Annual Report 2007/2008 - CIDB Report 2007... · 2015. 8. 19. · Title: Annual Report 2007/2008 Created Date: 10/21/2008 2:06:50 PM

development through partnership

Annual Reportof the Construction Industry Development Board 2007/08

VISION 2012 AND BEYONDA dynamic, innovative and development

organisation that provides strategic

leadership and an efficient service

to stakeholders, leading to a

transformed and competitive

construction industry that delivers

quality infrastructure, promotes

economic growth, and an

organisation that is caring for its

employees.

MISSIONTo direct and drive an integrated

construction industry development

strategy that transforms the role of

industry and stakeholders for sustainable

growth, improved delivery, performance

and value to public and private sector

clients, and investors through strategic

partnerships; to strategically and

deliberately promote the empowerment of

small, medium and micro enterprises to

improve their capability and grow

the economy; to develop employees to

be meaningful participants in the

organisation.

P R O V I D I N G Q U A L I T Y A N D V A L U E TO S TA K E H O L D E R S :

Minister's Foreword

Statement by the Chairperson of the Board

CEO's Report

Board Members

Organisational Structure

2007/08 Performance Summary

Construction Registers Services

Construction Procurement Reform

Building Public Sector Infrastructure Delivery Capacity

Growing SA’s Contracting Capacity

Expanding Reach in the Provinces Through the CCC’s

Focus on Construction Industry Performance

Partnership for Construction Industry Development

The Corporate Services Cluster

Reaching Out to the Communities

Accounting Authority's Report for the Year Ended 31 March 2008

Audit Committee Report

Board Approval of the Financial Statements

Report of the Auditor-General

Financial Statements

CONTENTS


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i cidb l ANNNNUUAALL REEPPOORRTT l 2008

WE ARE PRIVILEGED TO HAVE SEEN YET ANOTHERYEAR OF UNPRECEDENTED GROWTH AND

OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY.AT THE SAME TIME WE CANNOT UNDERPLAY THECHALLENGES WE FACE AS A COUNTRY AND THE

CONSTRUCTION INDUSTRY IN PARTICULAR

- NOTABLY THE SKILLS SHORTAGE, RISING MATERIALPRICES AND THE ENERGY CRISIS.

Government's commitment to investing in strategic infrastructure over the past few years, combined with theprivate sector's contribution to sustain development, haveled to the positive growth witnessed by the industry in thelast few years. The country has seen for the first time inmany decades investment of high magnitude in infrastructure,both in value and in the number of big projects.

The management of this investment and growth opportunities requires a "business unusual" approach andleadership. As industry we have demonstrated resilience tochallenges and complex hurdles and we will always riseabove problems. We have managed to work together tosupport some of our strategic projects from stalling. I amconvinced that we will continue to do so in the face of thetight deadlines for the 2010 infrastructure, rising prices,skills shortage and inadequate energy generation capacity.

The role of the cidb in providing leadership to the industry in the past year must be commended. This role and contribution have been acknowledged by contractors and public sector clients in many of our "imbizos". cidb's focuson improving service quality and forming strategic partnerships aimed at achieving sustainable solutions has alsobeen acknowledged by stakeholders. The newly established Construction Contact Centres (CCC), renewed focuson the national Stakeholder Forum, the consultative process on the proposed Register of Professional ServiceProviders as well as awareness creation have added tremendously to this positive image. More work still needs tobe done to achieve the objectives set out for the cidb. Based on all the positive outcomes, as well as the volume ofwork that is still required, government has increased its investment in this entity. I thank management and staff forthe work they have done in the year 2007/08, including the achievement of an unqualified audit report. I havenoted the contents of the Auditor-General's report which highlights, among other issues, emphasis of matter, performance information and other matters that cidb should deal with. I have been assured that these matters willbe addressed by cidb by November 2008.

I wish to congratulate and welcome the new Board. I am positive that the contribution of Board members in theirindividual as well as collective capacity will go a long way to supporting cidb's focus on its mandate. Under thechairmanship of Professor Raymond Nkado, the Board has set out to identify strategic projects that must guide itsfocus. I take this opportunity to also thank the outgoing Board members for their contribution. I hope they will continue to support the cidb and its work in future.

Thoko Didiza, MPMinister of Public Works

Thoko Didiza, MPMinister of Public Works

FOREWORD BY THE MINISTER

1 cidb l ANNNNUUAALL REEPPOORRTT l 2008

THE SOUTH AFRICAN CONSTRUCTION INDUSTRY HAS GROWN CONSIDERABLY OVER THE PASTYEAR. WE HAVE WITNESSED INDUSTRY PLAYERS, NEW AND OLD, ADAPTING TO THE CHANGINGENVIRONMENT AT SUBSTANTIAL SPEED. SOME OF THE ESTABLISHED CONSTRUCTION COMPANIESAT THE HIGHEST GRADE 9 ON THE CONSTRUCTION INDUSTRY DEVELOPMENT BOARD (cidb)REGISTER HAVE DOUBLED THEIR ORDER BOOKS IN THE PAST YEAR OR SO, MAINLY FROM THEBOOMING CONSTRUCTION SECTOR IN SOUTH AFRICA AND ALSO FROM A DIVERSIFIEDPORTFOLIO IN OTHER PARTS OF THE WORLD.

Against the background of this positive growth we are stillfaced with a crippling shortage of skills. The progress madeby some companies and the public sector in providingmuch needed training and learnerships is commendable.The importation of Cuban professionals, led by the Ministryand the Department of Public Works, has been seen as apositive contribution based on our good relationship withCuba. Other countries, especially African countries, thatmay have excess capacity, will have to be engaged to seewhat contribution could be made to alleviate our shortageof skills in the short to medium term. While the private sector always has the prerogative to import skills from anypart of the world, a government-assisted programme mayyield results that benefit both the public and private sectorsin the medium to long term.

Engaging specialised local and international skills shouldbenefit the delivery of projects for public infrastructure. The country will have to exercise caution in sourcing professionals and skilled workforce from fellow Africancountries to avoid being seen as hegemonic and depletingtheir resources. The cidb will facilitate, wherever it can and in collaboration with all relevant organisations and government, to ensure a credible approach is used.

The shortage of energy is a concern to the industry. Apartfrom stifling progress on already confirmed infrastructureprojects, there is the possibility of reducing potential jobopportunities and turning away investment opportunitiesthat would support the growth of this industry. It is estimated

that at least 130 000 job opportunities may be lost due to the energy crisis in South Africa. This is against abackground of the projected total formal employment of 800 000 in the building and construction sector by 2010.We have engaged Eskom in various forums and as cidb specifically, with the hope that our continued dialogue willyield positive results.

While we are faced with many challenges, progress has been noted in most major projects. Where challengesseemed to constrain us we have managed as a country to put our heads together, plan and forge ahead.Government's strategic objectives of achieving a 6% GDP growth from 2010 onwards and halving poverty andunemployment by 2014 have not dropped off our radar screen. Instead, we confront current challenges to meetthese targets, taking all available opportunities to achieve progress. We need leadership that is innovative andresponsive to the identified challenges on a daily basis to attain the national targets in the medium to long term.

Professor Raymond NkadoChairperson

STATEMENT BY THECHAIRPERSON OF THE BOARD


2010 FIFA SOCCER WORLD CUP

The 2010 FIFA Soccer World Cup is around the corner.To many South Africans, 2010 is about soccer. Tobusiness organisations and those specifically linked tothe construction of the required infrastructure, 2010 isabout delivering the required facilities and otherrelated services before the games begin. It is in thisregard that we are all anticipating the 2010 gameswith some anxiety. All critical role players, the 2010FIFA Soccer World Cup Local Organising Committee(LOC), cidb, construction companies, Department ofSports and Recreation and other tiers of governmentinvolved in ensuring a successful FIFA Soccer WorldCup, the host cities for the 2010 games, AirportsCompany South Africa (ACSA) and many others, mustmanage all delivery processes to ensure that we realisea successful and spectacular international event on theAfrican soil.

Too much focus on 2010 could cloud our judgment interms of the bigger picture. We need to keep our eyeson "all the balls in the air" to ensure we do succeed in2010 but do not wake up too late to a realisation thatother strategic projects have been neglected. It is in thisregard that we keep reminding all role players in the

construction industry that there is more to constructionthan just 2010. The fact that 2010 has taken the centrestage is primarily because of the internationalattraction of this scale of event first and foremost, andsecondly because it is the first such event to be hostedby an African country and we want to make it asuccessful and spectacular experience. All countriesthat have had the opportunity to host the FIFA SoccerWorld Cup will attest to the fact that it is always adominant event, a developmental opportunity, abusiness opportunity beyond soccer and anopportunity to market other aspects of a host countrywell beyond the two-week event. Tourism is one areathat is promoted for many years into the future.

Our performance as an industry will therefore bemeasured in large part by our delivery of the requiredinfrastructure for the FIFA Soccer World Cup as well asby our management of the many other projects that gobeyond 2010. The challenges that we face as anindustry must be resolved speedily so that tightdeadlines can be met. It is for this reason that theleadership and performance of the cidb, among otherrole players, will be subject to scrutiny.


LEADERSHIP AT THE cidb

The new Board of the cidb has been appointed toprovide the required leadership to the industry in amanner that responds to the extant and newchallenges faced by the industry and to support allrelated national government interventions. We arepleased to join and support the CEO and his dedicatedteam of executives, senior managers and staff to fulfilthe mandated role of the cidb. We are pleased that theMinister of Public Works continues to provide the levelof political leadership that is crucial for thetransformation of this industry.

The cidb is in its second quinquennium of operationand will have to be assessed by a panel of independentreviewers on its performance again at the end of the10th year, as required by legislation. The Minister hasexpectations of the strategic direction and achievementof specific targets by the end of this Board's term. Theindustry expects the Board to add value in many ways.The Board has therefore embarked on a process ofidentifying strategic projects, based on the cidb'smandate, business plan, Minister's and stakeholders'expectations. We are committed to continuously planahead all the time and oversee delivery every year inorder to achieve the required targets during the term ofthe Board. Each member brings to the Board someunique capability. Therefore, working together as ateam, the Board will facilitate the achievement of thecidb's mandate for the growth and development ofSouth Africa's construction industry.

The appointment of the new Board and the subsequentinduction programme that the executive team puttogether and presented to the Board have helped theBoard to settle into its role. All Board subcommitteesare in place and nominated Board members now playkey roles in these. All cidb stakeholder events andactivities, including the launch of the Gauteng and FreeState Construction Contact Centres (CCC’s),presentation of the Business Plan and Budget to theParliamentary Portfolio Committee, launch of theQuarterly Monitor at a breakfast event organised bycidb on 13 May 2008 and many more, have beenattended and supported by Board members.

Prior to the release of the Built Environment Professions(BEP) Bill for public comment, the cidb Board andmanagement were delegated to meet with the Ministerof Public Works and provide comments. A meeting washeld with the Minister where various issues relating tothe Bill were discussed. Subsequently, a set ofconstructive comments was submitted to Parliamentand copied to the Minister.

The executive team of the cidb has stabilised during theyear under review. Some programmes are undergoingmajor restructuring to respond appropriately to servicedelivery demands by the growing industry. The cidbhas successfully established and launched five CCC'sin Gauteng, KZN, Western and Eastern Cape andrecently Free State. The organisation has grown andthe resulting constraint of office accommodation isbeing addressed through an expansion programme atthe Pretoria headquarters. This demonstrates that allinstitutional arrangements are in place for the cidb tomore fully discharge its mandate.

cidb Board Members


LEADERSHIP THROUGHSTRATEGIC PARTNERSHIPS

The cidb continues to work with various stakeholders toensure successes on its projects. In particular, theNational Contractor Development Programme (NCDP)and the National Infrastructure Maintenance Strategy(NIMS) launched in May 2008 by the Minister of PublicWorks will generate imminent results. Substantial workis being done in conjunction with the Department ofPublic Works to ensure that these programmes deliverbeneficial outcomes. We have also started discussionswith the Construction Education and Training Authority(CETA) to identify areas of common interest andcooperation. The cidb works very closely and has agood relationship with all its stakeholders includingMaster Builders South Africa (MBSA), the South AfricanFederation for Civil Engineering Contractors (SAFCEC),Consulting Engineers South Africa (CESA), the SouthAfrican Institution of Civil Engineering (SAICE), theNational African Federated Chamber of CommerceConstruction (NAFCON), the National Association ofBlack Contractors and Allied Trades (NABCAT), theCouncil for the Built Environment (CBE) and itsmember councils, the South African Black Technicaland Allied Careers Organisation (SABTACO),established and developing businesses and others.These relationships will be maintained or strengthenedto achieve our mandate.

In addition to strategic partnerships with localstakeholders, cidb is strengthening its relationshipswith international bodies and individuals. The recentWomen's Day Breakfast where Dr Sarah Buck,president of IStructE, was a guest speaker illustratesour extended partnerships with importantorganisations and professionals around the world.Other strategic links exist with the London-based ICE,where cidb has always received positive support.

The long awaited Construction Charter is expected tobe gazetted in due course. We know that manycontributors and IMC representatives have workedtirelessly to achieve a section 12 generic code for theConstruction Charter but we need even morecommitment from industry players for successfulgazetting of the Construction Charter as a Section 9specific sector code. This will avoid the potential forconfusion as some companies are already usinggeneric codes in their BEE assessment in the absenceof specific sector codes.

SPECIAL ACKNOWLEDGEMENTS

The cidb has achieved an unqualified audit for the yearunder review. I would like to thank management andstaff at the cidb for their hard work that yielded thislaudable achievement, as well as their commitment tocollaborative teamwork during the difficult periods ofdelivery on so many projects.

May I take the opportunity to congratulate the thirdand newly appointed Board for having hit the groundrunning and thank each member of the Board for theircommitment and dedication to the work of the Board.The results of their support are already evident. I alsowish to thank the second Board of the cidb for havinghanded over to the new Board a successfully runorganisation.

Last but not least, on behalf of the Board,management and staff of cidb, I wish to thank theMinister of Public Works, Ms Thoko Didiza, for herleadership, support and contribution to theconstruction industry.

Professor Raymond NkadoChairperson

Minister Thoko Didiza receives theNIMS document at the launch ofthe strategy in May 2008


THE CONSTRUCTION INDUSTRY HAS SEEN ANOTHER YEAR OF EXCITING RESULTS WITHIN ANENVIRONMENT FULL OF CHALLENGES. THE CONSTRUCTION INDUSTRY DEVELOPMENT BOARD(cidb) HAS NOT BEEN IMMUNE TO THESE CHALLENGES.

The exciting news has been the continued momentum ofcommitment to investment in infrastructure by both thepublic and private sectors. The total investment in themedium term is now estimated to be around R500 billion.With the investment in the construction of the 2010 stadiacurrently standing at R8,2 billion, this confirms that thegood news will not end in 2010. There is long termcommitment to support the construction industry by dealingwith new opportunities and reducing the infrastructurebacklog. This will extend the current growth cycle. All roleplayers who provide training and skills development shouldtherefore take a long-term view in their planning with thecomfort that the future will need skilled artisans andprofessionals for a long time into the future.

The challenges that have come with the exciting news arethe continuing shortage of skills, project cost escalation dueto, among other factors, the rising material prices and theworrying energy generation capacity in the country. Theshortage of skills in the industry has been reported onextensively and should now be unpacked to prioritisetraining of artisans in critical areas in the short, mediumand long term. The cidb report on skills should help inidentifying areas which require focus in the short to mediumterm. There is no doubt that experienced site managers, siteengineers as well as professional project managers andconstruction project managers should be prioritised to dealwith the tight deadlines, improve turnaround times andquality of construction projects.

We commend the independent initiatives and contribution of the private and public sector stakeholders who havedecided to run programmes to help us out of this situation. cidb is working with these partners to support theseinitiatives. We have signed an agreement with the Workforce Group to assist lower grade contractors with artisantraining.

The pressure of the boom in the industry, the required speed of delivery and the influx of new emerging playershas put strain on quality, health and safety. The relationship between quality and occupational health and safetyduring construction should be strengthened. Then there is the environmental aspect of construction which has beengaining recognition but still ignored by some players. While this critical aspect of construction projects is normallyrelated to the immediate surroundings of infrastructure, the issue of climate change should be a wake-up call forall stakeholders. Substantial focus is being put on climate change all over the world. Training and skillsdevelopment should now focus on this subject to ensure that contractors, designers, clients and other stakeholdersare fully aware of the environmental outcomes of each project.

The energy crisis has hit the residential and business communities as well as government service facilities within thelast ten months. It has been debated and discussed by various players. The main reason, according to Eskom,economic analysts and commentators, is inadequate generation capacity. The shortage of energy has led toplanned and unplanned "load shedding" in various parts of the country. A number of reasons have been given byEskom for the "sudden" load shedding apart from inadequate generation capacity, but the following wereprominent: lower than the minimum required level of coal stock, bad quality coal stock, mainly unplanned andsometimes planned maintenance.

Ronnie KhozaChief Executive Officer

CEO'S REPORT


We believe the reality of energy shortage will be with usfor some time and needs a different and innovativeapproach if we want a sustainable solution. We haveengaged Eskom to see how cidb can assist in reducingthe negative impact due to energy shortage on newprojects and reduced employment opportunities bypromoting positive and supportive behaviour. In thisregard we will be putting advice on such positivebehavior on our website and add relevant messages topamphlets and advertisements through newspapersfrom time to time. We have also agreed with Eskomthat we will continue to engage them on energy relatedissues and invite them to our consultative stakeholdermeetings. The cidb is represented on the MBSAinitiative to discuss the energy situation with Eskom.

Our calendar of delivery has been full of interactionwith various stakeholders to ensure that we are alwaysin touch with the developments in the industry. Specificstakeholders were involved on projects andconsultations relevant for their area of expertise oroperation.

CONTRACTOR DEVELOPMENT AND ROLLOUTOF THE CONSTRUCTION CONTACT CENTRES

Over quite some time we reported our intention toopen provincial offices to bring our services closer toour stakeholders. Last year we reported that we hadestablished the first four Construction Contact Centres(CCC's) in KwaZulu-Natal, Western Cape, EasternCape and Gauteng. It is exciting that we can nowconfirm that these offices have been officially openedwith the support of the national Minister of PublicWorks and her deputy. These offices have been used as"pilots" to plan future CCC's scheduled for the year2008/09 and 2009/10. The Free State CCC waslaunched recently as part of the second group ofCCC's after the first four pilot centres. The following

provinces are scheduled to have their officesestablished in due course: Mpumalanga, North West,Northern Cape (2008/09) and Limpopo (2009/10).

The basic registration service and contractordevelopment have been the main focus of the alreadyestablished CCC's while head office has also looked atvarious supporting initiatives, branded as value-addedservices. In this regard I am pleased to report that we have recently signed two Memoranda ofUnderstanding (MoU's) with two of the big banks inSouth Africa, FNB and ABSA Bank. The intendedbenefits of these partnerships are improved access tofinance, non-financial support like enterprisedevelopment for the developing businesses - all aimedat contractors registered with cidb. These MoU's havebeen signed at national level and therefore we expectthat the benefits will cascade down to provincial level,with the regional offices of these banks working closelywith our CCC's. We are continuing to negotiate withthe other big banks, in particular, to ensure thatcontractors have a good choice of support by thesebanks.

We have continued to enhance the NationalContractor Development Programme (NCDP) throughconsultation with various stakeholders. While thecurrent version of the NCDP has been developed withinputs from stakeholders, we believe that cidb shouldmake adjustments continuously on the basis of ourstatistics and the changing dynamics of the industry.The previous versions of NCDP were presented to theHeads of Departments (HOD's) Forum and theDepartment of Public Works National IntergovernmentForum (DPWNIF). Future versions will always bepresented at these forums but a new approach toengage other departments like the departments ofEducation, Transport, Health as well as municipalitiesshould be implemented. This will ensure that all tiers ofgovernment and parastatals responsible forinfrastructure implementation are aware of, andcomply with cidb requirements.

cidb BoardChairperson

Prof. RaymondNkado and Minister

Thoko Didiza of Public Workswith employees of the Gauteng CCC

at the launch of the centre in February 2008


STATE OF ACTIVE REGISTERS

The Register of Contractors has continued to mirror theboom in the construction industry. The Register ofContractors had captured a total of 63 148registrations by the end of March 2008 - an effectiveincrease of 100 per cent on the previous figure of 32 264 at the same time last year. Also, at the end ofthe financial year, 48 236 of the 63 148 registrationswere active. About 80% of these registrations are atgrade 1, indicating the level of attractiveness of theindustry to the potential business enthusiasts, mainlythose without the required skills.

Our successful launch of the Registers CommunicationDrive in November 2007 has led to an improvedunderstanding of the registration requirements bycontractors. The quality of documents coming throughis much better than in the past.

We have substantially simplified the registrationprocess for Grade 1 contractors. Registration for thisgrade is now done over the counter, with activation onthe system taking place within 48 hours. This is a greatimprovement on the old system which treated Grade 1applications the same way as the more complexGrades 2 to 9. Other benefits of the simplified Grade 1registration process is that there is no morerequirement for a cidb certificate and the removal ofannual updates of registration has reduced the feesrequired over the three year validity period ofregistration. The new process has also reduced theadministration burden on the cidb. The regulationamendments for Grades 2 to 9 were issued for publiccomment and we have received supportive responsesfrom stakeholders. With Board approval and Minister'sconcurrence, we envisage gazetting the amendmentsin October 2008.

The i-Tender/ Register of Projects (i-Tender RoP) hasbeen slow for some time due to a number ofimplementation challenges. We have providedrepeated capacitation support to the same clients whoexperience frequent loss of personnel in their SupplyChain Management units. By the end of March 2008,there were 69 (out of 284) municipalities, 24provincial Departments, 13 National Departments and32 private sector companies registered as employerson our database, all totaling 197 registrations. Thisnumber had already increased to 278 by mid August2008, with municipalities already standing at 126.

The programme responsible for maintaining theregisters has been restructured for efficient servicedelivery. Major improvements have already been notedin registration turn-around times and quality of work.

MONITORING AND IMPROVINGINDUSTRY PERFORMANCE

Lack of the required competency in the industry is ahuge risk and this has prompted the cidb to fast trackcompetency assessment of contractors. Suchassessment will be followed by accreditation, which willbe considered by clients when appointing contractorsin future. This is not only a necessary value-add by cidbbut a further risk management and best practiceinitiative that will see only committed contractors whoadhere to quality, health and safety participating in theindustry.

Phase Two of the Registers, in the form of Best Practice,is being prioritised as the industry demands betterperformance. The various components of Best PracticeContractor Recognition Scheme and Best PracticeProject Assessment Scheme are at an advanced level ofpreparation for implementation. Contractors will beassessed against relevant quality, health and safety aswell as environmental management systems; cidbaccredited construction management systems, closeoutreports, among other criteria, for specific grades.These components will require adequate resourcesfrom cidb, clients and contractors to ensure smoothimplementation. We have therefore decided toimplement the criteria in phases but without unduedelay.

Our registers have started generating interesting datawhich must be translated into useful information for theindustry. This, together with what is generated byanalysts and other stakeholders in the industry, will bepackaged on a quarterly basis in our recently launchedQuarterly Monitor. Three editions of the QuarterlyMonitor have already been published and posted onour website. We have also surveyed the status of, andpublished a report on, material supply in the industry.This is part of a new approach to dealing with smallbut responsive chunks of the old status report as sectorreports. More sector reports will be published in future.

NATIONAL INFRASTRUCTUREMAINTENANCE STRATEGY

The National Infrastructure Maintenance Strategy(NIMS) was officially launched by the Minister of PublicWorks in Cape Town in May 2008, following NIMSapproval by Cabinet in 2006. The Minister is expectedto provide political oversight within Cabinet. Theappointment of the Project Steering Committee (PSC),with a broad-based representation within government,


will provide implementation oversight. Cabinet hastasked the Department of Public Works to lead theimplementation of the strategy in partnership with cidb.Together with the Department, we see NIMS as anotheropportunity to support contractor development,especially at the lower end of the cidb grading system.

The strategy and brochure were published last yearand are available as hard copies and on the cidbwebsite.

RESEARCH AGENDA

Work is progressing well in our quest to promote theresearch agenda. We have established good workingrelations with research institutions and have consultedwith specific academics to see how we can prioritiseresearch, provide seed funding and other strategicimperatives.

PROCUREMENT REFORM

We have been active in a number of projects aimed atimproving the understanding and compliancerequirements with cidb regulations.

The rollout of the registers through contractorworkshops, client capacitation on the Register ofContractors and the Register of Projects has continuedon a needs basis albeit against the backdrop ofdeclining skills and high staff turn-over within theclients' stable. There has been a marked improvementin how clients have been responding to the cidbrequirements in the last financial year. From an era ofnot being aware at all of the registers to now askingfew, clarification questions and specific requests forsupport, we are convinced that there is now a hugeinterest and/or change of attitude towards compliance.As previously mentioned under the title "State of ActiveRegisters", the focus on the Register of Projects hasgained momentum as demonstrated by the improvedstatistics reflected earlier in that section. Enforcementof compliance has played a role in these improvedoutcomes. We have discussed with the Auditor-General(A-G) about the best ways to enforce compliance. Wehave agreed that one of the most effective ways toachieve this is by consulting National Treasury toregulate a minimum list for auditing by the A-G.

The Standard for Uniformity (SfU) has been modifiedand streamlined to be in line with the new regulationamendments and to implement practical improvements

to support procurement reform. We have prepared aProcurement Toolbox, based on the latest version of theSfU. This Toolbox was used to enter and win the IPSAPan African Procurement award on "Best ProcessImprovement Initiative". This award has demonstratedthat our innovative construction procurementprocesses, procedures and methods, can be usedbeyond the borders of South Africa. Already capturedin the South African National Standards and publishedby our national standards body, the SABS, thesestandards are being converted into internationalstandards by the International StandardisationOrganisation (ISO).

PUBLIC SECTOR INFRASTRUCTURE DELIVERY

The provincial departments continued to receivesupport through the Infrastructure DeliveryImprovement Programme (IDIP). The active partners,National Treasury, cidb and DBSA have presentedprogress to date to the DPWNIF and the joint MINMECbetween Public Works and Education, led by therespective national Ministers. The partners have alsoengaged the Minister of Education and her teamspecifically to improve communication and reportingwith the Department. These engagements have beenpositive and helpful. The partners have also engagedthe new management team of the Department ofPublic Works to drive both the strategic andoperational aspect of implementing infrastructure. Thesupport from the Department has been positive.Departmental staff have been deployed on IDIP and arevised MoU will be signed during the course of 2008.

REGISTER OF PROFESSIONALSERVICES PROVIDERS

The formal consultative process was extended betweenOctober 2007 and early 2008 to give anotheropportunity to stakeholders to engage us on areas ofconcern and give us their comments or ask specificquestions. A number of regional workshops werearranged in all provinces and the response wasphenomenal. The comments were positive andconstructive.

We wish to thank all those who participated in theseconsultative sessions. We have classified andresponded to the comments and will be sending theseback in the public domain through correspondenceand meetings where possible. As a parallel process, we


are preparing regulations for the establishment of theRegister as a priority and will review the issues relatedto the rotating database and other operational issuesin due course. We envisage piloting the Registeraround the middle of 2009.

SUPPORT TO 2010 INFRASTRUCTURE

We continued our support to the 2010 infrastructureprocesses on an advisory capacity, at various stages ofthe construction of the stadia as well as relatedinfrastructure. While restricting our role to supportbased on the SfU and advice, we have always beenavailable to assist on request by the 2010 Local Organising Committee (LOC), GovernmentDepartments responsible for infrastructure and the hostcities. Working closely with various players likeNational Treasury, the Department of Public Works andthe Department of Sports and Recreation, we believewe have now developed a comprehensive totalmanagement system for mega projects for the publicsector.

IMPROVING CORPORATE SERVICES

The Corporate Services division is undergoing a majorrestructuring exercise. Some areas of the restructuringhave been completed while others still need attention.The human resource function no longer falls under theresponsibility of the Financial Manager. We now havea fully fledged Human Resources (HR) unit headed bya qualified Human Resources Manager. The departureof the first HR Manager and the appointment of anacting HR Manager slowed down our plans toimplement an HR Plan and relevant policies. We haverecently appointed a dedicated payroll administratorand recruitment has been internalised for the manypositions we are filling, saving the organisation onrecruitment and placement costs. We submitted ourfirst Employment Equity Plan when we reached 100employees on our payroll in October 2007.

The Information Technology (IT) unit has continued toprovide strategic support and high-tech facilities to theestablishment of the new CCC's. The Supply ChainManagement (SCM) unit has been re-prioritised todeal with compliance requirements, sourcing andmanagement of service providers through a credibletendering system and purchasing of goods.

Financial management has been beefed up. Theprocess of restructuring this unit will be finalised beforethe end of the current financial year. The correct leveland number of staff are being identified for asustainable structure to deal with the growingcomplexity of our business.

TACKLING FRAUD AND CORRUPTION,IMPROVING RISK MANAGEMENT ANDINTERNAL AUDIT PROCESSES

Our fraud reporting hotline has proved to be a positiveinvestment to fight fraud and corruption. Launched in2007, the fraud reporting hotline has provided criticalleads on allegations of fraud and corruption bycontractors, cidb staff and in some cases public sectorofficials. We are supported by a firm of reputableforensic investigators and an investigations committeeto ensure quality and speedy investigations, followedby disciplinary action and prosecution if warranted.Cases involving contractors are investigated asprovided for in our regulations. Where cidb employeesare alleged to be involved, internal disciplinaryprocedures and criminal investigations are carried out.We report our staff to the police for furtherinvestigations and lay criminal charges once we haveevidence of their involvement in such cases.

The number of cases reported and earmarked forinvestigations amounted to more than 40 betweenFebruary and April 2008. Of these 55% (22 cases)have been successfully investigated and offendersprosecuted while 45% (18 cases) were pendinginvestigation. All cases where contractors have beensuccessfully prosecuted have been gazetted as per ourregulations. So far two employees have beendismissed and their criminal cases reported to thepolice.

A total of six "fraud awareness training" sessions havebeen held at head office and at the establishedConstruction Contact Centres. The forensicinvestigations firm attends the Audit Committeemeetings and reports on progress made on fraud andcorruption cases.

Our focus on risk management and internal audit hashelped us to focus on critical areas that affect ourbusiness in a different way. The senior managementteam has been trained on the approved RiskManagement Plan of the cidb and the list of ten toprisks has been reviewed through consultation with theLeadership Team and the Board. The top ten risks arereviewed once a year or when a major shift has takenplace in our operation, calling for such a review on anad-hoc basis. The internal audit unit has assessedvarious programmes and units according to a planagreed to after the training of senior management.

I am excited to report that cidb has achieved anunqualified audit for the financial year 2007/08. Thishas come as a result of our commitment and resolvelast year to beef up our resources and systems to dealwith the management of the complex contractor


accounts during the exponential growth phase of theRegister of Contractors. The Auditor-General's reportrefers to other areas that require attention, like the"emphasis of matter" and "other matters". While ourefforts were focused on ensuring that cidb achieve anunqualified audit, these areas will now receive priority.We have committed ourselves to resolving them byNovember 2008. I would like to take this opportunityto thank all management and staff, the AuditCommittee and the Board members for their support.

VISION 2012 AND BEYOND

A new vision for the cidb, "Vision 2012 and Beyond",has been crafted with the participation of allmanagement and selected staff. This process started asa strategic focus and team building workshop inNovember 2007, progressed through furtherconsultations in 2008 and culminated in the crafting of"Vision 2012 and Beyond", a mission statement and astrategy to achieve cidb's 2012 objectives. I would liketo thank all employees who participated for theircontribution and commitment.

STAKEHOLDER COMMUNICATIONS

The national Stakeholder Forum meeting of 2007 washeld with the current membership of the StakeholderForum. The second and last meeting of the currentmembership will be held in September 2008. A nomination drive for Stakeholder Forum membersfor the next two years will be kick-started in September2008.

SPECIAL ACKNOWLEDGEMENTS

The process of appointing the third Board of the cidbwas concluded in December 2007. A total of 13 Boardmembers were appointed. Unfortunately, theDepartmental representative, Mr Nyiko Gudhluza, hasleft the Department and will have to be replaced soonas a Board member. Two members of the secondBoard were retained and one from the inauguralBoard was appointed. This has helped with continuityof the work and responsibility of previous Boards. Thenew Board has started its work in earnest after anintense induction programme between the end ofFebruary and the beginning of April 2008. I wish tocongratulate and welcome the members of the thirdBoard of cidb on their successful appointment. I alsowish to congratulate the Chairperson, Professor

Raymond Nkado, and his deputy, Mr Cecil Rose, fortheir appointment in these challenging roles. TheBoard subcommittees have now been constituted andalready started discharging their responsibilities.

The term of the secondBoard ended officiallyin October 2007. It wassad that we lost MrMandla Ndlovu whowas tragically gunneddown in September2007. Mandla Ndlovuwas a committed blackcontractor, a visionaryand a stalwart ofcontractor developmentin South Africa. Hispassing on has left a big gap in the areas where heprovided leadership and support. We appreciate thatthe members of the second Board continued to supportmanagement and staff while the appointment of thenew Board was in progress, well beyond their term. Iwish to take this opportunity to thank the outgoingBoard members again for their contribution andsupport.

The external members of our Audit Committeecontinued to support us between the two Boards anddeserve special acknowledgement. On behalf ofmanagement and staff I wish to thank them for thissupport.

The cidb has continued to receive phenomenal andunwavering support from the Ministry and theDepartment of Public Works. In this regard I would liketo thank the Minister of Public Works, Ms Thoko Didiza,for her support and leadership at all times, especiallyduring our engagement with stakeholders, includingthe official opening of our Construction ContactCentres and the Stakeholder Forum meeting of June2007. A big "thank you" must go to the DeputyMinister, Mr Ntopile Kganyago, who has also providedsupport on numerous occasions, including the officialopening of three Construction Contact Centres,handing over of the Independent 5-Year Review reportto the Ministry by Proffessor George Ofori, NationalConstruction Week project and many other successfulevents that were hosted by cidb.

Ronnie KhozaChief Executive Officer

The lateMandla Ndlovu


Professor Raymond Nkado isa director at Letchmiah DayaMandindi, a consulting firmof professional quantitysurveyors and projectmanagers. Prior to this hewas the Executive Dean ofthe Faculty of Engineeringand the Built Environment at the University of theWitwatersrand. He is aleading built environmentpractitioner, academic andresearcher. He has co-authored over 40 refereedjournals and conferencearticles locally andinternationally.

Raymond has conducted,supervised and publishedresearch on managementissues in the built environment, including thechallenges faced by SMMEs.He has received awards foracademic excellence includingthe Old Mutual gold medalfor best MBA (Wits).Raymond is a member of theSouth African Council for the Quantity SurveyingProfession, of which he ispresident (2005-2009), theChartered Institute ofBuilding, the South AfricanCouncil for the Project andConstruction ManagementProfession and a visiting professor at Wits University.

Cecil Rose, Director ofKantey and Templer and itsformer Managing Director,has played a leading role inthe development of SouthAfrica's roads and transportinfrastructure in a career thatspans decades of planning,design and construction ofroads and transport. A civilengineer by profession, Cecilis immediate past presidentof the South AfricanAssociation of ConsultingEngineers (SAACE) and ofthe South African RoadsFederation.

He has been very active in important construction industry bodies in a variety ofleadership positions and has contributed widely to the development of the engineering profession. Hehas worked extensively inboth the public and privatesectors.

Gavin Strydom, ManagingDirector of KwaZulu Natal-based Edstan & Sons Group,is an eminent leader in construction. He is Presidentof the Master BuildersAssociation KZN, a BoardMember of Master BuildersAssociation South Africa(MBSA) and represents MBSAon the ConstructionEducation and TrainingAgency (CETA). He has contributed to the develop-ment of the ConstructionCharter as a representativeof the MBSA on theConstruction TransformationCharter Group.

He is passionate about education, training anddevelopment, leading theBuilding Industry StandardsGenerating Body (SGB) as itsChairperson and also serving on the SGB for thequantity Surveying Professionand the NSB12 Inter SGBcommittees. Gavin is a qualified quantity surveyor, amember of the Association of South African QuantitySurveyors, and of the Royal Institute of CharteredSurveyors. He is also a registered project manager.

Nyeleti Makhubele isDirector for Water Serviceswith the BushbuckridgeWater Board. She hasworked for various publicand private sector organisa-tions including Bigen AfricaServices, Ehlanzeni DistrictMunicipality and theDepartment of Public Works-Mpumalanga in varioustechnical and managerialpositions. During her directorship with theMpumalanga ProvincialDepartment of Public Works,Nyeleti was instrumental inthe piloting of theInfrastructure DeliveryImprovement Programme(IDIP), a flagship programmeof government that is leadingthe effort to improve publicservice budget expenditureon infrastructure, and isbeing implemented in partnership by the cidb,National Treasury, PublicWorks and the DevelopmentBank of Southern Africa.

She is a recognised leaderand has, among her many accomplishments, BSc(Natural Sciences), BScHonours (Microbiology) andBSc Honours CivilEngineering (AppliedSciences).

RAYMOND NKADO(CHAIRPERSON)

CECIL ROSE(DEPUTY CHAIRPERSON) GAVIN STRYDOM NYELETI MAKHUBELE

cidb BOARD MEMBERS


Sisa Ngebulana, the founderof Billion Group, is a life-long entrepreneur andstrategist. He holds aBachelors Degree in Lawfrom Fort Hare, an LLB postgraduate degree from NatalUniversity, and LLM degreefrom RAU. He is an admittedattorney of the High Court ofSouth Africa. He also hasqualifications in financialmarkets, as well as beingqualified as an Estate Agent.He has been in the propertymarket since 1992.

Around 1996 Sisa established a constructioncompany, Afcon, which specialised in constructionand development of upmarket homes. In 1997the vision of Billion Groupwas conceived and formalised. The business ofAfcon was consolidated intothe Billion Group and thisentity expanded into otherproperty sectors such ascommercial and retail properties. Sisa has previously set up and runvarious diverse businesses intransport, coal mining andgold mine dumps reclamation among others.He was voted Entrepreneurof the Year in 2006 in theEastern Cape.

Greg Steele is the ExecutiveDirector of East Cape MasterBuilders and Allied IndustriesAssociation, a position he hasheld for the past 13 years. Heoriginally qualified with aNational Higher Diploma asa quantity surveyor from thePort Elizabeth Technikon andgained valuable industryexperience in a professionalpractise for 11 years. Gregwas one of the first Technikongraduates awarded corporatemembership of theAssociation of South AfricanQuantity Surveyors after completing further studiesthrough UNISA and UPE (nowNMMU).

He joined the Master BuildersAssociation as its ExecutiveDirector in 1995. Among keyachievements of the MasterBuilders Association underGreg's leadership are theestablishment of a successfultraining department to servethe needs of the Eastern Capeindustry, the formation of theMBA's own health and safetydepartment with the supportof FEM and involvement inthe establishment of the initialCoega Development's Section21 Company leading to theestablishment of the CoegaDevelopment Corporation.Greg has also served on theBuilding Industry BargainingCouncil, the Board of MasterBuilders South Africa and theBoard of the Port ElizabethRegional Chamber ofCommerce.

A civil engineer by profession, Lungile Mchunuis Deputy Director-Generalfor Roads and Transport inthe Free State province. She is former NationalCoordinator for theExpanded Public WorksProgramme (EPWP) and haspreviously worked as DistrictRoads Engineer in theNorthern Cape, TransportSystems Planner in theEastern Cape and for V3consulting engineers. Shehas been involved in planning, design and construction of roads andother infrastructure projects.As an industry leader she hasbeen at the forefront of key government delivery programmes on roads andtransport infrastructure atnational and provincial level.She is Free State provincialchairperson of the 2010 FIFAWorld Cup transport andinfrastructure Sub Committee.

She has done a lot of transportation studies especially in rural communi-ties of KwaZulu Natal andEastern Cape. She has extensive knowledge in transportation engineering,roads construction andmaintenance, and publicservice administration. Shehas a BSc Honours in Civil Engineering (AppliedSciences).

Shereen Tebogo Bogosing isChief Executive Officer ofINIMBA Group Holdings. She is a civil engineeringtechnologist with a passionfor skills and communitydevelopment, especiallywomen in construction andengineering. She has extensive experience in thedesign of roads, water andsanitation, transport plans aswell as project management.She has worked closely withcontractors taking part inmany successful projects.

She is a recognised businessleader and the 2007/8 Black Business Quarterly(BBQ) business woman of the year and 2007/8 TorchBearer for Woman in infrastructure Development.She has among her manyaccomplishments, NationalDiploma in Civil Engineeringand a Bachelor ofTechnology in CivilEngineering. She is also amember of various industrybodies including, IPET,SAWIC, IoD, BWA.

SISA NGEBULANA GREG STEELE LUNGILE MCHUNU SHEREEN BOGOSING


Marten Govender is ChiefExecutive Officer of SynergyM&A, a mergers and acquisitions, managementand transformation consul-tancy company based in theWestern Cape. He is formerBusiness DevelopmentDirector of Amandla Holdingsand Financial Manager ofIris Software Solutions.

He has a Diploma inFinancial Management, aDiploma in BusinessManagement and hasworked extensively with local and internationalorganisations. Marten is alsoa non executive Director of K-Commercial College(Training Institution forBusiness and theConstruction sector, a partner of Synergex RetailConsulting). He is a memberof the Board of the HappyChildren of God AidOrphanage, the AdvisoryCommittee of Cape TownRoutes Unlimited andChairperson of Cape TownNational African FederatedChamber of Commerce.

Lwandile Kona is ProjectManager and shareholder ofJHI. He is qualified as a professional architecturaltechnologist, having attaineda Bachelor of Technologydegree in ArchitecturalManagement with theUniversity of Johannesburg,National Diploma inArchitectural Technology atTechnikon NorthernTransvaal and other qualifi-cations. He has worked on various infrastructure projects from which he has gained experience on the construction sector whilst contributing to its development. He is a member of the South AfricanCouncil for the ArchitecturalProfession.

Nazir Alli is Chief ExecutiveOfficer of the South AfricanNational Roads AgencyLimited (SANRAL) and formerchief director of the NationalDepartment of Transport. Inthis capacity and as aChartered Engineer, he hasprovided client leadership foran improving industry. Hehas been instrumental indeveloping the public-privatepartnership concept in SouthAfrica. He has been involvedin large, diverse infrastructuralprojects such as urban highways and water supplyschemes including theLesotho Highlands (Water)Scheme.

An activist for transforma-tion, Nazir served on theTransitional Working Teamson transport and local government during the negotiations which led toSouth Africa's first democraticgovernment. He also servedon the Strategic ManagementTeam to establish theDepartment of PublicTransport and Roads inGauteng, and was a memberof the Inter-ministerial TaskTeam on ConstructionIndustry Development. Hewas a member of the secondBoard of the ConstructionIndustry Development Board.

Cannon Noyana isManaging Director ofNoyana's ManagementConsultancy (Pty) Ltd, a company that provides construction mentoring andproject management services.He holds a Diploma inProject Management and isalso a Contractor. He has made an invaluable contribution to constructionindustry developmentthrough his active participation and leadershipin various transformationprocesses, including development of the WhitePaper on ConstructionDevelopment, Inter-MinisterialTask Team and leadership of the emerging sectororganisations. He has servedon the first Board of the cidb.

Through training and mentorship of emerging contractors Cannon hasmade a major contribution tothe development of blackcontractors across the country. He is a registeredconstruction project managerand an accredited construc-tion mentor. Among hisachievements, Cannon hasdeveloped, in collaborationwith the CSIR, the strategy for integrated andsustainable development ofemerging contractors in theAlexandra Renewal Project.

MARTEN GOVENDER LWANDILE KONA NAZIR ALLI CANNON NOYANA

PROGRAMME FUNCTION

Programme 1: Growth and Contractor Development- focused on promotion of enterprise development, investmentand spending as the basis for a stable, developing industry and the participation of the emerging sector.

Programme 2: Construction Industry Performance- focused on improved performance and best practice for anindustry that delivers reliable value to clients, investors and end-users, information on construction industryindicators to inform cidb strategy, policy makers and stakeholders.

Programme 3: Procurement and Delivery Management- focused on enhanced public sector constructionprocurement and infrastructure delivery management capability of public sector clients enabling efficient andeffective delivery of quality infrastructure to the public.

Programme 4: Construction Registers Services- focused on:• Registration of contractors and both public and private sector projects• Regulation to effect improved performance and best practice of clients and suppliers

Programme 5: Office of the Chief Executive Officer- focused on:• overall strategic leadership and governance in support of the Board• stakeholder consultations and communications

Programme 6: Corporate Services, responsible for:• financial management including registers fees• human resource administration• supply chain management• information technology


cidb ORGANISATIONAL STRUCTURE

BOARD

CHIEF EXECUTIVEOFFICER

STAFF: 6

PROGRAMMEMANAGER:

GROWTH ANDCONTRACTORDEVELOPMENT

STAFF: 20

PROGRAMMEMANAGER:

CONSTRUCTIONINDUSTRY

PERFORMANCESTAFF: 4

PROGRAMMEMANAGER:

PROCUREMENT &DELIVERY

MANAGEMENTSTAFF: 6

PROGRAMMEMANAGER:

CONSTRUCTIONREGISTERS SERVICES

STAFF: 47

CHIEF FINANCIALOFFICER:

CORPORATESERVICES

STAFF: 23

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ConstructionRegisters Service

CIDB MANDATE/PROGRAMME

Enhancements, quality and integrityimprovements of registrations on the CRS

STRATEGIC PROJECT

Applications processed within 21working days

TARGET - PERFORMANCEINDICATOR

PERFORMANCE - PROGRESS TO DATE

2007/08 PERFORMANCE SUMMARY

As at 31 March 2008 there were 63,148 registrations (up from 32,264 a yearearlier) of which 48,236 were active. This phenomenal increase has required thatthe Registers unit expand and improves it's operations with regard to humanresources, business processes and I.T. systems. The impact of the large volume ofregistrations is also being felt in the cidb's finance department where registrationfees are processed.

The financial year commenced with substantial momentum gained from the intensefocus placed on eliminating the backlog in applications between January andMarch 2007. Compliant applications were processed and non-compliantapplications were cancelled after due process.

The Register was then better placed to focus on processing compliant applicationsand achieve improved turnaround times in this regard. Compliant applications thatare checked and forwarded to the Registers unit by the Construction ContactCentre's (CCC's) are processed within 21 working days.

The Registers unit continued to receive non-compliant applications via the post. Thiswould reduce after Construction Contact Centre's are established in all theprovinces, and it is envisaged that this will happen in the 2008-2009 financial year.

It is anticipated that new regulations published for comment on 18 April 2008 willempower the cidb to cancel applications in a shorter time frame than the currentallowance of 90 days.

During the 2007-2008 financial year the Registers unit embarked on acommunication campaign designed to improve the quality of applications submittedby contractors. Support material was also developed for applicants to easilyunderstand registration requirements.

The Registers Programme has paid particular attention to the appointment ofappropriately qualified and experienced personnel, and has also adopted anapproach of growing potential candidates internally. The focus of the Registers unithas shifted to the grade 2 to 9 applications as the high volume grade 1applications are now processed at the provincial Construction Contact Centre's,where these exist.

The Registers Programme has been restructured at senior level in order to deliveran improved registrations service. A Registrations Manager and Project Managerhave been appointed. The post of Manager - Strategic Support could not be filledduring the year under review as a suitable candidate was not found. Restructuringof middle management and operational areas are in progress. A Training Officerhas been appointed in order to increase the technical proficiency of the unit andensure consistency.



Software enhancements to supportthe Register including distributedarchitecture for regionalregistrations processing at CCC's

STRATEGIC PROJECT

Enhancements to support improvedturnaround times and qualityimprovements; basic systemfunctionality available at CCC's


Temporary staff contracts were converted to permanent contracts to improve loyaltyand trust. All temporary staff were given a chance to apply for the permanent postsand the due process of interviews was followed. Temporary staff was reducedsubstantially by the end of the financial year.

The CIDB has adopted a zero tolerance to fraud approach, and adopted increasedfraud awareness and controls within the unit. A fraud hot line has been establishedand the CIDB has also appointed a forensics company to investigate cases of fraud.All contractor suspensions are reflected on the CIDB web site. Two employees weresuccessfully investigated, dismissed and their cases were reported to the police.

The new Regulations governing the registration of grade 1 contractors commencedon 1 January 2008. The broader set of Regulations governing the registration ofgrade 2 to 9 contractors have been published for public comment on 18 April2008. Some of the many benefits of the proposed regulations are designed toimprove the registration process, improve synergy between the Registers and theconstruction industry, increase the tender value ranges which will create greateraccess to work for contractors, increase registration fees, and remove the subjectivebank rating factor, thus enabling contractors to determine more accurately thegrades that they qualify for.

The software supporting the Registers has been stable and well maintained over thefinancial year. Reports have been extended on-line and available to CCCs, and thisallows summary reporting on areas such as black owned, women owned, youthowned, provincial breakdown etc.

The software was enhanced to support the new Regulations allowing an 'over thecounter' registration service for grade 1 contractors. This was effective from 1January 2008.

The software has been further enhanced to provide a rich client GUI (GraphicalUser Interface) application which lends itself to ease of use and improved stability.

Numerous enhancements were made to the software to support improvedregistrations processing and to support the cidb's finance department with regard toregistration fee processing.

It should be noted that a major portion of the Registers software needs to beredeveloped in the .Net platform and this will be addressed in the new financialyear.


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Growth andContractorDevelopment


Alignment and automation betweenthe CIDB Register of Contractorsand the NHBRC Register of homebuilders

Phasing out of outsourced provincialhelp desks - harnessing the potentialof Construction Contact Centre's tooffer entry level, high volumeregistration services

Establishment of the NationalContractor DevelopmentProgramme (NCDP).

Support and advice to national andprovincial contractor developmentprogrammes. Ongoing monitoringand evaluation

STRATEGIC PROJECT

Automated registration between thetwo registers

The actual rolling out of physicalCCC infrastructure is based in theGrowth & Contractor DevelopmentProgramme within the CIDB and thisreport is contained in that section ofthe CIDB report.

Performance indicator is based onbasic registrations processing at theCCC's; Grade 1 applicationsprocessed at CCC's.

• Establishment of NCDP Framework and rollout to all provinces


A task team was set up to assess the potential for automated registration betweenthe two Registers. The recommendation from the work of the task team is that thetwo registers are designed to achieve fundamentally different outcomes and thatthere should be no (automatic) alignment between them. This project was thenclosed out.

The Registers Programme drives the extension of registrations processing systems tothe CCC's and ensures synergies between Head Office and the CCC's.

Regulations have been implemented from 1 January 2008 enabling an 'over thecounter' registration service for grade 1 contractors. Registration forms for grade 1contractors have been simplified and shortened. The printing of registrationcertificates have been phased out for grade 1 contractors. Due to the large volumesof grade 1 contractors, representing 79% of all registrations, the cidb has alsorealised a cost saving in the printing of registration forms. The processing of grade1 applications at the CCC's has enabled the Registers unit to improve its serviceand turnaround times for grade 2 to 9 applications.

As at 31 March 2008 there were four established and operational CCC's in fourprovinces only, and there is still a reliance on the limited outsourced help desks untilCCC's can be established in the remaining five provinces. This has beenrescheduled for the new finacial year.

Framework established and rolled out to four provinces where CCC's established ie.Gauteng, KZN, EC and WC. Technical Task Teams (TTT's) established and regularmeetings held. All provinces were in the process of establishing NCDP TTT's, someof which have already been convened and are operational by the end of thefinancial year. Continued engagement with relevant stakeholders included GEP, NEF,WIH, ESKOM, EPWP, DPLG, NYS.

NCDP Framework undergoing constant update/s and revisions and refinements tothe guidelines for implementation. Already tabled at HOD meeting OF 14 March2008 and endorsed and approved with minor refinements. Referred to MINMECJointly tabled and taken forward by N.DPW and CIDB-GCD.

Status quo report on analysis of SA Contractor Development programmes in finaldraft stage. Recommendations likely to cover institutional framework/ process forway forward eg. Co-ordination, training, alignment of programmes, lessons and'best' practice/ guide to contractor development.

NCDP Implementation/ action plan awaiting MINMEC approval to be followed bycommunications strategy eg. launch, brochure, Provincial targets andimplementation. Benchmarking and targeting process being taken forward withConstruction Industry Performance (CIP) Programme.



Procurement andDeliveryManagement


Support and advice to national andprovincial contractor developmentprogrammes. Ongoing monitoringand evaluation

Construction Contact Centressupport services, including:

• training courses• business-to-business linkages• business and contracting support

services

Construction Contact Centresestablishment and infrastructure(excluding capex)

Improvement of Public SectorProcurement Reform.

Amendment to the CIDB Regulations(Standard for Uniformity)

STRATEGIC PROJECT

Number of CCC established – first 4pilots around mid year 2007/08and rest by end of 2007/08 to early2008/09.

• Published on 1 Feb 2008 Gazette No 30692


Constant 'ad-hoc' contractor development related interventions, support initiativesand tools, rolled out through CCC's and Provincial Contractor DevelopmentProgrammes.

Access to finance MOU with FNB finalised and to be signed early in first quarter of2008/9.

Ongoing contractor training via service providers eg. Standard Bank - financialmanagement, OHS, GCC, etc.

Support to Provincial initiatives, conferences, summits.

On-going facilitation of workshops with clients and contractors in terms offacilitated access to training and value-add products eg. Procurement practices,access to finance, etc. - via cidb Programmes, service providers and GCD-Enterprise Development unit and NCDP. At Head Office and some provincialCCC's various value propositions were tabled, negotiated and agreements entered into.

Ongoing stakeholder interactions and partner MOA's signed eg. ECDC, trainingService Providers, Standard Bank, etc.

Four CCC’s have opened for business and been launched (KZN, WC, EC andGauteng). Delays due to procurement processes, contractor material delays resp.Provincial MOA’s/ site acquisitions have affected the remaining CCC deliveryprocess.

Staff positions for newly proposed CCC’s (except for N-W) advertised and filled.Next quarter focus on staff training, and additional staffing.

Free State CCC and Limpopo (temp) Help Desks on-track to open doors forbusiness mid 2008. Limpopo Help Desk to be converted to full CCC in late 2008.Mpumalanga renovation likely to commence in May 2008 and temporary HelpDesk accommodation to accommodate staff. N-Cape delays may result in openinglate in 2008 and N-West to also follow later in 2008.

• Clients have been emailed the necessary documentation highlighting the changes and amendments

• Website has been updated with the revised documents


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Development of a conceptualframework and electronic databasefor the Register of Professionals

• Regional road-shows• Board approval of the framework• Project Planning for Phase 2• Appointment of a service provider

for strategic support• Development and implementation

of the database

Development of Practice Notes insupport of compliance andimplementation challenges forClients

Development of Inbrief Notes forimproved understanding ofregulation amendments toregistration of Grade 1 contractors

Active prevention, detection andinvestigation of fraud, corruptionand non-compliance to CIDBRegulations.

• Receipt and administration of complaints

• Verification of complaints• Conduct investigations• Administer hearings• Implementation of outcome of

the hearings• Provision of legal advice and

related services• Administer a reporting hotline

STRATEGIC PROJECT

• Rollout estimated for April 2009

• Continuous development of Practice Notes per financial year

• Continuous development of Inbrief Notes per financial year

• Identify and appropriately manage non-compliance for the period Dec 2006 to Dec 2009


• Concept Paper developed and available on the website in October 2007

• Briefings held in all provinces over February / March 2008 with all major stakeholders

• Comments are currently being documented with the appropriate responses

• Framework currently being revised as per constructive comments received

• (Revised framework to be ready for presentation at the Board Meeting in June 2008 for approval)

• Practice Notes 10 (Attaining social and economic deliverables), 11 (Program approach to delivery), 12 (Competitive Negotiations) and 13 (Identifying a construction works contract) developed and released for implementation in February 2008

• Clients informed of new practice notes made available on the website

• Inbrief Notes 1-5 released in February 2008 to support and guide Client and Contractors understanding and implementation of the amendments to the CIDB Regulations (Nov 2007) for contractor registration

• A service provider contracted for 3 years for administration of the project. A draft Annual Report developed for documentation of achievements and analysis of work done for the year

• Names of defaulters published on 1 Feb 2008 Gazette No 30692

• Notification of the Gazette of Defaulters to Clients




STRATEGIC PROJECT TARGET - PERFORMANCEINDICATOR


IDIP Toolkit Training

Procurement Training andDevelopment of the ProcurementManual for infrastructure deliveryclients

Development and implementationsupport to NIMS

IDIP Logframe planning workshopsin Provinces

Toolkit / GIAMA Alignment

IDIP Brochure

Alignment of IDIP with NDPWInitiatives

Development of constructionprocurement as a profession andspecialised skill within theconstruction industry

To create an enabling environmentfor the elevation of constructionprocurement as a specialisedprofession

• Random training for the period 1 April 2007 to 31 Mar 2008

• Estimated for August 2008

• Ongoing

• Estimated for completion in May 2008

• Estimated for completion in June 2008

• Estimated for completion in May 2008

• Estimated for completion in June 2008

• Estimated for 1 April 2009

• Detailed training has been done in the North West and Kwazulu Natal on the guidelines and templates for infrastructure planning, infrastructure programme and implementation as well as construction procurement

• Procurement training undertaken for all the IDIP Technical Assistants and Provincial Treasury champions on 26 February 2008

• Draft manual for construction procurement developed and is currently being reviewed for finalisation

• Terms of Reference for the institutional capacity building for NIMS have been developed and are currently being rolled out

• Awareness of the NIMS through IDIP Forums undertaken in February 2008

• Planning workshops have been completed in all the provinces except Northern Cape and Eastern Cape to prepare the provinces for the independent international review

• A Task Team comprising IDIP members and the NDPW Representatives established on 25 March 2008

• Planning templates are being reviewed for alignment and finalisation

• A draft brochure for the IDIP has been developed in March

• The final draft is being finalised

• In March NDPW Representatives responsible for the Cuban programme became members of the IDIP Programme Management Unit managed at National Treasury

• The IDIP Technical Assistants are engaging with the Cubans to induct them on the IDIP principles

• Research has commenced with key academics in the field. Meetings held between January and March. Further research required to develop a position that will outline CIDB positioning and support for the project

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ConstructionIndustryPerformance

Development of best practiceguides, management systems,plans, etc.

Development and piloting of "Star"rating system / diagnostic tools

Development of targeting strategies

New: Development andmaintenance of Knowledgebase

• 4 off distributed by March 2008

• Pilot implemented by March 2008 (revised target - August 2008)

• Developed by June 2007 (revised target - December 2007)

• Implemented by March 2008

• Implementing Employment Intensive Road Works - A cidb Practice Manual; CDs complete

• Contract Management Guidelines• Series 1 of 3 at layout• Series 2 of 3 in final edit• Series 3 of 3 under development (delayed by service provider)

Work progressing;

• Framework complete

• Close-out Reports in final draft

• Skills Management Plans put on hold

• Health and Safety Management Plans being development

• Environmental Management Plans in working draft

• Competence evaluation being developed• overseas study tour complete• discussions taking place with industry

• 1st Quarterly Monitor published (January 2008)

• Industry Insight database integrated with RoP data

cidb publications:

• Website live

External practice documents:

• MS Access database complete, and distributed via CCCs

• Upgrade to Intranet delayed• InMagic Software due for delivery April 2008





New: Status report on The Buildingand Construction Materials Sector;

Challenges and Opportunities

New: Status report on "Health andSafety"

Development and implementationsupport to NIMS

Infrastructure delivery skills

• Report published by Jan 2008

• Report published by June 2008

• Strategy endorsed by stakeholders by May 2007

• Implementation in accordance with strategy

• Strategy endorsed by stakeholders by August 2007


• Status Report published

• Stakeholder workshop complete (Sept 2007)

• Presentations given to InterCem, ACSA, and Competition Commission

• Follow-up actions being developed• enterprise development workshop being developed

• Service provider appointed

• Work progressing as per plan

In-hand:

• Project Manager appointed

• All major Departments on-board

• Start-up workshops held August & September

• Technical Task Teams 2 & 3 established

• PEPs for Task Teams 2 & 3 complete / progressing well

• Good progress being made in various forums - NIMS on the agenda

• Programme Steering Committee (PSC) to be established 21 April 2008

• NIMS Launch by Minister in hand (May 2008)

• Extensive interactions with stakeholders undertaken

• Draft business plan for ESDA complete

• Submission made to DoL for recognition of cidb to establish an ESDA

• approval expected in April 2008

• Work progressing well on:• Promotional DVD being developed with SAFCEC & SAICE nearly complete• Competence assessment framework in final draft• Skills Passports framework being developed

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Leadership,stakeholderrelations andcommunication

2007 CIIs

R&D Agenda

2007 Stakeholder Forum

5-Year Review Report

Appointment of 3rd Board andinduction of members.

Communications, publications(infocus, Practice Notes, CIDquarterly, etc.) and knowledgesharing

Appointment and Stability ofLeadership Team

• Published by July 2007 (revised date - December 2007)

• Strategy endorsed by stakeholders by May 2007


• Stakeholder Forum to be held in the first quarter of the 2007/08

• Handover to Minister Chairperson of Panel, no fixed time set but before end of 2007

• Appointment by Minister in October 2007. Induction after appointment

• Quarterly infocus publication; engagement with new publications-ongoing; Participation in seminars, conferences, etc.

• All positions filled

• Brochure with key message published

• Medium-term contract signed with service provider (U Free State)

• Breakfast launch with industry & press planned for May 2008

• Draft benchmarking tools developed - discussions with CCCs in hand to roll-out

• Draft R&D Strategy complete - ready to be submitted to Board for approval

Achieved. Stakeholder Forum held on 1 June 2007. Also provincial stakeholderworkshops in preparation for the national Stakeholder Forum.

Achieved. Formal handover in December 2007. Initially delayed due to tight diariesof Minister and Chairperson (based in Singapore).

Advertisement and selection process from August. Actual appointment in December2007. Delays at interview stage. All 13 members appointed. Induction in Februaryand beginning of April 2008. Board fully functional.

Achieved-Infocus published quarterly and posted on the web; Advertorials inMetrobuild, Brainchild Biz, discussions with Municipal Monitor to provide access tomunicipal audience. Endorsements of ISIZA and Futurebuild. Presented at the CIBcongress, CETA Skills Conference and ASOCSA.

ISIZA, cidb-endorsed quarterly magazine launched-two editions by end of the yearunder review. New website launched-enhancements continuing.

Attended conferences with cidb personnel in Tanzania, Denmark, France andAustralia-benefits being incorporated for improvements in specific areas.

All positions filled by end of the financial year. Programme Manager -PDM andCFO appointed in June and October respectively.


cidb LEADERSHIP TEAM

From left to right:

Ebrahim Moola,Programme Manager:

Construction Registers Services;Gerard Naidoo, Programme Manager:

Growth & Contractor Development; Peter Mongwenyana, CFO; Ronnie Khoza, CEO;

Inba Thumbiran, Programme Manager: Procurement & Delivery; Rodney Milford, Programme Manager: Construction Industry Performance

PROVIDINGQUALITY ANDVALUE FORSTAKEHOLDERS


THE CONSTRUCTION REGISTERS SERVICESTHE REGISTER OF CONTRACTORS AND REGISTER OF PROJECTS HAVE BEEN ESTABLISHED IN TERMSOF THE CIDB ACT (ACT 38 OF 2000). THE REGISTER OF CONTRACTORS, THROUGH THECATEGORISATION OF CONTRACTORS, FACILITATES PUBLIC SECTOR PROCUREMENT, PROMOTESCONTRACTOR DEVELOPMENT AND FORMS THE BASIS FOR DRIVING PERFORMANCE IMPROVEMENT. ITIS MANDATORY FOR PUBLIC SECTOR CLIENTS TO APPLY THE REGISTER OF CONTRACTORS WHENCONSIDERING CONSTRUCTION WORKS TENDERS.

The Register of Projects provides information on thenature, value and distribution of projects and promotesthe performance of public and private sector clients.Public sector clients are required to registerconstruction works projects above R 200,000 whileprivate sector clients are required to register projectsabove R 3 million. Projects are registered on the cidbwebsite, www.cidb.org.za.

The cidb has also developed the free i-Tender service.i-Tender enables clients to advertise tenders on the cidbwebsite automatically alerting registered contractors bye-mail and sms. Compliance with legislativerequirements to register projects is made easy forclients who convert the same tender information at thetime of award.

This system allows contractors to develop their trackrecord. The number of tender notifications sent outincreased to 647, 799 by the end of March 2008. Atotal of 33,435 contractors received notifications oftender opportunities through the i-Tender service. Bythe end of March 2007 there were 1677 projectsregistered on the Register of Projects.

The growth in the Register of Contractors continued inthe year under review with 63,148 registrations by 31March 2008 representing an increase of almost 100%(up from 32,264 on 31 March 2007). At the currentgrowth rate it is estimated that there will be 88,000registrations by December 2008 as illustrated below.

CCC Help Desk Supportassisting a contractor

50000

40000

30000

20000

10000

0

100000

90000

80000

70000

60000

No.

of

regi

stra

tions

Projected growth based on historical data

Dec

04

Dec

05

Dec

06

Dec

07

Apr

08

Dec

08


The year under review commenced with an increasedfocus on improving the quality of applications received.This was supported by the Registers communicationcampaign that sought to provide increased materialand support to contractors to improve theirunderstanding of registration requirements.

Construction Contact Centres were establishedprovincially to improve registration efficiency by easingthe burden on the cidb head office and improving thequality and compliance of applications for registrationon the Register of Contractors. By March 2008Construction Contact Centres were operating in fourprovinces and more centres are in the process of beingestablished.

Further improvements to registration services focusedon business process efficiency, restructuring of theRegisters Programme and increasing staff training foroptimal service delivery. High volume, low complexityregistrations were migrated to the ConstructionContact Centres paving the way for the RegistersProgramme at the cidb head office to also improveregistration services for contractors at grades 2 to 9.

SIMPLIFIED REGISTRATION PROCESS FORGRADE 1 CONTRACTORS

Registration for entry level contractors has beensimplified with an over the counter registrations serviceprovided to Grade 1 contractors at the provincialConstruction Contact Centres. This has been effectivefrom 1 January 2008 and was made possible throughregulation amendments published in November 2007.

The development of a shorter and simpler registrationform has reduced the administrative burden on Grade1 contractors. It has also enabled the cidb to speed upprocessing of these high volume applications. Therequirement for grade 1 contractors to update theirregistrations annually has been removed effectivelyreducing fees from R850 to R450 over the three yearperiod of registration validity.

The cidb has abolished registration certificates forgrade 1 contractors and it is anticipated thatcertificates will also be phased out for the highergrades as well, further easing the burden oncontractors, clients and the cidb. Contractorregistration information is available to the public on-line on the cidb website, www.cidb.org.za. Clients arealso required to verify contractor registration on-line,on the cidb website when evaluating tenders.

GENERAL IMPROVEMENTS TO THECONSTRUCTION REGISTERS SERVICE

The substantial growth in the construction industry hasnecessitated that the Construction Registers Service berestructured in order to support industry development.The cidb has consistently improved the ConstructionRegisters Services and has effected numerousimprovements since the first implementation of theRegisters in June 2004. The cidb Stakeholder Forumand other stakeholder engagements ensure that theConstruction Registers Services is aligned with industryand economic developments in the country.

A substantial analysis of issues affecting and beingaffected by the Construction Registers Service wasconducted in the year under review and the inputcontributed to regulation amendments published bythe Minister of Public Works on 18 April 2008. Theamendments provide for improved and simplifiedregistration process, adapting grading criteria andtender value ranges to provide for inflation adjustment,and alignment of legal procedures.

Specifically the draft regulations amendments propose:

• Increases in tender value ranges

• Alignment of registration criteria and registration fees with the new tender value ranges

• Removal of bank rating from the calculation of employable capital

• Simplification of the requirements for registration to enable applicants to calculate the grades that they qualify for, before applying for registration

• Abolition of printed cidb registration certificates

• More definition in terms of the use of financial sponsorships that contractor's may use to boost their employable capital

• Strengthening of requirements for financial statements in accordance with GAAP (Generally Accepted Accounting Practice)

• More equitable requirements between new and existing enterprises

• Raising the threshold for registration of projects for the private sector and major SOE's

• Private sector from R 3 million to R 10 million

• Major state owned enterprises from R 200 000 to R10 million


STATISTICS FROM THE REGISTER OF CONTRACTORS

The Register provides a wealth of information that can be used to inform procurementstrategies and direct development interventions. This information is accessible to the publicon the cidb website, www.cidb.org.za.

TABLE 1: Class of Works by Grading (2008-03-31)

Designation

1

2

3

4

5

6

7

8

9

Total

GB

26250

2029

582

604

278

241

111

23

24

30142

CE

7766

1179

435

658

354

332

151

52

39

10966

ME

1130

202

78

114

89

50

25

7

21

1716

EE

837

203

102

185

113

63

34

7

11

1555

SW

3120

410

80

93

83

30

24

9

8

3857

Total

39103

4023

1277

1654

917

716

345

98

103

48236

Class of W

Annual Report 2007/2008 - CIDB Report 2007... · 2015. 8. 19. · Title: Annual Report 2007/2008 Created Date: 10/21/2008 2:06:50 PM

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