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Budget Policy Vote, Vote 11: Public Works, TW Nxesi MP, Minister of Public Works

15 May 2018

Zero tolerance of corruption

Improving the way we do business

Utilising state property for economic development

Honourable Chairperson;

Members of Cabinet and MECs;

The Chair and members of the Portfolio Committee;

Honourable Members of Parliament

Let me also recognise in the gallery the presence of:

Chairpersons and CEOs of Public Entities and Professional Councils;

Representatives of the Auditor-General's Office

Members of the Audit Committee;

The Director-General of Public Works, the Acting Head of PMTE and senior management, as well as HoDs of provincial departments;

Representatives of SALGA; of labour; and of women's organisations;

Beneficiaries of DPW's school support, bursary and Young Professionals training programmes

Participants from EPWP programmes

Ladies and gentlemen

The Budget Vote

The Departmental budget allocation over the medium term is R23.7 billion. Approximately 87% (R20.5 billion) of this budget is earmarked for transfers as follows:

R7.1 billion for EPWP Incentives for the creation of job opportunities and income support. Deputy Minister, Honourable Cronin, will speak on this.

R700 million will be transferred to the Departmental entities (CIDB, CBE and Agrement SA).

R12.7 billion is for funding the operations of the PMTE (Property Management Trading Entity) The actual PMTE budget over the MTEF is R63 billion - the balance by way of cost recoveries from User Departments.

The remaining of R3.2 billion from the Main Vote is for the Department's own operations and priorities.

Audit outcomes and performance

The main vote has achieved unqualified audit outcomes for the past 3 years. The PMTE, however, received an adverse opinion in 2016/17. With respect to the value of the PMTE assets, we have substantially assigned the correct values, but for an error in assigning values to the individual buildings in a specific facility resulting in an exceptional material error, hence the adverse opinion by the Auditor-General. This error was agreed with the AG and has been remedied for the forthcoming 2017/18 audit.

If we look at the Department's MPAT scores - government's Management Performance Assessment Tool for benchmarking good management performance and compliance - the scores have increased from 38% at inception in 2012/13 to 66% last year. Our target is for 90 to 100% compliance by the end of this Administration.

Political environment

This Budget Vote debate takes place against the backdrop of new political leadership which is committed to, amongst others:

The Turnaround Plan

In 2012 I announced that the Turnaround Strategy would be based on two pillars:

Zero tolerance of fraud and corruption, and
Improving the way we do business.

PMTE

At the core of improving the way we do business, as Public Works, is ring-fencing and fully operationalizing the PMTE to optimally manage the state's massive property portfolio (over 93,000 buildings on some 29,000 land parcels under the custodianship of National Public Works.)

In 2016/17 fiscal year, the deemed cost of the immovable assets was disclosed as R139 billion.

The plans for the PMTE also speak to the President's SONA commitment to drive new investment in the economy to promote growth and jobs. Examples include:

Professionalising the PMTE is being done also with an eye to other government priorities of empowerment, transformation and job creation:

Zero tolerance of corruption

The second pillar of the turnaround strategy is zero tolerance of fraud and corruption. We will shortly be announcing jointly with the SIU (Special Investigating Unit) some of the successful outcomes of investigations we started some years ago.

Investigations into the cost of maintenance by the Department's Anti-Corruption Unit has uncovered over 16,000 suspicious payments to the value of R2 billion. We are calling for the extension of an existing proclamation to enable the SIU to investigate the matter.

We have previously reported progress on Operation Bring Back for the return of state properties wrongly transferred or occupied:

Some 1,300 such properties were identified. These will be verified and regularised during 2018/19.
As a result of 54 cases reported by whistle-blowers, some 14 eviction orders were obtained, and illegal transfers detected in Gauteng and KZN where a criminal syndicate was stealing vacant state land.

I have also announced that all senior managers and officials who occupy positions of high risk will undergo lifestyle audits - starting with myself.

Let me conclude by thanking the President for entrusting me with this important task, and for much more: for reawakening hope and confidence in the future of our great country.

Thank you.

     
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