1

Free State Public Works, Roads and Transport NCOP Meeting

28 NOVEMBER 2006

2

CONTENTS

• Bridging the first and the second economy• Extended Public Works Program• Integrated Sustainable Rural Development • Contribution to poverty alleviation and job

creation• Empowerment through Procurement

Procedures• Projects currently undertaken• Challenges• Way forward

3

Bridging the first and the second economy

• State of the Nation Address

• State of the Province address

• Our Budget Speech

• 2014 Millennium Goals

• 2010 Intervention

• EPWP

4

State of the Nation Address

“We cannot allow.” that government departments become an obstacle to the achievement of the goal of a better life for all because of insufficient attention to the critical issue of effective and speedy delivery of services.”

“Integration of planning and implementation across the government spheres is therefore one of the prime areas of focus in our programme …..”

President Thabo Mbeki – State of the Nation Address 2006

5

State of the Province address

• Creation of 50 000 jobs through EPWP

• Halving poverty and un-employment

• Transfer of skills

• Targeted procurement processes

6

Our Budget Speech

• Accelerated infrastructure delivery

• Targeted procurement

• Transformation of the construction and property industry

• Nurturing of the incubator strategy

• Empowerment of youth, women, disabled, etc.

7

ISRDP and Contribution to poverty alleviation and job creation

• Makwane access road – 27 learnerships and 1800 jobs created – R64 million

• Road infrastructure• Selosesha – R15 million project• Trompsburg – Jagersfontein – R78 million• Fezile Dabi Projects

– Sasolburg Interchange– N1 – Parys: 20 km– N1 – Sasolburg Currently out on tender: 24 km– Vredefort Dome road: 30 km out on tender– Koppies Dam access road 8 km out on tender– Heilbron – Petrus Steyn – Reitz : Tender Closed 3 Nov 06 : First

Phase R149 million

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Rationale for roads upgrading and construction

• Access to Bio-Fuel plants (Economic corridor) and linking Free State and Vereniging / Gauteng

• Promotion of Tourism• Promotion of Freight Corridors• Linkage of North-West and the Eastern Free

State• Promote mobility, accessibility and future

growth• Access to the Heritage site

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Key Highlights in Sep 06 Mid-term Report

45%

47%

43% 48

%48

%

45%

38% 45

%45%

32%

25%

65%

44%54

%102%

39% 45

%45%

55%

55%

47%

20%

40%

60%

80%

100%

AverageSpent

Personnel Capital Educ Cap Health Cap WR&T Cap Own Revenue

All Provinces

Free State

PWR&T

10

2006/07 Departmental BudgetR1 066 323.00

Budget Distribution 06/07

Equitable Share

R 637.3 m60%

P I GR 183.4 m

17%

O I GR 213.8 m

20% Own RevenueR 31.8 m

3%

Roads

Admin, Works,Transport, EPWPTraffic

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2006/07 Budget IssuesState of the Budget

Budget Distribution

TransportR 19.9 m

2%

RoadsR 515.4 m

49%

TrafficR 130.6 m

12%CBPWPR 14.2 m

1%

AdminR 130.5 m

12%

WorksR 255.7 m

24%

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Actual Monthly Departmental Expenditure and Projected for 2006/07

TOTAL OVER EXPENDITURE = R 261 million

50

7279

96

72

93

139

113

164152

118132 133

0

20

40

60

80

100

120

140

160

180

Ran

d M

illon

'Apr06 'May06 'Jun06 'Jul06 'Aug06 'Sep06 'Oct06 'Nov06 'Dec06 'Jan06 'Feb06 'Mar06

ActualProjected

Till 20 Nov 06

13

MAIN INDICATORS: Economic Classification

169179

213

153157

220

2 2 2

85

123

165

0

50

100

150

200

250

300

Ran

d M

illon

Comp Goods&S Transf Capital

Actual Expenditure

Actual Sep05Actual Sep06Actual Oct06

14

61

75

134

131

117

147

284

257

196

274

719

515

14

18 3

019

70 80144

130

3 5 16 14

0 0 1

0

100

200

300

400

500

600

700

800

Rand M

illion

Admin Works Roads Transp Traff EPWP Theft&L

Till Sep06Till Oct06Projected 06Budget 06

Spending Outcomes and budget 06/07

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Actual Monthly Roads Expenditure till 31 October 2006 and Projected

for 2006/07

12

29

35 3543 43

79

110102

64

8088

0

20

40

60

80

100

120

Ran

d M

illon

'Apr06 'May06 'Jun06 'Jul06 'Aug06 'Sep06 'Oct06 'Nov06 'Dec06 'Jan06 'Feb06 'Mar06

ActualProjected

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• Unbundling of contracts to ensure that all participate despite the CIDB grading limitation.

• Maintenance and upgrading contracts targeted for small contractors.

• Learnership contracts: Makwane road, Monontsa Pass in Qwaqwa, Heuweltop in Tsetseng and Route 4 in Tsetseng. The last 3 projects are yet to commence (Total cost for these 3 is R147 million)

Empowerment through Procurement Procedures

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Promotion and nurturing of BEE’s

• Shortened payment cycle: Pay in 7 days on correct invoice.

• Appointment of mentors for SMME projects: Engineers or project managers.

• Approval of sessions and reduction of guarantees.• Monthly project meetings and continuous monitoring.• Contractors in the incubator programme.• Sustainable and continuous projects • Targeted procurement

18

Massification of EPWP

• Various projects have been identified for massification and youth development

• Palisade fencing projects.

• Grass cutting and road maintenance

• Possible waste management projects

• Property maintenance projects

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Challenges

• Ownership and re-determination of roads between provincial and local e.g. through Parys is designated as a street instead of a provincial road. Proclamation to be made.

• Nature reserves and resorts: Jim Fouche in Oranjeville and Koppies dam nature reserve leased to private sector at not market related price. Department is currently revisiting the processes.

• CIDB – 845 of the contractors are at the entry level and at grade 9 are only 2

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• Planning & Co-ordination and monitoring not adequate

• Project Management still lacking• Consultants not playing ball.• Identify appropriate staff, engineers,

project and financial managers• Material supplies still not transformed• Financial Institutions not always flexible• Transformation of the property and

construction sectors

Challenges (Continue)

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In Year -Budget Pressures

• Floods

• Material supplies

• Transport Infrastructure

• Law enforcement

• Maintenance

• Accommodation

• Construction material

• Accelerated infrastructure delivery

• 2010 Infrastructure

• CIDB

• Taxi recapitalization

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Interventions and corrective measures

• Planning procedures• Project Management• Monitoring• Consultants• Client departments• Appropriate staff for infrastructure delivery• Changed planning patterns• Fast-track payments• Streamline operations• Batho Pele: Testing stations and Revenue

Authorities

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Learnerships

Motheo & Xhariep

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Gravel Roads

Regraveled in Xhariep

Road S 1521 Thaba Nchu

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Road repair

Extensive Blading Process Patch work

learnershipsRepair and cleaning of rest areas

Cleaning of storm water drainage

Rehabilitation by milling

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Bridges

Sterkspruit bridge

Repair bridge approach and remove debris

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Makwane access road bridge structure

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MAKWANE-S1499 before and after

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MAKWANE: S1500 before

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MAKWANE: S1500 Construction

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MAKWANE: S1500 After

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PARYS - N1

33

34

SELOSHESHA

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ZASTRON BRIDGE: Before and after

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BRIDGE OVER THE CALEDON RIVER AT

WEPENER

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FLOOD REPAIR: Bloemfontein-Zastron

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TROMPSBURG-JAGERSFONTEIN

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Conditional Grant Spending Business cases

• Infrastructure Plan• Revisions to the maintenance budget to provide

for flood damage repair work;

Road S708 near Ladybrand Road S 1521 Thaba Nchu

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WORKS AS AN AGENT FOR CLIENT DEPARTMENTS

CLIENT DEPARTMENTS

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SEDERHOF

42

Clinic Construction

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Sectoral Issues Works

• Service Level Agreements with client departments;

• Payments made to contractors by PWR&T or Client departments

• Budgets payment as an advance or as claimed by PWR&T

• Reporting requirements of client or agent.• Reconciliation of data with client

departments

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Works Project Spending 30 Sep 06118

85

10

26

87

3

12 15

5

25

50

77

0

20

40

60

80

100

120

140

Education Health Environment SACS&T PWR&T SocDev

Client Departments

R

Budget Used

Sectoral Issues Works

65%

102%

35%

47%

30%

21%

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TOTAL EXPENDITURE

DEPARTMENT BUDGET EXPENDITURE %

HEALTH R84 849 000 R86 897 006 102.4%

EDUCATION R117 695 000 R76 732 997 65.2%

ENVIRONMENTALAFFAIRS

R10 000 000 R3 483 993 34.8%

SPORT ARTS &CULTURE

R26 000 000 R12 257 737 47.1%

SOCIAL WELFARE R24 758 000 R5 159 770 20.8%

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HEALTH PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

BloemfonteinPelonomi hosp - Block E. Upgrade of ICU

     Temporary ICU to be completed before project can tender

Kroonstad

Boitumelo hosp - contract 3 - pharmacy, radiology and theatres Block D

R3.98m 89 87  Will be completed by December 2006

Kroonstad Boitumelo hosp - Contract 4: Maternity

R 1,96m 44 5

Contractor has requested to complete project with cessions. Project still behind schedule

Kroonstad

Boitumelo hosp - Contract 7: Mechanical infrastructure

R5,44m  67 37 Will be completed during June 2007 

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HEALTH PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

Bloemfontein

Pelonomi hospital - upgrade Pharmacy block I and Fence Upgrading

R 0,92m 13 2  Busy with demolitions. Internal work 50%

KroonstadBoiutmelo hosp - contract 8 Electrical Infrastructure

R 6,19m 88 78 To be completed by end November 2006

JagersfonteinDiamant Hospital Upgrading

R 3,47m 33 12 Expected completion June 2008 

Qwa-QwaE Ross Hospital final phase of upgrading

R 10.23m 22 27

 Expected completion December 2009

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HEALTH PROJECTS

TOWN PROJECT EXPEND TIMEPRO

G COMMENTS

HarrismithThebe hosp final phase ofupgrading

R 10,63m 27 27  Expected completion November 2008

HeilbronHeilbron Tokollo hosp final phase of upgrading

R 9,24m 38 24 Expected completion February 2008  

BloemfonteinNational Hospital - Paliative Care Unit

R0, 75m 143 76 In process to address problems which caused delays

BloemfonteinPelonomi Hospital: Block P New Ortopedic workshop

R 1,87m 129 67

Contractor was delayed by additional requests from client dept. Work is neat and progress fair.

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HEALTH PROJECTSTOWN PROJECT EXPEND TIME PROG COMMENTS

DealesvilleNew Community Health Care Center

  133 95

Contractor a banded site. Legal advise sought. Discussions with SARS

Odendaalsrus

Thusanong First phase of upgrading - Maternity, Theatre complex and CSSD

R 3,68m 66 32 Progress improved. To be completed August 2007.

VirginiaKatleho Hospital - phase 1 of upgrade - new maternity ward

R 0,57m 88 96 Will be completed ahead of schedule

Thaba NchuMoroka - MDR Dining Hall

R 0,17m 117 7

Work came to a standstill - cash flow problems. Alternative quotations received for completion of project.

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HEALTH PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

Bloemfontein

Pelonomi hosp - Mankovs Staff accommodation Contract A

R 1,36m 25 15  Initial minor problems being managed by architect

Bloemfontein

Pelonomi hosp - Mankovs Staff accommodation Contract B

R 0,97m 25 15

Initial minor problems being managed by architect  

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ENVIRONMENTAL AFFAIRS PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

BloemfonteinPhilip Sanders Resort

First PhaseR 0,52m    

Project started. Expected completion November 2006

BloemfonteinPhilip Sanders Resort

2ND PhaseR0, 39m    

Project unbundled in seven projects. Tenders to be called for in November 2006

Gariep Dam Gariep Dam Phase 2 R 0,16m 50 31 Expected completion September 2007

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SOCIAL WELFARE PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

BloemfonteinTshiriletsong

Place of Safety

R0, 16m    

Documentation completed. Wait for client confirmation to proceed

WelkomOne stop

service center

R0,004m    Mine buildings need to

be purchased

Thabo Mofutsanyana

One stop secure care center

R 2,46m    

Documentation completed. Wait for client confirmation to proceed

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SOCIAL WELFARE PROJECTS

TOWN PROJECT EXPEND TIME PROG COMMENTS

Thabo Mofutsanyana

Victim Support Center

     Documentation will be completed 20 Feb 2007

BloemfonteinMonument Place of Safety Secure Care

R 2,39m 100 98

Contractor asked for extension of time until January 2007

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REVENUE

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REVENUE BUDGET = R251mPROJECTION = R245m

Revenue collected per month on 30 September 06

17

32

18

12

17

24

1922

23

20

22

14

16

2216

2521

19

24

21 21 21

21

21

0

5

10

15

20

25

30

35

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

R m

illio

n

'05/06

'06/07

56

Revenue Classifications

• Motor licences

• Sales of goods and services non-capital

• Fines, penalties and forfeitures

• Interest, dividends and rent on land

• Sale of capital assets

• Financial Transactions in assets and liabilities

57

REVENUE: 6 month target = R125.7m

6 month actual = R118.3m

95.3

85.0

23.3 23.6

6.4 7.4

0.1 0.8 1.0 0.0 1.2

0

10

20

30

40

50

60

70

80

90

100

Ran

d M

illio

n

VehicleLic Sales Fines Inerest&Rent Sales Cap Fin Trans

Projected vs. Expenditure till 30 September 06

ProjectedActual

58

REVENUE CLASSIFICATIONCLASSIFICATION ITEM BUDGET

ACTUAL 30Sep 06

% Collected

MOTOR VEHICLE LICENCES TAX

MOTORVEHICLE LICENCES TAX -190,581,000 -84,961,300 45%

SALE GOODS&SERV PRODUCED BY

DEPT

DRIVERS LICENCE APPLICATION FEES -8,147,000 -4,430,297 54%

LEARNER LICENCE APPLICATION FEES -4,000,000 -2,876,594 72%

CONV DRIVERS LICENCE - CARD TYPE -4,000,000 -2,571,800 64%

ABNORMAL LOADS LICENCES -3,473,000 -2,409,635 69%

RENTAL:OFFICE BUILDINGS -8,010,000 -1,540,584 19%

TESTING ROAD WORTHY FEES -2,000,000 -1,188,025 59%

RENTAL:PARKING COVERED&OPEN -2,250,000 -1,185,764 53%

SPECIAL LICENCES NUMBERS -2,000,000 -1,124,884 56%

DUPLICATE DOCUMENTS LICENCES -1,500,000 -1,097,721 73%

PUBLIC DRIVERS PERMITS -1,400,000 -879,483 63%

TEMPORARY SPECIAL PERMIT -999,000 -842,996 84%

LEARNERS CERTIFICATE -1,300,000 -782,135 60%

ROAD WORTHY CERTIFICATE -1,000,000 -493,109 49%

SERV REND: COMMISSION INSURANCE -830,000 -411,373 50%

MOTOR VEHICLE REGS PERSONAL -800,000 -400,271 50%

ACTIVITIES ON PUBLIC ROADS FEES -400,000 -386,512 97%

DRIVERS LICENCE CERTIFICATE -500,000 -176,460 35%

SALES:TENDER DOCUMENTS -180,000 -168,619 94%

RENEWAL DRIVERS LICENCES -2,000,000 -155,867 8%

MOTOR VEHICLE REGIS SPECIAL -400,000 -155,566 39%

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REVENUE: Classification (Continue)

CLASSIFICATION ITEM BUDGET ACTUAL 30Sep 06

% Collected

FINESCOURT FINES -11,746,000 -6,324,521 54%

IMPOUND FEES -1,000,000 -1,075,270 108%

SALES OF LAND & SUBSOIL ASSETS

SALES OF LAND -1,500,000 -1,016,155 68%

REVENUE: FINANCIAL ASSETS

REV:FA:REC OF PREV YEARS' EXP - -649,973

REV:FA:REC:PRV SEC:CON DEPT DEBT - -366,267

REV:FA:CASH SURPLUSES - -78,355

REV:FA:REC:PRIV S:TRANS-RES-WORK - -48,314

REV:FA:STALE CHEQUES - -11,565

REV:FA:UNALLOCATED CREDITS - -361

REC:FA:REC:PRIV SEC:STAFF DEBT - -7

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THANK YOU