1. Hospital Revitalisation Joint Budget Committee 23 May 2005

2. Agenda Purpose of Hospital Revitalisation Grant Brief overview of HRP Grant Methodology of Allocations Progress/Expenditure on Grant Challenges Photos

3. Purpose of HR Grant – “To provide strategic funding to enable provinces to plan, manage, modernise, rationalise and transform the infrastructure, health technology, organizational management and development and monitoring and evaluation of hospitals in line with national policy objectives”: DoRA Act 1 of 2005 Framework

4. Brief Overview MTEF Allocation Province2005/20062006/20072007/2008 Eastern Cape 15773271666102552 Free State 113082128853104360 Gauteng 17955148664133093 KwaZulu-Natal 1289776094081090 Limpopo 212918123698160690 Mpumalanga 57018101032117071 Northern Cape 69651217464234960 North West 98056125493106495 Western Cape 172038202474198987 TOTAL1 027 4271 180 2841 239 298

5. Business Cases Provinces must submit business case to have project included in HRP Business case consists of 2 areas 1. Strategic Context containing: Strategic plan of province on health service delivery in hospitals Prioritisation of hospitals to be included based on: – Service delivery issues (Access to services, political risk, risk of delays, and other areas the province identifies) – Financial issues (cost to correct, backlog of maintenance, condition)

6. Business Cases 2.Priority Hospital Details with regard to site Size of hospital (beds by level of care) Specific details such as area per bed, cost per bed, admission rate, average length of stay) Cost Period of Construction Operational cost Staffing plan Health technology plan Quality Assurance plan Appraisal – National Department of Health appraises all business cases to ensure strategic plan of province is adhered to and size, location, cost, sustainability and level of service adheres to National Guidelines

7. Methodology of Allocation Project/Needs based allocation Information utilised: – Approved business cases – Expected cash flows per year (received from provinces) – Number of active projects (currently minimum 4 due to funding constraints)

8. Methodology of Allocation Process to obtain available funds figure: – 2004/2005 DORA allocation amount – ADD expected roll-over from 2003/2004 – SUBTRACT Expected expenditure for 2004/2005 – Result = Expected Roll-over into 2005/2006 + DoRA allocation

9. Methodology of Allocation Provinces supplied expected expenditure for MTEF period (information from business cases and Project Implementation Plans) Expected Need calculated as follows: – Amount required for projects in provinces – The allocation puts provinces in a favourable position where they will be able to spend the full allocation without having to cut on budget.

10. Methodology of Allocation Allocation – Need LESS 2004/2005 roll-over indicates 2005/2006 allocation – Process is repeated into outer years to determine allocation Allocation HEAVILY dependent on quality of information and prioritisation received from provinces.

11. Achievements on Grant Progress – 3 Hospitals finished: Calvinia (NC) Colesberg (NC) Swartruggens (NW) – Hospitals to be completed in 2005/2006 George (WC) Eben Donges (WC) Lebowakgomo (LP) Jane Furse (LP) Piet Retief (MP) Hospitals to be completed in 2006/2007 Dilokong (LP) Nkenshani (LP) Vredenburg (WC) Barkley West (NC)

12. Expenditure on Grant In 2004/2005– HRP spent 84% if KZN is excluded *KZN requested to return the allocation due to extensive problems with Public Works

13. Challenges Delays in appointing contractors on site (public works related issues) – ALL provinces reported various problems with public works Public Works – Specific Examples: – Lebowakgomo, Jane Furse (LP) – Tenders closed in Aug 2004, contract not yet awarded. – Contracts awarded to inefficient contractors – contractor awarded tender at Jane Furse after contractor went 80% over contract at other site. (LP) – Contractor on 14 month contract at King George V was 6 months into contract, but already 3 months behind. Appeal followed, appellant received contract. (KZN) – delayed by about 10 months – Design/Architect/Engineers do not give input in design phase. Nothing from contractors questioned – “Everything goes” (NC) – Large contracts awarded to small contractors – insufficient capacity, no capital to fund project, delays are inevitable. All provinces are troubled by this. – Procurement: Extremely slow: 10 months to appoint completion contract at Frontier Hospital (EC) – Lack of personnel to do quality checks on construction at regular intervals

14. Challenges Provincial Capacity in Revitalisation – Appointing Revitalisation Managers is slow process – Most managers schooled in infrastructure – very little capacity exists in Health Technology, Organisational Development and Quality Assurance. Reporting/Communication to and from provinces are ineffective and unreliable. Recommendation will be made shortly to increase accuracy, compliance and reliability at limited cost. Web page reporting model to be designed that will result in a more accurate, efficient data and compliance of HRP

15. Reason of Delaying Transfer

16. Current and New projects

18. Project Management Unit Technical Specialists – New Posts to be filled

19. Photos: Jane Furse (LP) [PMG note: photographs not include] Old Revitalised

20. Photos: Dilokong (LP) [PMG note: photographs not include] Old Revitalised

21. Photos: Swartruggens (NW) [PMG note: photographs not include]

22. Photos: Colesberg (NC) [PMG note: photographs not include]

23. Thank You