8

Public Works

Introduction

The public works sector manages government’s immovable asset and

accommodation portfolio. The functions of the sector include the
acquisition, leasing, maintenance and disposal of immovable and related
non-fixed assets held by the state. The sector also creates work
opportunities and facilitates skills development. In terms of the
Constitution, public works is a function and responsibility shared by
national, provincial and local government.

Public works contribute to the NDP’s vision by facilitating job creation and Public works contribute to
improving public infrastructure (economic and social infrastructure). It also Priorities 1 and 2 of the
contributes to Priority 1 (a capable, ethical and developmental state) and 2019-2024 MTSF.
Priority 2 (economic transformation and job creation) of the 2019-2024
MTSF. The construction and maintenance of economic infrastructure and of
social infrastructure (schools, community libraries, hospital and clinics)
create opportunities for labour-intensive and technical or professional
employment. This directly addresses Outcome 4 of the NDP (decent
employment through inclusive economic growth) and includes work
opportunities reported through the EPWP.

One of the roles of public works is to provide office and institutional

accommodation for national and provincial departments so that they can
function effectively. It also provides residential accommodation for

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members of Parliament and provincial legislatures. The size of government’s

portfolio of immovable assets makes it a significant player in the built
environment. The Department of Public Works and Infrastructure (DPWI)
develops and enforces rules and regulations for the built environment and
the use of fixed assets in the public sector.

Public works helps to Public works is also mandated to support the transformation of the
empower individuals and construction industry and the development of small, medium and micro-
communities from enterprises, cooperatives and non-profit organisations. In doing so, it helps
historically disadvantaged to empower individuals and communities from historically disadvantaged
backgrounds. backgrounds. Public works contributes directly to government’s economic
growth and employment creation plans.

The prevailing tight fiscal environment presents the public works sector with
Despite the tight fiscal
the opportunity to:
space, the public works
sector is working towards  Provide more efficient solutions to government’s infrastructure
a number of requirements by eliminating fruitless and wasteful expenditure.
opportunities.  Correctly value government’s immovable assets portfolio.
 Update immovable asset registers and dispose of immovable assets
at market-related prices.
 Budget for and provide accommodation by using market-related
prices.
 Eradicate lease contract price increases that are markedly above
the inflation rate and ensure fair prices for leased accommodation.
 Fight fraud and corruption and achieve the optimal mix of state-
owned and leased accommodation.
 Professionalise the management of government’s immovable
assets portfolio.

Departments of public works are also expected to play an effective role in

growing and enhancing the economy through infrastructure projects.

This chapter reviews the current public works landscape, budget and
expenditure trends, service delivery achievements and plans for the sector
over the medium term.

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Current landscape

The Constitution defines the roles and responsibilities of national, provincial

and local government in the public works sector.

National

 As set out in the Government Immovable Asset Management Act

The functions of the DPWI
(GIAMA) (2007), the DPWI is mandated to be the custodian and and of the PMTE were
portfolio manager of government’s immovable assets. Since the redefined as part of the
creation of the Property Management Trading Entity (PMTE) in 2015/16 turnaround
2015/16, the department’s role consists of policy formulation, strategy.
coordination, regulation and oversight relating to the provision of
accommodation; expert built environment services to client
departments at national level; and, through the entity, planning for,
acquiring, managing and disposing of immovable assets in the
department’s custody. The department is also mandated to
coordinate and provide strategic leadership in initiatives to create
jobs through the EPWP.

This functional separation clarifies and emphasises the department’s wide

responsibilities in the public works sector and addresses the conflicts
between the department’s earlier roles as policy maker, regulator and
implementer. Since 2015/16, the budgets of the DPWI and the PMTE have
been restructured to reflect their functions.

The DPWI carries out its oversight function through a range of structures
The DPWI
Theprovides
Nationalan
including the Ministers and Members of Executive Councils (MinMEC) oversight role through
Public Works
forum, the Government Immovable Asset Management Act Implementation various forums.
department
Technical Committee, the Chief Financial Officers’ Forum, the Asset Register
oversight role
Management and Infrastructure Delivery Management System Committee
and the national Planning, Monitoring and Evaluation Forum. The purpose
of decisions taken by these intergovernmental structures is to ensure
alignment of policies and strategies.

The GIAMA provides for effective and efficient management of The DPWI, in partnership
government’s fixed asset portfolio. Through the DPWI’s project with the CIBD and the
management facility, with technical support from the Construction Industry National Treasury, has
Development Board (CIBD) and the National Treasury and in consultation developed a draft NIAMM
with national and provincial government structures, the DPWI has framework.

developed the National Immovable Asset Maintenance Management

(NIAMM) framework. This forms part of government’s national
infrastructure maintenance strategy and was endorsed by the DPWI
MinMEC in July 2017 as the policy that guides the public works sector. The
framework emphasises the importance of planning and of providing for the
management and maintenance of immovable assets using full-life costing
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principles. Implementation of the infrastructure maintenance strategy, with

more efficient use of infrastructure budgets, is expected to help to reduce
the maintenance backlog and, over time, to enable government to acquire
the capacity needed to efficiently maintain its immovable assets.

The PMTE is responsible for planning, acquiring, managing, maintaining and

The PMTE is responsible disposing of national immovable assets under the custodianship of the
for planning, acquiring, DPWI. To do this, the entity needs an accurate and reliable immovable
managing, maintaining and
disposing of immovable assets register. This register has been updated and, in the view of the DPWI,
assets under the has on record about 99 per cent of the national government’s immovable
custodianship of the DPWI.
assets. The quality of the assets register continues to be improved by
updating the asset values and space measurements in accordance with
norms and standards. Similarly, provincial and municipal governments’
immovable assets registers are being updated by the respective public
works or property management entities.

Expanded Public Works Programme

The DPWI developed the policy relating to and coordinates the

The DPWI is responsible
implementation of the EPWP, a nationwide government-led initiative with
for coordinating
implementation of the
the objective of providing work opportunities and income support to poor
EPWP. and unemployed people through labour-intensive delivery of public and
community assets and services. The programme also aims to empower
urban and rural communities and aspiring contractors from historically
disadvantaged backgrounds, many of whom lack relevant skills. The
programme identifies opportunities in the infrastructure, economic,
environment, culture, social and non-state sectors. The Minister of Public
Works and Infrastructure has been mandated by the Cabinet to champion
the EPWP. The department is responsible for:
 Coordinating and supporting implementation of the EPWP
 Providing technical support for designing labour-intensive
programmes in particular
 Reporting on the department’s implementation of the EPWP
 Monitoring achievement of the EPWP’s targets
 Evaluating the impact of the programme
 Documenting and publicising EPWP best practices
 Reporting on the EPWP reporting system
 Managing and monitoring the utilisation of EPWP conditional
grants.

Introduced in 2004, the EPWP is now in its fourth phase; this started in 2019
Implementation of the
and will end in 2024. Phase 1 was implemented from 2004 to 2009 with a
EPWP began in 2004 and
is now in Phase 4 which
target of 1 million work opportunities. The target of Phase 2, implemented
will end in 2024. from 2010 to 2014, was 4.5 million work opportunities and of Phase 3 (2015
to 2019) 6 million work opportunities or 2.5 million full-time equivalent
(FTE) jobs. Phase 4 of the EPWP builds on lessons learned over the

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preceding fifteen years and on international experience. It aims to take

public employment to the next level by expanding the programme through
replicating and improving programmes across all sectors; implementing
projects and programmes attractive to young people who are not in
education, employment or training (NEET); and increasing women’s
participation in all programmes and sectors. Guided by the targets set out
in the 2019 MTSF, the goal is to realise the EPWP’s developmental potential.

Debts owed to municipalities

The DPWI is leading a project to verify debts, reported in terms of Section

71 of the Municipal Finance Management Act (MFMA) (2003), that national
and provincial departments owe to municipalities and to facilitate
settlement of these debts. The national intergovernmental task team on
debt is made up of representatives of the Office of the Presidency, the DPWI,
provincial departments of public works, the Department of Rural
Development and Land Reform, the Department of Cooperative
Governance and Traditional Affairs, the National Treasury and the South
African Local Government Association (SALGA) and was established to
coordinate and oversee the government debt verification and settlement
process. Debts to municipalities relate mainly to the services offered by
municipalities including water, electricity and waste management and to tax
charges such as property rates.

As at 30 July 2020, government owed municipalities R14.8 billion. Of this, As at the end of July 2020,
national departments accounted for 39.2 per cent (R5.8 billion), provincial government owed about
departments for 51 per cent (R7.5 billion) and other organs of state for 10.1 R14.8 billion to
per cent (R1.5 billion). municipalities

Table 8.1: Debtors age analysis for provinces as at 30 July 2020

180 days to
R' 000 0 -30 days 31 - 180 days 1 year Over 1 year Total
Eastern Cape 30 078 259 816 40 704 116 287 446 885
Free State 414 350 214 498 161 279 1 039 416 1 829 543
Gauteng 251 553 215 139 65 118 98 122 629 932
KwaZulu-Natal 182 302 195 659 178 327 568 301 1 124 589
Limpopo 26 635 85 958 59 710 530 280 702 583
Mpumalanga 29 189 82 383 54 758 711 771 878 102
Northern Cape 27 172 109 041 95 451 569 183 800 847
North West 37 892 81 141 146 536 669 709 935 278
Western Cape 73 908 59 503 17 947 151 358
Total 1 073 080 1 303 137 801 884 4 321 016 7 499 118
Source: National Treasury Database

Table 8.1 gives the age analysis of debt that provinces owed to
municipalities as at 30 July 2020. While 0-30-day debt stood at R1.1 billion,
over-one-year debt amounted to R4.3 billion.

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Public works sector planned policy reviews

The process of reviewing the 1997 and 1999 Public Works White Papers
began in the fourth quarter of 2017/18 and was completed in March 2019.
The main purpose of the review process was to:
 Clarify the roles and functions of the national and provincial public
works departments including concurrent functions in Schedule 4,
Part A of the Constitution
 Reinforce the DPWI’s role in driving transformation in the
construction and property sectors
 Review and update policy goals for and approaches to addressing
current events in the local and global construction and property
sectors.

The intention of the review was to enable more effective and efficient
functioning of the departments. Key stakeholders in the Construction
Industry Development Board Act (2000) and the Council for the Built
Environment Act (2000) were consulted to provide inputs on the existing
policies. The aim was to identify policy gaps needing amendment. Draft
policy is in the process of development.

Provincial

The Constitution assigns concurrent powers to provinces for the

There is an increasing
construction, maintenance and management of fixed, or immovable, assets.
demand for office
accommodation. These activities are carried out in support of services provided by other
provincial departments. Provincial public works departments provide,
maintain and lease property for office accommodation for provincial
departments and agencies that provide government services. The sector has
significant responsibility as implementing agent for constructing and
maintaining facilities for social and economic sectors areas such as health,
education, social development, community safety and agriculture.

Municipalities

The Constitution gives concurrent functions to municipalities for municipal

The role of municipal
public works departments public works. In line with applicable norms and standards, national and
is to provide services such provincial governments regulate how they carry out these functions. Most
as water, sanitation, municipalities carry out infrastructure planning and delivery functions for
municipal roads and the services that they provide such as water, sanitation, municipal roads and
electricity distribution. electricity distribution. Municipal planning, which includes spatial, economic
and social planning, is supported through five-year integrated development
plans.
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The expanded public works programme integrated grant to municipalities,

managed nationally, encourages local government to increase labour-
intensive employment through infrastructure programmes that maximise
job creation and skills development. The grant is allocated by the DPWI
through a formula based on municipalities’ past performance in creating
jobs. Poor and rural municipality allocations are given an extra weighting. In
2018/19, the grant amounted to R693 million, 100 per cent of which was
transferred to 245 eligible municipalities and created 223 789 work
opportunities.

Provincial public works departments institutional arrangements

Table 8.2 shows the institutional arrangements for provincial public works
departments. The Eastern Cape, the Free State, Gauteng and KwaZulu-Natal
have stand-alone public works departments. In other provinces, they are
combined with roads and transport; in the case of these departments, this
chapter analyses only their public works expenditure.

Provincial public works departments generally have two broad spending

programmes:
 Public works infrastructure
 The EPWP (known as community-based programmes in some
provinces).

Table 8.2: Public works, roads and transport functions per province,
2019/20
Public Works, Public Works Public Works
Roads and and Roads
Transport
Mpumalanga Limpopo Eastern Cape
Northern Free State
Western Cape Cape
Gauteng (Infrastructure
North West
Development)
KwaZulu-Natal
Source: National Treasury provincial database

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Public works infrastructure

Provincial public works Through the Public Works Infrastructure Programme, provincial public
departments provide, works departments operate as implementing agents and/or appoint other
manage and maintain service providers to fulfil their mandate of planning, designing, constructing
non-moveable assets. and maintaining provincial non-moveable assets and of providing office
accommodation for provincial departments and entities.

With its mandate derived from the GIAMA, this aspect of the public works
sector became applicable to provinces in April 2010. As noted above, the
GIAMA provides a uniform framework for the efficient management of
immovable assets and for coordinating the use of these assets with service
delivery objectives; and provides guidance on the provision of
accommodation to provincial departments using government and privately-
owned properties.

Subject to the relevant provincial land administration laws and to the

GIAMA, public works departments acquire, manage and dispose of
immovable assets. Public works departments act as caretakers or custodians
of government properties and are required to have Custodian Asset
Management Plans (C-AMPs) in place for the life cycle of all immovable
assets in their custody.

To improve the roll-out of and compliance with the GIAMA, provincial

Provincial public works
departments have prioritised filling critical posts. However, challenges that
departments are working
to improve provinces face in complying with the GIAMA, including limited budgets, have
implementation of the meant that only certain government buildings have been identified for
GIAMA. condition assessment.

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Budget and expenditure trends

Provincial public works infrastructure

Expenditure per province

The infrastructure budgets for public work departments relate to their roles
as implementing agents while client departments’ infrastructure budgets Provincial public works
are within their own baselines and managed by them. Table 8.3 indicates infrastructure expenditure
that between 2015/16 and 2019/20, provincial expenditure on the public increased by R3.6 billion
works infrastructure programme increased by R3.7 billion from R9.3 billion between 2015/16 and
2019/20.
to R13 billion, an average annual increase of 8.6 per cent. There were
particularly notable increases in Mpumalanga (15.5 per cent), Gauteng (12.5
per cent) and KwaZulu-Natal (10.4 per cent), largely attributable to inflation-
related adjustments, wage adjustments, filling posts critical to the delivery
of infrastructure, an additional allocation for addressing the backlog in
building maintenance and settling property rates and tax debts.

Between 2019/20 and 2020/21, the budget for the public works
infrastructure programme is expected to decline by 0.8 per cent, with
marked decreases in the following provinces:
 Northern Cape (23.9 per cent)
 KwaZulu-Natal (16.3 per cent)
 Gauteng (2.9 per cent)
 Mpumalanga (1.6 per cent)
 Limpopo (1.3 per cent).

The reduction in the 2020/21 budget allocation in the Northern Cape and Provincial public works
KwaZulu-Natal is due to a once-off allocation in 2019/20 for property rates infrastructure expenditure
paid to municipalities to settle old municipality debts. The reduction in is expected to reach R13.4
Mpumalanga’s 2020/21 budget allocation is due to non-allocation of the billion in 2021/22.
coal-haulage portion of the provincial road maintenance grant (PRMG)
allocated in the previous years and ending in 2019/20. The declines in
Gauteng and Limpopo are due mainly to budget cuts implemented by the
provinces. The allocations to North West and the Eastern Cape are expected
to increase above inflation, with the increase of 12.7 per cent in North West
largely due to expected appointments to strengthen capacity. The Eastern
Cape’s expected increase of 8.1 per cent is mainly due to provision for filling
critical positions to build capacity and for settlement of old municipal debts.
The Western Cape 2020/21 allocation increases by 2 per cent due to an
additional provision for planned urgent maintenance and construction,
acquiring office accommodation and increased municipal services costs.

Over the 2019/20 medium term, the budget for the provincial public works
infrastructure programme is expected to grow slightly by 1.2 per cent, or

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R481 million, from 2019/20 to 2022/23. This increase does not allow for the
growing pressure to pay municipal rates and taxes. The annual rate at which
the budgets for the Free State, Gauteng, Limpopo and the Western Cape
increase over the 2020 MTEF is below the expected rate of inflation. The
equivalent rates for the Northern Cape and KwaZulu-Natal decline by 5.7 per
cent and 3.6 per cent respectively. The 2020 MTEF allocations thus do not
cover the pressure on budgets from municipal rates and taxes.

Table 8.3: Provincial public works infrastructure expenditure by province, 2015/16 - 2022/23
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Revised
Outcome Medium-term estimates
R million estimate
Eastern Cape 1 255 1 359 1 548 1 698 1 775 1 918 1 995 2 065
Free State 1 207 1 216 1 200 1 408 1 503 1 506 1 563 1 639
Gauteng 1 677 1 797 2 237 2 402 2 687 2 609 2 704 2 762
KwaZulu-Natal 1 053 1 083 1 152 1 260 1 565 1 310 1 347 1 404
Limpopo 701 749 794 777 887 875 1 029 1 009
Mpumalanga 669 756 798 978 1 193 1 173 964 984
Northern Cape 178 190 138 158 237 180 190 199
North West 1 025 931 1 033 1 004 1 003 1 130 1 156 1 235
Western Cape 1 566 1 696 1 843 1 911 2 146 2 189 2 134 2 182
Total 9 330 9 777 10 743 11 595 12 997 12 891 13 082 13 478
Percentage growth 2015/16– 2019/20– 2019/20–
(average annual) 2019/20 2020/21 2022/23
Eastern Cape 9,1% 8,1% 5,2%
Free State 5,6% 0,2% 2,9%
Gauteng 12,5% -2,9% 0,9%
KwaZulu-Natal 10,4% -16,3% -3,6%
Limpopo 6,1% -1,3% 4,4%
Mpumalanga 15,5% -1,6% -6,2%
Northern Cape 7,4% -23,9% -5,7%
North West -0,5% 12,7% 7,2%
Western Cape 8,2% 2,0% 0,5%
Total 8,6% -0,8% 1,2%
Source: National Treasury provincial database

Expenditure per subprogramme

Table 8.4 shows provincial public works infrastructure expenditure by

subprogramme for the years 2015/16 to 2022/23.

Programme support

The subprogramme provides administrative and professional support

services to ensure effective implementation of the GIAMA Between 2015/16
and 2019/20, expenditure increased by 8.6 per cent. The increased costs for
programme support from 2015/16 to 2019/20 were the result of wage
Funding for management adjustments, the appointment of officials in accordance with occupation
and operational support is specific dispensation (OSD) salary scales and provision for improving
expected to decline by 8.3
per cent in 2020/21. infrastructure support. Some provinces, such as KwaZulu-Natal, appointed
consultants to assist the department with preparing its immovable asset
register; conduct its financial statement audit; and assist with training and
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development. The budget for this subprogramme is expected to decline by

8.3 per cent between 2019/20 and 2020/21 and to increase slightly, by 0.4
per cent, over the 2020 MTEF.

Table 8.4: Provincial public works infrastructure expenditure by

subprogramme, 2015/16 - 2022/23
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Preliminary
Outcome Medium-term estimates
R million Outcome
Programme 365 1 417 1 556 1 654 1 991 1 827 1 932 2 013
Planning 58 152 142 124 181 175 199 197
Design 117 78 93 58 54 69 74 78
Construction 1 355 1 290 1 262 1 163 1 461 1 468 1 113 1 001
Maintenance 1 217 1 582 1 734 1 835 1 664 2 020 2 123 2 229
Immovable Asset
5 534 4 378 4 931 5 605 6 612 6 179 6 438 6 687
Management
Facility Operations 685 879 1 025 1 156 1 034 1 154 1 203 1 273
Total 9 330 9 777 10 743 11 595 12 997 12 891 13 082 13 478
Percentage growth 2015/16– 2019/20– 2020/21–
(average annual) 2019/20 2020/21 2022/23
Programme 52,8% -8,3% 0,4%
Planning 33,1% -3,4% 2,8%
Design -17,7% 28,9% 13,4%
Construction 1,9% 0,5% -11,8%
Maintenance 8,1% 21,4% 10,2%
Immovable Asset Management 4,6% -6,5% 0,4%
Facility Operations 10,8% 11,6% 7,2%
Total 8,6% -0,8% 1,2%
Source: National Treasury provincial database

Planning

The budget for the planning subprogramme grew by 33.1 per cent between The budget for the
2015/16 and 2019/20. The main purpose of the increase was to assist planning subprogramme
provincial public works departments to comply with the GIAMA, to assist is expected to reach R197
client departments with the development of user asset management plans million in 2022/23.
(U-AMPs) and to develop and monitor norms and standards in line with
GIAMA requirements. Over the 2020 MTEF, the budget is expected to grow
slightly, at an average annual rate of 2.8 per cent.

Design

Table 8.4 indicates that, between 2015/16 and 2019/20, the budget for
infrastructure projects at the design stage declined at an average annual
rate of 17.7 per cent. The decline was due to reprioritisation to cater for
planned maintenance of buildings and settlement of property rates and
taxes. The budget for projects at the design stage increases by 28.9 per cent
between 2019/20 and 2020/21. The largest increases are in the Free State,
Mpumalanga and North West.

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Construction

Over the 2020 MTEF, the budget for the construction sub-programme,
which includes upgrading and refurbishing of immovable assets, is expected
to decrease by 11.8 per cent. This decline is due to the need in 2019/20 to
allocate R141 million for the demolition of the Bank of Lisbon building in
Gauteng, severely damaged by fire in September 2018, and a decrease in
the allocation for the Mpumalanga Parliamentary Village from R215 million
in 2019/20 to R90 million in 2020/21.

Maintenance

Figure 8.1 shows that the maintenance subprogramme has the public works
To address the
infrastructure programme’s second largest budget, accounting for
maintenance backlog, the
provincial public works approximately 13 per cent of the total. The maintenance allocation caters
sector maintenance for routine and scheduled maintenance, alterations and condition
budget is expected to assessments for provincial buildings. Table 8.4 shows that, from 2015/16 to
increase by 10.2 per cent 2019/20, the maintenance budget grew by R447 million, an average annual
over the 2020 MTEF.
rate of 8.1 per cent. Over the 2020 MTEF, this budget is expected to increase
by R564 million, an average annual growth rate of 10.2 per cent; this is
above the expected rate of inflation. The increase is largely informed by
reprioritisation to cater for maintenance of and repairs to buildings to
address the maintenance backlog.

Figure 8.1 Proportion of public works infrastructure budget by subprogramme, 2019/20

Source: National Treasury provincial database

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Immovable asset management

Immovable asset management is the largest subprogramme in the public

works infrastructure programme and, as Figure 8.1 indicates, accounts for
62 per cent of the budget. The purpose for the programme is in line with the
sector’s core focus which is to:
 Manage provincial property portfolios
 Provide accommodation for all provincial departments and other
institutions
 Acquire and dispose of properties
 Manage leasing-in and leasing-out
 Monitor and evaluate the utilisation of provincial government
facilities
 Monitor property rates payments.

As Table 8.4 shows, between 2015/16 and 2019/20 expenditure on

Between 2015/16 and
immovable asset management increased by R1.1 billion or an average
2019/20, the increase in
annual rate of growth of 4.6 per cent. The increase in expenditure is
immovable asset
attributed to an additional allocation for rates and taxes and departments’ expenditure is attributed
constantly increasing demand for office space. Between 2019/20 and to an additional allocation
2020/21, the budget for this subprogramme declines by 6.5 per cent mainly for rates and taxes.
due to a once-off allocation in 2019/20 during the adjustments for municipal
rates and taxes. The 2020/21 allocation does not cater for the pressure to
settle property rates and taxes; over the MTEF, the budget is only expected
to increase at an average annual rate of 0.4 per cent, or by R76 million.
Payment of rates and taxes thus remains a challenge.

The subprogramme’s allocation for providing accommodation for all

provincial department and other government institutions includes the cost
of monthly rentals for office accommodation leased from private owners.
During 2017/18, the Government Technical Advisory Centre (GTAC) carried
out an expenditure review of 645 leases of commercial office
accommodation in provinces; 473 were current leases and 172 expired. The
review excluded expenditure on rental of agricultural land and on facilities
such as schools, hospitals, clinic and police stations.

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Table 8.5: Total office rental expenditure per month by province, including above market
rentals as at July 2016
Total rental Percentage
Number of Total rental expenditure per share of
leases expenditure per month above expenditure
Province analysed Extent m2 month (Rands) market (Rands) above market
Eastern Cape 80 146 052 18 904 566 4 788 780 25%
Free State 56 118 764 18 191 828 8 419 841 46%
Gauteng 45 351 372 41 280 818 9 271 914 22%
KwaZulu-Natal 149 222 014 28 186 758 6 305 610 22%
Limpopo 59 114 890 20 780 150 8 748 207 42%
Mpumalanga 49 49 108 10 960 285 5 114 678 47%
Northern Cape 50 71 976 6 733 828 1 016 002 15%
North West 52 57 613 6 666 296 1 597 651 24%
Western Cape 105 93 452 11 573 547 2 769 571 24%
Total 645 1 225 241 163 278 076 48 032 254 29%
Source: National Treasury: GTAC

Table 8.5 summarises the findings of the review and shows the number of
leases analysed, monthly rental expenditure and monthly rental
expenditure above the market (including current and expired leases) per
province. Based on the data analysed, as at July 2017 provincial
governments were leasing 1.2 million square metres of office
accommodation at an average cost of R120/m2. Total monthly rental
expenditure was R163.3 million or approximately R1.96 billion per year. R48
million was expenditure above the market, of which R8.1 million per month
was for expired leases (R97.2 million per year). The review thus concluded
that reverting expired leases to market rates could save R97.2 million
annually.

Facility operations

The facility operations sub-programme manages operations of buildings.

Table 8.4 shows that, between 2015/16 and 2019/20, the budget increased
by R349 million, an average annual increase of 10.8 per cent. Between
2019/20 and 2020/21, it is expected to increase by 11.6 per cent and, over
the 2020 MTEF, by an annual average of 7.2 per cent.

Expanded Public Works Programme (EPWP)

Expenditure per province

The purpose of this programme is to provide poverty and income relief by

The EPWP budget creating temporary work opportunities for unemployed people through
in some provinces
socially beneficial activities. The public works sector is responsible for
is expected to
implementing, monitoring and reporting on the EPWP for the DPWI and
decline.
provinces. The budget for the programme consists of a conditional grant

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from the DPWI and an equitable share allocated to the provinces by the
National Treasury. To maximise job creation opportunities, provinces are
encouraged to supplement the grant from the equitable share.

Table 8.6 shows that, from 2015/16 to 2019/20, EPWP expenditure

increased at an annual average rate of 3.4 per cent. Between 2019/20 and
2020/21, there is an overall decline of 7 per cent with marked decreases in
the Free State and North West but some significant increases in KwaZulu-
Natal, Limpopo, Mpumalanga and Gauteng. Over the 2020 MTEF, the EPWP
budget is expected to grow at an annual average rate of 0.1 per cent, below
the anticipated rate of inflation. There will be above-inflation increases in
KwaZulu-Natal (16.4 per cent), Mpumalanga (11 per cent), Limpopo (6 per
cent) and Gauteng (5.4 per cent); the budgets of the other provinces are
expected to increase at rates below inflation or to decline.

Table 8.6 Expenditure on the Expanded Public Works Programme by

province, 2015/16 - 2022/23
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Revised
Outcome Medium-term estimates
R million estimate
Eastern Cape 620 644 796 741 776 787 723 755
Free State 186 162 180 159 172 151 146 149
Gauteng 296 317 286 285 267 305 298 313
KwaZulu-Natal 30 32 34 53 30 42 44 47
Limpopo 38 40 51 48 58 69 66 69
Mpumalanga 71 76 73 75 66 87 86 90
Northern Cape 92 107 103 120 124 130 122 122
North West 163 134 84 128 213 122 198 158
Western Cape 47 56 53 56 57 58 62 64
Total 1 543 1 569 1 660 1 665 1 763 1 750 1 743 1 766
Percentage growth 2015/16– 2019/20– 2019/20–
(average annual) 2019/20 2020/21 2022/23
Eastern Cape 5,8% 1,4% -0,9%
Free State -1,9% -12,3% -4,6%
Gauteng -2,5% 13,9% 5,4%
KwaZulu-Natal 0,0% 40,6% 16,4%
Limpopo 10,9% 18,7% 6,0%
Mpumalanga -2,0% 32,5% 11,0%
Northern Cape 7,6% 5,4% -0,4%
North West 7,0% -42,7% -9,6%
Western Cape 5,1% 2,4% 4,1%
Total 3,4% -0,7% 0,1%
Source: National Treasury provincial database

Community development subprogramme

This subprogramme is responsible for managing the implementation of The budget for the
programmes that empower impoverished communities. The objective is to community development
ensure that, by supporting individual beneficiaries and enterprises, the programme is expected
construction sector is a catalyst for skills development, job creation and the to decrease over the
2020 MTEF.
development of sustainable communities. Government encourages
departments to create jobs and support communities through the incentive-
based EPWP grant. In 2019/20, the community development
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subprogramme accounted for 72 per cent of the EPWP budget. Between

2015/16 and 2019/20, this subprogramme increased at an average annual
rate of 4.6 per cent and is expected to decline at an average growth of 3.4
per cent over the medium term as indicated in table 8.7.

Table 8.7 Provincial expenditure on the Expanded Public Works Programme by

subprogramme, 2015/16 - 2022/23
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Revised
Outcome Medium-term estimates
R million estimate
Programme Support 224 238 100 125 197 265 275 289
Community Based/EPWP
Community Development 1 059 1 091 1 320 1 258 1 266 1 175 1 143 1 139
Innovation and Empowerment 182 165 160 196 228 220 229 238
Co-ordination and
Compliance Monitoring 77 74 80 85 72 91 96 99

Total 1 543 1 569 1 660 1 665 1 763 1 750 1 743 1 766

Percentage growth 2015/16– 2019/20– 2019/20–
(average annual) 2019/20 2020/21 2022/23
Programme Support -3,2% 34,7% 13,7%
Community Development 4,6% -7,2% -3,4%
Innovation and Empowerment 5,8% -3,6% 1,5%
Co-ordination and
-1,7% 26,1% 11,3%
Compliance Monitoring
Total 3,4% -0,7% 0,1%
Source: National Treasury provincial database

Service delivery achievements

Provincial public works infrastructure

One of key purposes of the public works infrastructure programme is to

ensure that construction and maintenance of social facilities projects such
as schools, hospitals and clinics are completed on time and within budget.
Table 8.8 gives information about provincial performance in 2019/20. It
shows that provincial public works departments completed 222 of 462
targeted construction projects on time and 328 of 467 within budget. All
provinces thus underperformed in terms of these two indicators.

During the year, against a target of 396 the sector completed 280
maintenance projects on time and 298 within budget. Due to projects
carried over from the previous financial year and completed in 2019/20, the
KwaZulu-Natal department of public works recorded more completed
maintenance projects than the target for the year.

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Table 8.8: Public works infrastructure projects, 2019/20 (pre-audited)

Construction Maintenance
Number of projects Number of projects Number of projects Number of projects
completed within the completed within completed within the completed within
contract period budget contract period budget
Province Target Actual Target Actual Target Actual Target Actual
Eastern Cape 7 2 7 3 6 3 6 3
Free State 26 18 26 18 28 7 28 7
Gauteng 33 15 33 20 70 70 69 69
KwaZulu-Natal 14 2 14 12 20 23 20 28
Limpopo 8 7 13 23 47 27 47 30
Mpumalanga 254 152 254 202 16 18 16 16
Northern Cape 24 12 24 18 30 13 30 17
North West 54 6 54 8 23 7 23 11
Western Cape 42 8 42 24 156 112 156 117
Total 462 222 467 328 396 280 395 298
Source: Department of Public Works and Infrastructure (quarterly performance reporting
System)

Expanded Public Works Programme

The target of Phase 1 of the EPWP programme, from 2004 to 2009, was to
create one million work opportunities. The figure 8.2 shows that the target
was exceeded. The target for Phase 2, implemented from 2010 to 2014, had
a target of 4.5 million works opportunities; only 4 million were achieved.

Figure 8.2: EPWP work opportunities created against target, Phase1 to

Phase 3, 2004 - 2019

Source: Department of Public Works and Infrastructure

Phase 3 reported 4.5 million work opportunities against a target of 6 million,

or 75 percent of the target. In terms of FTEs, Phase 3 created 1.7 million
against a target of 2.5 million, or 69 per cent of the target. The
underperformance on FTEs can be attributed to the short duration of the
work opportunities reported. Based on the number of FTE jobs created,
provincial departments may become eligible for the EPWP integrated grant
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and the social sector EPWP incentive grant which incentivises provinces to
create jobs.

Figure 8.3: EPWP Phase 3 work opportunities created per sector against target,
2015 – 2019

Source: National Department of Public Works and Infrastructure

The work opportunities created through the EPWP were delivered by the
following sectors:
 Environmental
 Infrastructure
 Social
 Non-profit organisations
 Community works programme.
Figure 8.3 shows that, between 2015 and 2019, 71 per cent of the total
planned EPWP work opportunities were created. At 109 per cent, non-profit
organisations created more jobs than targeted; environment created 84 per
cent of its target and social 83 per cent. The lowest performing sectors were
infrastructure and the community work programme, at 60 per cent and 63
per cent respectively.

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Figure 8.4: Work opportunities created against target per province, 2015 - 2019

Source: Department of Public Works and Infrastructure, 2018/19

The national sphere contributed 1 774 301 work opportunities, the

provincial sphere 1 651 979 and the municipal sphere 963 236. Figure 8.4
shows the performance during Phase 3 across the provinces. KwaZulu-Natal
created the most work opportunities at 497 154, followed by the Eastern
Cape at 349 908.

Medium-term outlook

The provincial public works departments plan to spend approximately R44.7 The provincial public
billion over the 2020 MTEF, of which R39.5 billion will be spent on public works sector plans to
works infrastructure and R5.2 billion on the EPWP. This investment is spend about R39.5 billion
expected to contribute to inclusive growth by providing public on public works
infrastructure, addressing the backlog on building maintenance and creating infrastructure over the
2020 MTEF.
jobs. By building the capacity and skills needed for effective implementation
of the GIAMA and the IDMS, the provincial public works sector will improve
human resource capacity. The sector will also strive to ensure that critical
posts are filled.

The provincial public works infrastructure programme has a strong focus on

maintaining government buildings as well as continuing with
implementation of GIAMA-compliant projects, including condition
assessments and ensuring compliance with occupational health and safety
standards. Approximately R6.4 billion will be made available for these
purposes over the 2020 MTEF, an investment that is expected to improve
the condition of buildings and reduce maintenance backlogs.

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The provincial public works The provincial public works sector will continue to provide office
sector plans to spend about accommodation for all provincial departments; it will also cater for property
R19.3 over the medium rates. About R19.3 billion will be made available over the 2020 MTEF.
term on providing office
space for provincial
The sector will continue to ensure that the EPWP generates work
departments and settling
property rates and taxes.
opportunities and FTEs towards creating sustainable jobs. Approximately
R5.2 billion will be made available over the 2020 MTEF to ensure
implementation of the EPWP in the provinces.

The DPWI will continue to focus on:

 Creating jobs
 Building a capable and developmental state by strengthening its
governance, risk and compliance functions
 Fighting corruption by strengthening its oversight of the public
works sector
 Strengthening its research and policy development capacity.

These aims support the realisation of Outcome 4 (decent employment

through inclusive growth), Outcome 6 (an efficient, competitive and
responsive economic infrastructure network) and Outcome 12 (an efficient,
effective and development-orientated public service) of the 2019-2024
MTSF.

The DPWI has established an intergovernmental coordination branch to

promote and facilitate collaboration and cooperative decision-making
within the public works sector. The branch aims to ensure that policies and
priorities across all three spheres of government encourage service delivery
that effectively meets the needs of the citizenry. The branch will oversee the
development of appropriate tools for guiding integrated development
planning and reporting to enable better governmental coordination. Over
the medium term, the department intends to sign 60 joint service delivery
agreements with provinces and municipalities to foster better coordination
for more effective service delivery. It will also continue to provide support
and guidance to the public works sector on planning and performance
management and will establish monitoring mechanisms to address negative
audit outcomes and improve performance.

The national department is playing

The national department is playing a leading role in the transformation of
a leading role in the transformation the built environment in consultation with its entities, built environment
of the built environment in professional councils, charter councils and other stakeholders. Over the
consultation with stakeholders. medium term, the DPWI will continue its review of the Construction Industry
Development Board Act and the founding Acts for the six built environment
professional councils. The development of a property management
empowerment policy will serve as the overarching framework for the
department’s empowerment initiatives and programmes to promote
transformation of the property industry. The department will also review
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relevant policies, such as the 1997 and 1999 White Papers on Public Works,
and will consult with the public works community in working towards the
proposed Public Works Act which will focus on the concurrent nature of the
public works function and seek agreement on the functions to be carried out
by the national and provincial spheres of government, including providing
accommodation for national and provincial departments. Once the Act is
promulgated, the department will be empowered to perform oversight and
performance management functions in relation to the activities and
programmes of the provincial public works departments.

Conclusion
Increased investment over the years has contributed to improved
government infrastructure delivery to the public and to the creation of
EPWP jobs. However, lack of capacity continues to hamper efficient
implementation of the GIAMA and operationalisation of the IDMS.
Provincial public works departments need to improve the efficiency of their
spending, prioritise maintenance projects and ensure compliance with the
Occupational Health and Safety Act (1993). They also need to address
property rates arrears and renegotiate expired leases to realise savings.

Over the medium term, expenditure will grow at below-inflation rates. To

fund maintenance, immovable asset management, property rate payments
and filling of critical posts, the sector has reprioritised across programmes
and economic classifications.

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