School Building Programme: input by Public Works Deputy Minister and Independent Development Trust

Meeting report

Introduction by Chairperson
The Chairperson welcomed the Committee Members, the Deputy Minister of Public Works, Mr Jeremy Cronin and the officials from the Department of Public Works, the Independent Development Trust and Agrement South Africa.

Department of Public Works
The Deputy of Public Works, Jeremy Cronin, thanked the Committee for the opportunity given the Department to present. The two presentations were both on the topic of the school building programme. The presentation would be delivered by the Deputy Director General for Projects, Mr Mfezeko Gwazube.

Mr Gwazube provided background, saying the national school building programme had been launched by the Presidential Infrastructure Coordinating Committee (PICC) and the Strategic Integrated Project (SIP) 13: National School Build Programme was established. SIP 13 was driven by the need for uniformity in planning, procurement and contract management as well as by the provision of basic services. SIP 13 was launched to deal with the major challenges schools faced through interventions such as replacing inappropriate school structures including mud schools, providing basic services and addressing basic services backlogs. The programme also focused on the national classroom, library, computer lab and administration building backlogs.

The Department of Basic Education (DBE) had engaged the DPW to collaborate in the building of school infrastructure in the Eastern Cape and the school beautification programme through the Accelerated School Infrastructure Delivery Initiative (ASIDI). A draft Memorandum of Agreement between the DBE and the DPW had been developed and was currently undergoing final consultation before signing by the Accounting Officers of the two departments.

On its roles and responsibilities, Mr Gwazube said that the DPW was responsible for the management of the allocated schools to ensure delivery of quality projects on time and within budget and that programme funds were utilized for the purpose intended. The IDT and Coega Development Corporation were to be engaged as implementing agents for the two programmes.

Proposed Interventions
The Committee was presented with the details of the agreement between the DBE and the DPW for the School Building programme and the School Beautification Programme. The proposed interventions were intended to reduce consultant costs; improve operational efficiency; ensure the use of standardized designs; and provide provisional bills of quantities.

IDT Capacity
The IDT had a national presence in offices in each of the nine provinces. A core team of programme management staff was supplemented by professional teams from the private sector and proven competent programme management skills were reinforced by development of administrative competencies. There were sound financial management systems and the IDT had obtained an unqualified audit for a consecutive period of eight years. There were robust management systems and tools to aid programme implementation and enhance outcomes achievement and reporting. These included an electronic based beneficiary information system (BIMS), electronic programme management systems, and world class project planning and management methodologies. The Committee was presented with the service delivery model of the IDT used for the Accelerated School Infrastructure Delivery Initiative (ASIDI).

Cost of ACM as against Brick and Mortar
Drawn from work done at ten schools in the Eastern Cape and two schools in the North West, Mr Gwazube presented the costs involved in building a school using alternative construction methods compared to the cost of using bricks and mortar. The table presented comprised of information on the ACM final construction cost, ACM cost per square meter, brick and mortar costing, brick and mortar cost per square meter and the savings realized by using ACMs.
           
While using ACMs, the average cost per school was approximately R9.2 million and R692 514 per classroom. With the use of bricks and mortar, the average cost per school was approximately R14.5 million and R1.08 million per classroom.

Independent Development Trust (IDT) briefing
The Chief Operating Officer, Mr Ayanda Wakaba, spoke about the history of IDT’s participation in the delivery of school infrastructure, its service delivery model, the IDT school infrastructure over the last five years, the current IDT school infrastructure programmes, IDT's participation in SIP 13 and the use of ACMs.

IDT participation in the delivery of school infrastructure
During the period from 2010 to 2012, the IDT participated in the Public Works funded programme for urgent school construction using alternative construction technologies. The 2009 to 2011 MTEF period was characterised by IDT participation in the National Eradication of Mud Schools and Inappropriate Structures Programme which was funded by the National Treasury. This came after an IDT funded programme in which the IDT contributed programme management expertise as well as R150 million for actual school infrastructure between 2008 and 2010. The IDT had also participated in the provincial school building programme funded through the Infrastructure Grant to Provinces from 2000 to 2011.

The Committee was presented with the infrastructure oriented IDT service delivery model and the IDT’s expenditure in school infrastructure over the last five years.

Schools Constructed in 2012/13
In terms of new and replacement schools constructed in 2012/13, Mr Wakaba told the Committee that the bulk of the schools projects in 2012/13 were renovations and additions to existing schools. A table showed the number of new and replacements schools completed: Eastern Cape had 1 school; Gauteng 1 school; KwaZulu Natal 8 schools; and North West 2 schools. This gave a total of 12 schools.

Mr Wakaba said that 8044 work opportunities had been created in 2012/13 through the schools infrastructure to the value of approximately R2.2 billion. Contracts worth R1.737 billion had been awarded to women contractors and service providers. This constituted 31% of the total programme spend. R667 million had been spend on youth contractors and R3.68 billion on BBBEE contractors. In total, 34 534 work opportunities were created by the IDT in its social infrastructure programme.

The Committee was presented with details of the 2013/14 total of IDT schools infrastructure programmes, new and replacement schools programmes, water and sanitation programmes, and renovations and additions.

Alternative Construction Methods (ACMs)
Mr Wakaba defined ACMs to be the use of materials for building which were not conventional. These ACMs were Agrement SA-certified and were generally panelized systems. He outlined the use of ACMs, their design, energy efficiency advantages environmental considerations and local economic contributions. The benefits arising from the use of ACMs as well as the limitations of ACMs were also explained.

Benefits and limitations of ACMs
Mr Wakaba listed the following benefits of building with ACMs:
▪ Generally higher quality though equivalent to conventional methods;
▪ With ACMs, facilities could be delivered more quickly than with conventional methods;
▪ Lower constructions costs;
▪ Better thermal efficiency;
▪ Easier delivery of materials with less and lighter panelized systems;
▪ Better technical performance (weatherproofing) as well, if not better than conventional methods;
▪ Environmentally more sustainable in terms of water, energy and material efficiency;
▪ High contribution towards local economic growth through labour and material acquisition;
▪ Up-skills construction industry;
▪ Local skills transfer in terms of site fabrication and assembly.

The Committee was presented with the limitations of the use of ACMs, which included: 
▪ Long-term durability and life cycle cost of the ACMs under local conditions had not been tested;
▪ The design of the buildings had to take into consideration the specific nature of the ACMs;
▪ The once-off use of ACMs in an area limits the benefits of skills transfer and the opportunity of utilization of acquired skills;
▪ More advocacy work was still required to promote social acceptance although the initial response had been positive.

Recommendations
The IDT recommended that ACMs should be encouraged as they offered distinct advantages over conventional construction in relation to speed, cost and quality. It was recommended that ACMs be considered as a feasible alternative to enhance delivery of school infrastructure where urgency was a primary factor.

In conclusion, Mr Wakaba reminded the Committee that the IDT was not the driver nor the responsible government structure for the school building programme. The DBE and its provincial departments were responsible for the programme. The IDT's work and products were dependent on the programmes it had been contracted to implement by the client department.

Discussion
The Chairperson said that the Committee Members could engage with the DPW and the IDT on the presentation but it was important to remember that the purpose of the meeting was to check if the DPW was reclaiming its mandate of building schools on behalf of its client departments.

Questions
Mr L Gaehler (UDM) said that there was a problem of the DPW not claiming its mandate. The DBE had instructed the DPW that they wanted to build with ACM. That was a simple instruction and there was not much which could be done. He was happy with the last part of the IDT’s presentation and he had nothing against ACMs but the presentations explained a lot. The President of the Republic had stated that job creation was a core function of every department. With ACMs, there was not much job creation and that was a big problem. There were thousands of emerging contractors in Grade 1 and with the use of ACMs the DPW could forget about upgrading these contractors. ACMs were going to play in favour of big companies and contractors. The ACMs were going to be manufactured somewhere in Gauteng and transported to building sites. In addition, the ACMs had not been tested. Sometime back, an ACM was used but today it was giving problems and the school was being rebuilt. Brick and mortar was 'tried and tested' and it created employment for the people. His recommendation was that only a certain percentage of the buildings should be done with ACMs.

Mr Gaehler was happy to hear that the DPW was planning to use fewer consultants for projects. This was simply going back to basics with the building of standard schools. The use of ACMs were not very friendly for job creation as some of the companies were foreign and were based in Gauteng and only those few were going to benefit from the ACMs.

Mr K Sithole (IFP) complained that the first three slides from the IDT’s presentation had not been provided to Committee Members. He was concerned about the lifespan of the ACM constructions. It was disturbing that the lifespan of the ACM buildings was just 30 years while that of brick and mortar buildings was between 100 and 200 years. How were the ACMs going to be tested? On the job and contract opportunities which had been created, how many had been allocated for women, youth and BBBEE companies? He did not hear anything being said about the DPW claiming its powers from the various client departments.

Ms N November (ANC) thanked the DPW and the IDT for the schools which had been built around the country. She had visited many schools and she was impressed with the quality of the buildings. She hoped that the communities and students were going to maintain these structures appropriately. On the draft Memorandum of Agreement (MOA) between the DPW and the DBE, there was no time frame for the signing of the agreement. The agreement neeeded to be signed to indicate that work was in progress. The IDT’s report was good and the interventions were logical but she was worried about the lifespan of the ACM buildings. Thirty years was such a short period for school buildings.

Ms P Ngwenya-Mabila (ANC) asked when the draft MOA was going to be finalised. She said that the monitoring of projects was still a challenge for the DPW as there were a lot of incomplete schools but contractors had been paid and had left these projects incomplete. This raised questions of who was responsible for the monitoring of such projects. For the Committee to effectively play its oversight role, it had to be told when schools were allocated and whether delivery was done on time. The completion dates of projects were important but it was equally important to indicate the starting dates of such projects so that time tracking and monitoring could be easier. Did the DPW have the necessary capacity to meet the targets and timeframes which it had set for itself? On the recovery or rentals and fees from other departments, was the DPW able to get its claims and money on time? What challenges were being experienced with this? On the IDT presentation, the figures today were not the same as those which were in the presentation which had been circulated earlier to Committee Members. She was concerned about the accuracy and consistency of the presentation.

The Chairperson agreed that she had noticed some differences to the presentation which had been circulated to the Members. She hoped that the current figures were the correct figures.

Ms Ngwenya-Mabila said that the Committee was not supposed to accept a situation where documents and the correct information were only circulated during the meeting because it "disorganised" the Members. When they received information beforehand, they studied those documents so changes during the meeting were not acceptable. If there were changes, such had to be made well before the meeting.

The Chairperson said that the point was taken.

Ms C Madlopha (ANC) asked if in the MOA, the DPW considered the concerns raised by the Committee about building and claiming later. This was one of the challenges with the projects because some projects were abandoned because of insufficient funds if the funds were not transferred on time to the DPW.

Ms N Ngcengwane (ANC) referred to the creation of work opportunities and asked if there was any skills transfer which was any value to the small contractors. She proposed that it would be good for the Committee to visit some of the new schools which had been built.

Ms N Madlala (ANC) asked if the IDT could provide the Committee with the details of the women and youth contractors it was working with. The IDT and the DPW had said that there were projects which were on hold and still under construction. Were these projects going to be completed by 2014? She was concerned because there was so many of these type of projects. For instance, the Eastern Cape alone had 63 of these incomplete projects. When were they going to be completed?

The Chairperson asked what the beautification programme was all about. Did it mean the building of fences, laboratories, extra classrooms or playgrounds? Why was Limpopo given a priority for such projects? What was the marinating strategy for the ACM buildings and could the Committee be briefed on such a strategy?

Responses
The Deputy Minister of Public Works, Jeremy Cronin, said that he was going to make some general comments in response to some of the questions while the other officials from the DPW, IDT and Agrement SA were going to provide technical details and responses.

The Deputy Minister thanked the Committee for the useful and constructive criticism which had been made. The meeting was about establishing to what extent the DPW had reclaimed its mandate. That was a very important question and the first issue to him was to establish what the mandate of the DPW was. The incoming Director General of the DPW had pointed out that there was no founding legislation which established the DPW and indicated what its mandate and scope should be. That was something the DPW was working on although it was not promising to bring such legislation to the Committee before the end of the current term of Parliament.

The DPW had four pillars. The first was to regulate the built environment in terms of its professions and industry through legislation and regulation. The second leg of DPW's mandate was the property management of public buildings. The DPW was the custodian and had the responsibility to preserve and look after these huge property assets. This also included the leasing function. The DPW was undergoing some restructuring so as to coordinate itself much more efficiently. Thirdly, the DPW coordinated the Extended Public Works Programme (EPWP). There were many departments involved with the EPWP and the DPW had the role of coordination. The fourth leg dealt with the responsibility for the construction of public buildings. This was an area where the DPW had many weaknesses and this was mainly due to historical reasons. The DPW had found that many client departments had been trying to set up small public works departments or mini-DPWs and the DBE was an example. It was understandable as this was due to frustrations with the performance of the DPW.

Reclaiming the mandate of the DPW was not a hostile issue and was not an issue of competition with other departments but it had to be a government and cabinet-wide discussion about how best the core functions of the DPW could be addressed in collaboration with other departments. The Ministry and the DPW were very keen on improving the capacity of the DPW. The DPW was self-critical and was not blaming the DBE or any other department which was pushing into this space as it understood why that was happening. However, there could not be a dysfunctional approach to the work which was to be done.

Deputy Minister Cronin said that he was going to be honest in saying that the DPW did not have the capacity to programme manage some of the projects but what it had was the IDT. The IDT had its own challenges and problems but at least it had the capacity. It was wrong to call the IDT “independent” and it should actually be a state entity. The DPW was self-critical of the fact that over the years, the DPW had tended to treat the IDT as if it were independent and therefore had not exercised effective governance over the IDT. This was something which was to be corrected. So if the DPW wanted to fulfill and reclaim its mandate, the IDT was a serious asset considering its capacity.

On the issue of ACMs, Deputy Minister Cronin said that he was happy to see the Committee advocating for emerging contractors as it was the priority of government to ensure the development of small and emerging contractors. However, that was not the first priority on the topic of the day. The first priority was to address the crisis of school accommodation. This was a crisis unique to many rural areas. It was not the DBE which was dictating to the DPW how to operate. It was a cabinet-wide decision and the PICC meeting in its plenary. There were challenges and it was important to be honest about them. The dangers were that when people heard of ACMs they viewed them as if they were the provision of another container for a school classroom while white communities had nice brick buildings and second class stuff was being given to the black communities. It was very important, as South Africans, to understand that in the USA, Germany, England, Canada, Australia, and many other developed and developing countries, ACMs were being actively used. The ACMs had to be adapted to South Africa’s geographical and topographical realities. It was however good to understand the shortcomings of ACMs and note there was a vast first world experience with ACMs.

Deputy Minister Cronin thanked the Members for being meticulous about the statistics and the figures in the presentations. The statistics were not just for accuracy sake but were primarily meant to pass on a message and for the learning of lessons. The figures were intended to inspire correction, interventions and oversight.

The Chairperson thanked the Deputy Minister for his responses and requested the officials from the DPW, IDT and Agrement SA to respond to the remaining questions.

The DDG: Projects at the DPW, Mr Mfezeko Gwazube said that on the question of the draft MOA, he was going to take the question back to the Department because there was an appointed programme manager so that clarity could be gotten as to when the finalisation and signing of the MOA could be expected. The findings were going to be communicated back to the Committee in writing. The context given by the Deputy Minister indicated why it was taking so long for the agreement to be completed. At the end of 2012, he had gone to the PICC with the DBE to provide a brief and the resolution was that the MOA had to be concluded.

On the issue of the starting of the schools and the progress of the DPW, the genesis was the agreement and none of the schools had been given to DPW yet. The agreement was needed as a governing document which allowed the DPW to do what it had to do. The MOA had to be signed before anything could be done.

In relation to DPW capacity, Mr Gwazube said that he could confirm that the DPW had already appointed the team for the particular projects to do the interventions proposed in the framework. The DPW was in a state of readiness awaiting the agreement. He could comfortably say that the DPW had the required capacity for the school building programme.

On the recovery of claims and money from client departments, the DPW had acknowledged that the problem of the billing system was more of what was reflected in the allocation. The DPW allocation had two components – what was appropriated to the DPW as a vote and what was also appropriated to the client departments. This was where the problem resided as it found more expression in the leasing portfolio. Within the construction environment, there was an additional arrangement called a recoverable account. This account was not going to be reflected on the DPW appropriations but it was in the clients’ accounts. However, this was not done for all clients.

In terms of the prioritization of Limpopo, Mr Gwazube said that Limpopo was proposed by the DBE in its engagements with DPW to say that they were pilot district municipalities in terms of the beautification programme. As to why these particular districts were prioritised by the DBE, the DPW had no insight.

The Chief Operating Officer of the IDT, Mr Ayanda Wakaba, said the beautification programme was looking at making the school environment better through addressing "low hanging fruits". It was all about infrastructure but of a lighter nature such as the repair of broken windows, painting, fencing, etc. It could even be looked at in the light of maintenance. What was done in one school was different from what was done in another school. The DBE had allocated about R500 000 for each school.

Mr Gwazube said that Mr Wakaba was not contradicting his understanding but that DPW was of the view that education was not only about being in the classroom but it also had to do with the extra-mural activities which completed the cycle of education. Many South African schools built for the previously disadvantaged communities did not contain all the facilities that completed the cycle of education. Such facilities included playgrounds, track fields, etc. The beautification programme was intended to provide the facilities to complete the educational cycle outside the classroom.

The Chairperson said that the Chief Executive Officer of Agrement South Africa could make a contribution to the discussion on the use of ACMs.

The CEO of Agrement SA, Mr Joe Odhiambo, said he would focus on the maintenance strategy and needs of the ACM building. Agrement SA was part of the assessment and testing process and it carried out durability tests as part of all evaluation. About the concern that the products had not been tested locally, it was important to note that the products had been tested in a laboratory. It could be argued that testing them in a laboratory was testing them in a controlled environment. This was true but a laboratory test was more onerous than testing them out in the field because in the laboratory they were tested over a long period and simulations of weather effects were carried out. Many of the products had been tested overseas for several years. Some of the major buildings in the world such as the Empire State Building in the USA were built out of these ACMs. Locally, the MacDonald’s building outside the parliamentary village in Acacia was built out of these ACMs. The ACMs had been used to build schools. Mr Odhiambo gave an example of a school in Mamelodi and the Nelson Mandela Primary School in Mthatha which was handed over on the 18 July 2013.

In terms of maintenance, the process started from the construction. During the construction, the contractor together with the school governing body and the project steering committee identified two people to work with the construction team who were left behind to be maintenance personnel. Such a model was the maintenance proposal from Agrement SA. Maintenance had to be part and parcel of the capital project. If such a maintenance model was not put in place, the projects were going to fail.

The Deputy Minister said that the discussion had been useful for the DPW and the IDT and he thanked the Committee for the engagement. He said that the Committee should consider organising a broader discussion and joint meeting with the Portfolio Committee on Basic Education, the Department of Basic Education, National Treasury and even the Development Bank of Southern Africa to discuss SIP 13 and the lessons learnt about school building programmes. He thanked the Committee for the engagement and criticisms.

The Chairperson said that there were many schools in Mpumalanga and Limpopo which had been built with ACMs so it was important to note that South Africans were gradually accepting these methods. She thanked the Deputy Minister and all the officials for their input.

The meeting was adjourned.