Council for Built Environment, Construction Industry Development Board & Independent Trust: Budget & Strategic Plan 2007/8

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Meeting report

PUBLIC WORKS PORTFOLIO COMMITTEE

PUBLIC WORKS PORTFOLIO COMMITTEE
15 March 2007
COUNCIL FOR BUILT ENVIRONMENT, CONSTRUCTION INDUSTRY DEVELOPMENT BOARD & INDEPENDENT TRUST: BUDGET AND STRATEGIC PLAN 2007/8

Chairperson
: Mr F Bhengu (ANC)

Documents handed out:
CBE Business Plan 2007-2010
CIDB Business Plan 2007/2008
Summary: CIDB Business Plan 2007/2008
IDT Corporate Plan 2007-2010

SUMMARY
The Council for the Built Environment gave a report on its activities and cited the lack of monitoring powers in the enabling legislation as a problem area. Its mandate was to transform the built environment profession to deliver on the needs of society in South Africa, based on internationally competitive practices while reflecting the composition of the South African population. It would create adequate human resources capacity and ensure organisational effectiveness, efficiency and compliance. The funding objective was to ensure sustainable funding and facilitate sustainability of professional Councils. The strategic programmes included accreditation of practitioners, provision of relevant reports, industry transformation programmes, sustainable funding for the organisation and institutional development.  The total budget for the years 2007 to 2010 was R74, 5 million. Good corporate governance would be pursued by appropriate strategies. Members asked questions on the amendments sought, whether the funding was sufficient, the shortfall in skills, the benefits accruing to members from membership, registration of foreigners and recognition of standards. It was suggested that mathematics should not be compulsory for all matriculants. Entrance requirements to universities were identified as a challenge. Further questions related to the role of the Council in ensuring good quality, the need for adequate corporate governance, the need to check the export of skills, and the registration.

The Construction Industry Development Board set out the mandate and mission. The achievements included improved public spending, increased black participation, and increased registration of projects and contractors. The Board had developed a code of conduct. Challenges include shifting priorities, the role of the structure as a national organisation, alignment of the register with the Construction Charter, and the unprecedented volume of registered contractors. The Board would be focusing on improving the number of contractors registered, clearing of the backlog, resolution of specific contractor problems and linkage to construction contact centres and project registration.  The total expenditure for the period was projected to be R74, 989 million. Members asked questions why there had been a delay in setting up the contact centres, how far it had achieved registration of professionals, the backlogs and the shortage of cement. Further questions addressed the benefits of membership, assitance to emerging engineers, monitoring mechanisms, linkage of registers, the duration of membership, and the reasons why Gauteng was strongly represented.

The Independent Development Trust was established in 1990 when it was to disburse a grant of R2 billion to disadvantaged communities. It reported that the five core business areas were development programme management, leveraging of resources, institutional delivery and capacity, knowledge management, monitoring and evaluation. The Trust operated as an anti-poverty and redistributive agency, which would find innovative ways of meeting core challenges of poverty and inequality. Key areas included poverty eradication, effective management of HIV, tackling unemployment, infrastructure backlogs and promotion of gender equality. The Trust faced a challenge in competing for qualified staff and currently had a vacancy rate of 36%. Members asked questions on what the Trust did to improve the lives of women, the employment equity drive, how closely it worked with women and the benchmarks. .

MINUTES
Council for Built Environment (CBE): Briefing
Mr Bheki Zulu, Acting CEO, CBE  reported that the vision of the CBE was to be a sustainable built environment profession serving the public and national interest. Its mission was to exercise thorough leadership of the built environment profession, facilitation of integrated development and promotion of efficiency and effectiveness.

The CBE mandate was to transform the built environment profession to deliver on the needs of society in South Africa, based on internationally competitive practices while reflecting the composition of the South African population. In doing so it would increase domestic demand, increase government consumption, sustain economic growth and eradicate unemployment. The institutional strategic objectives were to create adequate human resources capacity and ensure organisational effectiveness, efficiency and compliance. The funding objective was to ensure sustainable funding and facilitate sustainability of professional Councils. The strategic programmes included accreditation of practitioners, provision of relevant reports, industry transformation programmes, sustainable funding for the organisation and institutional development.

The total budget for the years 2007 to 2010 was R74, 5 million. Good corporate governance would be achieved by adequate administrative and monitoring structures as well as good risk management and fraud prevention plans.

Discussion
Mr N Gogotya (ANC) asked whether the CBE required an amendment to its own enabling law or to enabling laws for the institutions it supervised.

Ms N Ngcengwane (ANC) also asked for more elaboration on what type of amendment the CBE would want effect to the enabling laws.

Mr Zulu explained that the organisation was in charge of six councils in Engineering, Architecture and related fields. The CBE functioned as a channel of communication between the Government and the various bodies. The amendment was therefore sought for all the institutions under its supervision.

Mr Gogotya enquired whether the CBE wanted more funding specifically for itself or for all the institutions in the industry as a whole

Mr Zulu said that the institutions were supposed to pay some dues to it but rather they were cash strapped and often turned to CBE for funding. The increased funding was therefore sought for both. If there was inadequate funding, the CBE would be hard pressed to carry out investigations and do its work properly.

Mr S  Nxumalo (ANC) asked for the number of professionals needed to counteract the shortfall of expertise in the field.

Mr Zulu explained that the organisation could not give an exact figure of the shortfall in required skills. The CBE was running an audit on the question and would publish exact figures very shortly.

Mr Nxumalo asked what benefit would accrue from being a member of CBE.

Mr Zulu said that for the meantime not much benefit would appear to accrue from being a member but that in time, when it became compulsory to register, professionals would not be able to practise without being registered. Also no programme would be run in the sector without accreditation and registration.

Mr J Blanche (DA) asked whether foreigners could register with the CBE. He suggested that in the future it may prove necessary to co-ordinate foreign participation in the sector and to have some form of synergy with non- South African professionals who may be needed to supply skills in areas where local skills were deficient.

Mr Zulu replied that the CBE ensured that its standards were at par with what pertained internationally. This made it possible to utilise foreign skills in South Africa and also export local skills. However for countries that did not have an Agreement with South Africa further accreditation or assessments may be carried out on their professionals to ensure that their skills are up to the standards expected.

Mr Gogotya asked that CBE provide a breakdown of new graduates in the sector according to race and gender. He also suggested that universities help in addressing any imbalance.

This was not specifically answered in the meeting.

A member suggested that CBE liaise with the universities to alter entry requirements for candidates from disadvantaged backgrounds. She also suggested that mathematics should not be demanded for courses that were not science oriented.

Mr Zulu said that entrance level requirements for disadvantaged members of the society were a thorny issue. The CBE had to work with the universities and the education sectors to achieve success. CBE could not effect any changes if it did not work together with other stakeholders in the sector. It could however act as a catalyst and mobilise the stakeholders. Resources could also be facilitated for children from previously disadvantaged backgrounds.

 A question was asked as to whether South African universities were in line with international standards.

Mr Zulu said that some universities were in line with international standards while some were not.

Mr L Maduma (ANC) asked that more light be shed on autonomy issues

Mr Zulu explained that the Act required the CBE to assimilate reports from the institutions and then report on the matters covered. There was often insufficient time to assimilate the reports. The professional bodies did not believe they were accountable to Government because they were privately funded. The CBE was mentioned as a coordinating authority in the Act, but nothing more. It needed to have express powers in order to do more.

The Chairperson asked what the CBE was doing to ensure good quality of structures including houses, bridges and roads and what it could do differently to tackle collapsing structures.

Mr Zulu said that there was need for adequate corporate governance to forestall issues like cheap or collapsed buildings. On the collapse of the Njaga bridge, it was not within the CBE mandate to say whether any persons were liable and therefore to be prosecuted. It was a legal matter. The CBE was trying to re-open further investigations on the matter. An effective investigation was expensive and this tended to result in poor investigation of some incidents. There was therefore also a need for more funding of the organisation.

Mr Blanche asked what could be done to ensure South Africa does not become the source of supply of professionals for  more industrialised countries.

Mr Zulu suggested that this could be tackled by registering the professionals. He also noted that there was now a turn around in brain drain and some of the professionals who earlier left the country were now returning.

Construction Industry Development Board (CIDB) Briefing
Mr Ronald Khoza, CEO, CIDB, reported that the mandate of the CIDB was to provide leadership and an enabling regulatory framework for total construction delivery capability, to achieve economic and social growth for the country, , sustainable growth and empowerment of the historically disadvantaged, global standards of performance and to add value to society's standards. Its vision was for a transformed and competitive construction industry that delivered quality infrastructure, and promoted economic growth and sustainable opportunity for all participants. The mission was to direct and drive an integrated construction industry development strategy that transformed the role of industry and stake holders for sustainable growth, improved delivery, performance and value to public and private sector clients and investors.

The achievements of the organisation were tabled. They included improved public spending, increased Black participation, and increased registration of projects and contractors. The CIDB had developed a code of conduct which had been incorporated by some universities and organised client participation workshops on construction procurement, and was now accredited. Challenges include shifting priorities, the role of the structure as a national organisation, alignment of the register with the Construction Charter, and the unprecedented volume of registered contractors. Key focus areas for 2007/2008 included contractor registration, which was spurred by “operation improve”, clearing of the backlog, resolution of specific contractor problems and linkage to construction contact centres and project registration. There would be increased focus on registering new clients. Outreach centres had been convened in the provinces, and construction contact centres were now in Kwa Zulu Natal and Gauteng. More centres would be set up in Eastern Cape and Western Cape. A stakeholders' forum was being planned to take place in May, while Provincial stakeholders' workshops would run from March to April.
The senior management team was to be strengthened by the appointment of a manager for procurement and delivery. The management system would support the expanded business processes including financial, risk, and performance management systems. The Budget for 2007/2010 would make provisions for building human resource capacity, establishment of construction centres and improvement of register service delivery. The total expenditure for the period was projected to be R74, 989 million.

Discussion
Mr Nxumalo noted that the CIDB had indicated last year in its presentation to the Committee that it had plans to provide Provincial contact centres but it still appeared to still be in the same process of setting these up. He asked why there was a delay in the process.

Mr Gerard Naidoo, Programme Manager: Growth and Contract Development, CIDB, answered that there were problems in setting up and starting the programmes running. However, the contact centres would be launched in KwaZulu Natal and Gauteng by the middle of the year.

Mr Nxumalo asked how far the CIDB had gone with the registration of professionals in the sector.

Mr Khoza said that there were plans to get rid of backlogs in the last year. Consultants had been hired to facilitate the realisation of this goal but the process was still on-going and was in effect a work in progress. Challenges arose in obtaining outstanding documents and this slowed down the whole process. These outstanding documents might include a tax clearance certificate. Some contractors did not understand the importance of having a tax clearance certificate. The impact being made to clear backlogs would be more noticeable by April because over 90% of the backlogs have been cleared.

Mr Nxumalo asked for comments on the shortage of cement and how it impacted on their membership.

Mr Rodney Milford, CIDB, explained that it drove up the cost of doing business in the sector and this would be passed on to the contractor and the taxpayer. The CIDB was working towards resolving the situation.

Mr Nxumalo asked what benefit accrued to a professional on being a registered member of the organisation and asked the cost of any such registration.

Mr Gerard Naidoo said that information pertaining to the cost of registration and any benefits that may be gained from being registered were contained in the organisation’s website. He said there was value added by being a members.

Mr H Spencer, Adviser to the Minister of Public Works, said that the tendering system had been cleaned up. The current help desk in the provinces was outsourced initially, and this was the reason why the quality of service was not high. At present 61 organs of Government were making use of the registers, and they were therefore being properly utilised.

Mr Maduma asked how the CIDB could assist emerging Engineers.

Mr Milford replied that the organisation was in the process of providing a comprehensive register and all the benefits of being listed in such a register would prove beneficial to the emerging Engineers.

Mr Khoza added that there was a need for more training for new entrants in the profession on how to manage their finances. He suggested that it would be useful for the training institutions and the banks to partner with each other in this respect.

Ms Ngcengwane asked what monitoring mechanisms were in place, especially in respect to Provincial offices.

 Mr Khoza explained that the CIDB was not solely responsible for monitoring since it did not award contracts.

Mr S Huang (ANC) asked if there were linkages of registers in the sector.

Mr Ebrahim Moola,  Project Manager, CIDB,  explained that the registers for contractors and projects were linked. It was beneficial to be registered because a professional’s previous experience was reflected simply by accessing any of the registers.

Mr Nxumalo enquired into the duration of membership.

Mr Khoza replied that membership had 3-year validity, but that tax clearance had to be updated every 6 months.

Mr Nxumalo asked why Gauteng had a very high representation for contracts and projects.

Mr Khoza explained that Gauteng was the place where the headquarters of many organisations were based,  and this explained the reason for its over representation.

Mr Gogotya asked the benchmark for determining who qualified to be a contractor.

The question was not answered.

Independent Development Trust (IDT) Briefing
Ms Thembi Nwedamutswu, CEO, IDT, reported that the IDT was established in 1990 by the national Government. An original mandate was granted to disburse a grant of R2 billion to disadvantaged communities in South Africa. As at 1998 IDT had spent R2.8 billion on approximately 800 projects. There were five core business areas which were offered as an integrated suite of services and products. These were development programme management, leveraging of resources, institutional delivery and capacity, knowledge management, monitoring and evaluation. The Trust reported to Parliament through its executive authority, the Minister of Public Works. The principal purpose of the IDT was to operate as an anti-poverty and redistributive agency, which would find innovative ways of meeting core challenges of poverty and inequality and expand its capital base in the pursuit of workable strategies and programmes that could be shared and replicated.

The IDT would undertake an environmental scan in the environment within which it operated. Within this context the key opportunities and strategic choices were considerable. These key areas included poverty eradication, effective management of HIV, tackling unemployment, infrastructure backlogs and promotion of gender equality. IDT strategic objectives included improvement of service delivery and promotion of innovative development in pursuit of poverty eradication in women. Key focus areas were set out in the presentation. They included   development of social infrastructures in marginalised areas, social facilitation, focused on the empowerment of women, institutional delivery capacity building, and support to local government development.

Ms Nwedamutswu listed some of the challenges facing the IDT. It competed for qualified staff with other organisations and presently had a vacancy rate of 36%. It was committed to having designated persons represented at all levels of its organisational structure to reflect the demographics of the country.

Discussion
Mr Nxumalo asked for more explanations on what the IDT did to improve the lives of women.

Ms Nwedamutswu explained that the IDT built schools in target areas, like rural areas.  Female contractors were a focal point and were being empowered. Joint ventures projects were entered into with women to assist them realise their goals. The primary aim of the IDT was to bridge the gap between the rich and the poor.

Mr Nxumalo asked for more details on the IDT employment equity drive.

Ms Ngcengwane asked how closely the IDT worked with women and what benchmarks it set for itself.

Dr S Bhebhe, Acting Executive Head, IDT explained that 10% of work allocation had been set aside for women development matters. The joint venture projects had good female representation. Women were well represented in the workforce of IDT. Clean drinking water was is provided for remote communities and in this way women were reached and their lives impacted on in a positive way. Furthermore IDT would provide capacity development for co-operatives and participation from local municipalities where rural women resided. The IDT was involved in Project Consolidate in the municipalities.

The meeting was adjourned.


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