Council for the Built Environment & Agrément South Africa: Strategic Plans and budgets 2010/11

Meeting report

Council for the Built Environment (CBE) Strategic Plan and Budget 2010/11
Mr Bheki Zulu, Chief Executive Officer, Council for the Built Environment, presented the Strategic Plan and budget of the Council for the Built Environment (CBE) to the Committee, as well as a programme outline.

The Programme Outline comprised three main programmes. Programme 1 was sub-divided into five sub-programmes pertaining to Policy and Research, Regulation and Legal Services, Skills Development, Knowledge and Information and Operations Management. Programme 2 related to Communications and Programme 3 to Corporate Services. He then proceeded to describe each of the programmes in more detail.

The objective of the Policy and Research sub-programme was to provide policy and research services to the organisation. Its key policy priority was to strengthen the CBE’s skills and human resource base and build economic and social infrastructure. Built environment performance was measured against national indicators.

The objective of sub-programme two was for the provision of regulations and legal services to the CBE. Its primary policy priority was to for the pursuing of African advancement and for the enhancement of international cooperation. The sub-programmes’ expected outcome was for the increase of registrations for the six professions. For sub-programme two, increased built environment performance was measured against national indicators.

The measurable objective of the Skills Development sub-programme was to facilitate improved access to funding by learners that had been previously marginalised. The primary policy priority of the Skills Development sub-programme was to strengthen the skills and human resource base of the CBE. The Skills Development sub-programme was intended to drive industry transformation in line with the national agenda.

Sub-programme four pertained to Knowledge and Information. Its objective was to provide knowledge and information services to the CBE. Its primary or key policy priority was to build a developmental State that was inclusive of the improvement of public services and the strengthening of democratic institutions.

Sub-programme five pertained to Operations Management. The objective here was to lead and divide the operations division of the CBE. The expected outcome of sub-programme five was to improve performance, and its measurable objective was for the provision of a comprehensive capacity programme for all the professional councils.

Mr Zulu then highlighted Programmes 2 and 3 to the Committee. The objective of the Communications Programme was for the management of communication within the CBE as well as communication with the public and other stakeholders. The primary policy priority of the Communications Programme was to build a developmental State for the improvement of public services and also for the strengthening of democratic institutions. Mr Zulu noted that its expected outcome was to establish the CBE as a recognised facilitator and driver of sustainable built environment.

Programme 3 pertained to Corporate Services, with the objective of providing corporate services within the CBE. Its expected outcome was for the creation of an output-delivery oriented organisation and to ensure the CBE’s capacity to deliver on the mandates programme.

With regards to the Budget Implications, Mr Zulu said that over the Medium Term Expenditure Framework (MTEF) period, the CBE had requested a grant allocation of R60 million but that this had not been approved in full. He then presented an analysis of the total income expected, the total grant allocated, levies and interest. The expenditure breakdown was presented in terms of key cost drivers in line with the allocation grant. Mr Zulu noted the CBEs plans in terms of personnel cost, administrative expenditure, professional and special services, capital assets and programme expenditure (see attached presentation for full details)

The financial interventions for 2010/11 – 2013-14 were noted.

A graph was tabled to the Committee on the CBE’s actual financial performance for the past three years. Another tabled graph was presented to the Committee on the future analysis of the CBE, in terms of planned programmes versus the allocated grant. Revenue analysis for previous years had been tabled to the Committee. The grant allocated in previous years up to the current time was also tabled to the Committee.

Discussion
Mr C Kekana (ANC) displayed concern as to why the CBE presenter had spoken of policy frameworks, as polices had surely been formulated since the inception of democracy in 1994. Mr Kekana wanted to know policies were still being formulated. He noted the necessity of skilled people trained in engineering for the South African economy.

Mr Zulu said that the Act that had established the CBE had come into effect in 2000 and that the organisation had been established in 2001. The CBE had only started to really put into effect its mandate in 2007, as it had only started to bring in its human resources in 2006.

Mr G Oliphant (ANC) wanted to know what the CBE had been doing in the interim.

Mr Zulu responded that the CBE had been in the process of establishing itself in the interim. When the CBE had been established, it had received just R1 million. In 2006, it had received R7 million by way of a budget allocation. In the interim it had been trying to bring in human resources had taken place. Mr Zulu said that the policies had been formulated around the mandates, especially for the professional councils, as it was the responsibility of the CBE to ensure that the professional councils did have policies in place.

Mr S Masango (DA) wanted to know why the CBE was saying that it was”reviewing” the policies, as opposed to looking at policy implementations.

Mr Zulu said that once the policies had been put in place, they had been implemented by the professional councils. The CBE then received reports as to whether the implementation of those policies had been successful or not. In this way, the CBE could also ascertain whether any changes were needed.

Mr Masango said that there were many national indicators. He wanted to know which national indicators the CBE had been referring to in the presentation.

Mr Zulu referred to the CBE’s presentation on its business plan, noting that the slide’s last column noted linkages in each area. He gave the Committee an example pertaining to the Further Education and Training (FET) colleges to corroborate his response about national indicators.

Mr Masango sought clarity on the CBE’s bursary capacity, as the CBE had mentioned that it did not have enough money. He also enquired if there were students currently in the bursary programme or if this was something that was still in the pipeline. He also enquired what the 70% mentioned in the presentation was measured against, noting that a baseline was necessary to give meaning to this figure.

Mr Zulu said that the students were currently in the bursary programmes at universities completing their three to four year degrees. The CBE had realised that what was put into the educational system did not necessarily tally with what was received in return. He added that the CBE’s measure of success was that its students should achieve more than 70%. The CBE was providing mentorship to those students as well.

Mr Masango referred to the CBE’s reference to measurable objectives regarding the professional councils. He questioned why professionals needed to be capacitated, as they were already professionals.

Mr Zulu said that the CBE had been referring to intellectual capacity, and not financial capacity. He made the point that some of the councils did not have the financial capacity to perform their mandates.

Mr M Rabotapi (DA) was concerned about the rural areas, and asked how far CBE had gone into the rural areas, and which projects had been implemented there. He noted that South Africa was vast and that there were many rural areas that were still undiscovered and that had not been tapped into as yet.

Ms N Madlala (ANC) shared Mr Rabotapi’s concern about the issues pertaining to the rural areas and the outreach capacity towards those areas.
She also displayed concern about the use of sub-standard building materials.

Mr Zulu said that one of the aims of the CBE was to entice students from the rural areas into the built environment profession. He highlighted the importance of having Mathematics and Science as subjects at school level. He also noted that some of the CBE’s bursary recipients had been from the rural areas.

The Chairperson asked Dr Oswald Franks, Chief Executive Officer, Engineering Council of South Africa (ECSA) to present his opinion on the issue to the Committee.

Dr Franks said that there was so much more that needed to be done for the promotion of the engineering profession. He noted that the Engineering Council of South Africa (ECSA) had a 40 year history of being regulated and that the council had always taken a narrow view of its mandate. However, ECSA had now adopted another approach. It had initiated a bursary programme for indigenous students from the rural areas in the Limpopo Province and Kwa-Zulu Natal (KZN). He noted that ECSA had received R1.8 million from the Sector Education and Training Authority (SETA). ECSA wanted to expand the programme to 800 students.

Dr Franks said that much more needed to be done in terms of informing students in the rural areas and that ECSA was working in collaboration with the Department of Education (DOE) in that regard. He added that ECSA was keen on finding the ‘rough diamonds’ who most needed training. It was not just a question of giving money to rural students, but it was necessary to have a comprehensive initiative that comprised issues relating to accommodation, medical checks, psychological support as well as socialising into the university system. Dr Franks concluded that ECSA wanted to work very closely with the CBE on these matters.

The Chairperson commended ECSA for the initiative and added that further engagement was necessary.

The Chairperson questioned the size of personnel in the CBE.

Mr Zulu said that the CBE had a personnel capacity of 30.

Agrément South Africa (ASA) Strategic Plan and Budgets for 2010/11
Mr Joe Odhlambo, Chief Operating Officer, Agrément South Africa, noted that the current mandate, profile and exposure of Agrément South Africa (ASA) had to improved and raised. The vision of ASA was to be a world class technical agency. The ASA’s mission was to promote the government’s goals of economic development and to raise the living standards of all people living in South Africa. Its other mission pertained to sustainable environmental resource management.

Mr Odhlambo said that one of the mandates pertained to the enhancement of ASA’s position as the internationally acknowledged centre for the assessment and certification of non-standardised construction products. ASA aimed to have a strategy consistent with the Minister’s mandate.

Five overarching long term goals had been set by ASA. These were to provide active support to the Minister’s strategic programmes and initiatives aimed at the transformation of public works, to transform ASA into a viable and modern organisation with sound corporate governance, as well as to enable it to address current and future human resource challenges.

Mr Odhlambo tabled a typical product development graph to the Committee.

Mr Odhlambo said that effective management was imperative to ensure effective corporate governance processes, sound resource management and also for the increase of technical assessment outputs.

He noted ASA’s contribution to the national objective of poverty alleviation and job creation.

Mr Odhlambo also noted the efforts towards ensuring of transformation and steady growth of ASA's technical agency. He noted that ASA was to build a developmental state and improve public services in rural areas.

Mr Odhlambo also highlighted the benefits of Agrément certification (see attached presentation for details).

Mr Phumlani Myeni, Finance Manager, ASA, tabled ASA’s financial presentation to the Committee. He tabled the budget for 2009/10 to 2013, noting that the total budget percentage increase for 2010/11 was 7%, for 2011/12 it was 8% and for 2012/13, 8%.

Manpower costs pertained to 13^th cheques, Unemployment Insurance Fund (UIF), group life insurance, travel allowances, pensionable salaries and performance bonuses.

Mr Myeni noted that the total bottom line budget had increased from year to year by 7% and 8% and that it had been in line with cost escalation. Mr Myeni made reference to budget notes in relation to manpower costs, internal costs and running costs.

Discussion
Mr S Masango (DA) wanted to know why the ASA presentation had referred to travelling as “running costs”.

Mr Myeni said that travelling was inclusive of visiting the sites before the certificates were issued. He added that before ASA could issue certificates, it first had to go to the sites to ensure that people had been using those certificates for their intended purposes.

He also referred to travel costs when ASA needed to come to Parliament to table presentations to the Committee.

Mr Masango wanted to know why travelling was not rather categorised under accommodation.

Mr Myeni said that it would be included in “accommodation plus traveling” and that it would then be inclusive of flights and car hire.

The Chairperson wanted to query the ASA’s reference to the figure of R10 million.

Mr Myeni confirmed that the total allocation had been R8.9 million and that R1.1 million would go to Value Added Tax (VAT). The ASA was left with R7.8 million after VAT deductions.

The Chairperson emphasised the importance of a collaborative and proactive approach in dealing with challenges. He also emphasised dealing with issues in a more sustainable manner.

The Chairperson noted that government was losing a lot of money when it came to housing. He emphasised the importance of taking responsibility for implementation across government departments and organisations.

The Chairperson wanted to know if ASA was satisfied with its budget allocation.

Dr Mohammed Tayob, Board representative of ASA, responded that in order for ASA to move forward, it needed monetary assistance as well as assistance from allied ministries. He added that intellectual capital from allied ministries would be beneficial to the ASA.

Mr Tayob also noted that ASA was in need of a legislative framework that would assist with certification and accreditation. He added that that would be one way of dealing with the issue of homes that had been developed with sub standard infrastructure.

Mr Tayob said that ASA’s internal challenge was to hold on to its current expertise. He said that ASA was battling to compete with the private sector in terms of career paths and providing adequate salaries.

Mr Tayob also noted that the speeding up of the process of certification was vital for the ASA.

He added that ASA’s biggest challenge was to attract the necessary skills for it to perform its mandate effectively.

Committee Members noted their concern about the demolition of 20 000 houses in the Eastern Cape. Concerns were also raised on the cost of R50 000 per house. It was noted that those could not be Reconstruction and Development Programme (RDP) houses as these were initiated at R17 000 in the past, and the costs should not be currently exceeding R25 000. The Committee said that houses built for R50 000 did not constitute the RDP initiatives.   

The meeting was adjourned.