Construction Industry Development Board (cidb) Presentation to the

Construction Industry Development Board (cidb) Presentation to the

Construction Industry Development Board (cidb) Presentation to the PPC: Strategic Plan 2011/12 to 2015/16 APP 2011/12 Budget: Strategic Plan/APP 27 May 2011 cidb development through partnership Presentation Outline 1. Strategic Plan 2011/12 2015/16 State of alignment with NT Framework Part A: Strategic overview/priorities Legislative Framework & Mandate Vision and Mission Updated situational Analysis Strategic Outcomes Oriented Goals/Performance information Part B: Strategic Objectives Resource considerations Risk Management

2. Business Plan 2011/12 State of alignment with NT Framework Part A:Strategic overview Part B: Programme and sub-programme plans incl performance information 3. Budget: Strategic Plan (2011/12 -2015/16, incl anchor year APP 2011/12) cidb development through partnership Strategic Plan 2011/12 2015/16 Strategic Plan State of alignment with NT Framework Effort to align after submission in February 2011 Structure has improved towards required format Not yet 100% but close to it Have interacted with Treasury for clarity Interaction with cidb core programmes-a process Factoring in 4th and 5th years still work in progress-timing problem-Feb/March/April normally very tight but also October/November/Dec last year cidb development through partnership A: Strategic Plan Overview:- Legislative Framework & Mandate CIDB Act 38 of 2000mandates the cidb to

provide strategic leadership to industry stakeholders to stimulate sustainable growth, reform and improvement Regulate the construction industry Mandated, among others, to establish: RoC (Contractors) RoP(Projects) Others-RoPSP (BE Consultants), Material Suppliers, Material Manufacturers cidb development through partnership Strategic Plan A:..Implications of Distilled Mandate Dual responsibility of cidb: An enabler/developer -since inception A regulator/enforcer of compliance a focus being prioritised Change of emphasis critical to demonstrate valueadd in the industry, requires specialist human resources and funding- hence now continues to be prioritised Cross-cutting nature of cidb business emphasised cidb development through partnership A: Vision & Mission: Strategic Plan Vision 2012 and Beyond A 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. cidb development through partnership A:Vision & Mission: Strategic Plan Mission To 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. cidb development through partnership Strategic Plan A: Updated Situational Analysis Boom in construction 2004 2007 Slow down on new projects- reducing business confidence in building and construction from end 2008 Global financial crisis in 2008, culminating in economic recession 2009 2010 SA Construction industry resilient due to multiyear, multibillion Rand projects Stadia, Airports, BRT Systems, Roads networks, Gautrain, Transnet MPP

Opportunity to use demonstrated capability, capacity to build much required infrastructure cidb development through partnership Strategic Plan A: Updated Situational Analysis 2010 infrastructure got us excited Completed mainly before the beginning of the Soccer tournament BUT new projects slow down Delay in payments Companies closing shop, esp SMMEs Job losses Loss of capacity Frustration on the transformation agenda cidb development through partnership cidb Construction Industry Indicators (CIIs) < 14 days 60 to 90 14 to 30 90 - 120 30 to 60 120+ 2009 2008 2007

2005 0% 25% 50% 75% 100% cidb development through partnership 2010Q1 2009Q1 2008Q1 2007Q1 2006Q1 2005Q1 2004Q1 2003Q1 2002Q1 2001Q1 Employment (*1000) Strategic Plan A: Updated Situational Analysis

1 200 1 000 800 600 400 200 0 development through partnership cidb A: Updated Situational Analysis Register of Contractors (RoC) > 111 000 registrations Monitoring growth of RoC Specific skills remain a challenge Strategic Plan ESDA pilot kick-started Various initiatives: fast tracking NCDP and facilitating training strong requirement Transformation of the industry a concern and a challenge cidb development through partnership A: Strategic Outcomes Strategic Plan CIP-sample(see hard copy-table gets difficult to format and read on presentation) Background

Performance information CRS-sample (see hard copy-table gets difficult to format and read on presentation) Background Performance information cidb development through partnership A: Strategic Outcomes Strategic Plan CIP-sample(see hard copy-table gets difficult to format and read on presentation) Background Programme Focus-Industry performance improvement A key focus of the Construction Industry Performance Programme for 2011/12 is the further development and assessment of the cidb Best Practice Contractor Recognition Scheme and the cidb Best Practice Project Assessment Scheme through pilot projects, an incremental roll-out of elements of these schemes. Laying the foundation for performance improvement cidb development through partnership A: Strategic Outcomes Strategic Plan CIP-sample(see hard copy-table gets difficult to format and read on presentation) Background/cont Performance Improvement and Contractor Development Performance Improvement and Project Delivery Infrastructure delivery skills

National Infrastructure Maintenance Strategy (NIMS) R&D and Academic Excellence cidb development through partnership A: Strategic Outcomes CIP-sample/ Cont Background/cont Strategic Plan Excellent quality of internal and endorsed publications Surveys with partners Performance-see hard copies cidb development through partnership A: Strategic Outcomes-CIPexample Dissatisfied Neither Satisfied or Dissatisfied Satisfied Strategic Plan Residential Building Non-residential Building Civil Works Mechanical Works Electrical Works Special Works 0% 20% 40% 60% 80% 100% Client Satisfaction; Quality (%)

cidb development through partnership A: CIP-Payment Delays: Contractors < 14 days 14 to 30 60 to 30 to 60 120+ 90 - 2009 2008 2007 0% 25% 50% 75% 100% cidb development through partnership A: CIP- Payment Delays; Contractors < 14 days 30 to 60 90 -

14 to 30 60 to 90 120+ Private sector Public Corporation National Department Provincial Department Metropolitan Council Regional / District Council 0% 25% 50% 75% 100% cidb development through partnership A: CIP- Payment Delays: Clients Agent < 14 14 to 30 60 to 90 - 30 to 120+ 2009 2008 2007

0% 25% 50% 75% 100% cidb development through partnership A: Strategic Outcomes CRS-sample (see hard copy-table gets difficult to format and read on presentation) Strategic Plan Background Register of Contractors (RoC) > 111 000 registrations Software rewrite and EDMS (Electronic document management system)-one of the largest projects undertaken by cidb Efficiency and quality Detect and mitigate fraud and corruption Staff training Focus on i-tender RoP high priority, capacitation Performance-see hard copies later cidb development through partnership A: CRS-Class of Works Per Province Grade 1 Class of works

Strategic Plan Region GB CE ME EP EB SW TOTAL Eastern Cape 8093 2866 176 214 104 1574 13028 Free State 2865 1044 195

94 55 495 4749 Gauteng 13749 4483 821 955 321 4144 24474 Kw aZulu-Natal 14531 7089 673 354 283 3199 26129 Limpopo

5354 2717 297 424 115 950 9857 Mpumalanga 4782 1901 385 365 89 634 8156 North West 3409 971 165 166 43

621 5375 Northern Cape 738 185 62 37 28 117 1167 Western Cape 3558 939 178 144 127 1183 6129 Total 57079 22195

2952 2753 1165 12917 99064 GB: General Building CE: Civil Engineering ME: Mechanical Engineering EP: Electrical Engineering (Infrastructure) EB: Electrical Engineering (Building) SW: Specialist Works Actual number of companies registered = 70, 053 cidb development through partnership A: CRS- Class of Works - Grade 2 to 9 Strategic Plan Class of works Grade GB CE ME EP EB SW TOTAL 2

1965 1477 185 101 125 466 4319 3 573 550 87 63 89 109 1471 4 863 774 128 165 161

136 2227 5 566 643 189 205 157 223 1983 6 552 644 82 68 40 56 1442 7 214 225

37 37 21 27 561 8 78 87 19 13 2 7 206 9 30 46 20 19 5 10 130

Total 4841 4446 747 671 600 1034 12339 GB: General Building CE: Civil Engineering ME: Mechanical Engineering EP: Electrical Engineering (Infrastructure) EB: Electrical Engineering (Building) SW: Specialist Works cidb development through partnership Strategic Plan A: CRS-Actual no.of companies registered- Grade 2 to 9 Grade Total 2 3309 3 1119 4 1834

5 1444 6 1089 7 444 8 170 9 82 Total 9491 cidb development through partnership A: Strategic Outcomes Strategic Plan Increase in registrations

Dec 2004 1500 Dec 2005 7500 Dec 2006 27500 July 2007 42000 Dec 2007 55 000 End March 2008 > 65 000; End March 2009 >80 000; Jan 2010>100 000 cidb development through partnership Strategic Plan B: Resource Considerations cidb is a knowledge-based organisation May need same qualified employees as the industry General shortage of specific skills Competing for same target market use of internal resources vs external experts critical Skills transfer prioritised but will take time-targeting the right employees cidb development through partnership Strategic Plan B: Risk Management Risk Management a priority Resides in the office of the CEO Supported by an outsourced internal audit unit with a future insourcing strategy Risk Committee exercises oversight

Nominated Board members part of and drive RM oversight Strategic and operational risks identified and ranked Process under review cidb development through partnership Annual Performance Plan 2011/12 Annual Performance Plan State of Alignment with new NT Framework Not 100% but close to it A: Strategic Overview: - Maintenance of an efficient registration Service at the CRS (Construction Registers Service) - Efficient, flexible, integrated and suitable software and platform to replace the old-costing over three years and complex exercise to accommodate future needs; - to include EDMS (electronic document management systemwill assist with document management and mitigate the rampant fraud and corruption cidb development through partnership Annual Performance Plan Annual Performance Plan 2011/12 A: Strategic Overview:

- Research and Development (R&D) Agenda as well as Academic Capacity - Centres of Excellence (CoEs) have been appointed: Wits and NMU - Work will continue to deal with critical and identified areas of research to restore the culture of research in the industry - funded by the cidb - SA students to be assisted to pursue postgrad studies and a focus on research - - This in addition to the PG Conference /Doctoral Workshops series Phase 2 of the Registers-Best Practice Schemes - Best Practice Schemes to address quality, H&S and the environment - Piloting of components of Best Practice Schemes at various stages - will continue through 2011/12 cidb development through partnership

Annual Performance Plan 2011/12 A: Strategic Overview: Annual Performance Plan - Public Sector Procurement, Delivery, Capacitation and Enforcement of Compliance - Heightened focus on enforcement of compliance by clients; budget requirements a constraint - Enforcement of compliance requires internal and external capacity - Human Resource Development - Mitigation of Global Warming, Climate Change and Related Environmental Issues - The cidb is playing a critical role with other government departments, incl DPW to fast track environmental issues in construction eg retrofitting programme supported by government - Fraud and Corruption - Increased focus on fraud and corruption cidb development through partnership

Annual Performance Plan Annual Performance Plan 2011/12 A: Strategic Overview: - Alignment of Programmes and units for better efficiency - Based on experience from the last few years of operation - Corporate services already started - Core programmes will take time and consultation with Board - Piloting of the Register of Professional Service Providers - Approval by Board in December 2010 to pilot after many years of consulting and agreement/disagreement - A proposal with timelines -WIP cidb development through partnership Annual Performance Plan Annual Performance Plan 2011/12 A: Strategic Overview: - Alignment with the Governments Strategic Priorities and the Presidential Performance Outcomes: - The cidb has indirect impact - Outcomes 4, 5, 6 and 10-see list - ESDA-skilling of the youth; opportunity to graduate and improve employment opportunity

- NIMS-support to SMMEs/BEE; job creation; - Labour-based construction methods- job creation - 2005 CDs being distributed - New approach being developed with the CSIR cidb development through partnership Annual Performance Plan Annual Performance Plan 2011/12 A: Strategic Overview: - Alignment with the Governments Strategic Priorities and the Presidential Performance Outcomes: - The cidb has indirect impact - Outcomes 4, 5, 6 and 10-see list - ESDA-skilling of the youth; opportunity to graduate and improve employment opportunity - NIMS-support to SMMEs/BEE; job creation; - Labour-based construction methods- job creation - 2005 CDs being distributed - New approach being developed with the CSIR cidb development through partnership Annual Performance Plan Annual Performance Plan 2011/12 B: Programme and sub-programme Information -

CIP - CRS Background and Performance information as for Strategic Plan but based on anchor year 2011/12-see hard copies. Will be presented if required. cidb development through partnership BUDGET cidb 2011/12 2015/16 Budget 2011/12 Budget-SP and APP R'000 2012/13 %age R'000 2013/14 %age R'000 2014/15 %age R'000 2015/16 %age

R'000 %age REVENUE Registers and Other Income Interest Income Transfer payments from DPW Total 41 252 000 38% 44 552 000 39% 47 448 000 2 662 000 2% 2 890 000 3% 3 078 000 65 959 000 60% 66 882 000 59% 71 229 000 109 873 000

114 324 000 39% 51 243 840 39% 55 343 347 40% 3% 59% 3 170 340 75 858 885 2% 58% 3 265 450 80 789 713 2% 58% 121 755 000 130 273 065 139 398 510 EXPENDITURE Personnel Expenditure Administrative Expenditure Capital Expenditure Professional & Specialist Services Total 54 157 740 27 613 344

49% 25% 58 490 359 29 159 691 51% 26% 500 000 0% 500 000 0% 27 601 916 25% 26 173 950 23% 109 873 000 114 324 000 63 169 588 30 792 634 52% 25% 67 879 601 32 794 155 52% 25%

72 949 471 34 925 775 52% 25% 500 000 27 292 778 0% 22% 532 500 29 066 809 0% 22% 567 113 30 956 151 0% 22% 121 755 000 130 273 065 139 398 510 Notes Revenue - 38% of Total Revenue is generated through Contractor registartions. Averages 39% over 5 years - 60% of Total Revenue is from Government. Averages 59% over 5 years Expenditure - Personnel expenditure constitutes 49% of Total expenditure. Averages 51% over 5 years - Admin expenditure constitutes 25% of Total expenditure. Averages 25% over 5 years - Professional Fees constitutes 25% of Total expenditure. Averages 23% over 5 years cidb development through partnership

BUDGET Budget-SP and APP cidb 2011/12 - 2015/16 Budget: Programme Allocation 2011/12 2012/13 2013/14 2014/15 2015/16 R'000 R'000 R'000 R'000 %ag e R'000 Chief Executive Officer 10 375 400 9% 11 101 678 11 878 795 Corporate Services(CS)

29 611 252 27% 26 968 237 28 284 334 Growth and Contractor Development(GCD) 25 000 000 23% 26 143 738 27 973 800 Construction Industry Performance(CIP) 10 862 200 10% 11 622 554 12 436 133 Procurement Delivery Management(PDM) 12 386 400 11% 13 253 448 14 181 189 Construction Registers Services(CRS) 21 637 748

20% 25 234 345 27 000 749 Total 109 873 000 PROGRAMME: EXPENDITURE 114 324 000 121 755 000 917 806 097 12 650 30 726 29 792 227 744 583 13 244 481 33 381 31 728 14 105 373 15 102 967 798 13 473

16 084 660 28 755 130 273 065 925 30 624 139 398 511 cidb development through partnership ..Thank you Thank You Thank You Thank You cidb development through partnership

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