Transport and Public Works 2015 Budget Vote Speech
- Madam Speaker
- Standing Committee Chair
- Honourable Members
- Special Guests including my wife, Cheryl
- Senior Officials
It is my privilege to speak to the 2015/16 budget for the Department of Transport and Public Works (DTPW). In keeping with the nature of the challenging economic environment which has persisted stubbornly for some time internationally and nationally and with the commitment of the Western Cape Government to responsible and sustainable management of the resources at its disposal, this budget at R6.76 billion is tight. While it is scheduled to rise slightly in 2016/17 to R7.10 billion it drops in the outer period of the MTEF to R6.85 billion – very close to the budget to which I am speaking this afternoon.
Speaker, this department is the custodian of huge immovable assets consisting of over 6 000 properties and buildings. Managing them is challenging and they are sometimes vulnerable. It therefore gives me great pleasure to welcome as special guests here today two of the wonderfully brave, dedicated fire-fighters who recently fought the extensive fires in this province. As a result of their efforts damage to provincial property was remarkably limited – Chapman’s Peak and minor damage on the Porter Estate. Our thanks to Station Commander Germaine Carelse and Senior Fire Fighter Charles Royine. We are honoured by your presence here today and ask you to convey to all your colleagues our gratitude.
Our other special guest is a Deputy Director in the DTPW – Danielle Manuel. In the latter half of last year she attended the Mandela Washington Fellowship for Young African Leaders as a young African leader under the age of 35 selected to develop their business and leadership skills at one of 20 leading American universities. We were delighted to welcome her back to the department where she adds to the well of expertise and we are equally delighted that she is with us today.
Madam Speaker, as published, the budget for the Department of Transport and Public Works does not include the considerable amounts which this department spends on behalf of education and health. I will refer to these amounts in more detail later in this speech. However, even a superficial reading of the already tabled Estimates of Provincial Revenue and Expenditure for 2015 (the so-called Blue Book) will show that these amounts reflect a similar decrease in the outer year.
Madame Speaker, it goes without saying that a budget of this nature demands careful planning and management if we are to achieve our objectives and to provide the infrastructure needed for crucial services, including those aspects of public transport within our jurisdiction.
This budget is not a framework within which to spend rashly or to take ill-informed decisions. But, Madame Speaker, (and this is a big BUT) this does not mean that there is no space for innovation and the harnessing of new technologies in the work done by this department. Public Works (and this term usually includes transport) has been described internationally as a “multi-dimensional concept in politics and economics” as it touches on so many aspects of our society – education, health, government, transport, communications and recreation.
In fact, my 10-month period in this new portfolio has been as diverse as it has been instructive. Because this department interacts with and services these many aspects of society it would be failing in its responsibilities if it did not respond to the countless developments and new ideas in these fields, applying this new awareness and the new agenda wherever appropriate.
As knowledge of environmental sustainability, the urban ecology, green building technology and alternative energy resources increases, the Department of Transport and Public Works has to ensure the responsible incorporation of these developments in its day to day activities or be accused of creating infrastructure for a society which does not need it any more – a society which has moved on, so to speak.
So Madame Speaker, I am pleased to confirm that we will certainly innovate in a significant number of areas, some with macro impact and some at a micro level, including:
- With regard to financing, the implementation of our first formal PPP for the construction of new offices for the Western Cape Government - largely the WCED – in the CBD will release us from significant and costly lease arrangements.
- Extending the reach of Speed Over Distance (ASOD) technology to improve the enforcement of speed limits in our on-going efforts to make roads safer for those who use them in the face of unacceptable acts of irresponsibility by some drivers. The high costs of road crashes to the economy of the Western Cape are well known at R21 billion in the year for which the latest survey was conducted.
- The development – in conjunction with the private sector – of new Live Work Play residential models aimed at breaking down the persistent spatial patterns which are one of the more iniquitous legacies of Apartheid. The first of these will be located on the old Conradie Hospital site and the initial creative activity for this took place yesterday in Cape Town.
- The commissioning of a web-enabled permit application process for abnormal loads aimed at reducing the time for the issuing of these permits while ensuring that all safety requirements are met. These permits are becoming increasingly important because of the types of specialised economic activity developing in the Western Cape e.g. the construction of large luxury ocean-going yachts for the international market.
Madam Speaker, I have already drawn a distinction between responsible innovation and irresponsible decision-making. In the built environment this is a crucial distinction because assets wrongly utilised rapidly lose their value to the government as much as the assets belonging to individual people lose their value if they are not carefully used. Equally, an asset once disposed of is no longer an asset – private or government owned.
One of the important areas in which responsible innovation has to be undertaken by my department is in the area of its custodial duties concerning the property assets of the Western Cape. International experience has shown that the success or failure of the asset-management approach to public infrastructure is in the detail. There are success stories of the use of government assets to unlock sufficient value to finance the building of new facilities or the maintenance of others or the meeting of a government’s social objectives. However, there are also negative instances in which assets or future infrastructure revenues have been sold off without creating sustainable value.
Two examples involving metered parking will serve as illustrations. I have chosen metered parking as this is not something over which my department has direct jurisdiction and is clearly not a physical asset. However, the principles apply equally. In Indianapolis the city entered into a partnership with a large international company as well as with local businesses aimed at modernising the system and providing better service to the residents. The city will net in excess of $600 million over the lifetime of the contract and every 10 years has the right to exit the arrangement. Appropriate technological updates are a requirement in the contract. All in all an excellent deal for Indianapolis! By contrast in Chicago, the city entered a lease agreement for metered parking with a large international finance house. The city received a one – time payment of $1.15 billion – crucial to plug holes in its budget at the time. The finance house has improved the system to a level where it now generates triple what the city was getting on an annual basis. Unfortunately for Chicago the contract runs for 75 years. Not such a good deal!
And so the threefold challenge is:
- How a department unlocks the value of infrastructure by improving efficiency and leveraging income streams.
- At the same time meeting the social outcomes of the government.
- Providing services for the citizens.
Madam Speaker, I made the point earlier that the work of the Department of Transport and Public Works underpins many of the service delivery aspects of the Western Cape Government. It therefore comes as no surprise that this department has a significant role to play in all five of the Provincial Strategic Goals announced by the Premier and that the budget to which I am speaking today reflects a pattern of expenditure which supports the importance of these goals.
To give effect to these 5 Provincial Strategic Goals my department developed its own vision as follows:
"To lead in the delivery of government infrastructure and related services."
And its mission now reads:
"The Department of Transport and Public Works delivers infrastructure and services to promote socio – economic outcomes and safe, empowered and connected communities."
How then are these Goals as well as a number of critical challenges highlighted in the National Development Plan reflected in the budget of this department?
Madam Speaker, as I referred to earlier in this speech, we are the infrastructure implementing agent for both the Department of Education and the Department of Health and in this way the DTPW makes a significant contribution to both Provincial Strategic Goal 2 (improvement of education outcomes and opportunities for youth development) and Provincial Strategic Goal 3 (increase wellness, safety and tackle social ills).
These departments allocate significant amounts for the building and refurbishing of schools and health facilities – in this budget year R1.427 billion by education and R826.28 million by health. Over the three year MTEF the DTPW is scheduled to spend R3.996 billion on behalf of education and R2.234 billion on behalf of health. A full list of the projects scheduled to be undertaken or completed appears in the budget votes of these two departments and the strategic planning to locate facilities in particular areas remains theirs. The DTPW is very conscious of the need to deliver these projects on time and in budget and constantly assesses its levels of service in conjunction with these two important clients while maintaining dedicated infrastructure delivery structures for both the education and health facilities it provides. In the financial year under discussion here today my department has allocated R47 million for education and R53 million for health respectively for these delivery structures.
In addition to these contributions to the infrastructural requirements of Provincial Strategic Goal (PSG) 2 and 3, my department has made provision for a range of services and opportunities which impact on the overall goal of improving education outcomes and opportunities for youth development. These include the Masakh’Sizwe bursary programme currently with 246 bursary holders including 92 new ones for 2015, an additional professional development and mentoring programme and skills development as part of the National Youth Service. The budget allocation for these three programmes together is close to R30 million. In addition, the department provides resources for road safety education in schools and dedicated learner and driver licence training.
Madame Speaker, I cannot stress too much the importance of the education component of road safety if we are to succeed in reducing the senseless carnage on our roads. The events of last weekend – including 10 fatalities - are still fresh in our minds.
Madame Speaker, I now turn to Provincial Strategic Goal 1 – the creation of opportunities for growth and jobs.
Obviously the built environment lends itself to a range of exciting opportunities, both in the planning and construction of the infrastructure projects themselves and in the economic development which is underpinned by these projects. This is also, for obvious reason, the Strategic Goal within which Project Khulisa will play a major role as it is aimed at identifying economic sectors with great growth and job creation potential and accelerating their development. All in all this budget in its various programmes provides in excess of R5 billion for projects and services which support such growth and jobs. This includes in this financial year over 13 000 work opportunities on infrastructural and maintenance projects and more than 6 000 such opportunities on roads and public transport networks.
The Expanded Public Works Programme obviously constitutes a significant segment of this. Of great importance to the DTPW and to the broader construction industry we well as the many people seeking skills to be employed and to compete in this area of economic activity are the Contractor Development Programme and the Built Environment Artisan Development Programme. Yet another contribution by the DTPW to skills development and to job creation.
Madam Speaker, the synergies between the DTPW and Strategic Goal 4 are obvious as PSG 4 aims to enable a resilient, sustainable, quality and inclusive living environment. This clearly goes beyond physical infrastructure and includes aspects of public transport, the re-using of grey water, the installation of energy efficient lighting and design and construction which embraces green principles. An obvious example of this is the Khayelitsha Shared Services Centre which is the first public building to obtain a 5 Star Green Star rating from the Green Building Council. The challenge is to ensure that new accommodation – either acquired or constructed – is certified to a minimum of a 4 Star Green Star rating.
The custodial role in relation to the immovable assets of the Western Cape Province puts this department at the heart of on-going debate in recent times about the shift from merely providing and looking after these assets to the utilising of these assets for economic growth and job creation. So while property management remains one of its core functions, the DTPW also has to lead the way in developing policy for and making recommendations about the acquisition of new strategically important assets and the disposal of certain others. Very importantly, this will include active participation in the development of certain sites with the private sector and other agencies in line with the social objectives of the Western Cape Government. I have already mentioned the so-called Conradie Hospital site in this regard but include also the various properties approved by the Western Cape Cabinet for inclusion in the regeneration plan.
The best use of the overall immovable asset portfolio is key and May will see the release of the third Property Efficiency Report which will underpin initiatives of this department to improve space utilisation in government buildings, rationalise leased – in accommodation and retrofit systems to support energy reduction and efficient water usage.
Of course, Madam Speaker, our living environment also includes how we are able to move around in that environment. The need for safe, integrated transport systems involves the DTPW in a range of activities, initiatives and obligations. Some have a direct bearing on the structure of that transport environment – such as the building and maintenance of roads – while others relate to regulating aspects of the transport system, the licensing of vehicles and law enforcement. Time does not allow me to cover these complex aspects in any degree of detail. Three brief comments will have to suffice, as follows:
- We have an enviable asset in the road network under provincial control and management. Many visitors to this province comment on it freely and frequently. Of the just over 32 000 km, 20% is surfaced but this 20% carries 95% of all traffic. Our roads are an asset with an approximate value of R68 billion and they are consumed over time. The R2.77 billion which this budget provides for road construction and maintenance is money well invested and is crucial to future economic developments in this province.
- This department has, in close co-operation with the national Department of Transport and the George Municipality, successfully achieved the implementation of the first non-metro Integrated Public Transport Network. The pilot stage is running successfully and the formal launch is scheduled for later this year.
- The taxi industry is an important part of the broad transport network which services residents in this province. Given its history and the competition for passengers it is not without its challenges. Some are of a regulatory nature in a framework which is currently managed between the City of Cape Town and the province – but which is due to migrate to the City once the national Minister of Transport approves this. The DTPW interacts with various organisations involved in the industry and has a close working relationship with the South African National Taxi Council as an over-arching structure.
Madam Speaker, allow me in conclusion to touch briefly on the role of this department in relation to Provincial Strategic Goal 5 which is aimed at good governance and integrated service delivery. The DTPW has a broad responsibility for a number of the regulatory frameworks within the transport environment including the approval of the Integrated Transport Plans of the 30 municipalities in this province. It is the intention of the department to legislate more clearly with regard to public transport given the constitutional concurrency of this function. It will also tighten up on aspects of road traffic administration aimed at reducing undesirable behaviour of road users.
Given the size and number of tenders which the department places and awards, it is crucial that its Supply Chain Management processes are effective, lawful and transparent and meet the applicable BBBEE requirements. The Supply Chain Management environment is complex and, as a leader in this field, the department regularly reviews its processes with the aim of simplifying them without reducing the ever-present accountability standards.
Madam Speaker, in the short time available to me I have tried to convey the complexity of this department and its significant role in supporting the Provincial Strategic Objectives. It is an example of a department making its positive contribution to a government at work – the Western Cape Government is indeed a government at work and working.
Whatever the budgets and whatever the policies, a complex department of this nature requires high quality leadership and management. I want to acknowledge in the officials’ box the presence of our extremely competent HOD and her senior team. Three of the five positions in this senior team were vacant when I assumed office and are now all filled by well-qualified, capable officials. The DTPW will move ahead under their guidance in the service of the residents of the Western Cape.