well as providing safe river crossing during rainy seasons - especially for school children - also improve access and social and economic mobility for entire communities.

4. Asset Investment Management

The Department's Long Term Infrastructure Plan comprises three key elements:

• First, new buildings, replacements, upgrades and additions - to ensure service delivery to clients and the public from appropriate buildings;
• Second, maintenance and repairs - to safeguard the assets we have.
• Third, rehabilitation, renovations and refurbishments. We are committed to the conservation of state buildings - some of which are heritage buildings. This 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:

• Eleven 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, out of the 100 state buildings prioritised for last year, 42 buildings were completed and made more accessible for people with disabilities, with a further 146 buildings prioritised for this current year.
• Two properties measuring 433 hectares earmarked for sustainable human settlements were approved for release in 2012/2013. A further 5 properties have been identified for release in the current year as suitable for human settlement.
• In terms of Inner City Regeneration, targets for 2013 include: the completion of Precinct Development Plans for West Capital and Paul Kruger Street - as part of the Tshwane Inner City Project and Master Plan - and identification of four sites within the Paul Kruger Street Precinct for head office accommodations for national departments of government.

The Department is currently establishing a Green Building Programme Project Management Office. 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 base-line study on energy efficiency in public buildings. The pilot will target 1,000 buildings and contribute to the creation of green jobs and training energy scouts.

5. Prestige

The Prestige programme covers the management of national government offices and the accommodation of the Presidency, cabinet members, MPs and senior judges - as well as the organising of national events. Prestige is a fraction of the mandate of Public Works, but accounts for much of the negative publicity which the Department has attracted.

Given this profile, 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 been accomplished, and has resulted in the cancellation of a number of high-priced projects, with savings of R18 million. Meanwhile, underperformance by service providers, the pricing of renovations of heritage buildings and other irregularities are being investigated. Culprits will be held to account.

Let me add: all Prestige projects are now undergoing investigation. The process is complete in regard to Pretoria. We have now extended the investigation to Cape Town where R100 million was spent on renovating 11 ministerial 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 lack of accountability. As a Department we completed our investigation at the beginning of the year. We have referred our findings to the SIU for further investigation. We are also cooperating 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 honourable members, no stone is being left unturned. I have given an undertaking, that as a Department, we will act against any official where evidence of wrong-doing exists.

We have revived the parliamentary village boards. Our priority is to now deal with unauthorised and illegal residents and to upgrade the security system by introducing an access card system and reviewing all aspects of security.

The Department has now started the process of clearing the backlog of services outstanding. In tandem with the Supply Chain intervention, we are streamlining procurement processes to ensure enhanced service levels and the application of appropriate norms and standards. In this respect policy proposals on norms and standards will be presented to the Executive for a decision by June 30th. These measures will be underpinned by the deployment of additional resources in both Cape Town and Pretoria. The new systems will be fully operational within 6 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.

6. Policy: 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 in the last year:

• The Construction Sector Charter Council was registered as a section 21 Company, and the necessary structures and procedures established.
• A training manual has been developed, and training will take place this year for the public sector on compliance with Construction Sector Charter Codes.
• The National Contractor Development Programme (NCDP) - driven by the Construction Industry Development Board (CIDB) - was launched in December 2012, and a National Contractor Development Forum comprising DPW and other national infrastructure development departments has been established to co-ordinate contractor development. The NCDP is also being rolled out to municipalities in partnership with COGTA and SALGA.
• The Contractor Incubator Programme (CIP) contributing to the development of emerging contractors between grades two and six is to be implemented during the current year.

On the legislative front, this year the Department will be tabling in Parliament the Expropriation Bill, as well as a bill to establish Agrément South Africa as a public entity. Deputy Minister Jeremy Cronin is driving these processes and will provide further details.

7. The Department's Public Entities

I need to mention the important work done by the Entities that report to the Minister of Public Works:

• Agrément South Africa - is a world class technical assessment agency whose primary role is the assessment and certification of non-standard construction products in South Africa. An example of where the Department of Public Works has utilised Agrément certificated products is in the construction of new schools in the Eastern Cape and North West provinces. ['Agrément' - is a French word meaning 'agreement'.]

• The Construction Industry Development Board (CIDB) - was established to mitigate risks in the public sector construction procurement environment; to provide leadership to the construction industry and to stimulate sustainable growth. The Board's outputs include: developing standards for government tenders; and maintaining a national Register of Projects, as well as the contractor registration and grading system which is both a risk management tool for clients as well as a development tool for emerging contractors. The CIDB can also de-register contractors for non-performance and for breaches of the CIDB Code of Conduct.

CIDB is currently exploring a transparency and integrity system based on the internationally recognised Construction Sector Transparency Initiative (CoST).

CIDB also promotes skills development in the built environment through its Employment Skills Development Agency which will create 2,800 learning opportunities per year.

• The Council for the Built Environment (CBE) - advises the minister, whilst enhancing public protection by ensuring 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 built environment graduates to attain professional registration.

Meanwhile, the CBE bursary scheme produced its first batch of 8 graduates last year - one of whom - Ms Sandra Christine Serumaga-Zake - is in the audience today. She will participate in the CBE's candidacy and workplace training programme.

Key outputs for CBE for the upcoming year include:

• Contributing to the skills plan for the infrastructure roll out programme;
• Initiatives to contribute to the further production of built environment professionals;
• Environmental sustainability in the built environment, and
• Research into labour intensive construction, and
• Health and safety in construction.

• The Independent Development Trust (IDT) - supports the DPW to fulfil its mandate to deliver social infrastructure - as well as providing project management services to other national and provincial departments. IDT supports the EPWP especially in relation to its management information system and the Non-state Sector programme. As part of Strategic Infrastructure Project (SIP) 13, IDT has been appointed as one of the implementing agencies for the national Schools Beautification programme.

IDT has championed women contractors in the construction sector. 30% of projects in 2012/2013 - with a value of R1.7 billion - were awarded to women contractors. During the same year, 72% of the 75 contractors enrolled by IDT in its Contractor Development Programme were women.

DPW is currently working with IDT to develop a new business case to determine the organisation's mandate, funding model and institutional form - to ensure the long-term sustainability of the organisation.

As the Department sharpens its own vision for the future - as part of the turnaround - it will be essential to engage closely with the entities to develop synergies and coherence.

8. The Turnaround Strategy: Rebuilding Public Works

The Department's past performance has been characterised by corruption and mismanagement, evidenced by eight years of qualified audits and disclaimers in the past two financial years. The root causes of this deteriorating situation can be attributed to a lack of controls in Supply Chain Management practices, poor lease management, lack of accountability of our Regional Offices, lack of an appropriate accounting platform for the Property Management Trading Entity as well as the non-existence of a reliable Immovable Asset Register.

The issues and challenges facing the DPW are not new. They have been well-publicised and several prior attempts have been made over the last ten years to remedy the obvious defects. Despite some good work, little traction was gained in a large 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 DPSA, which is undertaking an Organisational Functional Analysis of the Department.

Early last year the Department embarked on a turnaround project that aims, over time, to return the Department to a state of full functionality. We have now put in place the building blocks for turnaround:

• We have the funding from National Treasury for the turnaround;

• The core of the Turnaround Team- now renamed the Business Improvement Unit - is in place under the office of the DG so that we build capacity in the Department - not the Ministry - to address stabilisation and for the long haul of transformation. So if the Minister is recalled tomorrow it will not derail the whole turnaround.

• The planning processes are well-advanced - with annual, 3-year and 7-year plans in place - developed in consultation with National Treasury, and fully consulted within the Department. Increasingly we talk less about 'turnaround', and use the language of 'Rebuilding Public Works'.

• We have also - crucially - stabilised the leadership of the Department. Remember, when we started out 18 months ago, we said that much of DPW's problems could be traced to a long period of unstable and constantly changing leadership. We also said that any turnaround strategy would need to be led from the top. I believe we have now stabilised leadership with the appointment of the new DG and CFO, and other changes at leadership level.

While the turnaround project that we designed consists of 23 discrete projects, our key focus has been on taking control of five key areas:

1. Developing a complete and credible register of state immovable assets
2. Conducting a comprehensive audit of leases and the establishment of a Lease Management Framework.
3. Ensuring progressively improving audit outcomes for the DPW with particular attention to processes, systems and controls and better supply chain management
4. Actively reducing fraud and corruption in the DPW
5. Operationalising the Property Management Trading Entity (PMTE).

I can report clear progress on all these projects.

• Combatting fraud and corruption

When I stood before this House a year ago, it was in the midst of major scandals around fraudulent leases. Since then we have worked closely with the SIU (Special Investigations Unit) to investigate a number of irregular leases and projects - some 40 investigations in all, of which 23 are completed. This has resulted in successful disciplinary actions, the dismissal of six officials including one DDG, and court actions to recover monies wrongly paid by the Department. We are also awaiting reports from disciplinary hearings involving one DDG and one Chief Director. I need to add, that the SIU has completed investigations into Prestige in Pretoria, relating to renovations of ministerial houses. They have recommended that we discipline officials involved - which we have started to implement.

SIU investigations, together with recent findings of the Competition Commission, tell the same story: over-pricing and collusion between some officials and sections of the construction industry - a timely reminder that it takes two to tango; that corruption and greed in the private and public sectors are mutually reinforcing each other. In the light of this, and mindful of the limitations of the SIU due to multiple commitments, we have started to enhance investigating capacity within the Department:

• Short-term, as part of the funding for the Turnaround, Internal Audit was empowered to commission forensic investigations. Some 19 investigations have been completed.
• We are also establishing an internal Compliance and Enforcement Unit -advised by SARS - as part of a separate Risk Management Branch.
• Looking forward, we are establishing a separate Supply Chain Management (SCM) Branch. I am mindful that the A-G has identified SCM as 'a major risk area'. In this regard we are working closely with National Treasury to review and strengthen SCM 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 but in place robust systems - and here I am quoting from 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.

We also trust that the Competition Commission will work with the Department and its relevant entities in developing a longer-term strategy to combat collusion in the construction sector.

• The Immovable Assets Register

The state land reconciliation with Deeds Office records has been substantially completed and the asset register updated. The results currently reflect the following - and indicate the magnitude of the task that we have undertaken:

Custodian	Number of land parcels
National DPW	28 841
Department of Rural Development & Land Reform	25 435
9 Provincial Departments of Public Works	50 606
9 Provincial Departments of Human Settlements	70 176
Work in progress, still to be allocated	1 174
Other custodians being confirmed	3 341
Total according to original Deeds download	179 573

These figures will form the basis of a physical verification process due to commence in July 2013.

We have commenced work in conjunction with the Chief Surveyor-General in addressing the completeness and accuracy of surveyed-not-registered and other unregistered state land.

We have established a process of engagement with the above state land custodians on an on-going basis to update registers and keep track of the balance of registered land parcels. This has never been attempted before and is proving to be more time-consuming than expected.

We have targeted the completion of the Immovable Asset Register in line with the revised requirements of the PMTE established with effect from 1 April 2013. This requires us to substantially complete the Immoveable Assets Register by 31 March 2015 with final adjustments effected by 31 March 2016.

National DPW still has in the region of 24,000 land parcels to be vested. These are planned for completion by March 2016.

We are confident that we are on-track for the creation of an asset register that will - for the first time ever - accurately reflect the state's assets.

This is a game-changer, colleagues. With a sustainable register of state 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.

• Audit of Leases

One of the key functions of the Department is to provide office accommodation to National Departments. The Department presently 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 DPW.

Our focus has been to review leasing business processes, policies and strategy while concurrently addressing a significant lease backlog.

The lease backlog is being progressively addressed by a newly-established Bid Adjudication Committee for Leases.

To date, 100% of the 2,788 leases have been reviewed. Of these, 1,316 required attention, revision or renewal. These we regard as backlog leases. Of the backlog leases, recommendations have already been made in respect of 365 leases. These included leases for Pretoria, Nelspruit and Polokwane. Recommendations for the remaining 951 leases will be in place by the end of June, 2013.

Challenges have been experienced in sourcing information and documentation for the Lease Review which has impacted our ability to conduct a physical verification of leased accommodation. At this stage only 42% of floor plans and tenant contact details are in place. In other words basic information to accompany leases was either not collected, or lost. As a result, the project is approximately one month behind schedule.

• Improving audit outcomes

The Clean Audit project was initiated in December 2012 and includes a consortium of service providers to assist in its roll-out. 165 specialists and interns have been deployed across the Department's Head Office and 11 regional offices. I am pleased to be able to announce that the Department has appointed 64 unemployed commerce graduates as part of this initiative. Indeed this exercise has gone so well that the DG is requesting that we employ a further 40 graduates.

The team is progressively clearing the myriad negative audit findings in the areas of Finance and Supply Chain. Skills development of Finance and PMTE staff is a secondary, but vitally important, output of the project. This process is well under way.

A key area of focus is the reduction of late payments and compliance with the President's injunction to pay suppliers within 30 days. For the first time all invoices are now logged in a central registry to make possible the tracking of payments. We have also approved the establishment of a Help Desk - staffed by unemployed graduates - to assist suppliers to comply with payment requirements. 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.

The verification of expenditure - and the highlighting of irregular expenditure - is also a key area of focus of the Clean Audit Project. This involves the inspection of every transaction in terms of compliance with supply chain management policy. Given over 1,1-million transactions a year with a value of over R72.8 billion, this is a huge task. I am pleased to confirm that all transactions for the Department and the PMTE will be fully tested for the 2013/2014 financial year in order to eliminate irregular expenditure going forward.

Let me add, one of the crucial strategies for improving audit outcomes and dealing with irregular expenditure is to ensure individual accountability and ownership of problems. To this end DPSA has assisted us in reviewing performance agreements of management to include ownership of audit issues. In the same vein, the DG has now instituted bi-weekly 'Accountability EXCOs' exactly to monitor and enforce compliance in this regard.

• Operationalising the PMTE (Property Management Trading Entity)

Honourable members will be well-aware of the background to this issue. In 2006 Treasury approved the establishment of the Property Management Trading Entity within DPW with the injunction that a business case be submitted within two years. The failure to finalise these processes contributed significantly to both DPW and PMTE receiving negative audit opinions in subsequent years.

I am pleased to confirm that we have now formalised the establishment of the Entity. With effect from 1 April 2013, the DG has approved interim measures to ring-fence all relevant asset and property management functions in the Department and to clearly separate the activities of PMTE and DPW main account.

The PMTE has, ahead of schedule, adopted GRAP (Generally Recognised Accounting Procedures) as its accounting system and the first formal training interventions have been completed.

A detailed business case is under development and will be submitted to Cabinet for approval in August, 2013. This relates to the final structure of the PMTE.

• Embedding the change management process

I wish to assure this House that the turnaround is proceeding in full consultation with organised labour. I have also given an undertaking that no retrenchments are envisaged. The parties have agreed to develop a National Framework Agreement to guide the change process.

9. Concluding remarks

I would like to conclude by thanking the following people.

• The President for entrusting me with the stewardship of the Public Works portfolio
• The Auditor-General, Public Protector and members of the parliamentary committees for their constructive criticism and support
• Members of the SIU for arming us in the fight against corruption
• Treasury - and TAU - for the assistance and support in developing and implementing a turnaround strategy
• The Department of Public Service and Administration for assisting us to address challenges with HR and the structure of DPW.
• The Director General and senior management of the Department - as well as the previous Acting DG - who have kept the ship afloat, even as we try to turn it around.
• The entities of Public Works who have contributed their personnel and their knowledge to assist in the turnaround; and
• I particularly want to thank all those officials of the Department of Public Works who are actively assisting in the process of rebuilding.

My message to them - and to honourable members - is this:

• Whilst we must never underestimate the magnitude and scope of the task we face, evenso:
• We have stabilised the Department;
• We are making real progress in tackling the immediate - and systemic - challenges;
• We have put in place the building blocks - and we have a plan - to rebuild Public Works;
• Together we can make Public Works work.

I thank you.