1. 1 DPW comments on the 2005/06 Medium Term Policy Statement Delivered by the Director General, James Maseko 1 st November 2005

2. 2 Agenda Recap on the vision and mission Our role in government’s Programme of Action Medium term Policy statement and challenges Some of our initiatives and key programmes Financial Performance Conclusion

3. 3 VISION The department of Public Works (DPW) is committed to facilitating delivery by other departments by providing accommodation and property management services and meeting the objectives of poverty alleviation and transformation.

4. 4 MISSION The DPW aims to promote the governments objectives of economic development, good governance and rising living standards and prosperity by providing and managing the accommodation, housing, land and infrastructure needs of national departments, by promoting the Expanded Public Works (EPWP) and by encouraging the transformation of the construction and property industries.

5. 5 Our role

6. 6 Our core business Provide accommodation to national departments Custodian and regulator of state’s fixed assets Logistic arm for national state events Co-ordinate the EPWP Manage and regulate the construction and property industries

7. 7 Highlights from MTBPS Increase in the local government share of Revenue from R17.5 Billion in the current year to R33.6 Billion in the 08/09 financial year. R500 Million increase to the MIG (EPWP possibilities) –Increase in roll out of basic service and infrastructure, fund job creation and promote sound governance

8. 8 MTBPS cont… R31 Billion for provincial infrastructure including schools, clinics and hospitals R20 Billion investment in the built environment including Housing, water schemes, public transport and community facilities R7 Billion for courts, police services and improved access to judicial services R8 Billion for public administration, including government accommodation

9. 9 MTBPS implications MTBPS confirms upward trend of public sector investment in capital formation to accelerate economic growth Capex expenditure plans will amount to R111 Billion in 06/07 and rising to R136 Billion in 08/09 Expansion in Job creation exist especially when Labour intensive methods are used Two key concerns to be noted namely, inflationary pressures and industry capacity to absorb this expenditure

10. 10 MTBPS implications / 2 Inflationary pressures will impact on the Capex programmes Capacity constraints include the following: –Shortage of skills in the industry –Capacity of government agencies to plan and manage the projected expenditure –Possible shortage of materials –Cost escalation as a result of increased demand

11. 11 Challenges

12. 12 Challenges Capacity to spend within a public accountability framework by the state Skills shortage and training implications Early identification of projects and planning is key Early warning systems to detect under-expenditure for timely interventions (ie.IDIP)

13. 13 Challenges/cont. Effective communication with the industry to mitigate shocks and price escalation Proposal for a medium term infrastructure plan, a country plan, alongside the MTEF

14. 14 Medium term infrastructure Plan Will improve planning Will encourage the industry to invest appropriately and to build capacity in line with the projected CAPEX investment Will enable the country to develop a skills plan to match the projected demand It could strengthen the partnership between government and the private sector

15. 15 DPW initiatives Service delivery improvement plan (SDIP)is being implemented in the department Learnerships are being implemented in partnership with the CETA and other SETA’s Training of the unemployed is a key to the EPWP Infrastructure Delivery Improvement Programme being implemented in partnership with Treasury to assist provinces to delivery infrastructure An incubator programme is in place to assist SMME’s to emerge Budget devolution to client departments

16. 16 Capacity to spend

17. 17 3 year expenditure Trend YEARTOTAL BUDGET EXPENDIT URE OVER/UN DER (%) R’000 2002/033 975 0994 202 187-227 088 (5.7) 2003/044 651 9854 682 345-30 360 (0.65) 2004/055 513 9095 304 916208 993 (3.8)

18. 18 Capital budget vs expenditure YEARDPW CAPITAL BUDGET EXPENDIT URE OVER/UND ER (%) R’000 2002/03135 148119 86415 284 (11.31) 2003/04238 266271 069-32 803 (13.77) 2004/05292 655 0

19. 19 Thank you