Speaker, hon members, one of the areas in which we have not made much progress as a country has been in the integration and co- ordination of infrastructure projects. While good progress has been made in improving the management of infrastructure development at national and provincial levels, much remains to be done in this regard.
While we have examples of world-class infrastructure being delivered on time - such as with the 2010 Fifa World Cup - there have been many other smaller and less complex projects that have suffered long delays. These delays are often not caused by individual departments, but are usually a result of the complexities of co-ordination and compliance with relevant regulations.
To address these legal and regulatory hurdles and other important infrastructure issues, the Presidential Infrastructure Co-ordinating Commission, PICC, was established in September 2011. It is headed by the President, and brings key Ministers, premiers and mayors into a forum that focuses on infrastructure co-ordination, makes infrastructure decisions and scrutinises delivery progress.
Thus far, the work of the PICC has concentrated on plans for future projects and infrastructure initiatives from a large number of authorities such as state-owned enterprises, and national, provincial and local government departments. These have been clustered, sequenced and prioritised into strategic integrated projects that, together, unlock the economic development of South Africa and maximise the returns on our infrastructure investment. A number of these were announced by the President in the state of the nation address earlier this month.
The three spheres of government and public entities have different and, in many cases, independent responsibilities on infrastructure as well as different funding sources, ranging from government grants and allocations to user revenues, borrowings and private partnerships. Public sector infrastructure projects vary in size and duration and there are thousands of active projects at any given point in time, with older ones being completed and new ones starting all the time.
Each entity, municipality, provincial or national department entering into infrastructure contracts has its own systems to manage projects and there is no common or central information system or database that regularly and comprehensively captures the changing status and progress of each of the infrastructure projects across the country. The idea of such a central system has been mooted, and Cabinet took a decision to institute a comprehensive project register which will collect and update project information on a quarterly basis.
This new tool that is being developed will be able to tell us the status of each infrastructure project under construction. It is envisaged that this information will be available to Parliament and the public.
In his Budget Speech the Minister of Finance also announced steps in this regard; in particular, that special attention will be given to the procurement processes for infrastructure, technical assistance through the Infrastructure Delivery Improvement Programme, adherence to the Construction Industry Development Board standards on infrastructure delivery management, and the establishment of a municipal infrastructure agency.
Beyond the Construction Industry Development Board's project register and National Treasury's infrastructure expenditure monitoring, which will scrutinise projects, special focus will be placed on the progress of the strategic integrated projects by the PICC.
I thank you for your attention. [Applause.]
Sekela likaMongameli esikhungweni soKuhlunyuleliswa Kwezimilo iTswelepele eKimberley, kwakuhlelelwe ukusetshenziswa izimali eyizigidi ezingamakhulu amabili zamarandi okwathi uma siqedwa leyo mali yase inyuke yayo fika emalini engaphezulu kwezigidi ezingamakhulu ayisishiyagalombili. Into efanayo yenzeka nasesikhungweni soKuhlunyuleliswa Kwezimilo i-South Interior Recreational Equine Centre, Sirec. Umbuzo wami Sekela likaMongameli uthi: Wenzani uhulumeni ukuqinisekisa ukuthi ukwenyuka okungaka kwemali okusuke kuhleliwe kuyavinjelwa noma okungenani kuyancishiswa? Ngiyabonga. (Translation of isiZulu paragraph follows.)
[Ms W NGWENYA: Deputy President, the amount budgeted for the construction of the Tswelepele Correctional Centre in Kimberley was R200 million, but upon its completion that amount had escalated to an amount of R800 million. A similar thing happened at the South Interior Recreational Equine Centre, Sirec. My question, Deputy President, is: What is the government doing to ensure that such an escalation of costs that had not been budgeted for is circumvented or alternatively reduced? Thank you.]
Speaker, I would like to thank hon Ngwenya for the question.
The specific examples that you allude to, hon Ngwenya, of correctional centres which experienced the escalation of costs, are the precise reason the PICC has a plan to ensure that each of these projects is monitored from the outset to ensure that, if there is a deviation from the going prices, that should be picked up early enough and corrective measures taken to ensure that we do not end up with escalating costs on any project. So, this initiative is informed precisely by this experience, that projects that had originally been costed much lower, end up with higher costs, as it were. So, in the PICC, there is a good plan to ensure that all the megaprojects are monitored from the outset. Thank you. [Applause.]
Hon members, please reduce the noise levels in the House so that we can hear the Deputy President.
Speaker, we have heard the Deputy President explain to us that there will be an infrastructure co-ordinating committee. It is a positive step forward, but we have to accept on two levels that there may still be some serious problems in terms of actually getting the projects off the ground.
The first matter concerns practicality. If we look at the expenditure that was highlighted by the Auditor-General in key departments that are also going to fulfil very important roles within this infrastructure roll-out, then we see that there was underexpenditure and a clear lack of capacity.
To mention just one of the departments: Yesterday a presentation was made and Minister Sbu Ndebele acknowledged that government had to learn very harsh lessons from the Gauteng Freeway toll project. How do you foresee that we will avert similar issues in future?
Are we not creating too many additional co-ordination committees? To mention one, the monitoring task team on the turnaround of the SABC has been operational for 20 months, but we have not really seen significant progress on government guarantees. Are we not going to run into problems again with financial accounting through these projects? Thank you.
Speaker, I would like to thank hon Kilian for the question.
The approach here is really informed by the understanding that this co- ordinating commission will draw on the most experienced talents that presently fall under institutions such as the Development Bank of Southern Africa, DBSA, as well as the various departments. It will pull together the best team - the A team, if you like, including persons from the private sector - in the implementation to ensure that we get value for money in the roll-out of this very important infrastructure.
You see, I would have had some reservations if all we were doing was announcing these infrastructure projects and leaving them to the departments to implement. Basically, the President has made it clear that we have to have this co-ordinating commission which also brings in people from Treasury who will pay particular attention to where the money goes and whether we are getting value for money. Thank you.
Speaker, the infrastructure project whose delay has, by far, the biggest ramifications for our country, is that of the Medupi power station. Now, this delay is caused primarily by Hitachi Power Africa not being able to fulfil its obligations to supply boilers in the specified time period. This will now delay the commissioning of this power station by over a year. This is the same company in which the ANC's funding arm, Chancellor House, has a 25% stake. So, essentially, this massive conflict of interest is now threatening our energy security, with dire consequences for our economy.
Can the Deputy President give this House the assurance that Chancellor House will not have any shares in any company that is given tenders on the proposed nuclear build programme, or, for that matter, on any of the infrastructure build projects? Thank you. [Applause.]
Hon Greyling, this is the third time I hear you make this point in this august House, and I think you deserve a straight answer.
Chancellor House is a company. It engages in economic activity in and outside of South Africa. Ideally, it should not do business with government at all. [Applause.]
In the case of the example you have cited, Chancellor House invested its money in Hitachi Africa without knowing that Hitachi Africa is Hitachi Africa. [Interjections.] [Applause.] They did not put their money in Hitachi Africa to produce boilers for Eskom. Hitachi Africa got the contract later ... [Interjections.] Yes.
Order! Order!
Those are the facts, yes. So I'm saying that, ideally, they should never ever do business with government. The market is large enough to have lots of goodwill. They can do business anywhere and everywhere in the private sector. But, as an investor, you know, you put your money in a bank and they put your money in a unit trust and that unit trust puts money in a company. You have no control over that. [Interjections.]
So, what I am saying is that, where there is clear evidence of manipulation, we would be the first ones to say, "Let us deal with this here". We will be the first ones to say so, that here there is a clear case and evidence of manipulation of processes. So, that should not happen. We say Chancellor House should not do so. It should not do business in a way which gives it an advantage because it is an investment wing of the ANC. That should not happen. That is our position. Thank you. [Applause.]
Speaker, I welcome the Deputy President's honest admission. I don't know whether it is about Hitachi, but there is an honest admission that there is a lack of co-ordination of infrastructure development. I think the co-ordinating commission should have come sooner rather than later, but they say better late than never.
However, Mr Deputy President, we would like the assurance in this House that, as they did in the 2010 World Cup - and they built infrastructure almost within six months, massive infrastructure -serious attention is going to be paid to infrastructure like schools and hospitals. In the Eastern Cape, there are still mud schools.
Many!
Yes, many, many mud schools. We have been told by the Department of Basic Education that these would be completed by the end of March, but there is no way in hell - if I may use that word, Mr Speaker - that it is going to be completed by the end of March.
What is wrong with this department? The only partners that they get to construct schools are the DBSA and Ithala. They are many other service providers with whom they can engage. In KwaZulu-Natal there was a Divine Life Society and a KwaZulu-Natal schools project trust that built schools and classrooms at one fifth the price the department built them. I think this commission should give urgent attention to this prioritised need. [Time expired.]
Speaker, indeed, I want to assure this House that the strategic infrastructure projects will bring together the projects which would ordinarily fall under Basic Education. For instance, the replacement of mud schools in any area will now be taken over by the PICC as part of the strategic infrastructure projects. The idea is to build them and hand them over to the relevant authority at the local level, as well as to the departments for maintenance, but the actual delivery would be part of the PICC programme.
Position regarding amendments to Labour Relations Act, and prioritisation of economic growth led by private sector
2. The Leader of the Opposition (DA) asked the Deputy President:
(1) Whether Cabinet intends to (a) approve amendments to the Labour Relations Act, Act 66 of 1995, with a view to ensuring flexibility in wage negotiations, (b) ensure greater competition in the labour market and (c) meet the demand for skills in the labour market; if not, why not, in each case; if so, what are the relevant details in each case;
(2) whether he has taken any steps to ensure that economic growth led by the private sector is made a priority; if not, why not; if so, (a) what are the relevant details and (b) how will the Short-term Job Creation Commission's approach to job creation be focused in light of the increase of 107 000 in the number of unemployed South Africans during the course of 2011?