Hon Chairperson, Minister of Public Works, members of executive councils present here, hon members, officials from the Department of Public Works, ladies and gentlemen, in the working environment, integrity, commitment and respect can allow a human being to be productive, content and effective in doing his or her work.
Minister, your efforts to assist the department in making sure that the systems are in place and that there is renewed commitment will allow the department to carry out its mandate. The committee commends the Minister in undertaking a consultation process to ensure that all members of the department and stakeholders participate in the turnaround strategy.
The main policy priorities of the department are well known and are set out in the 2012 state of the nation address, as well as in the department's strategic plan and annual performance plan. The areas of focus for Public Works remain the creation of job opportunities and poverty alleviation through the Expanded Public Works Programme, infrastructure development, an accurate and accessible immovable asset register, as well as skills development.
Government has the largest immovable asset portfolio in the country. The department is the custodian of government's immovable assets and is also responsible for providing accommodation to national departments. In the past few years, the department has relied on the private sector to fulfil a portion of this responsibility. However, the department plans to change this and to reduce its leasing portfolio by rehabilitating, constructing and upgrading its buildings. Examples are the construction and upgrading of 205 departmental accommodation sites; the management of 54 dolomite risk areas; the redevelopment of 154 border - post centres that consist of office space and accommodation for officials; the upgrading and construction of 150 prestige accommodation sites; and the development of five national government precincts. But, hon Minister, what plans are being put in place by the department to make sure that the programme of reducing its lease portfolio and implementing these capital-intensive infrastructure programmes are realised?
The committee is also aware of the commitments that have been made by the department to address the concerns raised by the Auditor-General, particularly the disclaimer of opinion for the 2010-11 financial year. The committee notes particularly the underspending by the Immovable Asset Management programme and the EPWP - two of the main delivery programmes of the department. This underspending affects the priorities of job creation, skills development and infrastructure development.
The Auditor-General highlighted underspending of R235 million, which prevented the department from achieving its objective to fast-track the construction of selected schools and energy-efficient interventions. This speaks directly to the reduction of mud schools and unsafe structures, aimed at providing schoolchildren with decent and safe facilities in which to learn. The other objective not achieved is the implementation of energy- saving interventions, which is critical to prevent a situation in which we again have rolling blackouts. This also forms part of the response to climate change.
In this regard, Agrment South Africa is one of the department's entities that has responded to the reduction of unsafe structures and to improving energy efficiency by certifying innovative products. These products are cheaper and faster to use when building than conventional construction materials and have been used in building two schools in the Eastern Cape, which the committee visited in 2011.
The department should therefore expedite the tabling of legislation to constitute Agrment South Africa as a juristic person. This will assist it in continuing to carry out the role of certifying innovative technology. These technologies, as I've already mentioned, are used to assist in reducing the large backlog of mud schools and unsafe structures. This form of construction requires very little skill. In addition, the technology's lifespan in relation to conventional construction methods remains untested.
The committee is aware that this model does not adhere to the core principles of the EPWP, such as labour intensity, skills development and offering work opportunities of longer duration. A balance will therefore have to be found between rapidly reducing the large infrastructure backlogs, while, at the same time, ensuring the use of labour intensity on projects and the transfer of skills.
In addition, R500 million was underspent in terms of the infrastructure grant to provinces and municipalities. The department reported to the committee that the underspending in this area, which is the result of underreporting and poor performance by bodies eligible for the incentive grant, has been addressed by providing technical assistance, such as data capturers, where needed. It is hoped that these interventions will improve the accessing of the incentive grant, which will translate into the creation of more work opportunities for unemployed and unskilled people.
As we are aware, the halving of poverty and unemployment is one of the key concerns of government and therefore every effort that is made to address this is welcomed. The contribution of the EPWP non-state sector, with the Independent Development Trust as the implementing agent, has been one of the successes of the programme, as reported by beneficiaries of nonprofit organisations and faith-based organisations during the Non-State Sector Summit held in Johannesburg in April 2012. The committee recommends that the participants in the nonstate sector be provided with a platform from which they can share their best practices with other sectors and come up with strategies to increase the areas they are working in. Two other entities reporting to the department, namely the Construction Industry Development Board and the Council for the Built Environment, also assist in implementing the department's key priorities. The announcement in the 2012 state of the nation address of the massive multiyear capital infrastructure development budget is an opportunity to ensure the development and participation of the emerging contractor sector in these programmes. The large numbers of contractors registered on the Construction Industry Development Board database can be provided with an opportunity to improve their skills. Contractors who move from the lower levels of Grades 1 to 3 up to Grades 4 to 9 will provide a wider pool of skilled and professional contractors, which can be called upon to address the large backlog in infrastructure.
In addition, the CBE, apart from the responsibility of facilitating the transformation of the built environment, is also expected to strengthen and implement a public protection regime. In this regard, it has six professional councils responsible for the registration of professionals in the built environment. These built environment specialists, such as architects, engineers and quantity surveyors, will be required to successfully implement the government's infrastructure programme.
The committee therefore believes that the Council for the Built Environment Act, Act No 43 of 2 000, needs to be amended to include enforcement powers. The strengthening of the CBE's enforcement role is intended to strengthen its management capacity and to assist in the transformation of the built environment professions.
For all the above programmes to be successfully implemented, hon Minister, governance issues and proper procurement measures, as well as management and reporting systems have to be in place. As we are aware, the Auditor- General made a number of recommendations for remedial action to be taken by the department, following the disclaimer of opinion. What progress has been made to date in some of the areas highlighted by the Auditor-General? The highlighted areas include proper financial planning and management, reporting on feasible and attainable targets, and improving the procurement processes.
Hon Minister, only once these issues have been addressed can there be real progress. The committee is encouraged by the priorities that the department intends to implement as noted above, particularly the tightening of its financial controls and procurement processes, the filling of key vacancies at management and technical levels, and priority being given to the completion of the Immovable Asset Register.
However, the real concern of the committee is that the department's programme might be affected by factors such as its current skills shortage, the implementation of its turnaround strategy and the forecast made by National Treasury that the country will see 2,7% growth in 2012, instead of the 7% required to see real growth in the country.
Finally, I'd like to thank all members of the portfolio committee, the Department of Public Works officials, all stakeholders, the committee staff and you, Minister, for the smooth working relationship. Although we as the committee know that is not always smooth sailing all the time, the lyrics of R Kelly's song go: "Everything's Gonna Be Alright". The ANC supports the budget. Thank you. [Applause.]