Gauteng Health Capital and Maintenance Programme: Review of

2004/05 and Outlook for 2005/06

Presentation to Select Committee on Finance

26 January 2006

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CONTENTS• Strategic Context

• Overview of GDPTRW current structure

• Overview of GDPTRW current delivery mandate

• Summary of expenditure 2004/2005

• Factors resulting in under-expenditure

• Measures put in place to improve service delivery

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STRATEGIC CONTEXT• All work undertaken by GPG departments is undertaken

– Within the context of the National Priorities of • Halving unemployment by 2014• Halving poverty by 2014

– With due consideration of Gauteng’s overall challenges of• Rapid urbanisation, urban sprawl, poverty, unemployment• Economic successes – places extra pressure on province to sustain

and create new forms of access for our people– In support of the Gauteng Provincial Government Priorities of

• Enabling faster economic growth and job creation• Fighting poverty, creating safer environments and build sustainable

communities• Developing healthy skilled & productive workforce and people• Deepening democracy & nation building• Building a caring and effective government

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DPTRW VISION, MISSION, AND VALUES– The activities of GDPTRW are guided by the Strategic Plan

2004 – 2009, which puts forward:• GDPTRW Vision

– Socio-economic growth, development and an enhanced quality of life for all people of Gauteng

• GDPTRW Mission– Developing an integrated, sustainable infrastructure, which

promotes a people-centred, innovative, developmental public works and an accessible, safe & affordable movement of people, goods and services

• GDPTRW Values• People-centred• Honesty and integrity• Collective responsibility• Professionalism• Transformative

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GDPTRW SIX (6) STRATEGIC OBJECTIVES• Provision of accessible, affordable, reliable, safe, integrated

and environmentally sustainable public transport system• Effective management and transformation of transport and

socio-economic infrastructure related institutions, systems and processes

• Support economic growth and investments through the provision of appropriate transport systems and socio-economic infrastructure

• Integrate transport systems and socio-economic infrastructure systems in the Gauteng Growth and Development Strategy and development plans of other spheres of government

• Implement the Expanded Public Works Programmes in a manner that optimizes employment and addresses economic and social needs of the poor

• Efficient and effective management of the Department

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CURRENT STRUCTURE APPLICABLE TO INFRASTRUCTURE SERVICE DELIVERY

• Public Works Branch – Chief Directorate Maintenance

• Directorate Maintenance Planning• Directorate Maintenance Implementation

– Chief Directorate Capital Works• Directorate Public Works Planning• Directorate Project Management• Directorate Statutory Compliance

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CURRENT DPTRW DELIVERY MANDATE• Departments for whom Public Works are undertaken:

– Dept. of Social Development– Dept. of Public Transport, Roads and Works– Dept. of Agriculture, Conservation and Environment– DEPT. OF HEALTH– Dept. of Sport, Recreation, Arts and Culture

• Value of delivery portfolio: approximately R1 BILLION• Delivery themes incorporate:

– Participation by women, youth and people with disabilities– Broad Based Black Economic Empowerment (BBBEE)– Small Medium and Micro Enterprises (SMME) participation and

development– Expanded Public Works Programme (EPWP)– Social capital

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WHAT WERE THE KEY CHALLENGES WITH REGARDS TO INFRASTRUCTURE DELIVERY

• Synchronisation of budget planning, implementation and procurement processes ( better flow – approvals and awarding of tenders a year in advance)

• Under expenditure in the previous year was influenced by and large by the following:

– Site identification– Lack of master plans– Change in scope and specifications– CIDB accreditation processes – to ensure construction quality compliance

• Break down of material amounts not spend in prior year:– JHB South New L1 hospital (Change in scope) R20m– Natalspruit New hospital (No site) R15m– Chris Hani Bara (Change in scope) R22m– Germiston hospital (Patients to be moved) R15m– Sebokeng hospital (Revised scope) R30m

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HEALTH BUDGET VS EXPENDITURE, 2004/05

Description Budget 2004/05 Actual 2004/05

CAPEX R288,009,000 R186,933,000

(101 076 000)

Maintenance R264,242,781 R210,679,148

(53,563,633)

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SOLUTIONS TO THE PROBLEMS (Part 1)Aspects being attended to• Procurement

– Current timeframe is in excess of 5 months– Alternative process which can reduce time by 2 months developed– Concession granted at DAC for 14 day advertising period (e.g.

Tembisa and Chris Hani Baragwanath Hospitals)• Health/ GDPTRW Working Relationship

– Improved engagement and discussion on problems experienced– Monthly and quarterly meetings scheduled and held– Proactive approach to problems identified

• Professional Service Providers– Tighter management of timeframes

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SOLUTIONS TO PROBLEMS (Part 2)• To increase internal productivity and capacity

– Increasing management at a programme and project level– PMRGs contracted as resources to the internal Project

Managers, and including capacity for troubleshooting– Restructuring of PMRGs to improve efficiencies– Contract workers appointed– Works inspector posts advertised and period contracts put in

place• Contractors

– Financial and production capacity problems, particularly for lower level contractors

– Less leniency on non-performing contractors– Higher levels of contractors being targeted for new work

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OUTLOOK BEYOND 2005/ 2006• What key interventions are being proposed by GDPTRW in moving

forward– Institutional structuring and development

• Doubling of capacity in capital works directorates• Strengthening of works inspector and artisan superintendent capacities

– Procurement reforms for both professional services and contractors– Key industry development- incorporating a focus on Level 5 to 9 contractors,

artisan development and professional development– Period contracts for maintenance– Revised planning cycles with requests for subsequent year’s projects to be

issued by April of the preceding financial year • What are the other critical elements for moving forward

– Approach of identifying problems and finding solutions– Early planning– Comprehensive specifications to be established for planning– Structuring of projects into larger packages– Turnaround times to be set for approvals and decision-making– Investigation into alternative service delivery and client relations models

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CURRENT INTERVENTIONS TO IMPROVE SERVICE DELIVERY

• Department has commissioned 17 Hospital Master Plans and will be completed by March 2006

• Additional 15 Hospital Master Plans have been started, and will be completed at the end of the financial year

• The appointment of Project Management Resource Groups since December 2004 has increased the rate of project completion and expenditure on health projects

• Monthly Meetings between DPTRW and Health, together with monthly Reports are improving communication levels and speedy resolution of delivery backlogs

• Change management and the adoption of the Infrastructure Delivery Improvement Plan (IDIP) Process

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Goal and Purpose of IDIP

Goal• To contribute to the improved quality of Service

Delivery in the South African Public Sector through enhanced infrastructure delivery

IDIP Purpose• To improve the effectiveness and efficiency of

the delivery of provincial public sector infrastructure through institutionalising best practice tools and building capacity

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CONCLUDING REMARKS

• Steps have been taken to identify key challenges which impede health infrastructure delivery

• Concrete measures have been taken to address these challenges

• Evidence suggests improved infrastructure completion and payment rates