1. 1 Portfolio Committees on Correctional Services and Public Works Kimberley Correctional Centre 18 August 2010

2. 2 CONTENTS 1.Project Tender History 2.Form of Contract 3.Project Cost Analysis 4.Time Frames 5.Achievements 6.Challenges (Risks)

3. 3 PROJECT TENDER HISTORY September 2004 –Preliminary estimate (R 287, 8 million) Desk top estimate based on high level needs assessments received from User Department; Estimate based on concept/blueprint (at this stage design, documentation, Bills of Quantities not started) Estimate excluded site-specific elements such as bulk earthworks, foundations including surface beds, external works (all site works, soil- and storm water drainage, water supply), municipal expenses (traffic lights, storm water connection, etc), on-going changes to security installation and professional fees; This estimate only takes into consideration building costs (provision not made for CPAP and unforeseen expenditure); Provision in estimate not made to unknown details w.r.t. specialised security installations and equipment. March 2005 –Pre-tender estimate (R 540 million) The first estimate based on a complete set of documents and information April 2005 (1 st invitation of tenders) –Tenders closed on 20 April 2005.

4. 4 PROJECT TENDER HISTORY (CONTINUE) May 2005 –Tender recommended – R499,4 million; –Following Departmental processes DCS was requested to confirm availability of funds to award bid; –Confirmation of funds not received; tender could therefore not be awarded; –DCS commissioned an investigation into tender prices received in relation to the pre-tender estimate; –Outcome of investigation not provided; in mean time tender validity lapsed; –Instruction received from DCS to re-invite tenders. July 2006 (Fourteen Months after closing of first bid) –Revised pre-tender estimate R 638,2 million. July 2006 (2 nd invitation of tenders) –Tenders closed for a second time on 19 July 2006; –Tender recommended – R662,3 million –Funding approval was received from User Department to proceed with awarding of bids. November 2006 –Bid awarded to GRINAKER-LTA / KEREN KULA JV on 14 November 2006.

5. PROJECT COST ANALYSIS

8. 8 –The project was financed from the DCS Capital Works budget. –Tender awarded: R662 343 119 (November 2006) –Funds spent on construction as at 30 July 2010: R822 738 765. –Final construction cost: R824 180 737 (Draft Final Account) –Contract instructions due to essential scope changes and requests: R46 260 000

10. 10 FORM OF CONTRACT JBCC (The Joint Building Construction Committee) contract used on this project. –Main features of the contract:-  Contractor provides construction program and cash flow.  Contractor is entitled to extension of time under certain circumstances such as: –Rain (Vis-Major)– extension without cost –Extra work – extension with cost –Delays caused by the client - extension with cost –Delays caused by the contractor – no extension  Contractor entitled to escalation [Base month: July 2006] (Haylett Formula with BER indices generally known as CPAP)  Contractual clause to compensated contractor for inflation  Based on Haylett Formula  Indices provided by Stats SA per workgroup  Contract divided into workgroups e.g. earthworks, concrete, metalwork (approx. 32 workgroups)  CPAP calculated per workgroup (lnflation differs per workgroup)

11. 11 FORM OF CONTRACT (Special Requirements of the Contract) Defects liability period:  6 months on building construction work.  12 months on security equipment, electrical and mechanical equipment. Contract Participation Goal (value of work to be subcontracted to HDI subcontractor companies) - 29,79%. Local procurement of material.

12. 12 TIME FRAMES Contract commencement date: 14 th Nov 2006 Contractual completion date: 14 Nov 2008 Actual Practical completion date: 30 October 2009 DCS occupation of facility: Early December 2009 Works completion date: 15 February 2010 Final inspections of “retention defects”: In process Extension of time awarded in terms of JBCC (11 Months & 2 weeks)  Rain (Vis-Major)  Unavailability of municipal services  Shortage of material  Additional work requested by DCS  Discrepancies in procurement documentation  Delay in approval of funds for additions requested by DCS

13. 13 ACHIEVEMENTS Job Creation  1168 Work opportunities created for local unemployed.  Ex-offenders (137) and woman (96) on site Skills Development/ Transfer  86 of the 100 NYS students successfully completed program. Empowerment of Emerging Contractors (subcontracts)  14 HDI subcontractors appointed Saving of R76 354 750 as a result of re- measuring of work done

14. 14 CHALLENGES (RISKS) Unavoidable Risks Excessive inclement weather. Country wide steel shortages (steel price escalate with +/- 60%). Country wide power shortage / load shedding. Shortage of qualified artisans. Price escalation determined by BER indices.

15. Questions posed during oversight visit Why, despite the delays in construction, the centre has to date still not been completed? –Practical completion was taken on 30 October 2009 –Works completion was taken on 28 April 2010. A breakdown of the total cost of the project as well as reasons for the reported escalation; –Breakdown was provided in the presentation. A comprehensive list of all construction still in progress; –All construction has been completed.

16. Questions posed during oversight visit Copies of the IT procurement contracts; –N/A A list of all the suppliers/service providers responsible for the substandard infrastructure reported; –Suppliers/service providers appointed by DPW were not responsible for substandard work Plans for the installation of toilets in all the hospital wards; –Generic design did not make allowance for toilets in the hospital wards – discussions in process between two Departments to address this requirement

17. Questions posed during oversight visit The centre’s maintenance plan; –DPW in process to compile facilities contract/s. How inmates were selected/screened for incarceration at the centre; –N/A Update on the investigation into the 3 August incident and the events that had led to the riot; –N/A Measures to be put in place to prevent re-occurrence of the riot; –N/A Measures put in place to address gang-activity at the centre; –N/A

18. 18 Thank You