1. 12 SEPTEMBER 2012 SELECT COMMITTEE ON EDUCATION AND RECREATION (Progress on Accelerated Schools Infrastructure Delivery Initiative (ASIDI)) 1

2. ASIDI BACKGROUND 2

3. SCHEDULE 7: SCHOOL INFRASTRUCTURE BACKLOGS GRANT The purpose of the grant is – for the eradication of entire inappropriate schools; – provision of basic level of water, sanitation and electricity to schools. The grant is also referred to as the ASIDI (Accelerated School Infrastructure Delivery Initiative) 3

4. ASIDI Targets The targets are as follows: Infrastructure CategoryBaseline2011/20122012/20132013/2014 Inappropriate Structures49650100346 Water12571881069 Electrification878164714 Sanitation868354514 Specialist Classrooms50 MTEF ALLOCATIONS 2011/12R 700 2012/13R2 315 2013/14R5 189 TOTALR8 204 The budget allocation for the ASIDI programme over the MTEF period is R8.2 billion and allocated as indicated in the table below: 4

5. ASIDI 2011/12 FINANCIAL BUDGET SPLIT In 2011/12 financial year the budget split was as follows – R420mil was allocated towards the eradication of 50 entire mud schools; – R280mil was allocated towards provision of water, sanitation and electricity to schools 5

6. ASIDI IMPLEMENTATION STRUCTURE 6

7. ASIDI : PROGRAMME IMPLEMENTATION STRUCTURE 7 The programme is driven by Department of Basic Education (DBE) has established a Project Support Unit to support the Programme Manager. The DBE works closely with its provincial counterparts at Provincial Education Departments (PEDs) to prioritise and assess the needs for specific projects. PED’s interacts with the Provincial Public Works Departments as custodians to coordinate the improvement of the facilities. DBE will appoint Implementing Agents to manage batches of projects. The Implementing Agents will appoint professional service providers and contractors to execute the work.

8. ASIDI : PROGRAMME IMPLEMENTATION STRUCTURE 8

9. ASIDI 2011/12 IMPLEMENTATION 9

10. ASIDI 2011/12 TARGETS 10 InappropriateElectricitySanitationWater Province Eastern Cape501045884 Free State0261332 Gauteng0270 KwaZulu Natal008210 Limpopo044038 Mpumalanga04700 North West0000 Northern Cape00166 Western Cape07213 Total50190237173 The following work was implemented during the 2011/12 financial year:

11. ASIDI IMPLEMENTING AGENTS 2011/12 DBSA is the appointed Implementing Agent for the 50 inappropriate schools in the Eastern Cape However only 49 schools are being implemented, 1 school is being implemented by EC DoE and has therefore been removed from the ASIDI programme, Mvula Trust is appointed to implement water and sanitation projects in Limpopo and Eastern Cape Eskom is the appointed Implementing Agent for electrification of schools in Eastern Cape, Mpumalanga and Limpopo Provinces. Free State, Gauteng, KZN and Western Cape were the Implementing Agents in 2011/12 financial year. 11

12. ASIDI ACTUAL FINANCIAL COMMITTMENTS 2011/12 The actual commitments made in 2011/12 financial year – R841mil was committed towards the eradication of school infrastructure (including professional fees, etc.); – R217.3mil was committed towards provision of water, sanitation and electricity to schools Therefore approximately R1.058bil was committed in contracts for the ASIDI implementation during the 2011/12 financial year. 12

13. Progress Report Inappropriate Schools 13

14. Overall Contractors’ Physical Progress As At (ASSESSMENTS 13-17 August)

15. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS (ASSESSMENTS 13-17 August) ContractorContract NoNo. SchSch IDSchool NameBuilding Progress Building Progress (Mean) ArmstrongRFP 29/2011-E12 Schools 1Qaka JPS 54.10% 43.30% 2Ntsonyini JSS 43.20% 4Ngidini SPS 50.30% 10Ndluzula JPS 36.40% 11Nomandla SPS 52.70% 15Gcinizizwe SPS 70.10% 20Maqolo SPS 43.40% 24Jonguxolo JSS 52.00% 27Vuyani SPS 36.40% 30Sidanda SPS 33.10% 36Tembeni SPS 23.70% 38Sizwe JPS 19.70% 15

16. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Keren Kula ConstructionRFP 31/2011-I 10 Schools 5Mpatiswa SPS 69.80% 49.70% 7Zingisile SPS 41.20% 14Goso JPS 27.30% 18Eludikidi SPS 32.70% 25 Upper Mbange SPS 53.30% 32Welese JSS 53.50% 33Sizane JSS 51.30% 46Nginza SPS 37.40% 50 Lower Mpako SPS 34.50% 16

17. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) SSI Mafuri JVRFP 29/2011-F16 Schools 12Manzabila SPS 55.50% 49.70% 13Gqweza SPS 56.80% 28Tshantshala SPS 48.30% 29Mseleni SPS 37.80% 31Mceteni SPS 40.70% 37 Maphindela SPS 59.40% TBPRFP 29/2011-F26 Schools 16Gungubele SPS 34.60% 28.20% 21Mahahane SPS 21.70% 22Madwaleni SPS 35.60% 23Ludeke SPS 21.20% 34Sompa SPS 19.20% 35Nkonkoni SPS 36.80% 17

18. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Trencon Construction RFP 31/2011-G 5 Schools 3Notsolo SPS 55.80% 59.40% 6 Mqokolweni SPS 57.10% 9 Ndlovayiphath wa SPS 52.90% 19Mdavuza SPS 65.80% 26Dumile SPS 65.30% Alfdav Construction RFP 31/2011-F x1 45Vulindlela JPS 65.20% Base Major Construction RFP 31/2011-H x1 40Mazama SPS 51.00% Cecils RFP 29/2011-C x1 48Kwezilethu JPS 68.90% Keren Kula (Inyameko/ Vukukhanye) RFP 31/2011-B x1 17Dikiso JSS 22.30% Inyameko Deck Steel JV RFP 31/2011-C x1 41Thabatha SPS 65.50% 18

19. ASIDI 2011/12 INAPPROPRIATE SCHOOLS PROGRESS:DBSA ContractorContract NoNo. SchSch IDSchool Name Building Progress Building Progress (Mean) Ishvuyo Building ConstructionRFP 31/2011-E x1 44Dakhile JSS 88.70% Leungo Construction RFP 31/2011-D x1 43Dumakude JPS 35.30% Marnolda RFP 29/2011-B x1 47Kwenxura SPS 64.30% Mauga Projects cc RFP 31/2011-A x1 8Nogaya SPS 41.90% Setheo RFP 29/2011-A x1 39Mandlobe SPS 36.60% Sizisa Ukhanyo RFP 29/2011-D x1 49Nobantu JPS 67.60% 46.80% 19

20. ASIDI 2011/12 PROGRESS ANALYSIS: INAPPROPRIATE SCHOOLS The planned completion date of 20 August has lapsed. – Various on-site conditions have been cited as the cause and they include, Poor accessibility of site due to lack of proper roads Difficult terrain Physical features Inclement weather Difficulty in obtaining material supply 20

21. ASIDI 2011/12 PROGRESS ANALYSIS: INAPPROPRIATE SCHOOLS In summary progress is as follows – Progress at 2 of the schools is between 10.1% and 20% – Progress at 5 of the schools is between 20.1% and 30% – Progress at 12 of the schools is between 30.1% and 40% – Progress at 6 of the schools is between 40.1% and 50% – Progress at 14 of the schools is between 50.1% and 60% – Progress at 8 of the schools is between 60.1% and70% – Progress at 1 of the schools is over 70.1% – Progress at 1 of the schools is over 80.1% 21

22. Progress Report Services 22

23. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : MVULA TRUST PROGRESS IN LIMPOPO Forty (40) of the 40 sanitation projects have achieved practical completion. Thirty-eight (38) of the 38 water projects have been completed. 23

24. PROGRESS IN EASTERN CAPE ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : MVULA TRUST Fifty-Eight (58) of the 58 sanitation projects have achieved practical completion. Eighty-four of the 84 schools have been provided with Rain Water Harvesting tanks and related infrastructure. Thirty-one (31) of the 32 projects have been connected to municipal bulk supply. None on the 49 projects identified for borehole connections are completed yet. 24

25. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : WC Western Cape is the Appointed Implementing Agent. Project scope entailed upgrading of water, ablution facilities & electrical and sanitation facilities. The targets were 7 schools for electrification, 21 schools for Sanitation and upgrading of water in 3 schools. All projects have achieved final completion. 25

26. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : GAUTENG Gauteng DoE is the appointed Implementing Agent. Seven (7) sanitation projects were implemented and two (2) electrification projects. All nine projects have achieved practical completion. 26

27. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : KZN KZN is the Implementing Agent. There were 88 schools identified in this Programme, after assessments 5 schools were taken out after it was found that they were already addressed. 33 schools have been completed, 13 projects are in progress and are between 90% and 99% Completion date is projected for 30 September 2012 for remaining projects. The balance of the 40 schools are on site but were delayed due to Inclement weather and procurement challenges. Projects are between 25% and 90% complete Projected completion date is 30 October 2012 27

28. ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : FREE STATE Free State DoE is the Implementing Agent. Water - 30; Sanitation - 12; Electricity – 24 Progress on projects: – Water – Finalising final completion defects lists. – Sanitation – All VIP’s reached final completion. Both mobile ablution practical completion reached. – Electricity – All final completion, except Huntersvlei are done by ESKOM – final completion scheduled for Sept 2012. 28

29. PROGRESS IN EASTERN CAPE ASIDI 2011/12 WATER AND SANITATION SCHOOLS PROGRESS : MVULA TRUST Fifty-Eight (58) of the 58 sanitation projects have achieved practical completion. Eighty-four of the 84 schools have been provided with Rain Water Harvesting tanks and related infrastructure. Thirty-one (31) of the 32 projects have been connected to municipal bulk supply. 29

30. ASIDI 2011/12 ELECTRIFICATION OF SCHOOLS PROGRESS : ESKOM Province Total Planned Connections July Planned Connections July Actual Connections YTD Planned Connections YTD Actual Connections Eastern Cape10011146148 Mpumalanga3100100 Limpopo50233 Grand Total13611167451 30

31. EXPENDITURE 31

32. ASIDI: TOTAL EXPENDITURE 32 2011/12 commitments were approximately R1bil R59.7mil was paid in 2011/12 and R944.9mil was carried over into the 2012/13 financial year. R2.3bil is the allocated budget for 2012/13 and commitments carried over are funded through the allocated budget. Description 2011/12 Commitments Expenditure as at 31 March 2012 2012/13 Budget Allocation Commitments Carried Forward from 11/12 Expenditure as at June 30, 2012 Expenditur e as at August 29, 2012 R’000 Inappropriate Structures 48 353 114 257 212 080 Sanitation 7 918 42 337 Water 1 116 14 299 14 434 Electricity 42 7 399 Other 2 254 2 622 8 405 TOTAL 1 040 849 59 683 2 315 000987 467180 914 284 520

33. CHALLENGES IN THE 1 ST YEAR OF ASIDI IMPLEMENTATION 33

34. ASIDI CHALLENGES IN 2011/12 Progress has been delayed on the construction of the 49 schools due to the following challenges: – Procurement of Implementing Agents took longer than anticipated. Negotiations with the Independent Development Trust (IDT) commenced in February 2011 as the implementing agent for the programme. – However, in April 2011, when negotiations with IDT were to be concluded, it was indicated that the Development Bank of South Africa, (DBSA) should be used as the implementing agent. – Negotiations with DBSA started in April 2011. – There were delays in the finalisation of the MOA with the DBSA as the bank had to receive approval from the Minister of Finance before the MOA could be concluded.

35. ASIDI CHALLENGES IN 2011/12 – Subsequently, DBE signed the MOA on the 13th June and DBSA only signed on the 06th July 2011. The DBSA submitted the implementation Plan on 03 August 2011 – DBSA planned to use PSPs to undertake scoping work which was crucial for determining the extent of scope of work. – This process for procurement of PSP to undertake the work had to be rescinded end of August after issues of conflict of interest were discovered between the companies bidding for the PSU and Project scoping.

36. ASIDI CHALLENGES IN 2011/12 – DBSA then started another process to appoint PSP’s for scoping, planning and detailed designs which was concluded on 15 September 2100 and resulted in a delay in the finalisation of scope before going out on tender in October 2011. – DBSA started another process to appoint PSPs for scoping, planning and detailed designs which was concluded on the 15 September 2011 and resulted in delay in finalisation of scope before going out to tender in October 2011. – A strategy adopted for procurement of contractors was to pre- Qualify contractors initially and appoint from a pool of pre- qualified contractors.

37. ASIDI CHALLENGES IN 2011/12 – The process started on the 22nd August 2011 but the process halted due to a dispute by contractors from the Eastern Cape who requested consideration of Grade 6GB instead of Grade 7GB. – Procurement of contractors resumed on the 25 th October 2011 and was concluded on the 04 th and 29 th November for 28 of 50 schools and 22 of 50 schools respectively. – Tenders received were based on the generic scope of work due to the delay in the development of project scoping per school. – As a result the tendered amounts for the first 28 of 50 and 22 of 50 schools were R711 044 966.48 and R595 167 614.37 respectively. This resulted in a prolonged adjudication process and appointment of successful tenderers. – Sites were handed over to the contractors on the 12th and 13th January 2012 for a contraction amount of approximately R675mil.

38. LESSONS LEARNED 38

39. LESSONS FROM 2011/12 FINANCIAL YEAR The programme has been approached through a number of relationships entered into with implementing agents specific to delivery requirements viz. DBSA for the Inappropriate structures; Mvula Trust and IDT (through a sanitation programme of the department of Human Settlements) for Water and Sanitation and Eskom for Electrification. In the 2011/12 financial year 50 schools were allocated to DBSA as implementing agent. The number was constrained by the budget available in the first year of the programme.

40. LESSONS FROM 2011/12 FINANCIAL YEAR It is difficult to understand levels for accountability, ineffective in communication and poor information flow The outcomes and outputs of the various implementing agents have not been logically related to an overall ASIDI programme plan. In those instances where Programme Implementation Plans have been submitted by implementing agents they have been limited to the projects allocated and have not been adequate to determine if and how they will complete the targeted number of projects within the time and budget parameters.

41. LESSONS FROM 2011/12 FINANCIAL YEAR The logical relationships between these agreements programme milestones and targets have not been established or documented. Analysis of the performance and health check on these IA has not been conducted. The PEDs and previous initiatives have adopted a practice of handing over project lists to implementing agents and consultants without adequate control and decision gates. The consequence has been a loss of control and inadequate control on the programme. The PSU has noted that all implementing agents have been surprised by the level of monitoring and accountability and in most instance have had difficulty in meeting requirements.

42. RISKS AND MITIGATIONS 42

43. RISKS AND MITIGATIONS FOR IMPLEMENTATION RiskProbabilityMitigation Current programme management and delivery experience is limited. Capacity of the all the Implementing Agents contracted with is limited and their systems do not meet requirements. High Diversify delivery modality. Reduce reliance and dependence on implementing agents. DBSA has low project maturity and capacity. Experiencing a learning curve on the first 50 Schools allocated. High Additional contract allocation will be dependent on competence, capacity and will be subject to performance. Mvula Trust are receptive and co operative but, need support and assistance in developing their systems, reporting, accountability and national programme management. They are equipped to deliver at local level and work through provincial directorated that work independent of each other. High Use their allocation in 2011/12 to develop their systems. On assessment of their compliance and performance increase allocations. Identify additional delivery modelities. Have not established a relationship with or finalise an agreement with IDT at a national level. Performance between different provinces has been observed to be variable. They demonstrated an ability to deliver for PEDs in selected provines (Gauteng, North West, Limpopo). HighLimit risk exposure to contracting with IDT at a provincial level. It will contain risk on allocations to one province and also slow release of work package in relation to performance.

44. RISKS AND MITIGATIONS FOR IMPLEMENTATION RiskProbabilityMitigation Eskom as with other implementing agents have not been used to being held accountable and reporting to a “client”. No alternative available for electrification especially with regard to securing network point of connection. Medium Develop their reporting capacity and closer monitoring. PEDs have not demonstrated an ability to implement water and sanitation allocations. They are often stretched by EIG and Equitable share projects with a few acceptions Medium Shift allocations away from PEDs in subsequent periods. Institutional capacity for traditional procurement timeframesand inadequate planning for procurement result in delays and also will require more capacity to cope with the programme. Medium Adopting a range of procurement options in addition to traditional approach. Capacity of smaller or lower CIDB grade contractors to complete projects. Medium Workpackages will allow for subcontracting and alternative delivery modelities will allow them to be accommodated in different sub programmes. The range of Schedule 2 (Major Public Entities e.g DBSA, IDT, ESKOM, ect.), implementing agents limited and they cannot be relied upon. HighExpanding the range of delivery agents to reduce reliance on implementing agents.

45. ASIDI IMPLEMENTATION APPROACH FOR THE REMAINING YEARS 45

46. ASIDI:IMPLEMENTATION APPROACH The programme approach has been revised. It is not limited to the existing relationships with DBE’s implementing agents as the only mode of delivery. This has already demonstrated the risk and constraints. DBE is increasing its capacity to ensure that it is able to maintain a greater degree of control at project level. DBE is also beginning to encourage efficiency by allowing the slack capacity to be used to accelerate delivery where practical.

47. ASIDI: IMPLEMENTATION APPROACH The following implementation measures and principles have been adopted and adhered to in the programmes: – Work Packages as a mechanism to manage the work breakdown structure but, retain the economy and scale required to accelerate delivery. – The Project Cycle turnaround time can be reduced to accelerate the programme and minimise bottlenecks. – Procurement bottlenecks be minimised by using a range of procurement strategies and expanding the resource pool beyond DBE. – Adopt a mix of delivery modalities increasing the number and diversity of implementing agents. – In addition to traditional procurement and procurement through implementing agents, DBE has entered into strategic relationships with those PED’s who have already established their own resources panels. These rosters be made available to the programme in the procurement of professional service providers and contractors.

48. ASIDI: IMPLEMENTATION APPROACH The following implementation measures and principles will be adopted and adhered to in the programmes: – DBE will negotiate with other National Department of Public Works in relevant provinces, their rosters are constituted of the relevant built environment skills sets and may already have a geographic focus. – The DBE has initiated a process to implement a framework agreement procurement model. – Implementing Agents, Professional Service Providers and Contractors are pre qualified. The services can be secured through their inclusion in a pre approved panel. DBE and the implementing agents have access to the panel appointed through the framework agreement. Thus reducing procurement through traditional open tender routes. It has the possibility of attracting larger contractors and professional teams. Project Teams will be assembled from the framework agreement.

49. PROGRESS ON 2012/13 PLANS 49

50. 50 INFRASTRUCTURE DELIVERY MANAGEMENT SYSTEM (IDMS): The Programme will be delivered according to the Integrated Infrastructure Management System (IDMS) from the CIDB and National Treasury as depicted below.

51. ASIDI 2012/13 PLANS: MASTER LIST InappropriateElectricitySanitationWater Province No of 2012/13 No of 2012/13 No of 2012/13 No of 2012/13 Schools Eastern Cape 42450317213345290619535 Free State302012910326129961 Gauteng222 021140 0 KwaZulu Natal 33116 13956229219 Limpopo33141137773712183 Mpumalang a 55129828817 North West2241 33 13 Northern Cape 110 01936 0 Western Cape 22147 021 03 0 Total492100882692 6894531 107928 51

52. ASIDI 2012/13 PLANS: PROCUREMENT COEGA, IDT AND DPWEC have been appointed for the implementation of the 50 schools in the EC and the MOA’s have been signed. An appointment letter has been issued to IDT FS for implementation of 10 schools in FS and MOA has been signed WCED is an appointment Implementing Agent for the implementation of 14 schools in WC. 52

53. ASIDI 2012/13 PLANS: PROCUREMENT Mvula Trust’s appointment includes implementation of Water and Sanitation in Limpopo and Eastern Cape for 2012/13 as well as Mpumalanga. ESKOM is appointed for the duration of ASIDI for Electrification. Implementation of Water, Sanitation and Electrification in FS and Gauteng will continue to be implemented by the provincial PED’s NW PED is the implementing agent of water and sanitation projects in NW. Outstanding and in progress: – Appointment of IA (s) for KZN water and sanitation – Appointment of IA for water and Sanitation in Northern Cape – Appointment of IA (s) for Inappropriate schools in other provinces 53

54. ASIDI 2013/14 PLANS: Rationalisation Approximately 424 Inappropriate Schools in ASIDI are from EC Province Approximately 324 Inappropriate Schools remain to be constructed 203 of 324 Inappropriate schools have enrolment figures of below 135 learners – In line with the guidelines these schools cannot be provided with a full compliment of infrastructure to schools with higher enrolment (over 135 learners) – The province needs to provide way forward on status of Rationalisation to avoid delays in implementation in the next financial year. 54

55. THANK YOU 55