1 2015-2020 STRATEGIC PLAN AND ANNUAL PERFORMANCE PLAN PRESENTATION TO SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT 14 MAY 2015.

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2015-2020 STRATEGIC PLAN 2015-2020 STRATEGIC PLAN AND ANNUAL PERFORMANCE AND ANNUAL PERFORMANCE PLAN PLAN

PRESENTATION TO SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT14 MAY 2015

TABLE OF CONTENT

No. Item Slide

1. Part A: Strategic Overview 3

2. Part B: Programme and Sub Programme Plans 19

3. Part C: Links to Long Term Infrastructure Plan 27

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PART A: PART A: STRATEGIC OVERVIEWSTRATEGIC OVERVIEW

Strategic Plan (Pages 16-71)

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1. MISSION & VISIONMissionThe pre-eminent accommodation and real-estate management service provider for National Government

VisionTo optimize the State’s immovable asset portfolio through innovative and best practice approaches to ensure competent, proficient and sustainable service delivery by :i.Reducing the cost to Government on leased-in accommodation and maximising returns on leased-out accommodation;ii.partnering the private sector for property financing and delivery options / strategies;iii.streamlining the value chain business improvement policy approaches and strategic alignments; andiv.utilising alternative energy solutions and green management technology for enhanced efficiency cost savings.

STRATEGIC & ANNUAL PERFORMANCE PLAN - PMTE

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2. VALUES

The PMTE’s core values are underpinned by the Batho Pele principles, and are augmented by the following values:

i.Integrity: by consistently honouring our commitments, upholding ethical, honest behaviour and transparent communication;

ii.Professionalism: by treating our stakeholders with respect and reliably delivering against expectations;

iii.Teamwork: by respecting diversity while sharing a common purpose and working together in cooperation with each other; and

iv.Innovation: by tirelessly seeking opportunities for service delivery improvement by thinking freely and not bound by old, non-functional, or limiting structures, rules, or practices.


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3. STRATEGIC GOALS

i. To effectively and efficiently manage the life cycle of immovable assets under the custodianship of Public Works.

ii. To promote economic growth through integrated infrastructure development in urban and rural areas.

iii. To create employment opportunities and develop skills in the provision of construction, property and facilities management services to the State

iv. To leverage the State’s property portfolio to contribute towards Government’s broader transformation, empowerment and economic development goals.

v. Good corporate governance to support effectual service delivery


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4. PMTE PRIORITY AREASi. To improve service delivery in the context of Government’s priorities

and to save costs to the Department and the fiscus by:o Maintaining the value of Government’s assetso Improving access to and quality of Government’s assetso Optimal utilisation of State stock and move away from leasing-ino Utilise State’s vacant properties productively to create a funding

stream for capital maintenance and improvements to extend the life-cycle of existing state properties;

ii. To reclaim mandate of Public Works ii. develop small proclaimed and unproclaimed harboursiii. develop Government precincts in small towns and rural areasiv. safeguarding the State’s assets from vandalism, theft and invasionv. reclaiming all misappropriated State landvi. preserve Government assets, structures, building, land parcels


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4. PMTE PRIORITY AREAS (cont…)iii. Leverage the State’s property portfolio to contribute towards skills

development – FM Service Centres (Workshops)

iv. Leverage the State’s property portfolio to create employment (FM Service Centres, Cooperatives, Turnkey Solutions procurement);

v. Leverage the State’s property portfolio to empower emerging black business (REMS & FM divisions - targeting SMMEs for unutilised state owned properties and/or maintenance/refurbishment projects)

vi. Ensure water & electricity supply security through sound investment decisions that meets conservation and renewable energy targets

iii. Smart Meter Installations, iv. Renewable energy (e.g. solar geysers) v. Energy audits, monitoring, reporting and verificationvi. Capacity Building and Training – Energy Efficiency Basicsvii.Retrofitting


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5. ALIGNMENT TO NDP AND MTSF


NDP/ MTSF PRIORITY MTEF Budget

Outcome 6: An efficient, competitive and responsive economic infrastructure network (NDP Chapter 3, 4 and 5):

The PMTE in collaboration with the Department of Environmental Affairs, the Department of Economic Development, the Department of Agriculture, Forestry and Fisheries and the South African Maritime Safety Authority (SAMSA) will develop identified harbours and State properties for economic development and revenue generation.

The PMTE, mainly through its Construction Project Management and Facilities Management Divisions will focus on electricity savings by meeting its renewable energy targets and ensuring that all future construction and refurbishment projects are in line with DPWs Green Building Policy

R1 818 631 000

Outcome 11: Protected and enhanced environmental assets and natural resources (NDP Chapter 4 and 5):

The PMTE, mainly through its Construction Project Management and Facilities Management Divisions will focus on water savings by meeting its water saving targets and ensuring that tender specifications include water saving equipment for all future construction, refurbishment and facilities management projects including unscheduled maintenance.

R 4 050 800

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5. ALIGNMENT TO NDP AND MTSF (cont…)



Outcome 7: Comprehensive rural development (NDP Chapter 6 : Inclusive rural economy)

The Department will be collaborating with sector departments and rural municipalities to coordinate infrastructure planning and ensure maximum positive impact in rural areas by making public services more accessible. The role of the Department is to unlock the potential of its collective asset base to stimulate the local economy in meeting the accommodation requirements of its user departments.

R6 Million

Outcome 8: Sustainable human settlements and improved quality of household life (NDP Chapter 8 : Transforming Human Settlements)

The Planning and Precinct Development Services of the Department ensures integrated planning of infrastructure and urban efficiencies by aligning and consolidating Government services to reduce costs associated with accessing public services, particularly by those who live in remote areas.

In addition, the Department will release well located land and properties for developmental purposes to the Department of Human Settlements

-

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5. ALIGNMENT TO NDP AND MTSF (cont…)



Outcome 12 : An efficient and effective development-oriented Public Service (NDP Chapter 13 : Building a capable and developmental State)

The PMTE provides office, functional and official residential accommodation and ensures optimal utilisation of immovable assets that contribute to improved service delivery.

Through the development of the Custodian Asset Management Plan and the User Asset Management Plan as principle strategic planning instruments, the PMTE will ensure that accommodation provided to user departments that promotes integration, accessibility, sustainability, environmental sensitivity, economic growth and social empowerment.

The medium term budget allocation for new, replacement, upgrading and additional infrastructure is R2.7 billion.

The PMTE medium term budget allocation is R33 billion (Clients capital budget, repair and maintenance, cleaning and gardening, private leases, rates and taxes)

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6. EXTERNAL ENVIRONMENT

i. The expected performance of the South African economy and the need to expedite economic growth through the implementation of the NDP.

ii. An overall view of the South African Property Sector and the implications for the PMTE.

iii. The Construction sector, the challenges in infrastructure development and the PMTE’s role in addressing these issues.

iv. Trends in the formal and informal employment sector.

v. Current electrical and water supply challenges in South Africa and possible water and energy saving initiatives.

vi. Trends in the political environment and emerging drivers of politics for the next five years.


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7. ORGANISATIONAL ENVIRONMENTi. The PMTE has a total staff establishment of 5 776 and a vacancy rate of

±23%. ii. A revised functional organisational structure has been developed, which is

aligned to the mandate of Public Works, depicting the following distinctive focal areas: i. Core Business - consisting of Real Estate Investment, Real Estate

Management, Facilities ii. Management, Real Estate Information & Registry Services, and

Construction Management. iii. Enabling and Support services - consisting of Management, Financial

Management and iv. Accounting, Operations Support Services, and Supply Chain Management. v. Direct Reports - consisting Internal Audit.

iii. The revised structure has been developed in line with the new business requirements benchmarked from the property management industry. i. The PMTE remains as a Trading Entity under the Accounting Officer of the

Department (i.e. the Director-General) until such time as a Government Component is established (as per Chapter 19 of the Treasury Regulations)


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8. BUDGET ALLOCATION SUMMARY PER PROGRAMME

Programmes

Adjusted appropriatio

n

Medium-term expenditure estimate

2014/15 2015/16 2016/17 2017/18

(R’000) (R’000) (R’000) (R’000)

Administration 9 150 1 009 137 1 058 668 1 108 073

Real Estate Investment Management - 107 021 112 007 126 080

Construction Project Services 35 583 465 962 485 693 523 864

Real Estate Management Services 5 121 173 5 720 352 6 152 426 6 633 046

Real Estate Information and Registry Services

720 000 1 662 469 1 664 749 1 670 325

Facilities Management Services - 2 803 656 2 812 980 2 919 291

*Total 8 596 421 11 768 59712 286

52312 980

679

*Excluding infrastructure budget

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9. BUDGET ALLOCATION SUMMARY PER ECONOMIC CLASSIFICATION (including Infrastructure Budget)

Economic classification

Adjusted appropriation

Medium-term expenditure estimate

2014/15 2015/16 2016/17 2017/18(R’000) (R’000) (R’000) (R’000)

Current payments 6 577 362 8 724 577 9 112 479 9 664 874Compensation of employees - 1 288 773 1 369 234 1 474 350Goods and services 6 541 656 7 398 875 7 705 008 8 150 877Damages and losses 20 000 20 000 20 000 20 000

Interest, dividends and rent on land

15 716 16 929 18 237 19 647

Transfers and subsidies 960 162 1 056 178 1 161 796 1 277 976Provinces and municipalities 960 162 1 056 178 1 161 796 1 277 976

Payments for capital assets 3 495 864 4 932 916 5 415 670 5 770 304Buildings and other fixed structures 3 495 864 4 902 223 5 378 256 5 731 995Machinery and equipment - 30 693 37 414 38 309Software and other intangible assets

- - - -

*Total 11 033 388 14 713 671 15 689 945 16 713 154

*Including infrastructure budget

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10. EXPENDITURE ANALYSIS

i. The total budget allocation for PMTE for the 2015/16 financial year is R14,7 billion.

ii. In operationalising the PMTE, the focus over the medium term will be on the implementation functions of providing office accommodation to client departments at national government level, as well as the planning, acquiring, managing and disposing of immovable assets under the custody of DPW.

iii. Further focus areas include rebuilding the PMTE’s technical and professional capacity to support greater efficiency in national infrastructure investment, reducing costs to the State, and becoming self- sustainable.

iv. The PMTE’s revenue is generated mainly from rental income for private and state owned properties leased out to clients, client infrastructure projects and management fees earned through administrative services provided on behalf of client departments, as well as through transfers from DPW.

v. The administrative services provided include the payment of municipal charges on behalf of client departments at a management fee of 5 per cent, and the collection of rental income on both Government owned buildings rented to client departments and privately owned buildings rented on behalf of government departments from private landlords.

SP & APP - PMTE

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10. EXPENDITURE ANALYSIS (cont…)

vi. Revenue is expected to increase from R10.7 billion in 2014/15 to R12.7 billion in 2017/18 at an average annual rate of 5.8 per cent due to additional transfers of R9.2 billion from DPW for the operationalisation of the PMTE.

vii. Cabinet approved budget reductions of R252.2 million will be effected over the medium term, mainly due to the under-spending on infrastructure projects. These budget reductions are moved to the PMTE as the implementation functions now reside with the PMTE.

viii. Previously, the PMTE did not have a budget for compensation of employees as the personnel costs were the responsibility of DPW. However, as a result of the operationalisation, DPW will, starting from 2015/16, transfer personnel and its associated costs to the PMTE in building its technical and professional capacity to achieve its objectives.

ix. Expenditure on goods and services is also expected to increase by 24.6 per cent, from R6.9 billion in 2014/15 to R8.6 billion in 2017/18.

x. 70.1 per cent of total expenditure over the medium term is expected to be on goods and services, especially in the Real Estate Management Services programme, which accounts for 51.1 per cent of the PMTE’s total spending.

SP & APP - PMTE

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11. SUMMARY OF REVENUE SOURCES (including Infrastructure Budget)

Revenue

Adjusted appropriation

Medium-term estimate

2014/15 2015/16 2016/17 2017/18(R’000) (R’000) (R’000) (R’000)

Sales by market establishment 6 662 550 7 138 968 7 641 665 8 174 875Accommodation charges leasehold – intergovernmental

3 727 724 4 025 942 4 348 018 4 695 859

Management fees – Municipal services

190 000 209 000 229 900 252 890

Construction Revenue 2 744 826 2 904 026 3 063 747 3 226 126Other Sales 4 006 567 3 940 223 4 208 428 4 475 041

Accommodation charges – freehold 4 006 567 3 940 223 4 208 428 4 475 041Other Non-Tax Revenue 50 354 49 830 49 680 49 890

Fines, Penalties, Interest, Rent on Land

50 354 49 830 49 680 49 890

Transfers received 673 372 3 584 652 3 790 172 4 013 347Augmentation from DPW 673 372 3 584 652 3 790 172 4 013 347

*Total 11 392 843 14 713 673 15 689 945 16 713 153

*Including infrastructure budget

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PART B: PART B: PROGRAMME AND SUB PROGRAMME AND SUB PROGRAMME PLANSPROGRAMME PLANS

Strategic Plan (Pages 79-128)Annual Performance Plan (Pages 23-86)

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PART BPROGRAMME STRUCTURE

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PROGRAMME 1: ADMINISTRATIONStrategic Objectives and Strategic Plan Targets

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PROGRAMME 2: REAL ESTATE INVESTMENT SERVICESStrategic Objectives and Strategic Plan Targets

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PROGRAMME 3: CONSTRUCTION PROJECT MANAGEMENTStrategic Objectives and Strategic Plan Targets

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PROGRAMME 4: REAL ESTATE MANAGEMENT SERVICESStrategic Objectives and Strategic Plan Targets

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PROGRAMME 5: REAL ESTATE INFORMATION & REGISTRY SERVICESStrategic Objectives and Strategic Plan Targets

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PROGRAMME 6: FACILITIES MANAGEMENT SERVICESStrategic Objectives and Strategic Plan Targets

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PART C: PART C: LINKS TO LONG-TERM LINKS TO LONG-TERM INFRASTRUCTURE PLANINFRASTRUCTURE PLAN

Strategic Plan (Pages 129-148)

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1. NEW, REPLACEMENT, UPGRADE AND ADDITIONS

STRATEGIC PLAN - PMTE

No of pro-jects

Programme Outcome Main appro-priation

Adjusted appro-priation

Revised Estimate

Medium Term Estimates

2011/12 2012/13 2013/14 2014/15 2014/15 2014/15 2015/16 2016/17 2017/18

(R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

77 Departmental 285 294 228 106 255 513 207 100 -

207 100 111 194 168 808 182 613

165 Accessibility 11 386 4 992 7 098 11 369 -

11 369 9 005 9 482 9 956

31Dolomite Risk Management

32 167 32 355 24 717 73 000 -

73 000 141 000 148 473 155 896

114Land Ports of Entry

274 626 233 892 191 684 142 000 -

142 000 261 137 261 159 276 663

32Inner City Regeneration

42 059 94 838 36 199 6 900 -

6 900 101 000 106 353 111 670

46 Prestige 365 876 118 820 57 626 70 000 -

70 000 150 000 139 540 146 517

TOTAL1 011 408

713 003 572 837 510 369 510 369 773 336 833 815 883 317

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NEW, REPLACEMENT, UPGRADE AND ADDITIONS: SIGNIFICANT PROJECTS

No Project Details Province Project cost

R`000

1. Pretoria, Salvokop, construction of bulk services for the STATS SA head office

Gauteng 73 405

Development of Government precinct

2. Cape Town, acquisition of Parliament Towers Western Cape

66 000

Acquisition of property

3. Pretoria, Bryntirion, Eastwood street entrance roads, refurbishment of existing roads on western side of Bryntirion estate

Gauteng 34 530

Refurbishment of existing roads

4. Research station, Antartica Island: Sanae IV research base: refurbishment of the existing base

Western Cape

31 509

Refurbishment of the existing research base

5. Pretoria, Thaba Tshwane, Swartkop Air Force Base, upgrading of wet services

Gauteng 30 928

Upgrading of civil infrastructure

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No Project Details Province Project costR`000

6. Cape Town, Rondebosch, Rygersdal complex - upgrading of the facility Western Cape

22 750

Upgrading of facility

7. Pretoria, DOD & SAAF 68 Air School north and south: bulk water connection and secondary engineering services: replacement and upgrade

Gauteng 21 910


8. Pretoria, Civitas Building, replacement of lifts Gauteng 18 727

Replacement of lifts

9. Cape Town, Parliamentary Villages, upgrading of access control at the three parliamentary villages by means of using electronic software

Western Cape

18 500

Upgrading of access to facilities

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STRATEGIC PLAN - PMTE

No Project Details Province Project costR`000

10. Johannesburg, Service Products, Dept of Labour, upgrading of infrastructure (buildings, roads, pavement and storm water drainage system) at Village Main & Springfields

Gauteng 18 300

Upgrading of facilities

11. Port Elizabeth, Eben Donges building, alterations and refurbishment including air conditioning and mechanical installation

Eastern Cape

17 506

Repairs, maintenance and upgrading of existing building

12. Lenasia, Lenz Military Base, dolomite risk management: upgrading of civil engineering services

Gauteng 15 920


13. Pretoria, Thaba Tshwane emergency dolomite call-out services Gauteng 14 167


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2. REHABILITATION, RENOVATIONS AND REFURBISHMENT (PMTE CAPITAL)

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Major renovations and refurbishment of state accommodation funded by PMTE through accommodation charges received from user departments and augmentation received from National Treasury

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PLANNED MAINTENANCE (PMTE CAPITAL) : SIGNIFICANT PROJECTS


R`000

1. Pretoria: Agrivaal Building: Upgrade, additions and Refurbishment Gauteng 159 277

New office accommodation for Government Department

2. Pretoria: Magistrates Office Gauteng 48 914

Restoration of old Magistrate’s Court

3. George: Police ComplexWestern

Cape27 930

Repair to Masimanyani Police Complex

4. Cape Town: Parliamentary ComlexWestern

Cape24 720

Tuynhuis: Various refurbishments to stores, access for people with disabilities and security installations

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PLANNED MAINTENANCE (PMTE CAPITAL) : SIGNIFICANT PROJECTSNo Project Details Province Project

costR`000

5. Bisho: Training College Eastern Cape 20 861

Repairs and Renovations to Training College

6.Caledon: Helderstroom Prison

Western Cape

19 390

Repair of Housing, Buildings and Related Services

7. Eshowe: Defence KZN 19 250

Rehabilitation of John Ross Highway

8. Worcester: Magistrate’s OfficeWestern

Cape17 150

Internal and External Repairs

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3. MAINTENANCE AND REPAIRS (PMTE - CURRENT)

The maintenance and repair of existing state accommodation as funded by the PMTE through accommodation charges received from user departments

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PLANNED MAINTENANCE (PMTE CURRENT) : SIGNIFICANT PROJECTS


R`000

1 Cape Town: Parliamentary VillagesWestern

Cape63 000

Integrated Facilities Management Services (5 Years)

2 Zonderwater Prison Gauteng 55 113

Maintenance of Electrical and Mechanical Installations

3 Cape Town: Parliamentary ComplexWestern

Cape40 900

Integrated Facilities Management Services (5 Years)

4 Pretoria: Government Printing Works Gauteng 29 850

Repair of leaking roof and structural work

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PLANNED MAINTENANCE (PMTE CURRENT) : SIGNIFICANT PROJECTS


R`000

5. Cape Town: HarboursWestern

Cape26 463

Rehabilitation of 8 Fishing Harbours

6. Graaff-Reinet: Official Quarters and Police CollegeWestern

Cape25 918

Maintenance of leaking roof and drainage system

7. Klerksdorp: PC Pelser Building North West 21 262

Repair of electrical reticulation and mechanical installation

8. Paarl: Drakenstein PrisonWestern

Cape18 000

Repair and Maintenance of Prison Buildings and related services

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END

• National Department of Public Works (NDPW)

• Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate Bag X65Pretoria0001

• Website: http://www.publicworks.gov.za

1 2015-2020 STRATEGIC PLAN AND ANNUAL PERFORMANCE PLAN PRESENTATION TO SELECT COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT 14 MAY 2015.

Documents

strategic goals

strategic alignments

strategic overview3

value of governments

rural areas o

service delivery improvement

states assets

sustainable service