DPW comments on the 200506 Medium Term Policy Statement

1
DPW comments on the 2005/06 Medium Term Policy
Statement

• Delivered by the Director General,
• James Maseko
• 1st November 2005

2
Agenda

• Recap on the vision and mission
• Our role in governments Programme of Action
• Medium term Policy statement and challenges
• Some of our initiatives and key programmes
• Financial Performance
• Conclusion

3
VISION

• The department of Public Works (DPW) is
  committed to facilitating delivery by other
  departments by providing accommodation and
  property management services and meeting the
  objectives of poverty alleviation and
  transformation.

4
MISSION

• The DPW aims to promote the governments
  objectives of economic development, good
  governance and rising living standards and
  prosperity by providing and managing the
  accommodation, housing, land and infrastructure
  needs of national departments, by promoting the
  Expanded Public Works (EPWP) and by encouraging
  the transformation of the construction and
  property industries.

5
Our role
6
Our core business

• Provide accommodation to national departments
• Custodian and regulator of states fixed assets
• Logistic arm for national state events
• Co-ordinate the EPWP
• Manage and regulate the construction and property
  industries

7
Highlights from MTBPS

• Increase in the local government share of Revenue
  from R17.5 Billion in the current year to R33.6
  Billion in the 08/09 financial year.
• R500 Million increase to the MIG (EPWP
  possibilities)
• Increase in roll out of basic service and
  infrastructure, fund job creation and promote
  sound governance

8
MTBPS cont

• R31 Billion for provincial infrastructure
  including schools, clinics and hospitals
• R20 Billion investment in the built environment
  including Housing, water schemes, public
  transport and community facilities
• R7 Billion for courts, police services and
  improved access to judicial services
• R8 Billion for public administration, including
  government accommodation

9
MTBPS implications

• MTBPS confirms upward trend of public sector
  investment in capital formation to accelerate
  economic growth
• Capex expenditure plans will amount to R111
  Billion in 06/07 and rising to R136 Billion in
  08/09
• Expansion in Job creation exist especially when
  Labour intensive methods are used
• Two key concerns to be noted namely, inflationary
  pressures and industry capacity to absorb this
  expenditure

10
MTBPS implications /2

• Inflationary pressures will impact on the Capex
  programmes
• Capacity constraints include the following
• Shortage of skills in the industry
• Capacity of government agencies to plan and
  manage the projected expenditure
• Possible shortage of materials
• Cost escalation as a result of increased demand

11
Challenges
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Challenges

• Capacity to spend within a public accountability
  framework by the state
• Skills shortage and training implications
• Early identification of projects and planning is
  key
• Early warning systems to detect under-expenditure
  for timely interventions (ie.IDIP)

13
Challenges/cont.

• Effective communication with the industry to
  mitigate shocks and price escalation
• Proposal for a medium term infrastructure plan, a
  country plan, alongside the MTEF

14
Medium term infrastructure Plan

• Will improve planning
• Will encourage the industry to invest
  appropriately and to build capacity in line with
  the projected CAPEX investment
• Will enable the country to develop a skills plan
  to match the projected demand
• It could strengthen the partnership between
  government and the private sector

15
DPW initiatives

• Service delivery improvement plan (SDIP)is being
  implemented in the department
• Learnerships are being implemented in partnership
  with the CETA and other SETAs
• Training of the unemployed is a key to the EPWP
• Infrastructure Delivery Improvement Programme
  being implemented in partnership with Treasury to
  assist provinces to delivery infrastructure
• An incubator programme is in place to assist
  SMMEs to emerge
• Budget devolution to client departments

16
Capacity to spend
17
3 year expenditure Trend
18
Capital budget vs expenditure
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Thank you