CIDB ANNUAL REPORT 2010/2011 by IWW Lateral Applications

2001- 2011 TEN YEARS STRONG

A N NU AL R EP ORT 2 0 10 / 11

C ONS T RUC TI ON I N DU S T RY DEV EL OP M EN T BO AR D

CONTENTS

List of A b b r e v i a t i o n s 2 Ministe r ’ s F o r e w o r d Chairp e r s o n ’ s S t a t e m e n t 4 CEO’s R e p o r t 6 2010/1 1 P e r f o r m a n c e S u m m a r y 1 5 The C o n s t r u c t i o n R e g i s t e r s S e r v i c e s 43 Pub l i c S e c t o r P r o c u r e m e n t a n d D e v e l o p m e n t M a n a g e m e n t 51 Fac i l i t a t i n g G r o w t h a n d C o n t r a c t o r D e v e l o p m e n t 71 Mo n i t o r i n g I n d u s t r y P e r f o r m a n c e 89 Cor p o r a t e S e r v i c e s 9 9 Accou n t i n g A u t h o r i t y ‘ s R e p o r t 111 Repor t o f t h e A u d i t C o m m i t t e e tbc Statem e n t o f R e s p o n s i b i l i t y a n d G oi n g C o n c e r n 118 Repor t o f t h e A u d i t o r - G e n e r a l tbc Annua l F i n a n c i a l S t a t e m e n t s 120

A N NU AL R EP ORT 2 0 10 / 11

LIST OF ABBREVIATIONS

C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

A G B A C B E C B E R B P C R S CCC C D C D P CE C E T A c id b C I F O Z C I O B C I I C P U T C M S C R S C R S D B S A D P W E C D C E D M S E P I N EPWP E S D A F E T F H U F I D I C G B G B C S A GCC G C D G D P H R

Auditor-General Bid Adjudication Committee Bid Evaluation Committee Bureau for Economic Research Best Practice Contractor Recognition Scheme Construction Contact Centres Contractor Development Contractor Development Programme Civil Engineering Construction Education and Training Authority Construction Industry Development Board Construction Industry Federation of Zimbabwe Chartered Institute of Building Construction Industry Indicators Cape Peninsula University of Techonology Construction Management System Construction Registers Service Contractor Registers Services Development Bank of Southern Africa Department of Public Works Eastern Cape Development Programme Electronic Document Management System European Policy Institutes Network Expanded Public Works Programme Employment Skills Development Agency Further Education and Training Fort Hare University Fédération Internationale Des Ingénieurs-Conseils International Federation of Consulting Engineers) General Building Green Building Council of South Africa General Conditions of Contract Growth and Contractor Development Gross Domestic Product Human Resources

IDC IDIP IDMT IDT IDZ ILO ISO JBCC JV LTA MoU M&E NCDP NCV NEC NEF NSF OHS OHSAS OHSC PCDF PDP PDM PPP RoC RoPSP RPL SABS SADC SAWIC SBSA SCM SEDA

I n d u s t r i a l D e v e l o p m e n t C o r p or a t i o n Infrastructure Delivery Improvement Programme Infrastructure Delivery Management Toolkit Independent Development Trust Industrial Development Zone International Labour Organisation International Organisation for Standardisation J o i n t B u i l d i n g C o m m i t t e e C o nt r a c t Joint Venture Long Term Technical Assistant Memorandum of Understanding Monitoring and Evaluation National Contractor Development Programme National Certificate Vocational New Engineering Contract National Empowerment Fund National Stakeholder Forum Occupational Health and Safety Occupational Health and Safety Advisory Services Occupational Health and Safety Committee P r o v i n c i a l C o n t r a c t o r D e v e l o pm e n t F o r u m Performance Development Plan Procurement and Delivery Management Public Private Partnership Register of Contractors Register of Professional Service Providers Recognition of Prior Learning South African Bureau of Standards Southern African Development Community South African Women in Construction Standard Bank of South Africa Supply Chain Management Small Enterprise Development Agency AN N UA L REP OR T 2 0 10 / 1 1

FOREWORD BY MINISTER

T h e c id b h a s c o n t i n u e d t o b e a p i l l a r o f s u p p o r t t o t h e c o n s t r u c t i o n industry during a period of uncertain global economic performance. The unprecedented demand for infrastructure linked to the 2010 F I F A S o cc e r W o r l d C u p w a s a g o l d e n o p p o r t u n i t y f o r S o u t h A f r i c a . While the country was the overall winner, the effort by all role players s h o u l d be c e l e b r a t e d . W e s h o u l d c e l e b r a t e t h e t e c h n i c a l e x p e r t i s e we have showcased during the period when we were faced with an acute shortage of skills. It would have been difficult to deliver the required infrastructure under the given tight deadlines without a streamlined procurement system for the construction industry. In this regard we should commend the cidb, the host cities, the built environment professions and contractors for a spectacular performance. We were hoping that the positive effects of the demand for infrastructure would lead to many years of growth in our economy. The South African construction industry is now faced with a sustainability challenge based on a world-wide downswing as well as country specific problems. From a number of years when the industry was a beacon of hope for the country’s economic performance over the few years leading to the 2010 FIFA Soccer World Cup, the future of the industry now requires critical analysis.

C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

There is overwhelming evidence that numerous companies have been forced to close down due to the difficult operating environment. Payment delays and poor project implementation have imposed an unpleasant climate for mainly small businesses. It is unacceptable that we fail to rollout approved projects and return millions of Rands to the National Treasury. As a result we work against government’s priorities of creating jobs. We therefore plead with all municipalities, provincial and national departments as well as State Owned Enterprises to pay contractors on time. I know t h a t p u bl i c s e c t o r c l i e n t s h a v e s t a r t e d d o i n g s o m e t h i n g t o a d d r e s s this issue. In the Department of Public Works we have prioritised payment to contractors through the Department’s “Operation re a

Patalaâ&#x20AC;?. W e h o p e t o m a k e a d i f f e r e n c e t h r o u g h c o n t r a c t o r s t h a t w o r k f o r u s . W e s h o u l d w o r k h a rder to identify pro j e c t s t h a t c r e a t e j o b s . The Depar t m e n t i s c u r r e n t l y a n a l y s i n g t h e r e g u l a t i o n a m e n d m e n t s w h i c h w e r e s u b m i t t e d f o r M i n isterial approval f o r p u b l i c c o m m e n t s . T h e s e p r o p o s e d r e g u l a t i o n a m e n d m e n t s a r e a i m e d a t i m p r o v i ng the registration c r i t e r i a t o r e m o v e u n n e c e ss a r y b o t t l e n e c k s i n t h e r e g i s t r a t i o n p r o c e s s a s w e l l a s i m proving efficiency a n d i n t e g r i t y o f t h e R e g i s t e r o f C o n t r a c t o r s . I am plea s e d t h a t t h e c id b h a s a g a i n a c h i e v e d a n u n q u a l i f i e d a u d i t r e p o r t . I n t h i s r e g a r d I wish to congratula t e t h e B o a r d , m a n a g e m e n t a n d s t a f f f o r t h i s a c h i e v e m e n t . M a n a g e m e n t h a s a s s u r e d me that all the are a s t h a t t h e A u d i t o r - G e n e r a l h a s h i g h l i g h t e d a s r e q u i r i n g a t t e n t i o n w i l l b e r e s o l v e d b e f ore the end of the f i n a n c i a l y e a r 2 0 1 1 / 1 2 a n d t h e n e x t e x t e r n a l a u d i t . I take this o p p o r t u n i t y t o t h a n k t h e t h i r d B o a r d w h o s e t e r m e n d e d i n D e c e m b e r , f o r p r o v i d i n g t h e r e quired guidance a n d l e a d e r s h i p n o t o n l y t o t h e c i d b b u t t h e c o n s t r u c t i o n i n d u s t r y a t l a r g e . I thank the C E O f o r h o l d i n g t h e f o r t w h i l e t h e r e w a s n o B o a r d , e f f e c t i v e l y a c t i n g a s A c c o u n t i n g A uthority until the n e w B o a r d w a s a p p o i n t e d . I n t h e s a m e s p i r i t I w e l c o m e t h e n e w B o a r d w i t h t h e h o p e t hat the members w i l l h a r n e s s t h e i r e x p e r t i s e f o r t h e g o o d o f t h e i n d u s t r y , p r o v i d i n g t h e r e q u i r e d l e a d e r s h ip and guiding th e c i d b t o d e l i v e r o n i t s m a n d a t e .

GL Mahlan g u - N k a b i n d e , M P Minister of P u b l i c W o r k s Date: XX A u g u s t 2 0 1 1

AN N UA L REP OR T 2 0 10 / 1 1

CHAIRPERSONâ&#x20AC;&#x2122;S STATEMENT

T h e t e r m o f t h e t h i r d b o a r d o f t h e c id b e n d e d i n t h e m i d d l e o f D e c e m be r 2 0 1 0 . T h e a p p o i n t m e n t p r o c e s s f o r t h e n e w b o a r d w a s f i n a l i s e d i n A p r i l 2 0 1 1 . E f f e c t i v e l y , t h e c i db d i d n o t h a v e a B o a r d in the last quarter of the 2010/11 financial year. During the period D e c e m be r 2 0 1 0 t o 3 1 M a r c h 2 0 1 1 t h e C E O a c t e d a s A c c o u n t i n g Authority, holding the fort until the new Board was appointed. I wish to take this opportunity to thank the outgoing Board Members f o r t h e i r r o l e i n l e a d i n g t h e c id b . I a l s o w i s h t o c o n g r a t u l a t e f e l l o w Board Members for the opportunity to serve the people of this country and the construction industry in particular. Last but not least, I wish to thank the Minister for her confidence in us to lead t h e c id b f o r t h e n e x t t h r e e y e a r s . W e a r e c o m m i t t e d t o p e r f o r m t h e task entrusted upon us by the Minister. W e a r e h a p p y t h a t t h e c idb c o n t i n u e d t o o p e r a t e a n d p r o v i d e i t s services to stakeholders when there was no Board. On behalf of the n e w B o ar d I w i s h t o t h a n k t h e C E O , m a n a g e m e n t a n d s t a f f f o r t h e work they have done over the years and achieving an unqualified audit report during the year under review. A special appreciation to the outgoing CEO, Ronnie Khoza, for the wonderful work that he has performed while in the service of the c id b a n d w e w i s h h i m w e l l i n h i s f u t u r e e n d e a v o u r s .

C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

Bafana Ndendwa Board Chairperson

AN N UA L REP OR T 2 0 10 / 1 1

CEOâ&#x20AC;&#x2122;S REPORT

INDUSTRY OVERVIEW We live in times that require responses to ever changing priorities. The recent global crisis that culminated in the 2009-2010 economic recession, and how it has affected various sectors of the economy, requires our collective wisdom, effort and speedy resolution. Our responses should be able to focus on our unique as well as common challenges as different nations and sectors of the economy. It is therefore important that we are able to identify solutions for micro challenges and extrapolate the solutions we provide to a macro level, taking advantage of common threads between us. It is also important for us to be guided by leaders who are able to live by example and show us sustainable solutions.

C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

The South African construction industry has experienced a positive image, state-of-the-art infrastructure and economic development between 2004 and 2010, leading to the 2010 FIFA Soccer World Cup. As a nation we have passed the litmus test on hosting a s u c c e s s fu l w o r l d c u p o f t h i s m a g n i t u d e . T h e b u i l t e n v i r o n m e n t , a n d the construction industry in particular, should be celebrated for this national achievement. While it is still a long road to where we s h o u l d be i n t a c k l i n g t h e i n f r a s t r u c t u r e b a c k l o g , o u r a c h i e v e m e n t s during the 2010 FIFA Soccer World Cup were no small feat. We have demonstrated capability and capacity to design, fund and construct a diverse suite of modern infrastructure under tight deadlines. Through the lessons learnt in various aspects of project managing the delivery of the 2010 FIFA Soccer World Cupâ&#x201E;˘ infrastructure, we are now able to share our experiences with the world. Our country has an unfortunate combination of first world and third world economies. We still have a huge backlog of critical and b a s i c i n fr a s t r u c t u r e f o r t h e v a s t m a j o r i t y o f o u r p e o p l e . W i t h p r o p e r planning we should be able to design, fund and construct the much needed infrastructure that will improve the quality of life for our citizens, especially the poorest of the poor.

“Celebrating 10 Y e a r s o f S u s t a i n a b l e Development th r o u g h P a r t n e r s h i p ”

There are n u m e r o u s o p p o r t u n i t i e s f o r c o n s t r u c t i o n c o m p a n i e s t o t a k e o n n e w i n f r a s t r u c t u r e p r o j ects in power gen e r a t i o n p l a n t s , p o w e r t r a n s m i s s i o n a n d d i s t r i b u t i o n , w a t e r r e s o u r c e s , w a s t e w a t e r t r e atment and water r e t i c u l a t i o n , n e w a p p r o a c h es t o p o w e r g e n e r a t i o n u s i n g r e n e w a b l e a n d n o n - f o s s i l s o u rces of energy, co n s t r u c t i o n o f r u r a l s c h o o l s a n d c l i n i c s a s p a r t o f r u r a l d e v e l o p m e n t , c o n s t r u c t i o n a n d t a r ring of township ro a d s , m a i n t e n a n c e o f e x i s t i n g i n f r a s t r u c t u r e a n d o t h e r a r e a s w i t h o b v i o u s b a c k l o g s . One of the G o v e r n m e n t ’ s s t r a t e g i c p r i o r i t i e s i s j o b c r e a t i o n . O u r c o u n t r y h a s e x p e r i e n c e d j o b l e s s e c o nomic growth be t w e e n 1 9 9 5 a n d 2 0 0 7 . W h i l e j o b l e s s g r o w t h a s s u c h w a s n o t i n t e n d e d , w e h a d d e v e l oped a strategy th a t w o r k e d i n g r o w i n g t h e e c on o m y . W e s h o u l d n o w b e a b l e t o d e v e l o p a s t r a t e g y t h a t w ill help us to matc h e c o n o m i c g r o w t h w i t h j o b c r e a t i o n . T h e c o n s t r u c t i o n i n d u s t r y , d u e t o i t s n a t u r e , i s o n e of the biggest em p l o y e r s o f u n s k i l l e d a n d s e m i s k i l l e d l a b o u r . F o r m a l e m p l o y m e n t i s n o r m a l l y e a s y t o t r a ck and reported o n w h i l e i n f o r m a l e m p l o y m e n t i s d i f f i c u l t t o c o n f i r m . W e w i l l n e e d t o d e a l w i t h t h e d i s c r epancy in reportin g o n t h e n u m b e r o f i n f o r m a l j o b s . The conce p t o f j o b c r e a t i o n s h o u l d n o t b e u n d e r e s t i m a t e d . W h i l e w e m a y g e t t o o o b s e s s e d w ith the concept o f j o b c r e a t i o n , w e s h o u l d g u a r d a g a i n s t t h e i l l u s i o n o f j o b c r e a t i o n o n e a c h p r o j e c t b u t focus on net job c r e a t i o n f r o m a l l i d e n t i f i e d p r o j e c t s . W e t h e r e f o r e n e e d t o a n a l y s e c o n s t r u c t i o n p rojects carefully a n d i d e n t i f y t h o s e t h a t m a y n ee d q u i c k d e l i v e r y f o r t h e b e n e f i t o f s u p p o r t i n g t h e e c o n o m y in the long-term t h r o u g h l o w e r c o s t s a n d m a n y p o t e n t i a l j o b s a f t e r w a r d s . A n e x a m p l e i s i n t h e r e v a m p i ng and constructio n o f n e w r a i l w a y l i n e s a n d t h e i n t r o d u c t i o n o f e f f i c i e n t r a i l s t o c k . W e m a y w a n t t o u s e l abourbased me t h o d s f o r m a n y y e a r s i n o r d e r t o c r e a t e j o b s b u t t h i s m a y b e c o u n t e r p r o d u c t i v e . T h e r e i s a dire need to pr o v i d e a n e f f i c i e n t r a i l s y s t e m u r g e n t l y i n S o u t h A f r i c a s o t h a t w e c a n t r a n s p o r t g o o d s t hrough such a sys t e m a n d b e n e f i t f r o m l o w e r t r a n s p o r t c o s t s . T h e r e i s n o w t e c h n o l o g y t o d e l i v e r s u c h s ystems quickly, wi t h t h e b e n e f i t o f m o r e j o b s i n t h e m a n u f a c t u r i n g a n d o t h e r s e c t o r s a s e a s y s p i n - o f f s l a ter. So the issue o f j o b c r e a t i o n s h o u l d b e b r o a d e r a n d c o n s i d e r w h e r e w e s h o u l d c r e a t e j o b s i n a s u s t ainable way while i m p r o v i n g p r o d u c t i v i t y a n d s u s t a i n a b i l i t y a t t h e s a m e t i m e .

AN N UA L REP OR T 2 0 10 / 1 1

The recen t e c o n o m i c r e c e s s i o n r e q u i r e s a l i g n m e n t o f G o v e r n m e n t ’ s s t r a t e g i c p r i o r i t i e s s u p p o r ted by innovative , s u s t a i n a b l e r e c o v e r y s t r a t e g i e s . T h e i n d u s t r y h a s l o s t m o r e t h a n 1 5 0 0 0 0 f o r m a l j o b s in the last two ye a r s a n d a n u m b e r o f c o n s t r u c t i o n c o m p a n i e s h a v e c l o s e d s h o p . O u r f o c u s s h o u l d p r ioritise recovery w h i l e c r e a t i n g n e w j o b s a n d c o m p a n i e s . A s w e c r e a t e n e w j o b s a n d s m a l l m e d i u m a n d micro enterprises , w e s h o u l d n o t f o r g e t t h a t t h e e x i s t i n g j o b s a n d S M M E ’ s m u s t a l s o b e m a i n t a i n e d .

Al l the project o p p o r t u n i t i e s a v a i l a b l e i n t h e c o n s t r u c t i o n i n d u s t r y i n S o u t h A f r i c a w i l l n o t m a k e p o s i t i v e impact in the ide n t i f i e d a r e a s i f t h e o b s e r v e d d i s t u r b i n g t r e n d s o f s l o w p r o j e c t i m p l e m e n t a t i o n c o n t i n u e . This trend, togeth e r w i t h p a y m e n t d e l a y s , i s e r o d i n g t h e e x i s t i n g c o m p a n i e s a n d l e a d s t o j o b l o s s e s . A l l construction com p a n i e s a r e a f f e c t e d n e g a t i ve l y b y t h e p a y m e n t d e l a y s b u t t h e e m e r g i n g s e c t o r i s t h e one where the im p a c t i s m o s t s e v e r e . T h e c i d b i s w o r k i n g w i t h v a r i o u s s t a k e h o l d e r s t o i m p r o v e p a y m e n t delays and creat e a w a r e n e s s o n t h e s l o w c o nt r a c t a w a r d o n n e w p r o j e c t s .

TRAINING AND CONTRACTOR DEVELOPMENT It was reported la s t y e a r t h a t t r a i n i n g a n d c o n t r a c t o r d e v e l o p m e n t w e r e n o t p r i o r i t i s e d b y t h o s e m a n d a t e d to do so. The ci d b w a s t h e r e f o r e r e q u e s t e d t o p l a y a r o l e , b e y o n d i t s m a n d a t e , t o i m p r o v e p e r f o r m a n c e in this area. The c id b h a s t h e r e f o r e d e c i d e d t o f a c i l i t a t e t r a i n i n g t h r o u g h v a r i o u s i n t e r v e n t i o n s , i n c l u d i n g in jecting funding f o r s t r a t e g i c t r a i n i n g o p p o r t u n i t i e s . C o n t r a c t o r D e v e l o p m e n t h a s b e e n r e c o m m e n d e d for consideration a s a n a t i o n a l p r i o r i t y . I n t h i s r e g a r d a S t e e r i n g C o m m i t t e e h a s b e e n f o r m e d b e t w e e n t h e ci db and the nat i o n a l D e p a r t m e n t o f P u b l i c W o r k s . P r o v i n c e s h a v e b e e n s e l e c t e d f o r p r o g r e s s i v e i n c l u s i o n regarding improv e d r e p o r t i n g o n a l l c o n t r a c t o r d e v e l o p m e n t o p p o r t u n i t i e s , i m p l e m e n t e d t h r o u g h t h e framework for th e N a t i o n a l C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e ( N C D P ) . T h e c o n s u l t a t i v e p r o c e s s w i t h MECs and HoDs a n d s e n i o r m a n a g e m e n t i n t h e i d e n t i f i e d p r o v i n c e s h a s b e e n v e r y p o s i t i v e . The ci db has unde r t a k e n a n i n i t i a t i v e t o e x p a n d t h e t r a i n i n g a n d d e v e l o p m e n t o f c o n t r a c t o r s b y c o n s i d e r i n g overseas opportu n i t i e s , s h a r e i n f o r m a t i o n w i t h r e g i o n a l p a r t n e r s a s w e l l a s i d e n t i f y a n d p a r t n e r w i t h t e r t i a r y in stitutions in Sou t h A f r i c a . T h e S o u t h A f r i c a n / G e r m a n i n i t i a t i v e h a s b e e n p u r s u e d w i t h t h e i n t e n t i o n o f sourcing funding a n d s i g n i n g a n M o U w i t h t h e G e r m a n c o u n t e r p a r t s . T h i s i s t o b e s u p p o r t e d b y o u r respective gover n m e n t s â&#x20AC;&#x2122; b i l a t e r a l a g r e e m e n t s . T h e c i d b h a s u n d e r t a k e n a n u m b e r o f t r i p s i n t h e S A D C region and hoste d v i s i t o r s f r o m S A D C c o u n t r i e s t h a t w a n t e d t o p a r t n e r w i t h t h e c idb o n i s s u e s o f c o m m o n in terest. The ci db h a s a l s o s u p p o r t e d t h e g ra d u a t i o n c e r e m o n i e s i n t h e L i m p o p o a n d W e s t e r n C a p e provinces for the E S K O M t r a i n i n g p r o g r a m m e a n d s p o n s o r e d t r a i n i n g t h r o u g h t h e U n i v e r s i t y o f F o r t H a r e .

REVIEW OF THE REGISTRATION CRITERIA The ci db has fin a l i s e d i t s c o n s u l t a t i v e p r o c e s s t o i m p r o v e t h e r e g i s t r a t i o n c r i t e r i a . T h e d e t a i l s o f t h e proposed amend m e n t s p r e p a r e d f o r t h i s p u r p o s e h a v e b e e n p a c k a g e d f o r e a s y u n d e r s t a n d i n g . A P r a c t i c e Note has been d e v e l o p e d t o c l a r i f y t h e c h a n g e d p o s i t i o n w h e r e c o n t r a c t o r s a r e n o t r e q u i r e d t o s u b m i t the names of reg i s t e r e d p r o f e s s i o n a l s a t t h e p o i n t o f r e g i s t r a t i o n . A s u b m i s s i o n i s d u e t o b e m a d e t o t h e Minister to take t o t h e n e x t s t e p o f p u b l i s h i n g t h e p r o p o s e d a m e n d m e n t s f o r p u b l i c c o m m e n t s .

IMPROVING THE EFFICIENCY AND EFFECTIVENESS OF THE REGISTER OF CONTRACTORS The registration s o f t w a r e r e - w r i t e a n d t h e E l e c t r o n i c D o c u m e n t M a n a g e m e n t S y s t e m ( E D M S ) h a v e b e e n approved and ar e b e i n g i m p l e m e n t e d o v e r a t h r e e y e a r p e r i o d . T h e n e w r e g i s t r a t i o n s o f t w a r e w i l l p r o v i d e a flexible platform t o a c c o m m o d a t e f u t u r e r e g i s t e r s a n d o t h e r i m p r o v e m e n t s .

INDUSTRY PERFORMANCE AND BEST PRACTICE The various com p o n e n t s o f t h e B e s t P r a c t i c e C o n t r a c t o r R e c o g n i t i o n S c h e m e a n d B e s t P r a c t i c e P r o j e c t Assessment Sche m e a r e a t v a r i o u s s t a g e s o f p i l o t i n g . T h e B e s t P r a c t i c e S c h e m e s w i l l u s h e r i n a n e w approach to how q u a l i t y , h e a l t h & s a f e t y a n d t h e e n v i r o n m e n t w i l l b e d e a l t w i t h i n f u t u r e . C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

FRAUD AND CORRUPTION The industr y c o n t i n u e s t o b e p l a g u e d b y v a r i o u s f o r m s o f f r a u d a n d c o r r u p t i o n . T h e c i db h a s a n e s t a blished disciplinar y p r o c e d u r e t o d e a l w i t h c o n t r a c t o r s a n d c l i e n t s w h o f a i l t o c o m p l y w i t h t h e C o d e o f C onduct or particip a t e i n f r a u d u l e n t a c t i v i t i e s a s w e l l a s o f f i c i a l s w h o d o n o t c o m p l y w i t h t h e c i db r e q u i r e ments. The ci db h a s w o r k e d w i t h t h e C o m p e t i t i o n C o m m i s s i o n i n i t s q u e s t t o d e a l w i t h a n t i - c o m p e t i t i v e b e haviour in the indu s t r y . T h e c id b ’ s a l s o a r t i c u l a t e d i t s s t r o n g s t a n c e a g a i n s t f r a u d a n d c o r r u p t i o n i n a n article published o n t h e 6 t h M a r c h 2 0 1 1 , a n d h a s r e p e a t e d t h i s p o s i t i o n a t v a r i o u s s e m i n a r s a n d c o n f e r e nces. In an effor t t o p r o v i d e l e a d e r s h i p o n f i g h t i n g f r a u d a n d c o r r u p t i o n i n t h e c o n s t r u c t i o n i n d u s t r y , t h e cidb has recen t l y h o s t e d t h e C o S T i n i t i a t i v e ( C o n s t r u c t i o n S e c t o r T r a n s p a r e n c y I n i t i a t i v e ) , i n t r o d u c i ng this internation a l i n i t i a t i v e t o t h e S o u t h A f r i c a n s e c t o r w h i l e d e m o n s t r a t i n g t h a t w e c a n n o t f i g h t t h i s s courge on our ow n b u t n e e d t o p a r t n e r w i t h t he i n t e r n a t i o n a l c o m m u n i t y t o s u c c e e d . A f o l l o w u p m e e t i ng was hosted by t h e c i d b o n 3 0 J u n e 2 0 1 1 . T h e p r o c e s s o f e s t a b l i s h i n g t h e M u l t i - s t a k e h o l d e r g r o u p S A ( M SG SA) is now bein g p u r s u e d a t h i g h s p e e d .

RESEARCH AGENDA AND ACADEMIC EXCELLENCE The ci db h a s a p p o i n t e d W I T S U n i v e r s i t y a n d t h e N e l s o n M a n d e l a M e t r o p o l i t a n U n i v e r s i t y a s t h e C e n tres of Excellence t o s u p p o r t t h e r e s e a r c h a g e n d a t h a t h a s b e e n e n v i s a g e d o v e r s o m e t i m e n o w . T h e y o uth will benefit fro m t h i s i n i t i a t i v e a s t h e u l t i m a t e i n t e n t i o n i s t o e x p o s e s t u d e n t s t o r e s e a r c h a n d t r y a n d retain them at te r t i a r y i n s t i t u t i o n s . This initiat i v e i s f u n d e d b y t h e c i d b f r o m i t s l i m i t e d r e s o u r c e s a s w e f e e l i t i s a c r i t i c a l s t e p t owards innovation i n t h e c o n s t r u c t i o n i n d u s t r y . I t i s i n t e n d e d t o b e a p a r t n e r s h i p t h a t s h o u l d s u c c e e d o n t h e basis of the cap a c i t i e s f o r i n n o v a t i o n a n d c o m m i t m e n t o f t h e u n i v e r s i t i e s a p p o i n t e d a n d t h e f u n d i n g p r ovided by the ci d b . This initiati v e w i l l , a s i n d i c a t e d i n p r e v i o u s y e a r s , c o m p l e m e n t t h e c id b ’ s P o s t G r a d u a t e C o n f e r e n c e Series and the ne w l y e s t a b l i s h e d D o c t o r a l W o r k s h o p s .

AUDIT PROCESS The audit p r o c e s s h a s b e e n f i n a l i s e d . I t i s p l e a s i n g t o a n n o u n c e t o o u r s t a k e h o l d e r s t h a t t h e c i d b has achieved a n u n q u a l i f i e d r e p o r t d u r i n g t h e y e a r u n d e r r e v i e w . T h i s h a s h a p p e n e d a s a r e s u l t o f s t r ategic and opera t i o n a l e f f o r t s t o e n s u r e t h a t a l l o u r s y s t e m s a r e o p e r a t i n g o p t i m a l l y a n d t h a t w e h a v e q u alified staff in eac h a r e a . W h i l e t h e F i n a n c e a n d A s s e t M a n a g e m e n t u n i t s r e m a i n s e n s i t i v e a r e a s , t h e r e h a s been consistent i m p r o v e m e n t i n g e n e r a l i n t h e s e a r e a s . M o r e w o r k i s r e q u i r e d t o d e a l w i t h r e c o m m e n dations from both i n t e r n a l a n d e x t e r n a l a u d i t o r s . The Suppl y C h a i n M a n a g e m e n t ( S C M ) a n d p e r f o r m a n c e i n f o r m a t i o n n e e d a s p e c i a l m e n t i o n . SCM, responsible f o r p r o c u r e m e n t i n c o m p l i a n c e w i t h N a t i o n a l T r e a s u r y r e g u l a t i o n s , r e c e i v e d m a j o r f o cus for the last tw o y e a r s . T h e c id b m a n a g e m e n t h a d r e c o g n i s e d t h e S C M a s o n e r e q u i r i n g m a j o r o v e r h a ul and regular “sp r i n g c l e a n i n g ” s i n c e i t w a s e s t a b l i s h e d a s a f u l l y - f l e d g e d u n i t l a t e i n 2 0 0 8 . T h e u n i t h a s been restructure d , t r a i n i n g h a s b e e n p r o v i d e d t o e m p l o y e e s r e s p o n s i b l e i n t h e a r e a a n d p r o f e s s i o n a l s upport has been u s e d t o i d e n t i f y w e a k l i n k s a n d a p p l y c o r r e c t i v e m e a s u r e s h o l i s t i c a l l y . O l d c o n t r a c t s have been term i n a t e d a n d n e w o n e s i m p l e m e n t e d i n a c c o r d a n c e w i t h T r e a s u r y r e g u l a t i o n s . N e w p o l i c i es and procedure s h a v e b e e n i m p l e m e n t e d .

AN N UA L REP OR T 2 0 10 / 1 1

Performan c e i n f o r m a t i o n h a s a l s o r e c e iv e d s p e c i a l a t t e n t i o n . T r a i n i n g h a s b e e n p r o v i d e d o v e r t w o years to designa t e d m a n a g e r s t o u s e t h e S M A R T a p p r o a c h a n d i m p r o v e m e n t s h a v e b e e n n o t e d i n t h e r evised targets an d t h e t a r g e t s f o r t h e y e a r 2 0 1 1 / 1 2 . U n f o r t u n a t e l y , t h e r e w a s n o r e s p o n s e o n t h e a p p r o v a l of the revised tar g e t s f o r t h e y e a r u n d e r r e v i e w . T h e t a r g e t s a u d i t e d w e r e b a s e d o n t h e o r i g i n a l s e t d e v eloped during the t r a i n i n g p h a s e , w h i c h i s h i s t o r i c a l .

These areas have b e e n n o t e d b y t h e A u d i t o r G e n e r a l a s r e q u i r i n g a t t e n t i o n . T h e c i db w i s h e s t o c o n f i r m that the previou s B o a r d w a s a p p r a i s e d o f t h e w o r k t h a t w a s b e i n g d o n e i n t h e s e a r e a s a n d t h a t t h e findings noted we r e n o t d u e t o t h e B o a r d ’ s l a c k o f o v e r s i g h t . A c l e a r , l o n g - t e r m s t r a t e g y o f a n a l y s i n g a n d improving these a r e a s h a s b e e n i m p l e m e n t e d f o r f u t u r e s u s t a i n a b l e r e s u l t s .

IMPROVING COMMUNICATION WITH STAKEHOLDERS The last annual, N a t i o n a l S t a k e h o l d e r F o r u m w a s h e l d i n O c t o b e r 2 0 1 0 . I t w a s f o l l o w e d , a s u s u a l , b y t h e now established P r o v i n c i a l S t a k e h o l d e r W o r k s h o p s . T h e s e P r o v i n c i a l S t a k e h o l d e r W o r k s h o p s a r e i n t e n d e d to reach out to a b r o a d e r a u d i e n c e o f s t a k e h o l d e r s . A g a i n i t p r o v e d t o b e s u c c e s s f u l . O n l y t w o p r o v i n c e s have not conven e d w o r k s h o p s ; c o m m u n i c a t i o n w i t h t h e r e l e v a n t M E C s t o r e s c h e d u l e t h e S t a k e h o l d e r Workshops in the i r p r o v i n c e s i s p r o g r e s s i n g w e l l .

CELEBRATING THE 10TH ANNIVERSARY OF THE cidb The ci db was e s t a b l i s h e d i n N o v e m b e r 2 0 01 w h e n t h e f i r s t C E O w a s a p p o i n t e d . I t i s t h e r e f o r e a n opportunity for th e c idb t o i n t h e c e l e b r a t e i t s f i r s t 1 0 y e a r s a n d h o s t v a r i o u s a w a r e n e s s c a m p a i g n s t o share achieveme n t s o v e r t h e f i r s t t e n y e a r s w i t h s t a k e h o l d e r s . A p r o g r a m m e o f a c t i o n i s b e i n g d r a w n u p to culminate in t h e s e c o n d i n d e p e n d e n t r e v i e w o f t h e c i d b e a r l y i n 2 0 1 2 .

SOCIAL RESPONSIBILITY AND STAFF MOTIVATION The ci db has ag a i n p a r t i c i p a t e d i n v a r i o u s s o c i a l r e s p o n s i b i l i t i e s : W o m e n i n C o n s t r u c t i o n E x c e l l e n c e Awards, to recog n i s e W o m e n i n C o n s t r u c t i o n t h r o u g h t h e p r o v i n c i a l a n d n a t i o n a l p l a t f o r m s ; N a t i o n a l Construction Wee k , a n i n i t i a t i v e o f t h e D e p a r t m e n t o f P u b l i c W o r k s , t h r o u g h t h e “ Y o u t h i n C o n s t r u c t i o n ” programme the c id b w o r k s w i t h v a r i o u s s t a k e h o l d e r s i n c o o r d i n a t i n g a c t i v i t i e s t h a t e x p o s e s e c o n d a r y school learners t o t h e c o n s t r u c t i o n i n d u s t r y .

ESTABLISHMENT OF THE LAST CONSTRUCTION CONTACT CENTRE - NORTH WEST

C ONS T RU CT I ON I ND US T RY D EVEL O PM EN T B OAR D

The permanent c i db p r o v i n c i a l o f f i c e i n N o r t h W e s t ( N W ) i s a l m o s t c o m p l e t e a n d w i l l b e o f f i c i a l l y o p e n e d in due course. Th i s w i l l c o m p l e t e a t o t a l o f n i n e c idb p r o v i n c i a l o f f i c e s e s t a b l i s h e d u n d e r t h e n e g o t i a t e d agreements in w h i c h t h e p r o v i n c i a l d e p a r t m e n t s o f P u b l i c W o r k s p r o v i d e p r e m i s e s w h e r e t h e c idb c a n offer its services.

REGISTER OF PROFESSIONAL SERVICES PROVIDERS (RoPSP) The Board, i n i t s m e e t i n g o n t h e 7 t h D e c e m b e r 2 0 1 0 , a p p r o v e d t h e p i l o t i n g o f t h e R o P S P a s a n a p proach to demons t r a t e h o w t h i s r e g i s t e r c o u l d w o r k . T h e t i m e l i n e s a n d i n i t i a l f r a m e w o r k f o r t h i s r e g i s t e r a r e being developed f o r p r e s e n t a t i o n a n d a p p r o v a l b y t h e B o a r d .

CORPORATE GOVERNANCE AND ACCOUNTING AUTHORITY OVERSIGHT The term o f t h e t h i r d B o a r d e n d e d o n 1 2 D e c e m b e r 2 0 1 0 . T h e d e l a y i n t h e a p p o i n t m e n t o f t h e fourth board resu l t e d i n t h e e n t i t y o p e r a t i n g w i t h o u t a B o a r d f r o m t h e m i d d l e o f D e c e m b e r t h r o u g h t o t he end of March 2 0 1 1 . T h e C E O a c t e d a s t h e A c c o u n t i n g A u t h o r i t y d u r i n g t h i s p e r i o d , u s i n g t h e P F M A S e c tion 49 (2)(b) as a b a s i s f o r t h i s . T h e c id b o b t a i n e d t h e M i n i s t e r ’ s c o n c u r r e n c e o n t h i s p o s i t i o n a n d t h e A uditorGeneral w a s a d v i s e d a c c o r d i n g l y .

SPECIAL ACKNOWLEDGEMENTS On behalf o f c idb M a n a g e m e n t a n d s t a f f , I w i s h t o a c k n o w l e d g e t h e s o l i d s u p p o r t o f t h e o u t g o i n g Board, under the l e a d e r s h i p o f i t s C h a i r p e r s o n , P r o f e s s o r R a y m o n d N k a d o . T h e t e r m o f t h e B o a r d e n d e d on the 12th of De c e m b e r 2 0 1 0 . A new Boa r d , l e d b y M r B a f a n a N d e n d w a a s C h a i r p e r s o n , h a s b e e n a p p o i n t e d . I t a k e t h i s o p p o r t u nity to wish the ne w B o a r d s u c c e s s i n t h e e x e cu t i o n o f i t s r e s p o n s i b i l i t i e s . I also wish t h a n k t h e M i n i s t e r o f P u b l i c W o r k s , M i n i s t e r G w e n M a h l a n g u - N k a b i n d e , h e r D e p u t y , M s H e n drietta Bogopane - Z u l u , t h e i r s t a f f a n d S e n i o r Ma n a g e m e n t a n d s t a f f i n t h e D e p a r t m e n t f o r t h e i r s u p p o r t .

Ronnie Kh o z a Chief Exec u t i v e O f f i c e r

AN N UA L REP OR T 2 0 10 / 1 1

LEADERSHIP TEAM

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

“Its a construc t i v e b u s i n e s s ”

A N NU A L REP OR T 2 0 10 / 1 1

LEADERSHIP TEAM

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

“Raising the b a r i n c o n s t r u c t i o n ”

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CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

2010/11 PERFORMANCE SUMMARY

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PART A: PROGRESS AGAINST BUSINESS PLAN OBJECTIVES PROGRAMME 1: GROWTH AND CONTRACTOR DEVELOPMENT PURPOSE

To promote sustainable growth of the construction industry and the participation of the emerging sector in the industry.

MEASURABLE OBJECTIVE

Promote enterprise development, investment and spending as the basis for a stable, developing industry and the participation of the emerging sector.

KEY POLICY PRIO R I T Y

Growth and Contractor Development.

EXPECTED OUTC O M E

Sustainable growth of the construction industry and development of contractors.

OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Contractor Development Interventions Focused and targeted implementation of the NCDP to all public sector clients responsible for infrastructure (National, Provincial, SOE’s, Municipalities).

Facilitate monitoring and evaluation for National Contractor Development Program (NCDP)

Continuous monitoring and evaluation

Achieved: Developed and circulated a template for reporting on provincial CDP’s. Quarterly reporting provided from provinces via CCC’s and consolidated and provided to N.DPW policy unit/ NCDP Steering Committee. Concluded NCDP client capacitation workshops in all nine provinces with at least 3 clients and 15 officials per province. Finalised a baseline assessment on Provincial Contractor Development Programmes. Facilitated formulation of NCDP guidelines and indicators to assist N.DPW in their M&E of CDP’s. Provided to NCDP Steering Committee.

Publish the Contractor tips and advice brochure

Publish one brochure per quarter

Achieved: Four brochures produced (one per quarter). These are Tips and Advice for: • Health and Safety • Contract Management • Marketing • Tender processes for Public Sector Procurement

REASONS FOR DEVIATION

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

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PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Construction Contact Centres (cidb Provincial Partnered offices) Assessed impact to clients and contractors

Conduct impact assessments of CCC towards clients and contractors.

Impact assessments completed by Sep 2010

Achieved: Customer satisfaction survey system (Phase 1) of impact assessment complete. In addition: Baseline study complete on provincial CDP’s. Field surveys (contractors) completed. Reports were finalised and form part of reputation audit survey. Reputation audit service performance and system reviews (at CCC’s) report concluded in February 2011.

Implemented initiatives for Provincial client contractor development.

Develop and Implement a support programme for provincial client contractor development initiatives.

Implementation a support programme by Jul 2010.

Financing models developed for contractors

Develop financing model based on implementation of various banks MoA’s

Developed by Nov 2010

Achieved: A support programme was developed early in Jul 2010. Implementation commenced in terms of the programme in Jul 2010. Four pilot provincial catalytic strategic projects have been funded or partnered via the cidb and were rolled out in 2010/11. Achieved: A single finance model was developed by end Nov 2010. A workshop was held with financial stakeholders, including banks, in Dec 2010 and the model tabled. Refinements, expansion and phasing have been requested by banks to facilitate ease of MOA implementation and addressing their concerns and challenges. A Mar 2011 Finance modelling options and phases document was finalised. Prior to publishing, further presentations, circulation and participation were solicited. Considering all input a working document to be published in May 2011.

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PROGRAMME 2: CONSTRUCTION INDUSTRY PERFORMANCE PURPOSE

To determine, establish and promote improved performance and best practice of public and private sector clients, contractors and other participants in the construction delivery process.

MEASURABLE OBJECTIVE

Improved performance and best practice for an industry that delivers reliable value to clients, investors and end-users, information on construction industry i n d i c a t o r s t o i n f o r m c i db s t r a t e g y , p o l i c y m a k e r s a n d s t a k e h o l d e r s .

KEY POLICY PRIO R I T Y

Construction industry performance.

EXPECTED OUTC O M E

Improved performance and best practice for the construction industry.

OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Institutional Support On hand support to national and international structures.

Participation in national and international structures: • Green Building Council of South Africa (GBSA)

• UNEP Sustainable Building and Construction Initiative (UNEP-SBCI)

4 GBCSA meetings by Mar 2011.

2 UNEP-SBCI meetings by Mar 2011

Achieved: Participation in: • Board; May 2010 • Exco; Jul 2010 • Board; August 2010 • Exco; Sep 2010 • AGM; Oct 2010 • Board; Nov 2010 • Exco; Dec 2010 (telecom) • Board; Feb 2011 (Strat)

Achieved: • AGM; May 2010 (Paris) • SBCI SB Index; October (Singapore)

STRATEGIC OBJECTIVE: Status Reports & Surveys Monitored industry performance.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Ongoing monitoring of industry performance and dissemination of: • cidb Construction Industry Indicators (CIIs) • cidb Quarterly Monitor

Achieved: • CII Report published

CIIs annually

Quarterly Monitor

Achieved: Quarterly monitors published: • 2010 Q1; Apr 2010 • 2010 Q2; Jun 2010 • 2010 Q3; Oct 2010 • 2010 Q4; Jan 2010

REASONS FOR DEVIATION

OUTPU T

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Status Reports & Surveys (continued)

Obtainable status reports.

• cidb SME Business Conditions Survey

BCI quarterly

Achieved: SME Surveys published: • 2010 Q1; Apr 2010 • 2010 Q2; Jun 2010 • 2010 Q3; Sep 2010 • 2010 Q4; Dec 2010

Development of status reports: • Construction Quality (initiated 2009/10) • Workplace Conditions (draft)

1 printed by Mar 2011

Achieved: • Discussion document published

1 draft produced by Mar 2011

Not Achieved:

• Not achieved due to change in priorities • Replaced with “Construction Skills Report - 1st draft available

STRATEGIC OBJECTIVE: Performance Improvement Implementation of cidb Best Practice Contractor Recognition Scheme.

Further development, piloting and assessment of cidb Best Practice Contractor Recognition Scheme: • construction management systems (CMSs) • contractor performance reports • competence assessment

4 pilots assessed by Mar 2011

3 of 4 Achieved: • Assessment of WC CMS Pilot; QES Report on record • Performance Reports Pilot; PGWC; Internal assessment signed off by PGWC on record • Competence Assessment Focus Group; Internal assessment on record

• 1 Assessment not achieved due to delays in setting up pilot within eThekwini, COEGA and/or ECPW

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OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

REASONS FOR DEVIATION

STRATEGIC OBJECTIVE: Performance Improvement (continued) Implementation of cidb Best Practice Contractor Recognition Scheme.

Finalise development and assessment of cidb Best Practice Project Assessment Scheme: • building skills policy (BSP) • H&S management plans

2 assessments by Mar 2011

Well developed and effective Health & Safety Practice guides.

Development of relevant practice guides: • H&S Practice Guides

1 off by Mar 2011

Not Achieved / WIP

Improved reporting systems on cidb H&S and GHG.

Facilitate the uptake of recommendations from the cidb H&S and GHG Reports which have not yet been implemented.

All cidb responsible recommendations implemented by Dec 2010

Achieved: • H&S; Participation in SACPCMP standards committee • Competence Assessment, CMS, performance Reports; Ongoing interactions with DoL • GHG; cidb participation on SANS 01400, comments on CO2 tax, participation in gov. workshops, support to DME on Energy, etc.

1 of 2 Achieved: • BSP Focus Group; Internal assessment on record

• Assessment of H&S Management Plans not achieved due to capacity constraints within service provider • 1st draft of H&S plans is available • H&S Practice Guides not achieved due to internal capacity constraints • 1st draft developed

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

OUTPU T

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Infrastructure Delivery Skills Improved and sustainable skills within the construction industry

Assess cidb / industry ESDA pilot

Assessment by Mar 2011

Achieved: • ESDA established • 20 learners placed Assessment of ESDA by Advisory Committee

Programme Management of NIMS

Continuous management till Mar 2011

Not Achieved:

Project Manage and development of maintenance management framework, maintenance accounting framework, maintenance planning guidelines.

3 draft guidelines by Dec 2010

See above

STRATEGIC OBJECTIVE: NIMS Improved National Infrastructure Maintenance Strategy

• Delays in transfer of funds from DPW • MoU has been prepared for signing • Should start May 2011

STRATEGIC OBJECTIVE: R&D Academic Excellence Informative and well supported Post Graduate Conference series.

Ongoing support to the cidb Post Graduate Conference series

PG Conference held by Dec 2010

Achieved: Post-doctoral workshop held in Sep 2010

STRATEGIC OBJECTIVE: Knowledge Centre Resourceful Knowledge Centre

Ongoing provision of library management services and development of cidb Knowledge Centre intranet

Mar 2011

Achieved

Informative endorsement to ISIZA

Support cidb endorsed quarterly magazine ISIZA

4 endorsed by Mar 2011

Not Achieved: (Partially Achieved) • 2010 Q1 • 2010 Q2 • 2010 Q3

Publisher changing from quarterly to twice per year

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PROGRAMME 3: PROCUREMENT AND DELIVERY MANAGEMENT

PURPOSE

Promote uniform application of policy throughout all spheres of government and promote uniform and ethical standards, construction procurement reform, and improved procurement and delivery management â&#x20AC;&#x201C; including a code of conduct.

MEASURABLE OBJECTIVE

Enhanced public sector construction procurement and infrastructure delivery management capability of public sector clients enabling efficient and effective delivery of quality infrastructure to the public.

KEY POLICY PRIO R I T Y

Procurement and Delivery Management.

EXPECTED OUTC O M E

Enhanced public sector construction procurement and infrastructure delivery management.

OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Infrastructure Delivery Improvement Improved cidb Toolkit

Upgrading of the cidb Toolkit.

Upgrade by Jul 2010

Achieved: Upgrade completed in July 2010 and peer reviewed by an independent external team. Appointment of publisher completed in Sep 2010. Completion of Management Guide in Sep 2010. Publishing of the Toolkit on the cidb website and in CD Completed and published in Oct 2010. Toolkit Upgrade is complete. Monitoring of Toolkit institutionalisation will be undertaken under the Infrastructure Delivery Improvement Programme and through Toolkit training in the next financial year.

Improved cidb Toolkit

Implementation of Toolkit Training Programmes.

Training programmes to take place by Mar 2011

Achieved: Planning for the development of Training Strategy for the roll-out of the Toolkit has commenced.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Induction program held at National Treasury on 8-10 Dec 2010 for all TAâ&#x20AC;&#x2122;s. Schedule of roadshows to all provinces finalised in Jan 2011. Identifying alternative models for infrastructure delivery.

Identify Aug 2010 and

Achieved: Alternative models for delivery are supported by alternative procurement strategies. These have been completed and incorporated into final version of the Toolkit. Practice Note 23: Construction Procurement Strategy published in Sep 2010 in support of alternative models for delivery.

REASONS FOR DEVIATION

OUTPU T

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Improvement and Maintenance of regulations to support Procurement Reform Improved cidb Regulations.

Development, improvement and maintenance of cidb Regulations

Dec 2010

Achieved: Focus Group Meeting hosted on 18 November for consultation on regulation amendments. Amendments presented and approved at Board meeting held on 7 Dec 2010. Amended regulations have been prepared and submitted to CEOâ&#x20AC;&#x2122;s office for submission to Minister of Public Works.

Reliable and effective communication methods

Administer communication methods to inform and train clients on cidb regulations.

30 Nov 2010

Achieved: The following Practice Note has been drafted in the reporting period: Draft Practice Note 25 prepared in Dec 2010 to inform clients of changes to cidb regulations. Training of Clients as per Client requests has continued for the reporting period. The development of an electronic tool to monitor and administer requests for training has progressed well for the reporting period. A communication strategy has been developed for the dissemination of information to clients and other industry stakeholders on cidb prescripts.

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OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Compliance and Enforcement Compliance to cidb regulations

Development and implementation of a strategy to monitor, evaluate and report on compliance to cidb regulations

Aug 2010

Achieved: A Compliance Strategy has been prepared outlining the cidbâ&#x20AC;&#x2122;s methodology for monitoring compliance. As part of the action plan, certain public sector clients have been identified for phase one of a compliance performance audit. A pilot project was launched in Nov for the collation of data on construction contracts awarded during 2009/2010 financial year. Only two(2) out of nine (9) clients submitted information on construction contracts awarded during 2009/2010 financial year. The Compliance Strategy was reviewed and adjusted according to the learnings from the pilot phase in Nov 2010. A Board Notice has been published in the government gazette and will be sent to all clients performing infrastructure delivery. An Audit Blitz will be conducted after assessing the information submitted by the clients for the reporting period.

REASONS FOR DEVIATION

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

OUTPU T

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Compliance and Enforcement Diminished fraud and corruption.

Forensic investigations of cases of fraud and corruption reported to the cidb.

As and when cases are reported.

Achieved: The forensic investigation into reported cases of fraud and corruption has progressed very well. During this financial year, twenty six (26) new cases were referred for investigation and were finalised. Twenty four (24) case were recommended for prosecution and two (2) were not recommended. The reports of the completed investigations have been evaluated for further action. Since the appointment of the service provider to manage the fraud hotline, 12 cases were reported and received from the fraud hotline The Investigations Committee which presides over cases of alleged non-compliance has progressed well. The Investigating Committee concluded six (6) disciplinary hearing this quarter. There were however thirty three (33) cases heard during this financial year. No challenges were received in terms of Promotion Administrative Justice Act. The cidb continues to maintain a database for the reporting and tracking of cases of non-compliance by public sector clients.

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PROGRAMME 4: CONSTRUCTION REGISTERS SERVICE (CRS) PURPOSE

Implement, manage and improve national registration services covering the R e g i s t e r o f C o n t r a c t o r s , R e g i s t e r o f P r o j e c t s a n d n e w R e g i s t e r s t h a t m a y b e i mplemented in terms of the cidb Act.

MEASURABLE OBJECTIVE

• R e g i s t r a t i o n o f c o nt r a c t o r s a n d b o t h p u b l i c a n d p r i v a t e s e c t o r p r o j e c t s . • R e g u l a t i o n t o e f f e c t i m p r o v e d p e r f o r m a n c e a n d b e s t p r a c t i c e o f c l i e n t s a n d suppliers.

KEY POLICY PRIO R I T Y

Construction Registration Services.

EXPECTED OUTC O M E

Effective and Efficient Registration Processes.

OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Service Excellence and Integrity in Registrations Process Sustained and measurable registration service excellence using Business Process Management (BPM) best practice.

Alignment of registration Quality Management System (QMS) with ISO standards and recommendations

Conduct Gap Analysis by 30 Jul 2010

Achieved: The gap analysis was conducted in Apr 2010.

Grade 2-9 Registrations Turnaround time

21 working days

Achieved: Compliant applicants are registered within 21 working days.

Query resolutions efficiency

Turnaround time: 48 hour

Achieved: The average time that it takes to respond to queries is within the stipulated turnaround time.

Fraud Awareness Workshop 1

30 Sep 2010

Achieved: The fraud awareness workshop took place on 13 and 14 Oct 2010, which was the date provided by the service provider.

Fraud Awareness Workshop 2

31 Mar 2011

Achieved: The fraud awareness workshop took place on 31 Mar 2011

REASONS FOR DEVIATION

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

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PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Enhancement of Software Systems New software system that support flexible business processes, work flow integration and improved performance monitoring across Head Office and CCCâ&#x20AC;&#x2122;s.

Implementation of new and improved CRS software system.

Complete phased implementation by 30 Sep 2011.

On Track: The service provider was appointed in Jan 2011. The Business Requirements Specifications were approved on 24 Mar 2011. The proposed solution includes three technologies i.e. Microsoft CRM, Microsoft SharePoint and K2 for business process management The delivery of the solution will comprise the Register of Contractors, the Register of Projects and the Electronic Document Management System (EDMS). The EDMS is being prioritised. A pilot was conducted at the cidb Kwa-Zulu Natal Construction Contact Centre (CCC) in Apr 2011.

Efficient document handling.

Document handling through Electronic Document Management System (EDMS) implemented at Registers head office and integrated with CCCâ&#x20AC;&#x2122;s.

Implemented by 31 Dec 2010

Not Achieved.

This project has been combined with the Construction Registers Service software re-write project to allow for seamless integration. The EDMS will be developed and implemented on or before 30 Sep 2011

STRATEGIC OBJECTIVE: Improved Communication Well informed Contractors and Clients on registration requirements and processes.

Development and distribution of registration brochures to assist contractors with registration

Assessment and revision of the Quick Guide to Contractor Registration Brochure by 28 Feb 2011.

Achieved: The brochure has been assessed and reviewed. The outcome is that the current brochure is still relevant and will remain in print.

Update to the comprehensive Registrations Guideline Brochure

Assessment and revision by 31 Dec 2010

Partially Achieved.

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The brochure was assessed. The revisions and design have been finalized and approved for print. Delivery is expected by 29 Apr 2011.

PROGRAMME 5: CHIEF EXECUTIVE OFFICER’S OFFICE PURPOSE

Provide strategic leadership to construction industry stakeholders to stimulate sustainable growth, reform and improvement of the construction sector

MEASURABLE OBJECTIVE

• O v e r a l l s t r a t e g i c l e a d e r s h i p , r i s k m a n a g e m e n t a n d c o r p o r a t e g o v e r n a n c e i n support of the Board. • M a r k e t i n g , s t a k e h o l d e r c o n s u l t a t i o n s a n d c o m m u n i c a t i o n s

KEY POLICY PRIO R I T Y

Overall strategic leadership, risk management and corporate governance in support of the Board.

EXPECTED OUTC O M E

Effective stakeholder relations, corporate governance.

OUTPUT

PERFORMANCE INDICATOR

TARGET

risk

management,

compliance

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Stakeholder Management Annual Stakeholder Forum meetings.

Stakeholder Forum (SF) meetings coordinated.

SF 2010 meeting held by end of Oct 2010depending on Minister’s availability;

Achieved: The National Stakeholder Forum convened on 18 Oct 2010. The KZN stakeholder workshop was held on 30 Jul 2010.

Well informed and educated contractors about the cidb mandate.

Regular articles in the commercial press and endorsed publications once a quarter;

Achieved: ISIZA magazine published for the 1st, 2nd and 3rd quarters.

All government departments to be informed about the mandate of the cidb.

Meetings with emerging contractor associations and clients at least once a quarter; Stakeholder Forum – Oct 2010; Construction Conference – May 2010

Achieved: cidb participated in: • MBSA Congress held in Namibia on 19 – 22 September 2010. The topic presented by cidb at the Congress was “The future of the SA/SADC construction industry - Beyond 2010”. • 5th Built Environment Conference on 19 – 20 Jul 2010. Topics presented by cidb were “Targeting Strategies for Contractor Development Programmes (CDPs) and Contractor Development: from Transformation to Performance Improvement.

STRATEGIC OBJECTIVE: Public Relations Well informed Contractors and Government Clients about cidb mandate.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The Provincial Women in Construction Excellence Awards were held between 5 & 28 Aug 2010. The National Women in Construction Excellence Awards was held on 31 Aug 2010. Youth in Construction initiative was coordinated in the 2nd quarter as part of the annual National Construction week.

with

good

REASONS FOR DEVIATION

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PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Public Relations (continued) Participation in HOD’s Forums, MINMEC’s and other relevant/ selected industry conferences.

Participation as and when scheduled (these are not coordinated by cidb).

Achieved: cidb participated in: • HOD’s forums held on 9 Jul 2010 and 25 Jan 2011. Could not attend the HOD forum scheduled for the 11 Mar 2011 due to another commitment with the Northern Cape MEC. • DPWNIF which took place on 27 Aug 2010. • MINMEC which took place on 25 January 2011.

STRATEGIC OBJECTIVE: Communication, including publications Internal newsletter.

Production of the Internal newsletter.

Internal newsletter once every 2 months.

Not Achieved.

Cancelled due to lack of capacity and problems with a previously awarded service provider contract.

Own and endorsed publications.

Production of own (Women’s magazine) and endorsed publications (ISIZA, 3s Media – Business Guide).

Women’s maga- Not Achieved. zine by Sep 2010;

The publication has been cancelled; the coverage of the Women in Construction Excellence Awards has been included in the internal newsletter. See CIP report. The authorisation of the distribution costs for the 3rd quarter ISIZA publication was done by the Office of the CEO, which is relevant for this section.

Approval and Implementation of Corporate Communication Strategy

Implementation of communications strategy by end of Apr 2010

Corporate Communication Strategy

Endorsed publications – quarterly.

Partially achieved.

The Communications Policy was approved by the Board and the Communication Strategy is in hand.

STRATEGIC OBJECTIVE: Fraud & Corruption Eradicated fraud and corruption in construction industry.

Publishing of successfully prosecuted contractors in the press and cidb website by 1 April 2010 and 1 Oct 2010.

Achieved: See PDM report on the Forensic investigations of cases of fraud and corruption. cidb continues to maintain a database for the reporting and tracking of cases of non-compliance by Public Sector Clients.

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Continuous participation in global and regional campaigns to eradicate fraud and corruption in the construction industry.

OUTPUT

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

REASONS FOR DEVIATION

STRATEGIC OBJECTIVE: Risk Management & Corporate Governance

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Eliminated risks

Annual risk assessment and mitigation

Risk assessment performed by Aug 2010.

Achieved: The Strategic and operational risks assessment completed on 5 Nov 2010. The delay in meeting the target was due to the late appointment of the internal auditors as reported in the 2nd quarter report. The risk information is now maintained on the BarnOwl Risk Management system.

Updated risk register

Regular updating of risk register.

Updated monthly.

Partially Achieved.

The updating of the strategic and operational registers has been completed including the identification of new risks but the Audit Committee requested that a review of the strategic risks be done. The exercise was started in Feb 2011 with Leadership Team but partially completed. Monthly risk reports of the operational risks were issued as from January 2011 for management noting and updating. Quarterly monitoring of risk action plan exercise has started from Apr.

Risk management reports.

Regular reports on risk management produced and submitted to board and management.

Risk reports presented monthly to Leadership as well as Risk Committee meetings.

Partially achieved.

Risk report for the 1st quarter was generated. Monthly reports were issued from Jan 2011

Proper management of Internal Audit process.

Management of outsourced Internal Audit Unitâ&#x20AC;&#x2122;s scope of work and 3-year contract.

Ongoing management

Achieved: The management of the internal audit process is in place and managed through the Risk and Governance manager. The new Internal Auditors have commenced with the Internal Audit Annual Plan

PROGRAMME 6: CORPORATE SERVICES SUB PROGRAMME 6.1: HUMAN RESOURCES MANAGEMENT PURPOSE

Human Resource Management

MEASURAB L E OBJECTIV E

P r o v i s i o n o f H u m a n R e s o u r c e a d m i n i s t r a t i o n a n d m a n a g e m e n t t o a l l p r o g r a mmes including CCCs

KEY POLIC Y P R I O R I T Y

Effective Human Resource Management

EXPECTED O U T C O M E

T o r e t a i n s t a f f w h o a r e p r o d u c t i v e , k n o w l e d g e a b l e a n d w e l l m o t i v a t e d i n their work

OUTPU T

PERFORMANCE INDICATOR

TARGET

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR D E V I A T I ON

STRATEGIC OBJECTIVE: Training and Development Motivated staff

Benefits and processes in place to improve staff retention

Phase 2 of the cidb Provident Fund in place by October 2010.

Achieved It is now a condition of employment for new employees to be members of the provident fund.

Employee Wellness programme in Jun 2010.

Commenced with the SCM process before the programme could be implemented.

STRATEGIC OBJECTIVE: Training and Development HR related competent management team

Disciplinary, poor performance training done.

Training done by May 2010.

Job profiling training done.

Training done by Oct 2010. Selection training done by Jul 2010.

Not Achieved

Training providers appointed to start in May 2011: • Job Evaluation training: To commence on 03/05/2011; • Training on staff discipline and grievance handling: to commence on 16/05/2011. The delay was caused by the involvement of the HR manager in the critical disciplinary process involving the CRS staff members relating to fraud and corruption.

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SUB PROGRAMME 6.2: FINANCIAL MANAGEMENT PURPOSE

To provide a dependable and accountable Financial Management

MEASURABLE OBJECTIVE

Financial management including registers fees

KEY POLICY PRIO R I T Y

Provision of financial management services

EXPECTED OUTC O M E

To safeguard assets, ensure observation of best practice governance principles a n d m a i n t a i n t h e g o o d n a m e o f t h e c i db

OUTPUT

PERFORMANCE INDICATOR

TARGET 2010/11

PERFORMANCE PROGRESS TO DATE

REASONS FOR DEVIATION

STRATEGIC OBJECTIVE: Corporate Governance Asset register

Perform Asset count.

Regions count to be completed by 31 Oct 2010 and HO by 30 Nov 2010

Reviewed residual values

Review useful lives and residual values.

First review by 31 In progress Jan 2011 and Second review by 31 Mar 2011.

Achieved • All regional counts have been completed in timeously • Head office counts have been completed timeously

STRATEGIC OBJECTIVE: Corporate Governance Internal/External Audit

Provide information to the internal and external auditors.

In line with the annual plan

Achieved: • Internal audits have been completed for the following audits o financial discipline review o Supply chain management o Follow up audits • Interim audit has been completed Discussion of audit findings with the audit committee is in progress All information required by the auditors has been provided

Policies and procedures

Develop required policies and procedures

Ongoing

Achieved • All policies governing critical areas have been developed

Estimate of residual values is in progress and the exercise is expected to be completed before 31 May 2011 in line with the GRAP 17 requirements

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

SUB PROGRAMME 6.3: INFORMATION TECHNOLOGY PURPOSE

T o p r o v i d e i n f or m a t i o n t e c h n o l o g y m a n a g e m e n t s e r v i c e s t o a l l p r o g r a mmes including CCCs

MEASURAB L E OBJECTIV E

Management of the Information Technology Systems

KEY POLIC Y P R I O R I T Y

Information (Technology) Systems

EXPECTED O U T C O M E

An efficient, effective and well managed ICT infrastructure

OUTPU T

PERFORMANCE INDICATOR

TARGET 2010/11

PERFORMANCE PROGRESS TO DATE

R E A S O N S FOR DEVIATION

STRATEGIC OBJECTIVE: Corporate Governance Compliance with security requirements

Provide information for security integrity

May 2010 – Oct 2010

Achieved: • UPS & Aircon Maintenance done • Follow up Audit Completed - Result: Adequate controls in place • Monthly reports sent to Exco on IT environment, including security related information • Setup reports for internet usage of staff - Daily reports - Monthly reports - Automated email of reports to IT management staff implemented. • Setup a new application to monitor for the following: - New computers added to the network - New applications installed on computers - Reports emailed weekly to IT management staff. • Security / antivirus application maintained - Daily checking of activities / potential threats - Improved access permissions (increased lockdown of unauthorised sites and personnel)

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OUTPUT

PERFORMANCE INDICATOR

TARGET 2010/11

PERFORMANCE PROGRESS TO DATE

STRATEGIC OBJECTIVE: Corporate Governance (continued) Compliance with security requirements

Provide information for security integrity

May 2010 – Oct 2010

•

• •

• Reviewed Policies and procedures

Annually updated IT policies

Oct 2010

Additional security built into the Registers website - Added trigger to divert any hack attempts to another site where we log details of attempt - Automated logging of such attempts - Automated notification of such attempts to relevant IT staff New backup and recovery solution implemented to ensure security of information in the event of a disaster Improved security within applications - User account management done on a monthly basis - Implemented reporting tools and improved management of network access - Improved security criteria within applications (password controls); Pastel, VIP, CRS Physical security systems and access control maintenance done

Achieved

•

Reviewed IT policies

5 policies approved by the board o Confidentiality Policy o Disaster Recovery Plan o Security Policy o Access Control and passwords Policy o Data Backup and recovery policy

•

Policies and framework for project management within cidb approved and rolled out to strategic focus group.

REASONS FOR DEVIATION

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

SUB PROGRAMME 6.4: SUPPLY CHAIN MANAGEMENT PROGRAMME 1: GROWTH AND CONTRA CTOR DEVELOPMENT T o p r o v i d e s u p p l y c h a i n m a n a g e m e n t s e r v i c e s t o a l l p r o g r a m m e s i n c l uding CCCs.

PURPOSE MEASURAB L E OBJECTIVE

Supply chain management

KEY POLIC Y P R I O R I T Y

Provision of Supply chain management services

EXPECTED O U T C O M E

A well managed SCM system that eliminates bottlenecks and prevents any fruitless, irregular and unauthorised expenditure

OUTPU T

PERFORMANCE INDICATOR

TARGET 2010/11

STRATEGIC OBJECTIVE: SCM / Governance SCM Governance

Annually updated SCM policies

SCM policies reviewed and rolled out to all staff by October 2010

PERFORMANCE PROGRESS TO DATE

•

REASONS F O R D E V I A TION

SCM policies have been reviewed and updated accordingly in line with the most recent National Treasury guidelines

Communication of Thresholds and guidelines by means of directives and through workshops were postponed to the end of February pending adoption of the SCM policy amendments.

A N NU A L REP OR T 2 0 10 / 1 1

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

THE CONSTRUCTION REGISTERS SERVICE The Registe r o f C o n t r a c t o r s a n d t h e R e g i s t e r o f P r o j e c t s h a v e b e e n e s t a b l i s h e d i n t e r m s o f t h e C o n s t ruction Industry De v e l o p m e n t B o a r d A c t , A c t 3 8 o f 2 0 0 0 . T h e R e g i s t e r o f C o n t r a c t o r s g r a d e s a n d c a t e gorises contractor s a c c o r d i n g t o f i n a n c i a l a n d w o r k s c a p a b i l i t y . I t i s m a n d a t o r y f o r p u b l i c s e c t o r c l i e n t s t o apply the registe r w h e n c o n s i d e r i n g c o n s t r u ct i o n w o r k s t e n d e r s . T h e R e g i s t e r o f C o n t r a c t o r s f a c i l i t a t e s public sector pro c u r e m e n t a n d p r o m o t e s c o n t r a c t o r d e v e l o p m e n t . The Registe r o f P r o j e c t s g a t h e r s i n f o r m a t i o n o n t h e n a t u r e , v a l u e a n d d i s t r i b u t i o n o f p r o j e c t s . W h e n clients register pr o j e c t s , t h e t r a c k r e c o r d s o f c o n t r a c t o r s a r e u p d a t e d a n d t h e i n f o r m a t i o n i s a v a i l a b l e t o other clients thro u g h t h e c idb w e b s i t e . T h e c idb h a s e m b a r k e d o n a n a c c e l e r a t e d d r i v e t o i m p r o v e client complianc e w i t h t h e a p p l i c a t i o n o f t h e R e g i s t e r s . T h i s w i l l a l s o f o r m t h e b a s i s f o r d r i v i n g p e r f o r mance improvem e n t t h r o u g h p r o j e c t c l o s e o u t r e p o r t s . P u b l i c s e c t o r c l i e n t s a r e r e q u i r e d t o r e g i s t e r p rojects above R2 0 0 , 0 0 0 w h i l e p r i v a t e s e c t o r c l i e n t s a n d l a r g e s t a t e o w n e d e n t i t i e s a r e r e q u i r e d t o r egister projects ab o v e R 1 0 m i l l i o n .

The ci db h a s a l s o d e v e l o p e d t h e f r e e i- T e n d e r s e r v i c e w h i c h e n a b l e s c l i e n t s t o a d v e r t i s e t e n d e r s on the ci db webs i t e . T h e i- T e n d e r s e r v i c e a u t om a t i c a l l y a l e r t s r e g i s t e r e d c o n t r a c t o r s o f t e n d e r o p p o r t u n i ties by email and s m s . T e n d e r s a r e a l s o d i s p l a ye d o n t h e c i db w e b s i t e . C o m p l i a n c e w i t h l e g i s l a t i v e r e q u i r ements to Register o f P r o j e c t s i s m a d e e a s y f o r c l i e n t s w h o c o n v e r t t h e s a m e t e n d e r i n f o r m a t i o n a f t e r a w a rd and add basic a d d i t i o n a l â&#x20AC;&#x2DC; p o s t a w a r d â&#x20AC;&#x2122; i n f o r m a t i o n . By 31 Mar c h 2 0 1 1 , t h e r e w e r e 6 , 7 4 4 p r o j e c t s r e g i s t e r e d a n d 9 , 7 6 6 t e n d e r s a d v e r t i s e d . T h e n u mber of tender no t i f i c a t i o n s d i s t r i b u t e d i n c r e a s e d t o 3 , 3 2 7 , 6 8 3 b y t h e e n d o f M a r c h 2 0 1 1 . A t o t a l o f 81,856 contractor s h a v e r e c e i v e d n o t i f i c a t i o n s o f t e n d e r o p p o r t u n i t i e s t h r o u g h t h e i - T e n d e r s e r v i c e . Growth in t h e R e g i s t e r o f C o n t r a c t o r s h a s c o n t i n u e d i n t h e y e a r u n d e r r e v i e w w i t h a t o t a l o f 9 9 , 4 2 1 Grade 1 Contrac t o r s r e g i s t e r e d a n d 1 3 , 7 4 9 G r a d e 2 t o 9 C o n t r a c t o r s r e g i s t e r e d b y 3 1 M a r c h 2 0 1 1 . Chart 1 below indi c a t e s t h e g r o w t h i n t h e t o t a l n u m b e r o f r e g i s t r a t i o n s a c r o s s G r a d e s 2 t o 9 f r o m J a n u a r y 2005 to January 2 0 1 1 .

Chart 1: Growth of Contractor Registrations 120 000

No. of Active Registrations

100 000

80 000

60 000

40 000

20 000

Jan 05

Jan 06

Jan 07

Jan 08

Jan 09

Jan 10

Jan 11

A N NU A L REP OR T 2 0 10 / 1 1

A comprehensive r e v i e w p r o c e s s o f t h e c r i t e r i a f o r r e g i s t r a t i o n o n t h e R e g i s t e r o f C o n t r a c t o r s w a s undertaken. The r a n g e o f p r o p o s e d i m p r o v e m e n t s i n c l u d e s a r e d u c t i o n i n t h e q u a l i f y i n g T r a c k R e c o r d values and Annu a l T u r n o v e r r e q u i r e m e n t s , a n e m p h a s i s o n t h e c o m b i n a t i o n o f b o t h f i n a n c i a l c a p a c i t y and also track r e c o r d ( a s o p p o s e d t o t h e c o n s i d e r a t i o n o f A v a i l a b l e C a p i t a l o n l y ) , r e m o v a l o f t h e re quirement for c o n t r a c t o r s t o h a v e p r o f e s s i o n a l r e s o u r c e s i n t h e i r e m p l o y a t t h e t i m e o f r e g i s t r a t i o n wi th the ci db, p r o v i s i o n f o r t h e M i n i s t e r t o p u b l i s h r e v i s e d t e n d e r v a l u e l i m i t a d j u s t m e n t s a n d o t h e r improvements. I t i s e n v i s a g e d t h a t t h e R e g u l a t i o n s w i l l b e p u b l i s h e d f o r p u b l i c c o m m e n t b e f o r e 30 September 20 1 1 . Information from t h e c id b Q u a t e r l y M o n i t o r i s i n c l u d e d i n C h a r t 2 b e l o w a n d s h o w s t h e t o t a l n u m b e r o f re gistrations in th e G e n e r a l B u i l d i n g ( G B ) a n d C i v i l E n g i n e e r i n g ( C E ) c l a s s e s o f w o r k s f o r t h e p a s t t h r e e years. It is seen t h a t t h e r e h a s b e e n a s l i g h t i n c r e a s e i n t h e n u m b e r o f r e g i s t r a t i o n s f o r t h e f i r s t q u a r t e r o f 2011. Furthermor e , t h e r e h a s b e e n a c o n s i s t e n t i n c r e a s e i n t h e n u m b e r o f r e g i s t r a t i o n s i n G r a d e s 5 a n d 6 and above. The application o f b e s t p r a c t i c e B u s i n e s s P r o c e s s M a n a g e m e n t ( B P M ) m e t h o d o l o g i e s c o u p l e d w i t h s k i l l e d and committed p e r s o n n e l h a s e n s u r e d t h a t t he c i db m e e t s i t s c o m m i t m e n t t o s t a k e h o l d e r s b y p r o v i d i n g an efficient regis t r a t i o n s s e r v i c e . C o m p l i a n t a p p l i c a t i o n s a r e p r o c e s s e d w i t h i n 2 1 w o r k i n g d a y s . P o t e n t i a l backlogs are ide n t i f i e d e a r l y a n d r e s o l v e d . T h e a p p r o a c h i s t o g e t i t r i g h t t h e f i r s t t i m e w i t h q u a l i t y assurance proces s e s i n p l a c e . A dedicated trai n i n g f u n c t i o n h a s b e e n e s t a b l i s h e d t o e n s u r e t h a t a l l c idb r e g i s t r a t i o n s p e r s o n n e l a r e knowledgeable o n r e g i s t r a t i o n r e q u i r e m e n t s a n d p r o c e s s e s . R e g i s t r a t i o n s e r v i c e s a r e o f f e r e d a t t h e c i db provincial offices a n d a t t h e c id b h e a d O f f i c e . T h e e n t r y l e v e l G r a d e 1 a p p l i c a t i o n s a r e p r o c e s s e d â&#x20AC;&#x2DC; o v e r th e counterâ&#x20AC;&#x2122; with r e g i s t r a t i o n s a c t i v a t e d w i t h i n a p e r i o d o f 4 8 h o u r s . The registration s o f t w a r e s y s t e m s a r e b e i n g r e d e s i g n e d t o p r o v i d e f o r s e a m l e s s p r o c e s s i n g a c t i v i t i e s between the ci db H e a d O f f i c e a n d t h e P r o v i n c i a l P a r t n e r e d O f f i c e s . T h i s n e w s y s t e m w i l l i n c l u d e e l e c t r o n i c document manag e m e n t w h i c h w i l l b o t h r e d u c e t h e t u r n a r o u n d t i m e i n p r o c e s s i n g a p p l i c a t i o n s a n d a l s o increase the integ r i t y o f t h e r e g i s t r a t i o n s p r o c e s s . T h e p r o j e c t c o m m e n c e d o n t h e 2 8 t h J a n u a r y 2 0 1 1 w i t h implementation p l a n n e d f o r S e p t e m b e r 2 0 1 1 o n w a r d s . The new system w i l l p r o v i d e b e t t e r a c c e s s t o i n f o r m a t i o n i n s i d e t h e o r g a n i s a t i o n , r e d u c e t h e r i s k o f f r a u d and corruption, i n c r e a s e e f f i c i e n c y a n d p r o d u c t i v i t y , i m p r o v e d a t a v a l i d a t i o n f u n c t i o n s , i m p r o v e u s e r interfaces, allow f o r b e t t e r i n t e g r a t i o n a n d g r e a t e r f l e x i b i l i t y i n b u s i n e s s p r o c e s s e s .

Chart 2: Number of Registrations 2008 Q1 to 2011 Q1 GB

CE 2 to 4

5&6 3 500

3 000

2 500

2 000

1 500

1 000

500

2011 01

4 000

3 500

2010 01

4 000

2009 01

2011 01

5&6

2010 01

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

2009 01

2 to 4

STATISTICS FROM THE REGISTER OF CONTRACTORS Informatio n f r o m t h e C o n s t r u c t i o n R e g i s t e r s S e r v i c e i s u s e d t o d i r e c t d e v e l o p m e n t i n t e r v e n t i o n s a nd inform pro c u r e m e n t s t r a t e g y . T h i s i n f o r m a t i o n i s a c c e s s i b l e t o t h e p u b l i c o n t h e c i db w e b s i t e , w w w. ci db.org.z a . T h e s t a t i s t i c s b e l o w a r e a s a t t h e e n d o f t h e f i n a n c i a l y e a r , 3 1 M a r c h 2 0 1 1 .

Table 1: Tender Value Ranges GRADE

MAXIMUM VALUE OF CONTRACT THAT A CONTRACTOR IS CONSIDERED CAPABLE OF PERFORMING

R 200 000

R 650 000

R 2 000 000

R 4 000 000

R 6 500 000

R 13 000 000

R 40 000 000

R 130 000 000

> R 130,000,000

(Indicates t h e m a x i m u m v a l u e o f a c o n t r a c t t h a t a c o n t r a c t o r i s c o n s i d e r e d c a p a b l e o f p e r f o r m i ng)

GRADE 1 STATISTICS The statisti c s f o r G r a d e 1 C o n t r a c t o r s h a v e b e e n s e p a r a t e d f r o m G r a d e s 2 t o 9 i n o r d e r t o b e t t e r illustrate c o n t r a c t i n g c a p a c i t y w h i l e a l s o a l l o w i n g f o r i m p r o v e d i d e n t i f i c a t i o n o f d e v e l o p m e n t t a r g ets.

There are n o s u b s t a n t i v e r e g i s t r a t i o n r e q u i r e m e n t s f o r G r a d e 1 c o n t r a c t o r s . T h e a c t u a l a v a i l a b l e contractin g c a p a c i t y i s t h e r e f o r e r e f l e c t e d i n t h e n u m b e r o f r e g i s t r a t i o n s i n G r a d e s 2 t o 9 .

A N NU A L REP OR T 2 0 10 / 1 1

Table 2: Class of Works per Province - Grade 1

REGION Eastern Cape Free State

CLASS OF WORKS GB

8210

2872

180

212

103

TOTAL

1547

13125

2885

1037

189

485

4739

Gauteng

13782

4465

803

925

312

4090

24378

KwaZulu-Natal

14671

7091

666

349

279

3187

26243

Limpopo

5286

2658

294

416

113

915

9682

Mpumalanga

4821

1876

385

356

637

8163

North West

3393

964

160

609

5327

718

184

115

1142

3580

929

171

142

124

1178

6124

57346

22076

2909

2686

1140

12763

98923

Northern Cape Western Cape Total

GB: General Buil d i n g C E : C i v i l E n g i n e e r i n g M E : M e c h a n i c a l E n g i n e e r i n g EP: Electrical Eng i n e e r i n g ( I n f r a s t r u c t u r e ) E B : E l e c t r i c a l E n g i n e e r i n g ( B u i l d i n g ) S W : S p e c i a l i s t W o r k s

Table 3: Consolidated Ownership Profile (%) Grade 1 REGION

TOTAL

BLACK OWNED

YOUTH OWNED

WOMEN OWNED

13125

4739

Gauteng

24378

KwaZulu-Natal

26243

L impopo

9682

Mpumalanga

8163

North West

5327

Northern Cape

1142

Western Cape

6124

Eastern Cape Free State

Grade 2 to 9 Statistics Table 4: Contractor Grading by Class of Works

GRADE

CLASS OF WORKS GB

TOTAL

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

1987

1493

189

106

131

464

4370

583

542

107

1458

848

765

132

167

159

134

2205

568

643

190

193

153

221

1968

553

642

1443

216

228

570

204

127

4861

4448

750

662

595

1029

12345

Total

Table 4 shows the t o t a l n u m b e r o f r e g i s t r a t i o n s i n t h e v a r i o u s g r a d e s a n d c l a s s e s o f w o r k s n a t i o n a l l y . The low numbers o f r e g i s t r a t i o n s i n t h e s p e c i a l i s t c l a s s e s o f w o r k s s u c h a s M e c h a n i c a l E n g i n e e r i n g ( M E ) in dicates the nee d t o a c c e l e r a t e s k i l l s d e v e l o p m e n t i n t h e s e s p e c i a l i s t a r e a s .

45 Table 5: Black Owned by Grade GRADE

TOTAL

BLACK OWNED

4370

4046

1458

1261

2205

1729

1968

1381

1443

992

570

292

204

127

1 2 34 5

9783

To t a l

% OF THE TOTAL

Medium si z e d c o n t r a c t o r s ( G r a d e s 3 t o 6 ) o f w h i c h 7 6 % a r e b l a c k o w n e d . Table 5 re f l e c t s t h e p e r c e n t a g e o f b l a c k o w n e d e n t e r p r i s e s ( w h e r e a t l e a s t 5 0 % o f t h e e n t e r p r i s e is black own e d ) . I t i s e v i d e n t t h a t t h e r e i s a l o w l e v e l o f b l a c k o w n e r s h i p a t t h e h i g h e r g r a d e s . I t i s t o be noted how e v e r t h a t t h e r e a r e m a n y p u b l i c l i s t e d e n t e r p r i s e s a t G r a d e 9 ; t h e r e f o r e t h e 9 % i n d i c a t ed at Grade 9 is n o t a n a c c u r a t e r e f l e c t i o n o f t h e a c t u a l l e v e l o f b l a c k o w n e r s h i p .

Table 6: Women Owned by Grading GRADE

TOTAL

WOMAN OWNED

4370

2153

1458

687

2205

942

1968

670

1443

474

570

143

204

127

1 2 34 5

5099

To t a l

% OF THE TOTAL

Table 6 re f l e c t s t h e p e r c e n t a g e o f w o m e n o w n e d e n t e r p r i s e s ( w h e r e a t l e a s t 5 0 % o f a n e n t e r p r i s e is women ow n e d ) . T h e r e i s a l o w l e v e l o f w o m e n o w n e r s h i p a t t h e h i g h e r g r a d e s .

Table 7: Grading by Province REGIO N

GRADE 3

Eastern C a p e

438

176

236

177

113

1 194

Free State

262

555

Gauteng

949

270

541

625

466

205

102

3 248

1215

469

542

380

277

102

3 029

363

143

242

241

158

1 206

Mpumala n g a

408

123

206

186

162

1 132

North Wes t

250

121

606

159

416

148

211

170

127

1 179

4322

1454

2203

1967

1443

570

204

127

1 2 335

Foreign KwaZulu-N a t a l Limpopo

Northern C a p e Western C a p e Total

T OTAL

Table 7 sh o w s t h e r e g i s t r a t i o n s b y r e g i o n a l b r e a k d o w n . W h i l e t h e G a u t e n g P r o v i n c e d i s p l a y s t h e highest number of r e g i s t r a t i o n s a t t h e h i g h e r g r a d e s , i t s h o u l d b e n o t e d t h a t m o s t o f t h e l a r g e r c o n t r a c t ors establish t h e i r h e a d o f f i c e s i n t h e G a u t e n g P r o v i n c e b u t o p e r a t e a c r o s s t h e c o u n t r y .

A N NU A L REP OR T 2 0 10 / 1 1

Statistics from the i -Tender Register of Projects By 31 March 2011 t h e r e w e r e 6 , 7 4 4 p r o j e c t s r e g i s t e r e d o n t h e R e g i s t e r o f P r o j e c t s a n d 9 , 7 6 6 t e n d e r s advertised using t h e i- T e n d e r s e r v i c e . T h e n u m b e r o f t e n d e r n o t i f i c a t i o n s d i s t r i b u t e d i n c r e a s e d t o 3,327,683 with a t o t a l o f 8 1 , 8 5 6 c o n t r a c t o r s r e c e i v i n g n o t i f i c a t i o n s o f t e n d e r o p p o r t u n i t i e s t h r o u g h t h e i-Tender service.

Table 8: Number of Clients registered to use the i-Tender Register of Projects REGISTERED CLIENTS

31 MARCH 2008

31 MARCH 2009

31 MARCH 2010

31 MARCH 2011

National Departm e n t s

P rovincial Depar t m e n t s

District and Loca l M u n i c i p a l i t i e s

162

174

179

State Owned Ent i t i e s

P rivate Sector C l i e n t s

197

319

341

380

Total

Chart 3: Number of Projects registered by Provinces by 31 March 2011

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

A N NU A L REP OR T 2 0 10 / 1 1

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

PUBLIC SECTOR PROCUREMENT AND DELIVERY MANAGEMENT

A N NU A L REP OR T 2 0 10 / 1 1

A mendment to the grading criteria for the Register of Contractors . The Procurement a n d D e l i v e r y P r o g r a m m e i s c u s t o d i a n t o t h e d e v e l o p m e n t , m a i n t e n a n c e a n d implementation o f t h e c id b , R e g u l a t i o n s a n d p r e s c r i p t s . ci db workshops a n d t h e N a t i o n a l S t a k e h o l d e r F o r u m p r o v i d e v a l u a b l e f e e d b a c k o n t h e c i db Regulations. Fee d b a c k i s a n a l y s e d a n d n e c e ss a r y a m e n d m e n t s p r i o r i t i s e d . The following dra f t a m e n d m e n t s f o r P a r t 1 1 o f t h e ( R e g i s t e r o f C o n t r a c t o r s ) w e r e s u b m i t t e d t o t h e Minister of Public W o r k s f o r c o n s i d e r a t i o n a n d g a z e t t i n g f o r p u b l i c c o m m e n t : The following cha l l e n g e s w i t h p r o p o s e d a m e n d m e n t s h a v e b e e n d o c u m e n t e d f o r P a r t 1 1 ( R e g i s t e r o f Contractors) and s u b m i t t e d t o t h e M i n i s t e r o f P u b l i c W o r k s f o r a p p r o v a l t o g a z e t t e f o r p u b l i c c o m m e n t :

Qualified Persons It has been reco m m e n d e d t h a t t h e r e q u i r e m e n t f o r c o n t r a c t o r s t o h a v e q u a l i f i e d p e r s o n s ( c o m m o n l y referred to as reg i s t e r e d p r o f e s s i o n a l s ) i n t h e i r e m p l o y b e r e m o v e d . C o n t r a c t o r s w i l l n o t b e r e q u i r e d t o provide proof of r e g i s t e r e d p r o f e s s i o n a l s a t c idb r e g i s t r a t i o n s t a g e . Clients will be re q u i r e d t o d e t e r m i n e t h e r e s o u r c e r e q u i r e m e n t s o n a ‘ p r o j e c t b y p r o j e c t ’ b a s i s b a s e d o n the scope of wor k , t h e c o m p l e x i t y a n d t h e s i z e o f t h e p r o j e c t . T h e c i db h a s d r a f t e d a P r a c t i c e N o t e t o coincide with the i m p l e m e n t a t i o n o f t h i s a m e n d m e n t .

A nnual Turnover It has been reco m m e n d e d t h a t a n n u a l t u r n o v e r q u a l i f y i n g v a l u e s b e r e d u c e d . A n n u a l T u r n o v e r i s a measure that i s e a s y t o v e r i f y a s t h e i n f o r m a t i o n i s p r o v i d e d i n t h e f i n a n c i a l s t a t e m e n t s o f t h e enterprise. It sho u l d b e n o t e d t h a t t h e r e i s n o A n n u a l T u r n o v e r r e q u i r e m e n t a t G r a d e s 1 a n d 2 . A t Grades 3 and 4 t h e r e i s f l e x i b i l i t y i n t e r m s o f f i n a n c i a l c a p a c i t y a s c o n t r a c t o r s a r e a l l o w e d t o m e e t ei ther the Annua l T u r n o v e r o r A v a i l a b l e C a p i t a l r e q u i r e m e n t s . A t G r a d e 5 a n d a b o v e b o t h t h e A n n u a l Turnover and Ava i l a b l e C a p i t a l a r e r e q u i r e d .

Contract (Track Record) It has been reco m m e n d e d t h a t a n n u a l t h e l a r g e s t p r o j e c t c o m p l e t e d t o b e r e d u c e d a s f o l l o w s ( v a l u e s rounded):

GRADE

UPPER LIMIT OF TEN D E R V A L U E R A N G E

CURRENT VALUES LARGEST CONTRACT (25 & OF UPPER LIMIT OF TENDER VALUE RANGE)

REDUCED VALUES LARGEST CONTRACT (22.5% OF UPPER LIMIT OF TENDER VALUE RANGE. 20 % FOR GRADE 2)

650,000

R 150 000

R 130,000

2,000,000

R 500 000

R 450,000

4,000,000

R 1000 000

R 900,000

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

6,500,000

R 1 600 000

R 1,500,000

13,000,000

R 3 250 000

R 3,000,000

40,000,000

R 10 000 000

R 9,000,000

130,000,000

R 32 500 000

R 30,000,000

400,000,000

R 100 000 000

R 90,000,000

Annual Tender Value Limit Adjustment The Regula t i o n s h a v e m a d e p r o v i s i o n f o r t h e M i n i s t e r , i n c o n s u l t a t i o n w i t h t h e c i db, t o p u b l i s h t e n der value limit a d j u s t m e n t s ( a t l e a s t o n c e i n t h r e e y e a r s b u t m a y p u b l i s h a n n u a l l y d e p e n d i n g o n t h e market conditions ) w i t h p r o p o r t i o n a l r e g i s t r a t i o n c r i t e r i a a d j u s t m e n t s . T h i s i s t o b e d o n e o n a s e t d a t e e a ch year and based o n t h e p r i n c i p l e s o f ‘ i n f l a t i o n a n d m a r k e t c o n d i t i o n s ’ .

Method B The Metho d B r e g i s t r a t i o n o p t i o n e s s e n t i a l l y p r o v i d e s a m e c h a n i s m f o r e n t e r p r i s e s w i t h l a r g e f i n a n cial capacity t o o b t a i n h i g h g r a d e s w i t h o u t h a v i n g a n y t r a c k r e c o r d . F e e d b a c k w a s r e c e i v e d b y l a r g e public sec t o r c l i e n t s o n p o o r d e l i v e r y b y c o n t r a c t o r s . Contractor s a r e a w a r d e d t e n d e r s b u t d o n o t h a v e a n y e x p e r i e n c e i n t h e C l a s s o f W o r k s u n d e r considerat i o n . B o n a f i d e c o n t r a c t o r s h a v e a l s o r a i s e d t h e i s s u e o f l o s i n g o u t t o ‘ c o n t r a c t o r s ’ w h o have no experie n c e a n d t r a c k r e c o r d . The Metho d B r e g i s t r a t i o n o p t i o n h a s a c c o r d i n g l y b e e n d e l e t e d f r o m t h e r e g u l a t i o n s .

Transfer of Records Regulation 1 1 ( 4 ) p r o v i d e s f o r t h e t r a n s f e r o f r e c o r d s f r o m o n e c o n t r a c t o r t o a n o t h e r c o n t r a c t o r a n d treated as i f i t w e r e t h e s a m e e n t i t y f o r t h e p u r p o s e o f a s s e s s m e n t u n d e r v a r i o u s c a s e s s u c h a s t h e amalgama t i o n o f c o m p a n i e s . As a meas u r e t o c a t e r f o r l e g i t i m a t e c a s e s w h e r e c o m p a n i e s w a n t t o r e g i s t e r b u t c a n n o t m e e t t h e required c r i t e r i a i n t h e n a m e o f t h e e n t e r p r i s e , i t i s f u r t h e r r e c o m m e n d e d t h a t R e g u l a t i o n 1 1 ( 4 ) ( M anner of determi n a t i o n o f c o n t r a c t o r g r a d i n g d e s i g n a t i o n ) b e e x t e n d e d t o i n c l u d e t h e t r a n s f e r o f r e c o r d s from one contra c t o r t o a n o t h e r i n t h e c a s e o f a n i n c o r p o r a t e d c o m p a n y w h o l l y o w n e d b y a c i db R e g i s tered company( ‘ s ) a n d c id b r e g i s t e r e d c o m p a n i e s s e t t i n g u p s u b s i d i a r i e s .

Joint Venture Calculation The Regula t i o n s p r o v i d e f o r j o i n t v e n t u r e s t o s u b m i t t e n d e r o f f e r s o r e x p r e s s i o n s o f i n t e r e s t i f e v e r y member o f t h e j o i n t v e n t u r e i s a r e g i s t e r e d c o n t r a c t o r i n t e r m s o f t h e R e g u l a t i o n s a n d t h e l e a d p artner has a con t r a c t o r g r a d i n g d e s i g n a t i o n i n t h e C l a s s o f W o r k u n d e r c o n s i d e r a t i o n , a n d p o s s e s s e s t h e required re c o g n i t i o n s t a t u s . T h e c a l c u l a t o r s u m s t h e f i n a n c i a l a n d w o r k s c a p a b i l i t i e s o f t h e i n d i v i d ual joint ventu r e p a r t n e r s . A problem i s t h a t c o n t r a c t o r s a n d c l i e n t s a r e e f f e c t i v e l y b y p a s s i n g t h e ‘ l e a d p a r t n e r ’ r u l e i n t h a t b igger contractor s a r e p l a c i n g s m a l l e r , o f t e n G r a d e 1 a n d 2 , c o n t r a c t o r s a s t h e l e a d p a r t n e r i n o r d e r t o satisfy the r e q u i r e m e n t t h a t t h e l e a d p a r t n e r i s r e g i s t e r e d i n t h e r e l e v a n t C l a s s o f W o r k e . g . M e c h anical Engineerin g . It has acco r d i n g l y b e e n r e c o m m e n d e d t h a t t h e l e a d p a r t n e r m u s t h o l d a C o n t r a c t o r G r a d i n g Designatio n n o t m o r e t h a n o n e l e v e l ( t e n d e r v a l u e l i m i t ) b e l o w t h e r e q u i r e d g r a d e .

Way forward Once the p u b l i c c o m m e n t p h a s e i s c l o s e d , t h e c id b w i l l c o l l a t e a l l c o m m e n t a n d p r e p a r e a f i n a l submission t o t h e M i n i s t e r o f P u b l i c W o r k s f o r a p p r o v a l . O n c e a p p r o v e d , t h e n e c e s s a r y c h a n g e s w ill be effected a n d t h e r e g u l a t i o n s w i l l b e r e p u b l i s h e d . A N NU A L REP OR T 2 0 10 / 1 1

Compliance and enforcement of cidb legislation The ci db Regulati o n s a r e m a n d a t o r y f o r a l l p u b l i c s e c t o r i n f r a s t r u c t u r e c l i e n t s . H o w e v e r p o o r l e v e l s o f compliance with t h e c id b r e g u l a t i o n s h a v e b e e n n o t e d i n t h e f o l l o w i n g a r e a s : 1. 2. 3. 4. 5.

Advertising of t e n d e r s o n t h e i- T e n d e r S y s t e m Recording of p r o j e c t a w a r d , c o n s t r u c t i o n a n d c l o s e o u t o f a p r o j e c t o n t h e R e g i s t e r o f P r o j e c t s . Application of t h e c id b S t a n d a r d f o r U n i f o r m i t y Layout of the t e n d e r s p e c i f i c a t i o n Matching proj e c t s w i t h t h e c o n t r a c t o r g r a d e s a s a r e s u l t o f a p o o r l y w r i t t e n s c o p e o f w o r k a n d incorrect estim a t e s . 6. Project specifi c q u a l i t y a n d e l i g i b i l i t y c r i t e r ia 7. Applying well- c o n s t r u c t e d p r o c u r e m e n t s t r a t e g y t o p r o m o t e g o v e r n m e n t â&#x20AC;&#x2122; s s o c i a l a g e n d a 8. Adherence to t h e r e q u i r e m e n t s o f t h e P r e f e r e n t i a l P r o c u r e m e n t P o l i c y F r a m e w o r k A c t a n d t h e S u p p l y Chain Manage m e n t G u i d e l i n e s a s p r e s c r i b e d b y t h e N a t i o n a l T r e a s u r y . Due to the high le v e l s o f n o n - c o m p l i a n c e , t h e c id b h a s i m p l e m e n t e d a s t r a t e g y t o m o n i t o r a n d e n f o r c e compliance to th e l e g i s l a t i o n . T h e f u n d a m e n t a l p r i n c i p l e s o f t h i s i n i t i a t i v e a r e : a. To educate pu b l i c s e c t o r C l i e n t s o n t h e l e g i s l a t i v e r e q u i r e m e n t s b y h o s t i n g s t r u c t u r e d t r a i n i n g a n d awareness ca m p a i g n s b. To create an a w a r e n e s s o f t h e p o w e r a n d a u t h o r i t y o f t h e c i db C o d e o f C o n d u c t f o r a l l s t a k e h o l d e r s that participat e i n t h e p r o c u r e m e n t a n d a w a r d o f c o n s t r u c t i o n i n d u s t r y t e n d e r s c. To widely com m u n i c a t e t h e c id b A n o n y m o u s F r a u d l i n e d e t a i l s t o f u r t h e r p r o m o t e t h e r e p o r t i n g o f fraudulent, un e t h i c a l a n d c o r r u p t p r a c t i c e s r e l a t e d t o t h e c i db L e g i s l a t i o n . T h e c o m m u n i c a t i o n m u s t also serve as a d e t e r r e n t t o w a n n a b e f r a u d s t e r s b y a d v e r t i s i n g t h e h a r s h c o n s e q u e n c e s o f a g u i l t y conviction on t h e c id b l e g i s l a t i o n . d. To record, inve s t i g a t e a n d t a k e a c t i o n w h e r e n e c e s s a r y a g a i n s t p e r p e t r a t o r s o f t h e c i db L e g i s l a t i o n e. Develop strate g i c p a r t n e r s h i p s w i t h k e y s t a k e h o l d e r s i n t h e p r o m o t i o n o f p r o c u r e m e n t c o m p l i a n c e

The ci db has part n e r e d w i t h t h e O f f i c e o f t h e A u d i t o r - G e n e r a l , C o m p e t i t i o n C o m m i s s i o n , S p e c i a l Investigation Unit , a c a d e m i c i n s t i t u t i o n s a n d v a r i o u s v o l u n t a r y a s s o c i a t i o n ( f o r e x a m p l e C E S A , S A F C E C , MBSA) as strategi c p a r t n e r s t o p r o m o t e c o m p l ia n c e w i t h p r o c u r e m e n t r e g u l a t i o n s . T o t h i s e f f e c t t h e ci db has signed a M e m o r a n d u m o f U n d e r s t a n d i n g ( M o U ) w i t h C E S A . The ci db has app o i n t e d t w o c o m p a n i e s o f f o r e n s i c i n v e s t i g a t o r s t o a u d i t a n d i n v e s t i g a t e o n n o n compliance by b o t h t h e c o n t r a c t o r s a n d c l i e n t s a n d t o i n i t i a t e h e a r i n g s i n t e r m s o f P a r t V o f t h e C i d Regulations.

Table 1: Categories of investigations conducted under the Register of Contractors

Financial Statements Track Record CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Professionals Tax Clearance Certificates Corrupt Payments cidb Certificate PE Status Non-compliance

Table 2: Categories of case

Table 3: Formal Enquiry cases

CATEGOR I E S O F C A S E S O F T H O S E F I N A L I S E D HEARIN G S / C O N V I C T E D C O N T R A C T O R S Tax Clear a n c e C e r t i f i c a t e Financial s t a t e m e n t s Profession a l p e r s o n s

OVERALL NUMBER OF INVESTIGATIONS EARMARKED FOR HEARINGS

Hearings pending as at 31 March 2011

Hearings finalised as at 31 March 2011

Number of contractors convicted

Number of cases withdrawn

Number of cases removed

Track rec o r d

Unauthori s e d p a y m e n t s t o c id b e m p l o y e e s

Forged c id b c e r t i f i c a t e s

Unauthori s e d u s e o f c id b l o g o / l e t t e r he a d

Sponsorsh i p

Non-com p l i a n c e b y e m p l o y e r

Number of contractors acquitted

All prosecu t e d f r a u d a n d c o r r u p t i o n c a s e s a r e p u b l i s h e d i n t h e G o v e r n m e n t G a z e t t e a n d a r e p o s t ed on ci db websi t e .

A 1 Delivery Management Infrastructure D elivery Improvement P rogramme (IDIP) The Infrastr u c t u r e D e l i v e r y I m p r o v e m e n t P r o g r a m m e ( I D I P ) i s a p a r t n e r s h i p p r o g r a m m e c h a m p i o n e d by the Nation a l T r e a s u r y a s t h e l e a d p a r t n e r , t h e D e p a r t m e n t o f P u b l i c W o r k s , a n d t h e D e v e l o p m e n t B ank of Southern A f r i c a ( D B S A ) . T h e p r o g r a m m e i s p r i m a r i l y a i m e d a t i m p r o v i n g p e r f o r m a n c e a n d t h e r a te of delivery o f i n f r a s t r u c t u r e p r o j e c t s a t a p r o v i n c i a l l e v e l , w h i l s t f a c i l i t a t i n g t h e s p e n d i n g o f a l l o c a t ed infrastructu r e b u d g e t s b y p r o v i n c i a l c l i e n t s . A k e y f o c u s i s o n i m p r o v i n g i n f r a s t r u c t u r e p l a n n i n g , a l i gning infrastructu r e d e l i v e r y a n d b u d g e t i n g c y c l e s , a n d r e f i n i n g r o l e s a n d r e s p o n s i b i l i t i e s o f t h e C l i e n t a nd Implement i n g A g e n t s . Table 1 be l o w c o m p a r e s t h e c o n s o l i d a te d s e c t o r a l p r o v i n c i a l i n f r a s t r u c t u r e b u d g e t s a n d e x p e n d i t ure trends for t h e t h e t h i r d q u a r t e r o f 2 0 0 9 / 1 0 a n d 2 0 1 0 / 1 1 .

Table 1: Consolidated sectoral provincial infrastructure budgets and expenditure trends – y/y comparisons 2009/10

SECTOR

ADJUSTED BUDGET (R ‘000)

EXPENDITURE AS AT 31 DECEMBER 2009 (R ‘000)

2010/11 % ACTUAL VS BUDGET (%)

ADJUSTED BUDGET (R ‘000)

EXPENDITURE AS AT 31 DECEMBER 2010 (R ‘000)

% ACTUAL VS BUDGET (%)

% BUDGET GROWTH: Y/Y (%)

% EXPENDITURE GROWTH: Y/Y (%)

Education

5 5 9 8 6 3 7

4 6 8 5 8 9 2

83,7%

7 287 397

3 648 658

50,1%

30,2%

( 2 2,1%)

Health

7 7 7 0 8 3 5

4 8 8 4 3 9 9

62,9%

8 938 595

4 649 982

52,0%

15,0%

( 4 ,8%)

Total

1 3 3 6 9 4 7 2

9 5 7 0 2 9 1

71,6%

1 6 2 2 5 9 9 2

8 2 9 8 6 4 0

51,1%

21,4%

( 1 3,3%)

S O U R C E – I N F R A S T RU C T U R E R E P O R T ING MODEL (IRM)

IDIP has co n t i n u e d t o m a k e a p o s i t i v e i m p a c t i n t h e d e l i v e r y o f i n f r a s t r u c t u r e b y t h e P r o v i n c i a l Departmen t s o f E d u c a t i o n , H e al t h a n d P u b l i c W o r k s . P h a s e 2 o f I D I P e n d e d o n 3 1 M a r c h 2 0 1 0 .

A N NU A L REP OR T 2 0 10 / 1 1

The budge t g r o w t h t r e n d s p e r s e c t o r s h o w t h a t t h e H e a l t h b u d g e t h a s g r o w n b y 1 5 % b e t w e e n t h e third quart e r s o f 2 0 0 9 / 1 0 a n d 2 0 1 0 / 1 1 f i n a n c i a l y e a r s f o l l o w e d b y E d u c a t i o n a t 3 0 . 2 0 % . H e a l t h a n d Education r e f l e c t n e g a t i v e g r o w t h i n e x p e n d i t u r e o f 4 . 8 % a n d 2 2 . 1 % r e s p e c t i v e l y a c r o s s 2 0 0 9 / 1 0 and 2010/11 fin a n c i a l y e a r s . C o m p a r i t i v e a n a l y s i s a c r o s s s e c t o r s s h o w s t h a t E d u c a t i o n s p e n t 5 0 . 1 0 % o f its allocated b u d g e t b y t h e e n d o f t h e t h i r d q u a r t e r 2 0 1 0 / 1 1 f i n a n c i a l y e a r . O v e r t h e s a m e p e r i o d H e alth spent 52% o f i t s i n f r a s t r u c t u r e b u d g e t r e s p e c t i v e l y . T h e s l o w s p e n d i n g i n H e a l t h r e l a t e s t o l a t e a w a rding of tenders, p o o r p e r f o r m a n c e b y c o n t r a c t o r s , c a p a c i t y o f I m p l e m e n t i n g A g e n t s t o d e l i v e r a n d l a t e payments o f c e r t i f i c a t e s .

IDIP Phase 3 com m e n c e d i n A p r i l 2 0 1 0 . I t a d o p t s a d i f f e r e n t m o d e l f o r t h e m o b i l i s a t i o n a n d u t i l i s a t i o n of experts to the m o d e l t h a t w a s u s e d i n P h a s e 2 . D u r i n g P h a s e 2 c o m p a n i e s w e r e a p p o i n t e d t o p r o v i d e the technical ass i s t a n c e t e a m s t o t h e p r o v i n ce s b u t i n P h a s e 3 i n d i v i d u a l e x p e r t s a r e c o n t r a c t e d directly or throug h t h e i r p a r e n t c o m p a n i e s . T hi s d o e s n o t o n l y c o n t r i b u t e t o s i g n i f i c a n t c o s t s a v i n g s but it provides m o r e d i r e c t m a n a g e m e n t c o n t r o l t o o f f i c i a l s o v e r t h e e x p e r t s . 4 L o n g T e r m T e c h n i c a l Assistants (LTAs) a r e d e p l o y e d t o e a c h p r o v i n c e a n d t h e y a r e b a s e d i n t h e P r o v i n c i a l T r e a s u r y P r o v i n c i a l Departments of H e a l t h , E d u c a t i o n a n d P u b l i c W o r k s . I t i s r e q u i r e d i n e a c h P r o v i n c e f o r t h e L T A s t o operate as a mu l t i - d i s c i p l i n a r y t e a m t h a t w o r k s c l o s e l y w i t h a n d r e p o r t t o g o v e r n m e n t o f f i c i a l s , t h e r e b y enabling transfer o f s k i l l s . P h a s e 3 i s f o c u s e d o n t h e i m p l e m e n t a t i o n o f t h e I n f r a s t r u c t u r e D e l i v e r y Management Too l k i t . C o n s e q u e n t l y i t a i m s t o s u p p o r t t h e f o l l o w i n g f i v e O u t p u t s d u r i n g t h e n e x t t h r e e years: • Effective func t i o n i n g o f t h e i n s t i t u t i o n a l a r r a n g e m e n t s a n d e n a b l i n g e n v i r o n m e n t f o r i n f r a s t r u c t u r e delivery • Improved infra s t r u c t u r e p l a n n i n g , b u d g e t i n g , m a i n t e n a n c e a n d p r o g r a m m e m a n a g e m e n t • Improved Infr a s t r u c t u r e p r o c u r e m e n t s y s t e m s a n d p r a c t i c e s • Improved infra s t r u c t u r e d e l i v e r y s k i l l s • Effective man a g e m e n t o f I D I P

Th e Infrastructure D elivery Improvement Programme (IDIP) T oolkit The Construction I n d u s t r y D e v e l o p m e n t B o a r d i n c o n j u n c t i o n w i t h N a t i o n a l T r e a s u r y , D e p a r t m e n t o f Public Works and t h e D e v e l o p m e n t B a n k o f S o u t h e r n A f r i c a a r e d e l i g h t e d t o a n n o u n c e t h a t t h e t h i r d edition of the Inf r a s t r u c t u r e D e l i v e r y M a n a g e m e n t T o o l k i t ( I D M T ) h a s b e e n p u b l i s h e d o n t h e c i db website. The purpose of th e I D M T i s d e p i c t e d a s f o l l o w s : • Provides a do c u m e n t e d b o d y o f k n o w l e d g e a n d s e t o f p r o c e s s e s t h a t r e p r e s e n t g e n e r a l l y recognised be s t p r a c t i c e s i n t h e d e l i v e r y m a n a g e m e n t o f i n f r a s t r u c t u r e • Focussed on t h e d e l i v e r y a n d l i f e c y c l e m a n a g e m e n t o f S o u t h A f r i c a n p u b l i c s e c t o r i n f r a s t r u c t u r e • Includes infor m a t i o n a p p l i c a b l e t o b o t h t e c h n i c a l a n d n o n - t e c h n i c a l m a n a g e r s • Provides “how t o ” g u i d e l i n e s f o r i n f r a s t r u c t u r e d e l i v e r y a n d p r o c u r e m e n t m a n a g e m e n t t h a t a r e necessary to d e l i v e r , o p e r a t e a n d m a i n t a i n i n f r a s t r u c t u r e • Helps to capa c i t a t e m a n a g e r s • Facilitates a u n i f o r m a p p r o a c h t o i n f r a s t r u c t u r e d e l i v e r y m a n a g e m e n t • Assist the pub l i c s e c t o r t o d e m o n s t r a t e c o m p l i a n c e w i t h t h e a p p l i c a b l e l e g i s l a t i v e r e q u i r e m e n t s The 2010 edition i n t r o d u c e s s i g n i f i c a n t u p d a t e s a n d a m e n d m e n t s t o t h e p r e v i o u s e d i t i o n . I t c a t e r s f o r : • A modernised a p p r o a c h t o p r o c u r e m e n t , • Greater emph a s i s o n P o r t f o l i o M a n a g e m e n t • Readiness for l o c a l g o v e r n m e n t • Alignment to t h e r e q u i r e m e n t s o f t h e G o v e r n m e n t I m m o v a b l e A s s e t M a n a g e m e n t A c t , N o . 1 9 o f 2 0 0 7 • Additional mo d u l e s t o p r o v i d e a n e x p a n d e d b o d y o f k n o w l e d g e i n s t r a t e g y , c o n s t r u c t i o n procurement s t r a t e g y a n d p e r f o r m a n c e m a n a g e m e n t

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The application i s b a s e d o n m o d e r n t e c h n o l o g y a n d h a s a w e b ( c i db w e b s i t e ) b a s e d n a v i g a t i o n t o o l for users to navig a t e t h r o u g h t h e d e l i v e r y p r o c e s s e s , p r a c t i c e g u i d e s a n d t h e i r a s s o c i a t e d s u p p o r t i n g documents.

I D I P Toolkit T raining Training on t h e T o o l k i t c o m m e n c e d i n S e p t e m b e r 2 0 1 0 . PROV I N C E

DATE

NO. OF ATTENDEES

CLIENT

THEME

Limpopo

8-10 Mar 2011

Department of Health and Social Development and Department of Public Works

•Construction Procurement

Western C a p e

30 Sept 2010

Western Cape Provincial Treasury, Department of Public Works

• P o r t f o l i o P l a nning • P r o j e c t Management

28-29 Mar 2011

Department of Transport & Public Works, Department of Health and IDIP Technical Assistants.

• C o n s t r u c t i o n Procurement

8-10 Dec 2010

IDIP Technical Assistants for Departments of Education, Health and Public Works

• P o r t f o l i o P l a nning • P r o j e c t Management • C o n s t r u c t i o n Procurement

23 -25 Mar 2011

IDIP Technical Assistants for Departments of Education, Health and Public Works

• C o n s t r u c t i o n Procurement

14-15 Apr 2011

All Provincial Treasuries and all Departments of Public Works

• P o r t f o l i o P l a nning • P r o j e c t Management • O p e r a t i o n s and Maintenance

15-17 Mar 2011

Department of Roads & Public Works, Health and Education

• C o n s t r u c t i o n Procurement

Gauteng

Eastern C a p e

The strateg i c p l a n f o r t r a i n i n g o n I D M T w i l l b e i m p l e m e n t e d i n t h e 2 0 1 1 / 2 0 1 2 f i n a n c i a l y e a r . A N NU A L REP OR T 2 0 10 / 1 1

Delay s in pay ments The cidb through i t s p a r t n e r s h i p p r o g r a m m e , In f r a s t r u c t u r e D e l i v e r y I m p r o v e m e n t P r o g r a m m e ( I D I P ) id entified delaye d p a y m e n t t o c o n t r a c t o r s a s o n e o f t h e m a i n b l o c k a g e s t o i n f r a s t r u c t u r e d e l i v e r y i n t h e construction indu s t r y . P r a c t i c e N o t e 1 9 i s s u e d i n J u n e 2 0 0 9 r e v i e w e d t h e t h r e e p h a s e s o f t h e p a y m e n t cycle, namely th e c e r t i f i c a t i o n , a u t h o r i s a t i o n , p r o c e s s i n g a n d a l s o e x a m i n e d t h e f l o w o f f u n d s b e t w e e n the client depart m e n t s a n d t h e i m p l e m e n t i n g a g e n t s . T h e P r a c t i c e N o t e h a s h a d m i n i m a l i m p a c t o n public sector clie n t s , a n d t h e i s s u e o f d e l a y s i n p a y m e n t s r e m a i n s a s o n e o f t h e c r i p p l i n g c o n s t r a i n t s t o effective infrastru c t u r e d e l i v e r y . The ci db hosted a w o r k s h o p o n 2 8 S e p t e m b e r 2 0 1 0 a t t h e R e s e r v e B a n k C o n f e r e n c e C e n t r e t o p r o m o t e consultation with i n d u s t r y s t a k e h o l d e r f o r t h e d e v e l o p m e n t o f a n a l l - e n c o m p a s s i n g s t r a t e g y t o e n a b l e prompt payment f o r a l l s e r v i c e p r o v i d e r s r e s p o n s i b l e f o r d e l i v e r i n g c o n s t r u c t i o n p r o j e c t s . P a r t i c i p a n t s o f this workshop sup p o r t e d t h e f o l l o w i n g r e c o m m e n d a t i o n s : • That the ci db e x a m i n e i t s a u t h o r i t y t o i n t r o d u c e r e g u l a t i o n p e r m i t t e d b y i t s A c t o n t h i s m a t t e r . • That further re s e a r c h b e u n d e r t a k e n o n t h e c o n t i n u e d l a c k o f u n d e r s t a n d i n g i n i n d u s t r y r e g a r d i n g payment eve n t s , e s p e c i a l l y r e g a r d i n g d i s pu t e s a n d r e l a t e d a d j u d i c a t i o n p r o v i s i o n s • That further ac t i o n c o u l d e n t a i l t h e “ n a m i n g a n d s h a m i n g ” o f e s p e c i a l l y s e r i a l d e f a u l t i n g p a y e r s • The possible i n t r o d u c t i o n o f c o n s t r u c t i o n l e g i s l a t i o n o f g r e a t e r i n f l u e n c e s u c h a s t h e H o u s i n g A c t of the UK or si m i l a r l e g i s l a t i o n i n S i n g a p o r e , w h i c h i n c l u d e s s e c u r i t y o f p a y m e n t b u t a l s o c o v e r s compulsory a d j u d i c a t i o n a n d e a s e s t h e e n f o r c e m e n t o f a d j u d i c a t i o n d e c i s i o n s . In April 2011, the c id b c o m m e n c e d w i t h a l i t e r a t u r e r e v i e w t o : 1. Investigate th e l e g a l r e m e d i e s a v a i l a b l e t o t h e S o u t h A f r i c a n b u i l d i n g a n d c i v i l e n g i n e e r i n g contractors a n d c o n s u l t a n t s t o e n f o r c e t h e i r r i g h t o f p a y m e n t f o r w o r k c o m p l e t e d o r s e r v i c e s performed; 2. To determine t h e e f f e c t i v e n e s s o f s a i d r e m e d i e s a n d t h e e n f o r c e m e n t t h e r e o f ; a n d 3. Suggest possi b l e s o l u t i o n s o n h o w t o i m p r o v e c u r r e n t p a y m e n t p r a c t i c e s i n t h e S o u t h A f r i c a n b u i l d i n g and construc t i o n i n d u s t r y . An Industry Work G r o u p w i l l b e e s t a b l i s h e d f o r c o n s u l t a t i o n o n t h e o u t c o m e s p r o p o s e d b y t h e r e s e a r c h findings.

Infrastructure G atewa y S ystem ( I G S ) Virtually all public s e c t o r i n f r a s t r u c t u r e p r o j e c ts a r e d e l i v e r e d u s i n g a t r a d i t i o n a l p r e p l a n n e d , n o n in tegrated procu r e m e n t a p p r o a c h . I n t e r m s o f t h i s a p p r o a c h , e a c h p r o j e c t i s t y p i c a l l y e x e c u t e d a s a single contract , o r m a y b e b r o k e n d o w n i n t o s m a l l e r c o n t r a c t s a l l o c a t e d t o s m a l l a n d e m e r g i n g contractors. Con t r a c t o r s w o u l d p r i c e a n d c o n s t r u c t i n f r a s t r u c t u r e o n t h e b a s i s o f d e s i g n s p r e p a r e d under the directi o n o f d e p a r t m e n t s a n d m u n i c i p a l i t i e s o r t h e i r a g e n t s .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Pr eviously, organ s o f s t a t e h a d t h e i r o w n i n t e r n a l d e s i g n , c o n s t r u c t i o n a n d m a i n t e n a n c e r e s o u r c e s that were capab l e o f d e s i g n i n g , c o n s t r u c t i n g a n d m a i n t a i n i n g p u b l i c i n f r a s t r u c t u r e . T h e s e f u n c t i o n s were only outsou r c e d t o t h e p r i v a t e s e c t o r w h e r e i n s u f f i c i e n t c a p a c i t y e x i s t e d . O v e r t i m e , t h i s i n t e r n a l capacity has bee n e r o d e d . T o d a y m o s t o f t h e s e f u n c t i o n s a r e o u t s o u r c e d t o t h e p r i v a t e s e c t o r , w i t h t h e design and proje c t m a n a g e m e n t f u n c t i o n s t y p i c a l l y b e i n g o u t s o u r c e d o n a d i s c i p l i n e s p e c i f i c b a s i s a n d rarely on a conso r t i u m b a s i s . C o n s u l t a n t s a r e a p p o i n t e d a t t h e i n c e p t i o n o f a p r o j e c t a n d a r e r e q u i r e d to scope the pro j e c t a n d t o d e v e l o p t h e p r o j e c t b r i e f . The traditional ap p r o a c h t o i n f r a s t r u c t u r e d e l i v e r y w o r k s b e s t w h e n a n o r g a n o f s t a t e h a s s u f f i c i e n t i n house capability a n d c a p a c i t y t o o v e r s e e t h e d e s i g n p r o c e s s r e s u l t i n g i n t h e d e s i g n a n d a s s o c i a t e d documentation b e i n g c o m p l e t e d b e f o r e t e n de r s a r e i n v i t e d . T h e c u r r e n t r e a l i t y i s t h a t w h i l e o r g a n s of state continue t o a d o p t t h e t r a d i t i o n a l a p p r o a c h t o d e l i v e r t h e i r i n f r a s t r u c t u r e p r o j e c t s , t h e y h a v e severe difficulty i n a t t r a c t i n g a n d r e t a i n i n g s u i t a b l y q u a l i f i e d s t a f f t o m a n a g e t h e p r o j e c t p r o c e s s . M a n y multidisciplinary c o n s u l t i n g t e a m s i n v o l v e d i n t h e d e l i v e r y o f b u i l d i n g p r o j e c t s r a r e l y h a v e c o m p l e t e d designs at the tim e t h a t t h e c o n t r a c t o r i s a p p o i n t e d , r e s u l t i n g i n p o o r p r o j e c t o u t c o m e s .

For this rea s o n , t h e r e i s a d i r e n e e d t o c o n s i d e r a l t e r n a t i v e o p t i o n s f o r d e l i v e r y a n d m a i n t e n a n c e of the much n e e d e d p u b l i c s e c t o r i n f r a s t r u c t u r e . S i m u l t a n e o u s l y , t i g h t e r c o n t r o l s a r e r e q u i r e d t o a l i g n infrastructu r e i n v e s t m e n t t o t h e s o c i a l a n d e c o n o m i c d e v e l o p m e n t a g e n d a o f g o v e r n m e n t t o e n s ure value for m o n e y . I n a d d i t i o n , t h e r e a r e m a n y c h a l l e n g e s , r i s k s a n d o p p o r t u n i t i e s f o r g o v e r n m e n t i n delivering t h e r e q u i r e d q u a n t u m o f p u b l i c i n f r a s t r u c t u r e i n a n e f f i c i e n t a n d e f f e c t i v e m a n n e r . In respons e t o t h e s e n a t i o n a l i m p e r a t i v e s , t h e c id b h a s d e v e l o p e d a n I n f r a s t r u c t u r e G a t e w a y S y s t em which has b e e n e m b e d d e d i n t h e u p g r a d e t o t h e c i db T o o l k i t . T h e 2 0 1 0 I D M T c a t e r s f o r i n f r a s t r u c t ure projects fr o m c o n c e p t t h r o u g h t o d e l i v e r y , m a i n t e n a n c e a n d w h e r e , n e c e s s a r y t h e d e c o m m i s s i o n ing of the asse t , t h u s i n c o r p o r a t i n g a l l a s p e c t s o f l i f e c y c l e m a n a g e m e n t o f a n a s s e t . T h e G a t e w a y S ystem provides fo r a n u m b e r o f c o n t r o l p o i n t s ( a p p r o v a l g a t e s ) i n t h e a s s e t l i f e c y c l e w h e r e a d e c i s i o n i s required b e f o r e p r o c e e d i n g f r o m o n e p h a s e o r s u b - p h a s e t o a n o t h e r . A n i n f o r m e d d e c i s i o n a t e a ch gate will p r o v i d e t h e a s s u r a n c e t h a t a p r o j e c t • remain s w i t h i n a g r e e d m a n d a t e s ; • aligns w i t h t h e p u r p o s e f o r w h i c h i t w a s c o n c e i v e d ; a n d • can pro g r e s s s u c c e s s f u l l y f r o m o n e p h a s e t o t h e n e x t . More impo r t a n t l y , t h e a p p r o v a l g a t e s m i n i m i s e t h e p r o j e c t r i s k t o t h e l i m i t a t i o n s o f t h e c a p a b i l i t y of a client to c o n t r o l i t s r i s k , w h i l s t i m p r o v i n g g o v e r n a n c e , a c c o u n t a b i l i t y a n d o v e r s i g h t i n t h e i n f r a s t r u cture delivery pr o c e s s . The Infrast r u c t u r e G a t e w a y S y s t e m c o m p r i s e s f o u r p l a n n i n g p h a s e s ( i n f r a s t r u c t u r e p l a n n i n g , p r o c u r ement planning, p a c k a g e p r e p a r a t i o n a n d p a c k a g e s o l u t i o n ) a n d a n u m b e r o f i m p l e m e n t a t i o n p h a s e s . The deliverable s a t t h e e n d o f t h e e a c h o f t h e p l a n n i n g p h a s e s a r e : • An infra s t r u c t u r e p l a n w h i c h i d e n t i f i e s l o n g t e r m n e e d s a n d l i n k s p r i o r i t i s e d n e e d s t o a f o r e c a s t ed budget f o r t h e n e x t f i v e y e a r s , • A procu r e m e n t s t r a t e g y f o r i m p l e m e n t i n g t h e i n f r a s t r u c t u r e p l a n i n t h e m e d i u m t e r m , • A strate g i c b r i e f s e t t i n g o u t t h e p a c k a g e i n f o r m a t i o n a n d • A repor t s e t t i n g o u t t h e i n t e g r a t e d co n c e p t f o r t h e p a c k a g e e n s u r e s t h a t p r o j e c t s a r e d e v e l o p ed not only in a c c o r d a n c e w i t h l e g i s l a t i v e r e q u i r e m e n t s b u t a l s o e m b r a c e b e s t p r o c u r e m e n t a n d d e l i very manag e m e n t p r a c t i c e s i n t h e i r i m p l e m e n t a t i o n . The implem e n t a t i o n g a t e s e n s u r e t h a t t h e d e s i g n i s d e v e l o p e d i n l i n e w i t h t h e i n t e g r a t e d c o n c e p t for the packa g e u s i n g a r a n g e o f c o n t r a c t i n g s t r a t e g i e s ( i . e . d e s i g n b y e m p l o y e r , d e v e l o p a n d c o n s t ruct and design a n d c o n s t r u c t ) a n d t h e n e ce s s a r y i n f o r m a t i o n i s o b t a i n e d s o o n a f t e r t h e c o m p l e t i o n o f the works. The inform a t i o n u p o n w h i c h a d e c i s i o n i s b a s e d a t a g a t e a n d t h e d e c i s i o n s m a d e c a n b e a u d i t e d to ensure tha t p r o j e c t s r e m a i n w i t h i n a C l i e n t ’ s m a n d a t e , a r e e q u i t a b l e a n d r e a l i s e v a l u e f o r m o n e y . The opportunit y t o a u d i t t h e l i f e c y c l e o f p r o j e c t s a l s o : • Improv e s t r a n s p a r e n c y w h i c h r e d u c e s o p p o r t u n i t y f o r m i s m a n a g e m e n t a n d c o r r u p t i o n i n p l a n n ing and im p l e m e n t a t i o n • Enable s t h e p r o c u r e m e n t s t r a t e g y a d o p t e d f o r a s e c t o r o r a p a c k a g e t o b e r e v i e w e d a n d i m p r oved upon w h e n d e l i v e r i n g s i m i l a r f u t u r e p r o j e c t s • Enable s p o s t i m p l e m e n t a t i o n r e v i e ws t o t a k e p l a c e t o e x a m i n e w h e t h e r p l a n n e d b e n e f i t s a r e achiev e d a n d r i s k s a r e b e i n g e f f e c t iv e l y m a n a g e d , a n d • Remove s p e r v e r s e i n c e n t i v e s r e l a t i n g t o t h e p r o m o t i o n o f o n e p r o j e c t o r a s o l u t i o n o v e r a n o t h er.

A N NU A L REP OR T 2 0 10 / 1 1

A 2 Procurement Reform Register of Professional S ervice Providers (Ro PSP) The Constitution o f t h e R e p u b l i c o f S o u t h A f r i ca , 1 9 9 6 , d e t e r m i n e s a s a b a s i c h u m a n r i g h t t h a t e v e r y person is free to c h o o s e a t r a d e , o c c u p a t i o n o r p r o f e s s i o n , b u t t h a t t h e t r a d e , o c c u p a t i o n o r p r o f e s s i o n may be regulate d b y l a w . I n a d d i t i o n , t h e C o n s t i t u t i o n d e t e r m i n e s a s a b a s i c r i g h t f o r e v e r y p e r s o n to live in an envir o n m e n t t h a t i s n o t h a r m f u l t o h i s o r h e r h e a l t h o r w e l l - b e i n g a n d a n e n v i r o n m e n t protected, for th e b e n e f i t o f p r e s e n t a n d f u t u r e g e n e r a t i o n s . A g a i n s t t h i s b a c k g r o u n d , g o v e r n m e n t h a s promulgated the b u i l t e n v i r o n m e n t l e g i s l a t i o n , r e g u l a t i n g t h e p r o f e s s i o n s a n d d e t e r m i n i n g t h e n e e d f o r every built enviro n m e n t p r o f e s s i o n a l t o b e r e g i s t e r e d w i t h a C o u n c i l f o r t h e P r o f e s s i o n s . I t i s t h e r e f o r e essential that tho s e p r o f e s s i o n a l s e r v i c e p r o v i d e r s w h o p r o v i d e c o n s t r u c t i o n r e l a t e d s e r v i c e s t o o r g a n s of state are regis t e r e d w i t h t h e r e l e v a n t s t a t u t o r y c o u n c i l s o r i f n o t s o r e g i s t e r e d , p e r f o r m w o r k u n d e r t h e direction of such p e r s o n s . Section 5(2)g of t h e c idb A c t e m p o w e r s t h e B o a r d t o e s t a b l i s h a n d m a i n t a i n a R e g i s t e r o f S u p p l i e r s , Manufacturers or S e r v i c e P r o v i d e r s . I n t h i s r e g a r d , t h e B o a r d h a s d e c i d e d t o e s t a b l i s h a R e g i s t e r f o r Pr ofessional Servi c e P r o v i d e r s ( R o P S P ) t o a s s i s t o r g a n s o f s t a t e i n t h e p r o c u r e m e n t o f a p p r o p r i a t e l y qualified built en v i r o n m e n t p r o f e s s i o n a l s . On infrastructure p r o j e c t s , p r o f e s s i o n a l s e r v i c e s a r e r e q u i r e d t o p l a n , b u d g e t , c o n d u c t c o n d i t i o n assessments of e x i s t i n g i n f r a s t r u c t u r e , s c o p e r e q u i r e m e n t s i n r e s p o n s e t o t h e o w n e r o r o p e r a t o r ’ s b r i e f , propose solution s , e v a l u a t e a l t e r n a t i v e s o l u t i on s , d e v e l o p t h e d e s i g n f o r t h e s e l e c t e d s o l u t i o n , p r o d u c e production inform a t i o n e n a b l i n g c o n s t r u c t i o n , c o n f i r m t h a t d e s i g n i n t e n t i s m e t d u r i n g c o n s t r u c t i o n , manage program m e s a n d p r o j e c t s , p r e p a r e p r o c u r e m e n t d o c u m e n t s , a d m i n i s t e r c o n t r a c t s a n d adjudicate dispu t e s . Decisions made d u r i n g t h e d e s i g n s t a g e o f a p r o j e c t c a n h a v e a m a j o r i m p a c t o n t h e s e r v i c e l i f e , t h e usefulness, the p e r f o r m a n c e a n d t h e l i f e c y c l e c o s t s o f c o n s t r u c t i o n w o r k s . I t i s a c c o r d i n g l y i m p e r a t i v e that the professio n a l s e r v i c e p r o v i d e r a p p o i n t e d t o d e s i g n c o n s t r u c t i o n w o r k s h a s t h e n e c e s s a r y expertise and, m o s t i m p o r t a n t l y , e x p e r i e n c e t o p r o v i d e t h e r e q u i r e d k n o w l e d g e b a s e d s e r v i c e s . I t i s a l s o essential for prof e s s i o n a l s e r v i c e p r o v i d e r s t o h a v e n o t o n l y t h e c a p a b i l i t y t o p e r f o r m a s e r v i c e b u t a l s o the resources an d i n t e r n a l m a n a g e m e n t s y s t em s t o p r o v i d e s u c h s e r v i c e t o t h e r e q u i r e d q u a l i t y w i t h i n the time frames s e t b y t h e c l i e n t . T h e a p p o i n t m e n t o f u n d e r - q u a l i f i e d , u n d e r - e x p e r i e n c e d a n d u n d e r resourced service p r o v i d e r s h a s l e d t o f r u i t l e s s a n d w a s t e f u l e x p e n d i t u r e a n d t h e c o m p r o m i s i n g o f service delivery o n p u b l i c s e c t o r p r o j e c t s .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The cidb’s manda t e i s t o p r o v i d e s t r a t e g i c l e a d e r s h i p , t o p r o m o t e s u s t a i n a b l e g r o w t h , i m p r o v e d procurement and d e l i v e r y m a n a g e m e n t , i m p ro v e d p e r f o r m a n c e a n d b e s t p r a c t i c e , a n d t o d e v e l o p systematic metho d s f o r m o n i t o r i n g a n d r e g u l a t i n g t h e p e r f o r m a n c e o f t h e i n d u s t r y a n d i t s s t a k e h o l d e r s . The Register of C o n t r a c t o r s i s a p p l i e d w h e n e v e r a c o n t r a c t o r i s a p p o i n t e d , w i t h o r w i t h o u t d e s i g n responsibilities to p r o v i d e c o n s t r u c t i o n w o r k s ( i . e . i r r e s p e c t i v e o f t h e c o n t r a c t i n g s t r a t e g y ) . T h e a w a r d of a contract trig g e r s t h e p o p u l a t i o n o f t h e R e g i s t e r o f P r o j e c t s . T h e r e p o r t i n g o n t h e c o m p l e t i o n o f a project triggers a s p e c t s o f t h e R e g i s t e r o f C o n t r a c t o r ’ s B e s t P r a c t i c e R e c o g n i t i o n S c h e m e . T h e R e g i s t e r of Professional Se r v i c e P r o v i d e r s c a n b e a p p l i e d i n t h e p r o c u r e m e n t o f p r o f e s s i o n a l s e r v i c e p r o v i d e r s . The linking of the R e g i s t e r o f P r o j e c t s t o t h e R e g i s t e r o f C o n t r a c t o r s a n d t h e R e g i s t e r o f P r o f e s s i o n a l Service Providers e n a b l e s i n f o r m a t i o n b e t w e e n t h e p r o f e s s i o n a l s e r v i c e a n d t h e p r o d u c t ( c o n s t r u c t i o n works) to be linke d e . g . q u a l i t y a n d p e r f o r m a n c e e t c . I t a l s o a l l o w s t h e p r o f e s s i o n a l s e r v i c e t o b e l i n k e d to the constructio n s e r v i c e , e . g . c o s t , t i m e o v e r r u n s a n d d i s p u t e s e t c . Defects that man i f e s t s e v e r a l y e a r s a f t e r c o m p l e t i o n e . g . a c o l l a p s e o f a r o o f , s e v e r e c r a c k i n g i n a building or a sub s i d e n c e i n t h e e a r t h w o r k s , c a n b e r e a d i l y l i n k e d b a c k t o b o t h t h e c o n t r a c t o r a n d t h e professional. The integration o f t h e c idb R e g i s t e r s , t r a n s f o r m i n g t h e i n f o r m a t i o n o b t a i n e d f r o m t h e R e g i s t e r s i n t o knowledge that w i l l i n f o r m g o v e r n m e n t e x p e n d i t u r e i n r e l a t i o n t o i n f r a s t r u c t u r e a s w e l l a s e c o n o m i c planning for both t h e p u b l i c a n d p r i v a t e s e c t o r s i s p i v o t a l t o t h e s u c c e s s o f t h e c i db i n d e v e l o p i n g t h e construction indu s t r y .

The develo p m e n t a n d i m p l e m e n t a t i o n o f a R e g i s t e r o f P r o f e s s i o n a l S e r v i c e P r o v i d e r s w i l l b e approache d i n t h e f o l l o w i n g p h a s e s : PHASE

DESCRIPTION

E X P E C T E D P R O C U R E M E N T R E L A T E D O U T C O MES

Phase 1: Establishm e n t o f a basic reg i s t e r categoris e d i n b r o a d l y defined p r a c t i c e a r e a s

Gather basic data of firms operating in broadly defined practice areas.

Reduce risk by: • r e q u i r i n g s e r v i c e s t o b e p r o v i d e d w i t h i n a discipline to be rendered under the supervision of a persons is in the full time employ of a PSP and who is appropriately registered with a statutory council; • e s t a b l i s h i n g r e q u i r e m e n t s f o r P S P s t o m a intain m i n i m u m l e v e l s o f c o m p e t e n c i e s i n o r d er to remain on the RoPSPs in a particular discipline; • p r o v i d i n g a m e a n s f o r p r o h i b i t i n g P S P s and their principals, if necessary, from c o n t r a c t i n g w i t h a p u b l i c s e c t o r c l i e n t f or a period of time when they default on a c o n t r a c t , b r e a c h t h e r e g i s t r a t i o n c o n d i t i ons o r b r e a c h t h e c i db C o d e o f C o n d u c t f o r the P a r t i e s E n g a g e d i n C o n s t r u c t i o n P r o c u r e ment; and • p r o v i d i n g a m e a n s f o r i d e n t i f y i n g i n t e r l o cking business ownerships through common p r i n c i p a l s w h i c h c a n l e a d t o t h e d e t e c t i on of c o n f l i c t s o f i n t e r e s t o r c o l l u s i v e p r a c t i c e s.

Phase 2: Peer asse s s m e n t o f PSPs capa b i l i t i e s i n narrowly d e f i n e d practice a r e a s

Records outcomes of peer assessment in a narrowly defined practice area of: a) the quality of outputs; or b) the qualifications, experience and contextual knowledge of a registered person, enabling r e g i s t r a t i o n in s u c h practice areas (process will b e p i l o t e d on a d j u d i c a t o r s and thereafter expanded to other areas)

Reduce risk by enabling an employer to identify specialist capabilities of PSPs.

Phase 3: Performan c e r e p o r t i n g after com p l e t i o n o f a constru c t i o n w o r k s contract

Records performance of PSPs in delivering a service.

R e d u c e s r i s k b y i d e n t i f y i n g u n d e r p e r f o r m e rs.

Phase 4: Best prac t i c e recognitio n s c h e m e

Records assessed abilities of a PSP to comply with or apply specified best practices.

(process will be piloted)

Enables quality of service to be improved as employer will have a means to include performance records in the evaluation of tenders. Reduces risk by enabling an employer to identify PSPs who are capable of delivering a s e r v i c e t h a t s a t i s f i e s p r e s c r i b e d b e s t p r a c tices.

The cidb h a s c o m m e n c e d a n i n v e s t i g a t i o n t o d e v e l o p P h a s e 1 , a n d w h e r e p o s s i b l e , a s p e c t s o f P hase 2. Piloting o f t h e s y s t e m i s e s t i m a t e d t o b e i n F e b r u a r y 2 0 1 2 .

A N NU A L REP OR T 2 0 10 / 1 1

E n a b l e s q u a l i t y o f s e r v i c e t o b e i m p r o v e d as employer will have a means to use of only those PSPs who have an assessed ability to deliver in terms of specific best practices.

PP P F A The Construction I n d u s t r y R e g u l a t i o n s , 2 0 0 4 , a d h e r e s t o t h e p r i n c i p l e s o f t h e P r e f e r e n t i a l P r o c u r e m e n t Policy Framework A c t ( N o . 5 o f 2 0 0 0 ) a n d i t s R e g u l a t i o n s p u b l i s h e d i n 2 0 0 1 . S i n c e 2 0 0 4 t h e M i n i s t e r of Public Works h a s m a d e R e g u l a t i o n s a n d t h e c i db h a s i s s u e d s u b s i d i a r y l e g i s l a t i o n ( a s a u t h o r i s e d by the Regulation s ) r e f e r r e d t o a s t h e S t a n d a r d f o r U n i f o r m i t y . T h i s S t a n d a r d f o r U n i f o r m i t y p r o m o t e s procurement refo r m i n t h e c o n s t r u c t i o n i n d u s t r y . One of the four p r o c u r e m e n t s t a n d a r d s p r o m o t e d i n t h e S t a n d a r d f o r U n i f o r m i t y r e f e r s t o M e t h o d 4 which is a comb i n a t i o n o f p o i n t s f o r p r i c e , f u n c t i o n a l i t y ( q u a l i t y ) a n d p r e f e r e n c e t o a r r i v e a t t h e h i g h e s t point scoring ten d e r , i n a c c o r d a n c e w i t h t h e P P P F A R e g u l a t i o n s , 2 0 0 1 . T h e v a l i d i t y o f P r e f e r e n t i a l Pr ocurement Reg u l a t i o n s 2 0 0 1 r e l a t i n g t o t h e e v a l u a t i o n o f f u n c t i o n a l i t y a n d p r i c e w e r e c h a l l e n g e d i n the KwaZulu-Nata l H i g h C o u r t , i n P i e t e r m a r i t z bu r g . T h e c o u r t f o u n d t h a t “ t h e w o r d p r i c e d o e s n o t i n c l u d e functionality and t h a t t h e y a r e e n t i r e l y d i s t i n c t i v e c o n c e p t s . ” a n d c o n s e q u e n t l y r u l e d t h a t s o m e o f t h e regulations relati n g t o f u n c t i o n a l i t y w e r e i n c o n s i s t e n t w i t h t h e A c t a n d t h e r e f o r e d e c l a r e d t h e m t o b e in valid. The cidb M e t h o d 4 h a s b e e n c o m p r o m i s e d b y t h i s c o u r t j u d g e m e n t , e f f e c t i v e l y r u l i n g o u t a k e y mechanism used t o d e t e r m i n e t h e m o s t e c o n o m i c a l l y a d v a n t a g e o u s t e n d e r o f f e r i n t h e p u r s u a n c e o f the following key m a n d a t e s o f t h e c id b A c t , w h i c h i s t o , a m o n g s t o t h e r s , : • Determine, es t a b l i s h a n d p r o m o t e i m p r o v e d p e r f o r m a n c e a n d b e s t p r a c t i c e o f p u b l i c a n d p r i v a t e sector clients, c o n t r a c t o r s a n d o t h e r p a r t i c i p a n t s i n t h e c o n s t r u c t i o n d e l i v e r y p r o c e s s ; • Promote unifo r m a p p l i c a t i o n o f p o l i c y t h r o u g h o u t a l l s p h e r e s o f g o v e r n m e n t a n d p r o m o t e u n i f o r m and ethical st a n d a r d s , c o n s t r u c t i o n p r o c u re m e n t r e f o r m , a n d i m p r o v e d p r o c u r e m e n t a n d d e l i v e r y management – i n c l u d i n g a c o d e o f c o n d u c t . National Treasury h a s i s s u e d a n I n s t r u c t i o n N o t e t o p r e s c r i b e t h e u s e o f f u n c t i o n a l i t y o n l y a s prequalification c r i t e r i a i . e . t e n d e r s s a t i s f y i n g t h e s p e c i f i c a t i o n s a n d / o r m i n i m u m l e v e l s o f f u n c t i o n a l i t y are evaluated on t h e l o w e s t p r i c e t a k i n g i n t o a c c o u n t e q u i t y c o n s i d e r a t i o n s i . e . a p r e f e r e n c e . O f importance is tha t t h e I n s t r u c t i o n N o t e p e r m i t s t e n d e r s i n t h e c a s e o f t h e c o n s t r u c t i o n i n d u s t r y t o b e evaluated in term s o f t h e c id b p r e s c r i p t s ( a s p r o v i d e d f o r i n t h e S u p p l y C h a i n M a n a g e m e n t R e g u l a t i o n s issued in terms o f t h e P u b l i c F i n a n c e M a n a g e m e n t A c t o f 1 9 9 9 a n d t h e L o c a l G o v e r n m e n t : M u n i c i p a l Finance Manage m e n t A c t o f 2 0 0 3 ) . The approach ad o p t e d b y N a t i o n a l T r e a s u r y r u l e s o u t t h e d e t e r m i n a t i o n o f t h e m o s t e c o n o m i c a l l y advantageous of f e r . T h i s a p p r o a c h i s s u i t a b l e f o r n o n - c o n s t r u c t i o n p r o c u r e m e n t w h i c h d e a l s i n t h e main with direct a c q u i s i t i o n s w h i c h i n v o l v e s t a n d a r d , w e l l d e f i n e d a n d s c o p e d s e r v i c e s , o f f t h e s h e l f items and readily a v a i l a b l e c o m m o d i t i e s . C o n s t r u c t i o n p r o c u r e m e n t d i f f e r s i n t h a t t h e r e i s s e l d o m the direct acquis i t i o n o f i n f r a s t r u c t u r e , p r o f e s s i o n a l s e r v i c e s a r e r e q u i r e d , a s n e c e s s a r y , t o p l a n a n d design the works , t h e s e r v i c e s a r e f r e q u e n t l y p e r f o r m e d o n i n f r a s t r u c t u r e t h a t i s i n u s e . T h e r i s k o f t h e unforeseen occu r r i n g d u r i n g t h e p e r f o r m a n c e o f t h e c o n t r a c t f r e q u e n t l y l e a d s t o c h a n g e s i n t h e t i m i n g for the delivery o f t h e w o r k s a n d t h e p r i c e a g r e e d a t t h e t i m e t h a t c o n t r a c t s w e r e a w a r d e d . T h e t o t a l cost of ownership o v e r l i f e s p a n a l s o n e e d s t o b e c o n s i d e r e d . A c c o r d i n g l y , l o w e s t p r i c e a d j u s t e d f o r a preference to me e t a m i n i m u m s t a n d a r d , i s ap p r o p r i a t e o n l y w h e r e p r o j e c t s a r e v e r y w e l l d e f i n e d , a r e straight forward a n d h a v e a l o w r i s k p r o f i l e . T h e r e i s a c c o r d i n g l y a n e e d i n c o n s t r u c t i o n p r o c u r e m e n t t o evaluate price a n d o t h e r f a c t o r s w h i c h r e l a t e d i r e c t l y t o t h e p r o c u r e m e n t i n l i n e w i t h t h e P r e f e r e n t i a l Pr ocurement Reg u l a t i o n s 2 0 0 1 , p r i o r t o t h e c o u r t j u d g e m e n t .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The construction i n d u s t r y h a s r e c e n t l y b e g u n to m o d e r n i s e i t s a p p r o a c h t o d e l i v e r y a s d e p i c t e d i n the 2010 version o f t h e I n f r a s t r u c t u r e D e l i v e r y M a n a g e m e n t T o o l k i t ( I D M T ) d e v e l o p e d b y t h e c i db in conjunction wi t h N a t i o n a l T r e a s u r y ) , e . g . b y i n t e g r a t i n g t h e d e s i g n a n d c o n s t r u c t i o n a s p e c t s o f construction work s , f o r m i n g l o n g - t e r m r e l a t i o n s h i p s t o i m p r o v e p e r f o r m a n c e i n c l u d i n g t h e q u a n t u m of service deliver e d b y e n t e r i n g i n t o f r a m e w o r k c o n t r a c t s , p a y i n g m o r e a t t e n t i o n t o t h e m a n a g e m e n t of construction re l a t e d r i s k s t h r o u g h t h e c o n t r a c t , f o s t e r i n g c o l l a b o r a t i v e r e l a t i o n s h i p s a n d e n g a g i n g in a competitive s e l e c t i o n p r o c e s s f o r p r o f e s s i o n a l s e r v i c e s . T h i s s h i f t i n p r o c u r e m e n t a r r a n g e m e n t s is underpinned b y a l t e r n a t i v e c o n t r a c t i n g s t r a t e g i e s a n d p r i c i n g s t r a t e g i e s a n d i s a i m e d a t n o t only improving th e q u a l i t y o f i n f r a s t r u c t u r e b u t a l s o i n c r e a s i n g g o v e r n m e n t ’ s c a p a c i t y t o d e l i v e r and maintain mu c h n e e d e d i n f r a s t r u c t u r e . T h e s u c c e s s f u l i m p l e m e n t a t i o n o f a l l o f t h e s e m o d e r n

approache s i s t o a l a r g e e x t e n t d e p e n d e n t u p o n t h e e v a l u a t i o n o f t e n d e r s b e i n g o n t h e b a s i s o f the most econ o m i c a l l y a d v a n t a g e o u s o f f e r a s o p p o s e d t o l o w e s t p r i c e . Evaluation M e t h o d 4 a s p r e s c r i b e d b y t h e S t a n d a r d f o r U n i f o r m i t y p r o v i d e s f o r p r i c e ( f i n a n c i a l o f f e r), preference a n d f u n c t i o n a l i t y ( q u a l i t y ) a n d i s t y p i c a l l y a p p l i e d t o e n s u r e t h a t t h e a p p o i n t e d c o n t r a ctor is able to a d d v a l u e i n t h e d e l i v e r y o f c o n s t r u c t i o n w o r k s . S u c h v a l u e a d d m a y b e d e m o n s t r a t e d i n a number of a r e a s i n c l u d i n g c o n s t r u c t i o n m e t h o d o l o g i e s ( b u i l d a b i l i t y ) , e x p e r i e n c e i n p r o j e c t s o f a s imilar nature, pro g r a m m i n g o f t h e w o r k s , m a n a g e m e n t o f t h e s i t e a n d s u p p l y c h a i n , w h a t i n n o v a t i o n c a n be brought to a s p e c i f i c p r o j e c t i n t e r m s of m a n a g i n g r i s k s r e l a t i n g t o h e a l t h a n d s a f e t y , e n v i r o n m e n tal requireme n t s a n d q u a l i t y . M e t h o d 4 r e c o g n i s e s a n d r e w a r d s t h o s e c o n t r a c t o r s w h o h a v e m a d e investmen t s i n i m p r o v i n g t h e i r p e r f o r m a n c e i n t h e d e l i v e r y o f c o n s t r u c t i o n w o r k s a n d t h e i r s e r v i c e to clients. Th i s n o t o n l y a d d s v a l u e a n d r e d u c e s l i f e c y c l e c o s t s b u t a l s o m i n i m i s e r i s k s ( t h e e f f e c t o f uncertaint y o n o b j e c t i v e s ) i n r e l a t i o n t o t i m e , c o s t a n d q u a l i t y o f t h e w o r k s a n d h e a l t h , s a f e t y a n d environme n t a l i n c i d e n t s w h i c h c a n i m p a c t n e g a t i v e l y o n p r o j e c t o u t c o m e s . After exten s i v e r e s e a r c h , t h e c id b i s w o r k i n g c l o s e l y w i t h t h e N a t i o n a l D e p a r t m e n t o f P u b l i c W o r k s and in consulta t i o n w i t h t h e N a t i o n a l T r e a s u r y f o r a n a m i c a b l e s o l u t i o n t o r e t a i n M e t h o d 4 . A p p l i c a t i o n for a possible re m e d y h a s b e e n p r e p a r e d f o r M i n i s t e r i a l a p p r o v a l .

A N NU A L REP OR T 2 0 10 / 1 1

A 3 Client Capacitation and Training Strategic Training Programme The cidb provide s t r a i n i n g t o a l l p u b l i c s e c t o r i n f r a s t r u c t u r e c l i e n t s o n t h e a p p l i c a t i o n o f c i db Regulations and s u p p o r t i n g p r e s c r i p t s o n t h e i r i n f r a s t r u c t u r e p r o g r a m m e s . The table below p r o v i d e s a l i s t o f c a p a c i t a t i o n p r o g r a m m e s o n c i db R e g u l a t i o n s c o n d u c t e d f o r t h e 2010-2011 financ i a l y e a r :

DATE 11.05.11

PROVINCE AND CLIENT Limp o p o , Dep a r t m e n t o f Edu c a t i o n

CLIENT CONTACT/ Wimpie Orffe 015 295 4408

REQUEST CCC Limpopo E. Mabelebele

CONTACT INFORMATION tel: 0861 222 765 fax: 086 677 8974 mobile: 078 457 7296 e-mail:

NO.OF PEOPLE TRAINED 12

e d w i n m @c i db. o r g . z a 12.05.11

Mpu m a l a n g a , Ema l a h l e n i Loc a l Mun i c i p a l i t y

12.05.11

Limp o p o Dep a r t m e n t o f Pub l i c W o r k s

13 0511

Limp o p o , Polo k w a n e Mun i c i p a l i t y

M.E Sedupane 013 690 6323

Portia Mabitsela 015 290 2506 /2248

CCC Mpumalanga B. Sibiya

tel: 0861 678 222 fax: 0866 856 733 mobile: 083 646 1942 e-mail: b o n g a n i s @c i db. o r g . z a

CCC Limpopo E. Mabelebele

tel: 0861 222 765 fax: 086 677 8974 mobile: 078 457 7296 e-mail: e d w i n m @c i db. o r g . z a

CCC Limpopo E. Mabelebele

tel: 0861 222 765 fax: 086 677 8974 mobile: 078 457 7296 e-mail: e d w i n m @c i db. o r g . z a

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Public services capacitation and training DATE

PROVINCE

ORGANISATION

AREAS OF CAPACITATION

Thu 01 Ap r 2 0 1 0

Gauteng

Botjheng Water

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Mon 12 A p r 2 0 1 0

Gauteng

Ekurhuleni Metropolitan Municipality

c i db r e g u l a t i o n s a n d p r o c e s s e s

Wed 28 A p r 2 0 1 0

Gauteng

c id b: H e a d O f f i c e

i-Tender Training

Tue 11 Ma y 2 0 1 0

Gauteng

Sedibeng District Municipality

i-Tender Training

Tue 18 Ma y 2 0 1 0

Gauteng

Ekurhuleni Metropolitan Municipality

P r o c u r e m e n t S t r a t e g y M e e t i n g for Contractor Development

Fri 02 July 2 0 1 0

Gauteng

Randfontein Local Municipality

c i db r e g u l a t i o n s , C o m p l i a n c e Audits

Tue 20 Ju l y 2 0 1 0

Gauteng

Ekurhuleni Metropolitan Municipality

Site inspection of Platkop and Rietfontein landfill sites

Fri 23 July 2 0 1 0

Gauteng

Eskom

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Thu 29 Ju l y 2 0 1 0

Gauteng

Independent Development T ru s t

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Fri 06 Aug u s t 2 0 1 0

Gauteng

South African Police Service

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Fri 01 Oc t o b e r 2010

Gauteng

South African Police Service

R e g i s t e r o f C o n t r a c t o r s & P r a c t ice Note 21.

Tue 26 Oc t o b e r 2010

Gauteng

Auditor General South Africa

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Tue & We d 0 7 - 0 8 Decembe r 2 0 1 0

Gauteng

De p a r t m e n t o f P u b l i c W o r k s

C C C C o n t r a c t o r D e v e l o p m e n t Roll Out

Mon 07 F e b r u a r y 2011

Gauteng

Randwater

Procurement Processes

Wed 28 F e b r u a r y 2011

Gauteng

Provincial Stakeholder Forum

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Fri 04 Jun e 2 0 1 0

Kwa-Zulu Natal

Umgeni Water

c i db r e g u l a t i o n s , C o m p l i a n c e Audits

Tue 07 De c e m b e r 2010

Kwa-Zulu Natal

De p a r t m e n t o f P u b l i c W o r k s

C C C C o n t r a c t o r D e v e l o p m e n t Roll Out

Thur 30 Se p t e m b e r 2010

Northern Cape

De p a r t m e n t o f R o a d s a n d Public Works, Provincial T re a s u r y , D e p a r t m e n t t o f Agriculture , Education & Na t i o n a l P u b l i c W o r k s

C o n s t r u c t i o n P r o c u r e m e n t , i T e nder Training, Practice Note 3 & 21.

Fri 03 Dec e m b e r 2010

Northern Cape

De p a r t m e n t o f A g r i c u l t u r e

Construction Procurement & i-Tender Training.

A N NU A L REP OR T 2 0 10 / 1 1

DATE

PROVINCE

ORGANISATION

AREAS OF CAPACITATION

Mon 13-15 October 2010

Western Cape

Department of Public Works, Provincial T r e a s u r y, C i t y o f C a p e Town, & Department of Housing.

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Wed-Thurs 2122 October 2010

Western Cape

Saldhana Municipality

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Thu 12 August 2010

Eastern Cape

Nelson Mandela Bay Metro

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Fri 13 August 2010

Eastern Cape

Department of Roads and Public Works

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Tue & Wed 9-10 November 2010

Eastern Cape

Department of Public Works

CCC Contractor Development Roll Out

Thur 18 November 2010

Eastern Cape

Department of Public Works

CCC Contractor Development Summit

Thur 19 November 2010

Eastern Cape

Amatole District Municipality

Procurement Strategy Meeting for Contractor Development

Thur 17 March 2011

Eastern Cape

Provincial Stakeholder Forum

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Mon 15 November 2010

North West

Department of Public Works

CCC Contractor Development Roll Out

Thur 17 March 2011

North West

Provincial Stakeholder Forum

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Mon 29 November 2010

Free State

Department of Public Works

CCC Contractor Development Roll Out

Thurs 07 October 2010

Mpumalanga

Department of Roads and Public Works

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Mon 04 October 2010

Mpumalanga

Eskom Meeting

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

Thur 24 March 2011

Mpumalanga

Provincial Stakeholder Forum

c i db r e g u l a t i o n s a n d i m p a c t o f compliance.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

C onstruction Procurement Skills Programme The cidb h a s i d e n t i f i e d a d e f i c i e n c y i n t h e s k i l l s s e t o f p u b l i c s e c t o r o f f i c i a l s a n d e x t e r n a l s t a k e h o l ders practicing c o n s t r u c t i o n p r o c u r e m e n t . S t a k e h o l d e r s t h a t p e r f o r m t h e w o r k a s s o c i a t e d w i t h c o n s t r u c tion procureme n t a n d d e l i v e r y m a n a g e m e nt p r o c e s s e s n e e d t o h a v e t h e s k i l l s s e t t o p e r f o r m t h e r e q u i red activities t h a t a r e a s s o c i a t e d t h e r e w i t h . The ci db w o u l d l i k e t o a s s i s t g o v e r n m e n t , i t s a g e n c i e s a n d t h e i r a d v i s e r s t o p r o m o t e t h e h i g h e s t p ossible standard o f p r o f e s s i o n a l i s m , a p p l y a n a p p r o p r i a t e l e v e l o f d i s c i p l i n e t o t h e c o n s t r u c t i o n p r o c u r e m ent process, a n d p r o v i d e a c o n s i s t e n t b a s i s f o r m a n a g i n g t h e i n t e r f a c e b e t w e e n G o v e r n m e n t a n d t h e constructio n s e c t o r s t a k e h o l d e r s w i t h a f a i r a l l o c a t i o n o f c o n t r a c t i n g r i s k s . T o d o t h i s g o v e r n m e n t requires sk i l l e d a n d e x p e r i e n c e d o f f i c i al s . The cidb h a s c o m m e n c e d w o r k o n a C o n s t r u c t i o n P r o c u r e m e n t S k i l l s F r a m e w o r k w h i c h a i m s t o c r e ate an enablin g e n v i r o n m e n t t o p r o v i d e c o n t i n u i n g p r o f e s s i o n a l d e v e l o p m e n t a n d a f o r m a l a c c r e d i t a tion/ certificatio n a s w e l l a s t r a i n i n g o p p o r t u n i t i e s f o r c o n s t r u c t i o n p r o c u r e m e n t p r a c t i t i o n e r s . T h e F r a m ework will consid e r t h e d e v e l o p m e n t a n d i m p l e m e n t a t i o n o f a c e r t i f i c a t i o n s y s t e m f o r p r o c u r e m e n t practitione r s t o e n s u r e c o m p l i a n c e w i t h t h e r e q u i r e m e n t s o f t h e S t a n d a r d f o r U n i f o r m i t y i n C o n s t r u ction Procureme n t . S u c h a s y s t e m w i l l e n a b l e A c c o u n t i n g O f f i c e r s a n d H e a d s o f S u p p l y C h a i n M a n a g e ment to entrust c o n s t r u c t i o n p r o c u r e m e n t r e l a t e d a c t i v i t i e s o n l y t o s t a f f m e m b e r s a n d c o n s u l t a n t s / a g e nts who are co n v e r s a n t w i t h t h e c id b s t a n da r d .

A N NU A L REP OR T 2 0 10 / 1 1

A 4 Competition Commission Section 5(4) of th e C o n s t r u c t i o n I n d u s t r y D e v e l o p m e n t B o a r d A c t , 2 0 0 0 d e t e r m i n e s t h a t t h e B o a r d m u s t publish a code o f c o n d u c t f o r a l l c o n s t r u c t i o n - r e l a t e d p r o c u r e m e n t a n d a l l p a r t i c i p a n t s i n v o l v e d i n t h e procurement pro c e s s . T h e a m b i t o f t h i s s e c t i on i n c l u d e s a l l p l a y e r s i n t h e c o n s t r u c t i o n p r o c u r e m e n t process, form Cli e n t s t h r o u g h t o s u b c o n t r a c t or s a n d s u p p l i e r s . The Code of Con d u c t a p p l i e s t o a l l c o n s t r u c t i o n - r e l a t e d p r o c u r e m e n t a n d a l l p a r t i c i p a n t s i n v o l v e d i n the procurement p r o c e s s , f r o m t h e a p p l i c a t i o n f o r r e g i s t r a t i o n a s a c o n t r a c t o r , t h r o u g h t o t h e t e n d e r process and the r e g i s t r a t i o n a n d c o m p l e t i o n o f a p r o j e c t , i n c l u d i n g p a r t i c i p a t i o n i n t h e B e s t P r a c t i c e Pr oject Assessme n t S c h e m e a n d t h e B e s t P r a ct i c e C o n t r a c t o r R e c o g n i t i o n S c h e m e . In relation to the c o n d u c t o f t e n d e r e r s , t h e C o d e o f C o n d u c t i n d i c a t e s t h a t a t e n d e r e r , h i s e m p l o y e e s or agent should: • Not, except fo r t h e p u r p o s e o f j o i n t v e n t u r e f o r m a t i o n o r c o l l e c t i v e a c t i o n d e a l w i t h u n f a i r c o n d i t i o n s or other faults i n d o c u m e n t a t i o n , b e c o m e i n v o l v e d i n c o l l u s i o n w i t h o t h e r t e n d e r e r s , o r p o t e n t i a l tenderers. • Not exchange i n f o r m a t i o n r e g a r d i n g t e n d e r s w i t h a n y o t h e r t e n d e r e r p r i o r t o t h e c l o s i n g t i m e a n d date for tend e r s . • Not knowingly p r i c e h i s t e n d e r i n s u c h a w a y a s t o g a i n a n u n f a i r a d v a n t a g e f r o m a n o b v i o u s e r r o r , or oversight, i n t h e t e n d e r d o c u m e n t s . • Not attempt t o i n f l u e n c e t h e t e n d e r e v a l u a t i o n p r o c e s s . • Not approach a n y r e p r e s e n t a t i v e o r e m p l o y e e d i r e c t l y i n c o n n e c t i o n w i t h a t e n d e r . With regard to th e c o n d u c t o f a c o n t r a c t o r ( t h e s a m e e n t i t y a s t h e t e n d e r e r o n c e t h e c o n t r a c t h a s been awarded), t h e C o d e o f C o n d u c t i n t e r a l i a l i s t s t h a t “ T h e c o n t r a c t o r o r h i s e m p l o y e e s s h o u l d n o t engage in collus i v e p r a c t i c e s t h a t h a v e d i r e c t o r i n d i r e c t a d v e r s e i m p a c t s o n t h e c o s t o f t h e p r o j e c t to the employer” . T h e a c t i o n s o f c o l l u s i v e t e n d e r i n g a n d p r i c e f i x i n g , c o m m o n l y r e f e r r e d t o a s c o l l u s i v e practices, have a n a d v e r s e i m p a c t o n t h e c o s t o f t h e p r o j e c t t o t h e C l i e n t , a n d t h e r e f o r e c o n s t i t u t e a transgression of t h e c idb C o d e o f C o n d u c t i n a d d i t i o n t o a c o n t r a v e n t i o n o f t h e C o m p e t i t i o n A c t , 1 9 9 8 . The ci db will be f o r m a l i s i n g a r e l a t i o n s h i p w i t h t h e C o m p e t i t i o n C o m m i s s i o n v i a a M e m o r a n d u m o f Understanding (M o U ) t o e n s u r e s y n e r g i e s i n t h e i n v e s t i g a t i o n a n d p r o s e c u t i o n o f b o t h c o n t r a c t o r s a n d built environmen t p r o f e s s i o n a l s f o u n d t o b e g u i l t y o f c o l l u s i v e p r a c t i c e s .

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A 5 Investigation into Transnet’s New Multi Product Pipeline (NMPP) In Decemb e r 2 0 1 0 , t h e c idb w a s a p p r o a c h e d t o p a r t i c i p a t e i n a M i n i s t e r i a l R e v i e w T a s k T e a m u n der the leader s h i p o f t h e D e p a r t m e n t o f P u b l i c E n t e r p r i s e s t o i n v e s t i g a t e t h e c o s t o v e r r u n s a n d t i m e d elays associated w i t h T r a n s n e t ’ s N e w M u l t i P r o d u c t P i p e l i n e . The Ministe r i a l R e v i e w T e a m w a s t o e x p lo r e w h e t h e r t h e k e y p a r a m e t e r s o f t h e N M P P i n t e r m s o f constructio n a n d o u t p u t p e r f o r m a n c e w e r e r e a s o n a b l e , a n d t h e s h o r t c o m i n g s t h a t r e s u l t e d i n c o s t trends of t h e p r o j e c t c y c l e d t h r o u g h m a s s i v e f l u c t u a t i o n s . The Review T e a m ’ s a p p r o a c h w a s t o a cc e s s a l l p o s s i b l e p e r s p e c t i v e s o n t h e t e c h n i c a l c h a r a c t e r i s tics, cost and s c h e d u l e t r e n d s o f t h e N M P P p r o j e c t t h r o u g h i n t e r v i e w s a n d t o c r o s s - c h e c k t h e s e w i t h accessed d o c u m e n t a r y e v i d e n c e , a n d s u b s e q u e n t l y f o r m u l a t e i t s f i n d i n g s a n d r e c o m m e n d a t i o n s . The ci db’s pre s c r i p t s a n d r e g u l a t i o n s w e r e m o n i t o r e d f o r c o m p l i a n c e , a s w e l l a s a n e x a m i n a t i o n o f t h e appropriat e n e s s o f t h e p r o c u r e m e n t m o d e l s a n d i t s o u t c o m e s i n r e l a t i o n t o t h e m a s s i v e c o s t i n c r eases of the proj e c t . A report of t h e f i n d i n g s a n d r e c o m m e n d a t i o n s o f t h e M i n i s t e r i a l R e v i e w T a s k T e a m w a s c o n c l u d e d in April 2011 . T h e r e p o r t h a s b e e n t a b l e d w i t h t h e M i n i s t e r o f t h e D e p a r t m e n t o f P u b l i c E n t e r p r i s e s .

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CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

FACILITATING GROWTH AND DEVELOPMENT

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The Growth and Contractor Development GCD programme gave focus in 2010/11 to: • Supporting to national, provincial and other Contractor Development (CD) programme implementation, • Strengthening clients capacity to manage the implementation of their CD programmes, • Facilitating access to various CD support initiative, and • Ensuring stakeholder capacitation and interaction Contractor development objectives were implemented through its core units the Enterprise Development Unit and the Construction C o n t a c t C e n t r e ( C C C ) /c i db P r o v i n c i a l P a r t n e r e d O f f i c e s .

Enterprise Development Informed by lessons from interactions with key stakeholders, both through the Provincial Contractor Development Fora (PCDF) and t h r o u g h t h e c i db P r o v i n c i a l S t a k e h o l d e r W o r k s h o p s , t h e G C D Enterprise Development Unit focussed its activities on the following areas:

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• Strengthening the institutional arrangements for the National Contractor Development Programme (NCDP) • Developing knowledge and information materials • Providing technical support and assistance to clients • Undertaking a Baseline Study of contractor development p r o g ra m m e s • Developing guidelines for implementing Contractor Development • Convening a national workshop on the promotion of Green and Decent Jobs in the South African building and construction sector • Establishing strategic and smart partnerships, and • Promoting regional collaboration on contractor development.

Strengthening the institutional arrangements for NCDP The cidb a s s i s t e d b y t h e P o l i c y a n d M o n i t o r i n g B r a n c h o f t h e N a t i o n a l D e p a r t m e n t o f P u b l i c W o r k s established a S t e e r i n g C o m m i t t e e t o c o o r d i n a t e t h e i m p l e m e n t a t i o n o f t h e N C D P . The NCDP S t e e r i n g C o m m i t t e e c o m p r i s e s o f r e p r e s e n t a t i v e s f r o m : • Nationa l D e p a r t m e n t o f P u b l i c W o r k s • ci db an d • Other r o l e p l a y e r s w h o m a y b e c o - op t e d a s a n d w h e n n e c e s s a r y ( t h e s e r e p r e s e n t a t i v e s a r e n o t perman e n t S t e e r i n g C o m m i t t e e m e m b e r s ) . The main f u n c t i o n s o f t h e N C D P S t e e r i n g c o m m i t t e e a r e t o : • Co-ord i n a t e t h e N C D P i m p l e m e n t a t i o n • Provide s t r a t e g i c g u i d a n c e a n d l e a d e r s h i p o n C o n t r a c t o r D e v e l o p m e n t • Facilita t e c o n s u l t a t i o n a n d i n p u t t h r o u g h w o r k s h o p s a n d n a t i o n a l f o r a • Facilita t e d e v e l o p m e n t o f g u i d e l i n e s • Monito r a n d r e v i e w a l i g n m e n t o f C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s t o t h e N C D P F r a m e w o r k • Monito r a n d e v a l u a t e t h e i m p l e m e n t a t i o n o f C o n t r a c t o r D e v e l o p m e n t p r o g r a m m e s . The NCDP S t e e r i n g C o m m i t t e e c o m p l e m e n t s t h e P r o v i n c i a l C o n t r a c t o r D e v e l o p m e n t F o r a ( P C D F ) t hat have been e s t a b l i s h e d b y : • Promot i n g a n d c a p a c i t a t i n g o n t h e N C D P ; • Sharing k n o w l e d g e a n d e x p e r i e n c e o n c o n t r a c t o r d e v e l o p m e n t ; • Adoptin g a n d p r o m o t i n g g o o d p r a c t i c e c o n t r a c t o r d e v e l o p m e n t g u i d e l i n e s a n d p r o c e s s e s ; a n d • Aligning c o n t r a c t o r d e v e l o p m e n t p r o g r a m m e s t o t h e N C D P .

Developing knowledge tools and information material

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The cidb d e v e l o p e d k n o w l e d g e a n d i n f o r m a t i o n t o o l s t o e m p o w e r c o n t r a c t o r s o n t h e c r i t i c a l a s p ect of managi n g a c o n s t r u c t i o n b u s i n e s s . D u r i n g t h e y e a r u n d e r r e v i e w f o u r b r o c h u r e s w e r e a d d e d t o the existing se r i e s o f T i p s a n d A d v i c e . T h e s e f o c u s e d o n : • Contra c t M a n a g e m e n t • Health a n d S a f e t y • Market i n g a n d • Tender i n g p r o c e s s e s f o r P u b l i c S e c t o r P r o c u r e m e n t

Technical support to clients A major focus wa s o n p r o v i d i n g t e c h n i c a l s u p p o r t t o c l i e n t s t o p r o m o t e c o m m o n a p p r o a c h e s t o Contractor Deve l o p m e n t , g o o d p r a c t i c e s a n d m o d e l s f o r c o n t r a c t o r d e v e l o p m e n t . Technical suppor t , t o c l i e n t s a n d c a p a c i t a t i o n w e r e p r o v i d e d t h r o u g h : • Bilateral enga g e m e n t s w i t h c l i e n t s i n r e s p o n s e t o a d - h o c r e q u e s t • Regular Provin c i a l c o n t r a c t o r d e v e l o p m e n t f o r u m m e e t i n g s , a n d • Capacitation r o a d s h o w s a n d w o r k s h o p s ; a n d • Information sh a r i n g t h r o u g h P r o v i n c i a l c id b S t a k e h o l d e r w o r k s h o p s The NCDP provinc i a l c l i e n t c a p a c i t a t i o n r o a d s h o w s a n d w o r k s h o p s w e r e c o n v e n e d i n a l l p r o v i n c e s . T h e focus of the work s h o p s w a s t o : • Capacitate c l i e n t s o n t h e N C D P F r a m e w o r k a n d i t s c o m p o n e n t s • Capacitate c l i e n t s o n o t h e r c id b p r o d u c t s a n d s e r v i c e s t h a t f a c i l i t a t e o r s u p p o r t c o n t r a c t o r development s u c h a s T a r g e t i n g a n d p r o c u r e m e n t s t r a t e g i e s • Share experie n c e s a n d g o o d p r a c t i c e i n c o n t r a c t o r d e v e l o p m e n t . The ci db respond e d t o a d - h o c r e q u e s t s a n d a s s i s t e d t h e f o l l o w i n g g o v e r n m e n t d e p a r t m e n t s w i t h t h e conceptualisatio n o f t h e i r C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s : • The Northern C a p e D e p a r t m e n t o f R o a d s a n d P u b l i c W o r k s – R e a G o n a E m e r g i n g C o n t r a c t o r Development P r o g r a m m e . • KwaZulu-Nata l D e p a r t m e n t o f P u b l i c W o r k s – M a s a k h e E m e r g i n g C o n t r a c t o r D e v e l o p m e n t Programme. • Mpumalanga P r o v i n c e D e p a r t m e n t o f P u b l i c W o r k s – S a k h a b a k h i C o n t r a c t o r D e v e l o p m e n t Programme Based on the rev i e w o f t h e a b o v e p r o g r a m m e s , i t i s a p p a r e n t t h a t c l i e n t s a r e a t v a r y i n g s t a g e s of aligning their p r o g r a m m e s t o t h e N C D P F r a m e w o r k . I t i s a l s o e v i d e n t t h a t c l i e n t a r e d e s i r o u s o f obtaining the be s t p o s s i b l e r e s u l t s f o r t h e i r C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s . I n t h i s r e g a r d t h e c i db seeks to further s t r e n g t h e n i t s c a p a c i t y t o p r o v i d e t e c h n i c a l s u p p o r t t o c l i e n t s .

Baseline study of contractor development programmes A Baseline Study o n P r o v i n c i a l C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s i n S o u t h A f r i c a w a s c o m p l e t e d . T h e study updates th e S t a t u s Q u o R e v i e w o f C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s p r e v i o u s l y c a r r i e d o u t b y the ci db in Marc h 2 0 0 9 . The aim of the st u d y w a s t o r e v i e w t h e p e r f o r m a n c e o f e x i s t i n g c o n t r a c t o r d e v e l o p m e n t p r o g r a m m e s and identify key s u c c e s s f a c t o r s , b e s t p r a c t i c e a n d a p p r o p r i a t e i n d i c a t o r s f o r m o n i t o r i n g a n d evaluation of con t r a c t o r d e v e l o p m e n t p r o g r a m m e s . I t w a s a l s o t o : • Review the pe r f o r m a n c e a n d o u t c o m e s o f c o n t r a c t o r d e v e l o p m e n t p r o g r a m m e s t o d a t e ; • Identify indica t o r s f o r s u c c e s s o f c o n t r a c t o r d e v e l o p m e n t p r o g r a m m e s t h a t c a n b e u s e d a s t h e b a s i s for effective m o n i t o r i n g a n d e v a l u a t i o n s y s t e m o f C o n t r a c t o r D e v e l o p m e n t P r o g r a m m e s ; a n d • Provide basel i n e i n f o r m a t i o n f o r u s e b y c o n t r a c t o r d e v e l o p m e n t p r a c t i t i o n e r s t o b e n c h m a r k programmes. CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The study of Baselines has commenced with participating organisations. The aim is to effect corrective measures where necessary and to agree on the basis for monitoring of future participating p r o g r a m m e s .

Guidelines for implementing contractor development The cidb d e v e l o p e d g u i d e l i n e s f o r d e s i g n a n d i m p l e m e n t a t i o n o f C o n t r a c t o r D e v e l o p m e n t P r o g r a mmes (CDP’s), to a s s i s t c l i e n t s a s a m e a n s o f e n g a g i n g g r a d e 2 - 6 c o n t r a c t o r s . T h e o b j e c t i v e s o f t h e g u i delines is to estab l i s h a l l t h e n e c e s s a r y m e c h a n i s m s , a s r e c o m m e n d e d b y t h e “ S t a t u s Q u o R e p o r t : S A Contractor D e v e l o p m e n t P r o g r a m m e s ” f o r i m p l e m e n t i n g C D P ’ s . The NCDP f r a m e w o r k f o r m s t h e b a s i s o f t h e g u i d e l i n e s . T h e r e f o r e a l l c l i e n t s w h o w a n t t o a l i g n t h e i r programm e s t o t h e F r a m e w o r k a r e r e q ui r e d t o c o m p l y w i t h t h e g u i d e l i n e s i n i m p l e m e n t i n g t h e i r prospectiv e C D P ’ s . T h e m e c h a n i s m s e s t a b l i s h e d b y t h e g u i d e i n c l u d e : • • • • • • •

Targetin g o f b u d g e t s , p r o j e c t s a n d c o n t r a c t o r s ; Evaluat i o n o f c o n t r a c t o r s w h e n e n t e r i n g a p r o g r a m m e ; Training a n d m e n t o r i n g ; Sharing t h e c o s t o f c o n t r a c t o r d e v e l o p m e n t ; Paymen t d i s p u t e r e s o l u t i o n ; Exiting f r o m t h e p r o g r a m m e ; a n d Monitor i n g a n d e v a l u a t i n g t h e p r o g r a m m e

National workshop on the promotion of green and decent jobs in the South A frican building and construction sector The State o f N a t i o n A d d r e s s b y t h e P r e s i d e n t o f S o u t h A f r i c a , a n d t h e I n d u s t r i a l P o l i c y A c t i o n P r o g r amme II presente d b y t h e M i n i s t e r o f T r a d e a n d I n d u s t r y o u t l i n e t h e p r o m o t i o n o f d e c e n t w o r k a n d t h e c r eation of green jo b s a s t w o p o l i c y p r i o r i t i e s o f t h e G o v e r n m e n t o f S o u t h A f r i c a a n d i t s s o c i a l p a r t n e r s . T h e re is a need for s t r a t e g i e s t o m a k e t h e s e g o a l s ‘ a c t i o n a b l e ’ i n a c o l l a b o r a t i v e e f f o r t b e t w e e n G o v e r n m ent, private sec t o r a n d c i v i l s o c i e t y . To contribu t e t o t h e d e b a t e o n c r e a t i o n o f d e c e n t a n d g r e e n j o b s i n u s i n g t h e b u i l d i n g a n d constructio n s e c t o r t h e c id b i n p a r t n e r s h i p w i t h t h e M i n i s t r y o f E c o n o m i c D e v e l o p m e n t , t h e I n t e r n a tional Labour Org a n i s a t i o n ( I L O ) , t h e U n i t e d N a t i o n s E n v i r o n m e n t P r o g r a m m e ( U N E P ) , a n d t h e C e n t r e f o r Industrial a n d S c i e n t i f i c R e s e a r c h ( C S I R ) o r g a n i s e d a o n e - d a y w o r k s h o p f o r s e l e c t e d s e c t o r s t a k e h olders. The worksh o p t o o k p l a c e o n 1 7 M a y 2 0 1 0 a t t h e S a n d t o n C o n v e n t i o n C e n t r e . The object i v e s o f t h e w o r k s h o p w e r e t o : • Validat e t h e f i n d i n g s o f f i e l d r e s e a r c h o n t h e p o t e n t i a l f o r g r e e n i n g t h e b u i l d i n g a n d c o n s t r u c t i on sector i n S o u t h A f r i c a , a n d h o w t o m a x i m i s e t h e c r e a t i o n o f d e c e n t j o b s i n t h e p r o c e s s . • Jointly r e v i e w b e s t p r a c t i c e i n p r o m o t i n g d e c e n t a n d g r e e n j o b s i n t h e b u i l d i n g a n d c o n s t r u c t i on sector w o r l d w i d e , a n d t o d i s c u s s c o n c r e t e p r o p o s a l s f o r f u r t h e r d r i v i n g t h i s a g e n d a i n t h e b u i l d ing and co n s t r u c t i o n s e c t o r i n S o u t h A f r i c a . Observatio n s f r o m t h e w o r k s h o p i n c l u d e d : • Issues r e l a t e d t o s k i l l s g a p s • Workfor c e d e v e l o p m e n t r e l a t e d t o g r e e n t e c h n o l o g i e s , • The nee d f o r a g o v e r n m e n t s u p p o r t e d t r a i n i n g p r o g r a m m e , • The imp o r t a n c e o f S M E ’ s u p t a k e a n d i n v o l v e m e n t . The ci db c o n s i d e r i n g s t r a t e g i e s t o r e s p o n d t o t h e s e o b s e r v a t i o n s .

A N NU A L REP OR T 2 0 10 / 1 1

Establishing strategic and smart partnership The cidb continu e d t o d e v e l o p r e l a t i o n s w i t h s t a k e h o l d e r s w h o c a n o f f e r c i db r e g i s t e r e d c o n t r a c t o r s value and suppo r t e n t e r p r i s e d e v e l o p m e n t . T h e s e i n c l u d e t r a i n i n g p r o v i d e r s , m a t e r i a l s u p p l i e r s , government entit i e s , b a n k s a n d f i n a n c e i n t e r m e d i a r i e s . On 1 October 20 1 0 t h e c id b s i g n e d a M o U w i t h N e d b a n k . T h e f o c u s h a s n o w s h i f t e d t o e n s u r i n g t h a t t h e MoUs are operati o n a l i s e d . The ci db commis s i o n e d a s t u d y i n t o t h e S o u t h A f r i c a n f i n a n c i n g l a n d s c a p e , w i t h t h e a i m o f d e v e l o p i n g a financial mode l a n d i m p l e m e n t a t i o n s t r a t e g y . The study acknow l e d g e s l a c k o f f i n a n c i a l s u p p o r t a s o n e o f m a n y c o n s t r a i n t s t o c o n t r a c t o r s development an d r e c o m m e n d s ( p a r t i c u l a r l y f o r f i n a n c i n g h o u s e s ) i m p l e m e n t a t i o n o f v a r i o u s s t r a t e g i e s that will facilitate q u i c k e r a c c e s s t o f i n a n c e as w e l l a s n o n - f i n a n c i a l s u p p o r t . A series of worksh o p s a n d f o c u s e d p r e s e n t a t i o n s w e r e c o n d u c t e d a s p a r t o f a c o n s u l t a t i v e p r o c e s s which included p a r t i c i p a n t s f r o m t h e i n s u r a n ce s e c t o r , b a n k i n g a n d f i n a n c i a l i n t e r m e d i a r i e s . Key issues raised i n c l u d e t h e n e e d t o c r e a t e a n e n a b l i n g e n v i r o n m e n t f o r a c c e s s i n g f i n a n c e , i m p r o v e d financial infrastru c t u r e a n d g o v e r n m e n t a n d p r i v a t e s e c t o r c o l l a b o r a t i o n i n t h e m e d i u m t o l o n g t e r m .

Promoting regional collaboration on contractor development As the current se c r e t a r i a t o f t h e C o n t r a c t o r D e v e l o p m e n t O r g a n i s a t i o n s i n A f r i c a a n d o t h e r D e v e l o p i n g Countries of the W o r l d t h e c id b u n d e r t o o k a f a c t f i n d i n g v i s i t t o H a r a r e , Z i m b a b w e . T h e t r i p f o l l o w e d a study trip to Sout h A f r i c a b y a d e l e g a t i o n f r o m C o n s t r u c t i o n I n d u s t r y F e d e r a t i o n o f Z i m b a b w e ( C I F O Z ) o n the 26 â&#x20AC;&#x201C; 27 May 2 0 1 0 The purpose of th e v i s i t s w a s t o e x p l o r e p r o s p e c t s f o r e s t a b l i s h m e n t o f p a r t n e r s h i p s b e t w e e n l o c a l construction com p a n i e s a n d t h e i r Z i m b a b w e a n c o u n t e r p a r t s . They also provide d a n o p p o r t u n i t y t o r e v i e w p r o g r e s s i n t a k i n g f o r w a r d t h e o b j e c t i v e s o f t h e M o U s i g n e d on 31 October 20 0 9 i n J o h a n n e s b u r g S o u t h A f r i c a B o t s w a n a , G h a n a , M a l a w i , M a u r i t i u s , S o u t h A f r i c a , Tanzania, Zambia a n d Z i m b a b w e .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

CONSTRUCTION CONTACT CENTRES (CCC’s) (Provincial partnered cidb offices ) With footp r i n t s i n t h e n i n e p r o v i n c e s ( N o r t h W e s t o p e r a t i n g i n t e m p o r a r y o f f i c e s a n d t o l a u n c h permanen t p r e m i s e s i n 2 0 1 1 / 1 2 ) , t h e c idb P r o v i n c i a l P a r t n e r e d O f f i c e s / C C C ’ s , i n 2 0 1 0 / 1 1 o f f e r e d improved s e r v i c e d e l i v e r y o n b o t h t h e i r r e g i s t r a t i o n f u n c t i o n , a n d o t h e r s u p p o r t i v e s e r v i c e : • Facilita t i n g C o n t r a c t o r D e v e l o p m e n t a n d o t h e r c id b s u p p o r t s e r v i c e s • Strateg i c p a r t n e r s h i p s • custom e r s e r v i c e o r i e n t a t i o n

F acilitating C ontractor Development and other cid b support services The Provin c i a l P a r t n e r e d O f f i c e s / C C C ’ s p r o v i d e i m p r o v e d r e g i s t r a t i o n s e r v i c e w i t h s h o r t e r t u r n a r o u nd times. The y a l s o p r o v i d e a n a d v i c e s e r v i c e f a c i l i t a t i n g b e t t e r c o m p l i a n c e t o r e g i s t r a t i o n r e q u i r e m ents. The centre s s u p p o r t c l i e n t s o n c o n t r a c t o r d e v e l o p m e n t , p r o c u r e m e n t a n d i n f o r m a t i o n d i s s e m i n a t i on, also facilit a t e a n d i m p l e m e n t a t i o n o f n a t i o n a l i n i t i a t i v e s a t p r o v i n c i a l l e v e l . I n i t i a t i v e s i n c l u d e contractor w o r k s h o p s , c l i e n t c a p a c i t a t i o n o n c o n t r a c t o r d e v e l o p m e n t , i m p l e m e n t a t i o n o f a l t e r n a tive procureme n t s t r a t e g i e s , a n d W o m e n i n C o n s t r u c t i o n E x c e l l e n c e A w a r d s .

A N NU A L REP OR T 2 0 10 / 1 1

P rovincial Stakeh older W orksh ops Pr ovincial Stakeh o l d e r W o r k s h o p s a i m e d t o b e n e f i t p r o v i n c i a l s t a k e h o l d e r s w i t h r e g a r d s t o c i db programme deliv e r i e s a n d p r o j e c t s t h a t s u p p o r t t h e c i db m a n d a t e , t h u s e n c o u r a g e p a r t i c i p a t i o n i n shaping the prog r a m m e s . Well attended Wo r k s h o p s w e r e c o n v e n e d i n v a r i o u s P r o v i n c e s a s f o l l o w s :

Table 1. Provincial Stakeholder Workshops: PROV I N C E

VENUE

DATE HOSTED

Gauteng

Leriba Hotel and Spa

Feb 2011

Western Cape

Old Mutual Con. Cen.

Mar 2011

North West

Palms Hotel

Mar 2011

Eastern Cape

Pick and Pay Bisho.

Mar 2011

Mpumalanga

Bundu Lodge

Mar 2011

Northern Cape

Flamingo Conference Centre.

To be hosted in 2011/12

KwaZulu

Sibaya Sun International

To be hosted on 2011/12

Free State

to be hosted in 2011/12

L impopo

to be hosted in 2011/12

C ontractor D evelopment Cataly tic Projects In its endeavor to p r o m o t e r e l a t i o n s h i p s w i t h c l i e n t s f o r t h e s a k e o f d e v e l o p i n g s u s t a i n a b l e c o n t r a c t o r development-am o n g s t o t h e r s - p r o j e c t m o d e l t h a t s u p p o r t a n d e l e v a t e c o n t r a c t o r d e v e l o p m e n t w e r e coined in suppor t a n d p a r t n e r s h i p w i t h p r o v i n c i a l d e p a r t m e n t s . C a t a l y t i c p r o j e c t s w e r e d e f i n e d a s t h o s e projects that hav e l i n k s t o a s p e c i f i c p r o j e c t o r d e v e l o p m e n t p r o g r a m m e o r d e v e l o p m e n t a l i n i t i a t i v e . Such project fina n c i a l c o n t r i b u t i o n o r p r o j e c t d e l i v e r a b l e s h o u l d b e r e p l i c a t e d a n d s e r v e a s a p e r t contribution to st i m u l a t e l i k e o r a d d i t i o n a l c o n t r i b u t i o n s f r o m o t h e r s t a k e h o l d e r s . T h e m a j o r p r i n c i p l e was to enhance p a r t n e r s h i p s w i t h i n P r o v i n c i a l D e p a r t m e n t o f P u b l i c W o r k s a s t h e p r i m a r y p a r t n e r f o r in itiatives, where p o s s i b l e , b u t s u c h p r o j e c t s m a y e x t e n d t o a n y s t a k e h o l d e r o r p a r t n e r s t r i v i n g t o achieve positive d e v e l o p m e n t a l o u t c o m e s .

Table 2: Participation in Special Projects to support CD: PROVINCE

C A T A LY T I C P R O J E C T N A M E

PROJECT AMOUNT

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Mpumalanga

Yanyukâ&#x20AC;&#x2122; Imbombela Youth Contractor Development Programme

R 79,173.00

Eastern Cape

JV and Subcontracting seminar

R 24,000.00

Eastern Cape

SMME summit on contracting options

R 55,475.00

Western Cape

Provision of Contractor Development training to department CDP related staff

R 100,000.00

Northern Cape

Contractor Development Skills Development training

R 100,385.00

C ontractor D evelopment F orums The Provin c i a l C o n t r a c t o r D e v e l o p m e n t f o r c e p r o v i d e f o r a n o p p o r t u n i t y f o r b e n c h m a r k i n g b e s t p r ac tices amo n g s t p a r t i c i p a t i n g c l i e n t s a n d s t a k e h o l d e r s b y s h a r i n g p e r t i n e n t i n f o r m a t i o n t h a t b u i l d s on successes , f a i l u r e s a n d b e s t p r a c t i c e s i n c o n t r a c t o r d e v e l o p m e n t l a n d s c a p e .

Table 3: Provincial Contractor Development Forum Meetings were convened as follows: PROVINCE

NUMBER OF ENGAGEMENTS

Northern C a p e

Eastern C a p e

Western C a p e

KwaZulu-N a t a l

Free Stat e

Gauteng

Mpumala n g a

North We s t

Limpopo

ISSUES DISCUSSED INCLUDE

• • • • • •

NCDP Framework Purpose, role and responsibilities of a PCDF Targeting Strategies Procurement strategies Sharing and collating information on CDP/ initiatives in the province Sharing of ideas

A N NU A L REP OR T 2 0 10 / 1 1

Women in C onstruction E x cellence Awards W omen in constr u c t i o n a w a r d s w e r e c o n d u c t e d i n v a r i o u s p r o v i n c e s . T h e a w a r d s r e c o g n i s e o u t s t a n d i n g achievements by w o m e n c o n t r a c t o r s i n b u s i n e s s a n d i n d e l i v e r i n g c o n s t r u c t i o n p r o j e c t s . T h e p r o v i n c i a l awards culminat e d i n t h e n a t i o n a l a w a r d s w i t h p r o v i n c i a l w i n n e r s c o m p e t i n g a t n a t i o n a l l e v e l . T h e following provinc i a l a w a r d w i n n e r s c o m p e t e d a t n a t i o n a l l e v e l :

Table 4: Women In Construction Excellence Awards: National CAT E G O R Y EPWP

Contractors in a d e v e l o p m e n t programme

Mainstream con t r a c t o r s

GRADES

COMPANY

PROVINCE

1 - 2

Mbonelaphanda

Gauteng

3 - 4

Ntshonondo Civils

Gauteng

1 – 2

Bokang Q Trading

(Free State)

3 – 4

Kanjo Business Enterprise

(Limpopo)

Tawana Business Enterprise

(Gauteng)

1 – 2

Lezelrique’s Development

(Northern Cape)

3 – 4

Tawana Business Enterprise

(Gauteng)

5 – 6

Phuma Ukhanye Construction

(Mpumalanga)

Mmamoleboge Investments

(Limpopo)

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

N C D P Client C apacitation Works h op The CCCs h e l d w o r k s h o p s f o r c l i e n t s o n t o p i c s i n c l u d i n g c i d b r e g u l a t i o n s , t a r g e t i n g s t r a t e g i e s , T h e National C o n t r a c t o r D e v e l o p m e n t F r a m e w o r k , P r o c u r e m e n t S t r a t e g i e s i n s u p p o r t o f C o n t r a c t o r Developm e n t , S u p p l y C h a i n M a n a g e m e n t P r o c e d u r e s a n d p r o m p t p a y m e n t s .

Table 5: Clients capacitated on NCDP -the rollout and implementation targets PROVINCE

TARGETED CLIENTS

Gauteng

National Public Works Department of Infrastructure Development Ekurhuleni Municipality Department of Water Affairs

Limpopo

National Public Works Provincial Public Works Department of Roads and Transport Department of Health and Social Development Department of Education

Western C a p e

Department of Transport and Public Works Department of Public Works National City of Cape Town Department of Treasury

KwaZulu-N a t a l

Ethekwini Department of Public Works Provincial Department of Public Works National Department of Transport Municipalities

Eastern C a p e

Department of Public Works IDZ ECDC IDT Chris Hani and Amathola District Municipality COEGA

Mpumala n g a

Msukaliwa Local Municipality Emalahleni Local Municipality Department of Public Works Mbombela District Municipality

Free State a n d N o r t h e r n C a p e

Department Department Department Department Department IDT

North Wes t

Department of Public Works, Roads and Transport Department of Treasury Department of Health Municipalities

of of of of of

Public Work Provincial Public Works National Treasury Housing Health

A N NU A L REP OR T 2 0 10 / 1 1

Strategic Partnersh ips In order to truly g i v e e f f e c t t o t h e c id b m o t t o o f ‘ d e v e l o p m e n t t h r o u g h p a r t n e r s h i p s ’ , t h e c i db c o n t i n u e d to implement pro v i n c i a l M o A ’ s . T h e s e i n c l u d e d i m p r o v i n g r e l a t i o n s a n d f a c i l i t a t i n g t r a i n i n g o r s u p p o r t t o contracts via trai n i n g s e r v i c e p r o v i d e r s , g o v e r n m e n t e n t i t i e s , p r o v i n c i a l s t a k e h o l d e r s , m a t e r i a l s u p p l i e r s and financiers. E x a m p l e s o f s u c h i n c l u d e t r a i n i n g o n O c c u p a t i o n a l H e a l t h a n d S a f e t y , f i n a n c i a l t r a i n i n g and spearheadin g t h e e n g a g e m e n t s w i t h v a r i o u s f i n a n c i e r s o n b o t h t h e F i n a n c i a l M o d e l i n g P r o j e c t s a n d Glenrand MIB on s u p p o r t f o r c o n t r a c t o r s i n G a u t e n g . I t w a s a g r e e d t o h a v e n a t i o n a l r o l l o u t o f s i m i l a r support to emerg i n g c o n t r a c t o r s .

C C C Customer S ervice O rientation The cidb adopte d a m o n i t o r i n g a n d e v a l u a t i o n ( M & E ) s t r a t e g y f o r i t s P r o v i n c i a l P a r t n e r e d O f f i c e s . One of the key in d i c a t o r s t o b e m e a s u r e d a s p a r t o f t h e M & E s t r a t e g y w a s t h e p e r f o r m a n c e a n d service delivery b y t h e s t a f f a s a s s e s s e d b y c o n t r a c t o r s , c l i e n t s a n d s t a k e h o l d e r s . I n t e r n a l a s s e s s m e n t systems during 20 0 9 / 1 0 , w i t h t h e n e e d f o r a r e v i e w o f t h e s e s y s t e m s w e r e c o n s i d e r e d n e c e s s a r y a n d a reputation survey f o r a l l p r o v i n c i a l o f f i c e s w a s c o m m i s s i o n e d . The objectives of t h e s u r v e y w a s t o : • Measure the s e r v i c e p e r f o r m a n c e a n d r e p u t a t i o n o f C C C ’ s a m o n g s t C l i e n t s / s t a k e h o l d e r s a n d Contractors so a s t o e s t a b l i s h i n i t i a l b a s e l i n e b e n c h m a r k s f o r t h e v a r i o u s s e r v i c e s r e n d e r e d ; • Review the ef f e c t i v e n e s s o f t h e c u r r e n t s y s t e m s i n p l a c e ; • Develop/prop o s e ( i f n e e d e d ) a m e n d m e n t s o r i m p r o v e m e n t s t o a n d o f t h e s y s t e m s i n p l a c e a n d • Further mains t r e a m s e r v i c e d e l i v e r y e f f e c t i v e n e s s .

Table 6: Typical responses received were measured against a performance benchmarking rate of 68% formulated as follows: Rating % = [(% o f r e s p o n s e s x 1 ) + ( % o f r e s p o n s e s x 2 ) + ( % o f r e s p o n s e s x 3 ) ] / 3 , e . g . SCORE % of Responses

BELOW PAR (1) 22%

AVERAGE (2) 52%

EXCELLENT (3) 26%

Rating = 68%

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Figure:1 Typical survey responses against performance benchmark Contractors Perspective (Red) Clients and stakeholders Perspective (Brown) How do you rate the current performance of the CCC against a previous experience? How well is the CCC performing in respect ofâ&#x20AC;Ś?

Rating 29%

Its location 19%

Phone support from call centre

23%

62%

40% 37%

14%

Waiting times in queue

60%

54%

33% 26%

Office efficiency; admin, telephone answering, etc.

64%

53%

28%

Informing you of events and courses

70%

50%

20%

68%

52%

22% 23%

General knowledge and expertise of consultants

69%

61%

16% 23%

Solving your problems/explaining options

66%

52%

26% 24%

Providing a consistent service

69%

59%

16% 24%

Help desk efficiency

02 Excellent

03 Adequate

70%

63%

13% 04

Unacceptable

A N NU A L REP OR T 2 0 10 / 1 1

The current performance against a previous experience?

Much worse 5%

Much better 37%

Same 58%

How do you rate the current performance against a previous experience?

Same 35%

Much better 64% CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Much worse 1%

Key findings and recommendations will form the basis for streamlining and efficiency going into the future.

Staff T raining and Capacitation In order to r e s p o n d t o t h e b e n c h m a r k e d a n d s e r v i c e l e v e l g a p s , e m p l o y e e s w e r e c o n t i n u o u s l y exposed to t a r g e t e d t r a i n i n g , t o b u i l d c a p a c i t y t h a t w o u l d r e s p o n d p o s i t i v e l y t o c u s t o m e r n e e d s and thus eleva t e c u s t o m e r s e r v i c e . B a s e d o n a n e e d s a n a l y s i s c o n d u c t e d b y m a n a g e r s , t h e t r a i n i n g a nd capacitati o n s e r v e d a s t h e b a s i s :

Table 7: Attended Staff Training Various training areas focused upon are highlighted below: PROVINCE

COURSE DESCRIPTION

Eastern C a p e

Effective Management Skills Inter-personal Skills Service Level Agreements and Contracts Ethics Management Customer Care

Gauteng

People Management for new managers Service Level Agreements and Contracts Essential Assertiveness Skills

Limpopo

Key Skills for Effective Managers F i na n c e f o r N o n - F i n a n c i a l M a n a g e r s Customer Care Advanced Computer Course Service Level Agreements and Contracts Registration Training

Northern C a p e

Western C a p e

Microsoft Training Service Level Agreements and Contracts

KwaZulu-N a t a l

Microsoft Training Service Level Agreements and Contracts

Mpumala n g a

Registration Training Service Level Agreements and Contracts

Free State

Registration Training Service Level Agreements and Contracts

A N NU A L REP OR T 2 0 10 / 1 1

G rowing c i db P rovincial reach The cidb has esta b l i s h e d 9 f u n c t i o n a l P a r t n e r e d P r o v i n c i a l O f f i c e s - C o n s t r u c t i o n C o n t a c t C e n t r e s (CCC’s) with the N o r t h W e s t C C C o p e r a t i n g a t t e m p o r a r y p r e m i s e s t o r e l o c a t e t o n e w p e r m a n e n t o f f i c e s and will be launc h e d d u r i n g 2 0 1 1 / 1 2 , i n p a r t n e r s h i p w i t h t h e N W D e p a r t m e n t o f P u b l i c W o r k s , R o a d s a n d Transport. The project in the N o r t h W e s t w a s c o n s t r u c t e d a n d c o m p l e t e d b y a c i db r e g i s t e r e d g r a d e 6 c o n t r a c t o r . The expected foc u s i n 2 0 1 1 / 1 2 w i l l b e o n i m p r o v e d s e r v i c e d e l i v e r y , c u s t o m e r s a t i s f a c t i o n a n d g r o w i n g the value add an d o f f e r i n g s . To this end, a ph a s e d a p p r o a c h c o m m e n c i n g i n 2 0 1 1 / 1 2 , w i l l s e e s t a f f r e s o u r c i n g , a n d a p r i o r i t y o n contractor devel o p m e n t a n d o t h e r c id b s e r v i c e s b e i n g m o r e a c c e s s i b l e w i t h i n t h e P r o v i n c i a l P a r t n e r e d Offices.

Focus areas for 2 0 1 1 / 1 2 • • • • • • • • •

Continued se r v i c e i m p r o v e m e n t Focus on imp a c t s a n d s u r v e y s a n d M & E Piloting of ext e n s i o n o f r e s o u r c e s t o o f f e r w i d e r s u i t e o f c i db s e r v i c e s Increased foc u s o n C o n t r a c t o r D e v e l o p m e n t a n d p i l o t i n g a n d t e s t i n g p r o j e c t s o r p r o g r a m m e s Space and re s o u r c e p l a n n i n g f o r m a x i m u m e f f i c i e n c y Addressing th e c h a l l e n g e o f i n f l u x o f G r a d e 1 ’ s Professional s e r v i c e p r o v i d e r s u t i l i s a t i o n a n d c a t a l y t i c p r o j e c t s r o l l o u t Ongoing co-o r d i n a t i o n o f s t a k e h o l d e r s a n d m a n a g i n g a n d p r i o r i t i s i n g s t r a t e g i c p a r t n e r s h i p s Ongoing supp o r t o n P r o c u r e m e n t a n d C o n t r a c t o r D e v e l o p m e n t t o c l i e n t s a n d i n d u s t r y

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

A N NU A L REP OR T 2 0 10 / 1 1

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

MONITORING INDUSTRY PERFORMANCE

A N NU A L REP OR T 2 0 10 / 1 1

T h e c id b h a s d e v e l o p e d a s u i t e o f p r o d u c t s t o h e l p m o n i t o r and evaluate the performance of the industry and to support contractor development, including: • s e c t o r s p e c i f i c s t a t u s r e p o r t s ; • t h e ci d b C o n s t r u c t i o n I n d u s t r y I n d i c a t o r s ( C I I s ) ; • t h e c i db Q u a r t e r l y M o n i t o r ; a n d • t h e c i db S M E B u s i n e s s C o n d i t i o n s S u r v e y . Collectively, these products provide a base for a detailed u n d e r s t a n d i n g o f t h e i n d u s t r y b y t h e c i db. T h e c id b C o n s t r u c t i o n I n d u s t r y I n d i c a t o r s ( C I I s ) h a v e b e e n captured annually since 2003, and measure the performance of the industry focusing on clients, the client’s agent / consultant and contractors. The CIIs are currently being captured by the c id b i n p a r t n e r s h i p w i t h t h e D e p a r t m e n t o f Q u a n t i t y S u r v e y i n g a n d Construction Management of the University of the Free State. The current CIIs reflect indicators measured for projects completed in the 2009 calendar year, drawn from client d e p a r t me n t s i n v o l v i n g 4 3 4 p r o j e c t s a n d 1 0 5 3 c o n t r a c t o r s f r o m across all nine provinces. The indicators captured cover: • c l i e n t s a t i s f a c t i o n ; • c o n t r a c t o r s a t i s f a c t i o n ; • p r o f i ta b i l i t y a n d p a y m e n t d e l a y s ; • p r o c u r e m e n t i n d i c a t o r s ; a n d • h e a l t h a n d s a f e t y .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

A s i n p r ev i o u s y e a r s , w h i l e t h e o v e r a l l p e r f o r m a n c e r e s u l t s f o r t h e industry are encouraging, and overall show an improvement over previous years, the challenge is to raise the performance of the industry as a whole, and in particular the performance of “the bottom 30%”: • C l i e n t s w e r e n e u t r a l o r d i s s a t i s f i e d w i t h t h e p e r f o r m a n c e o f contractors on 15% of the projects surveyed in 2010. • A r o u n d 1 2 % o f t h e p r o j e c t s s u r v e y e d h a d l e v e l s o f d e f e c t s which are regarded as inappropriate. • C o n t r a c t o r s w e r e n e u t r a l o r d i s s a t i s f i e d w i t h t h e q u a l i t y o f tender documents and specifications obtained from clients on around 22% of the projects surveyed. Contractor satisfaction was lowest for national/district council clients, followed by national departments. • C o n t r a c t o r s w e r e n e u t r a l o r d i s s a t i s f i e d w i t h t h e m a n a g e m e n t of variation orders on 26% of the projects surveyed. • C o n t r a c t o r s w e r e l e a s t s a t i s f i e d w i t h t h e m a n a g e m e n t o f variation orders with the national departments, followed closely by the metropolitan councils and provincial departments. • 4 8 % o f p a y m e n t s t o c o n t r a c t o r s w e r e m a d e o v e r 3 0 d a y s o r longer after invoicing; this shows a welcome improvement over t h e pa y m e n t d e l a y s c o m p a r e d t o t h e 2 0 0 8 a n d 2 0 0 9 r e s u l t s . Payment delays recorded in the 2010 survey were highest in the regional/district and metropolitan councils.

The cidb Q u a r t e r l y M o n i t o r p r o v i d e s a n o v e r v i e w o f t h e s t a t e o f c o n t r a c t o r d e v e l o p m e n t i n S o u t h Africa as in p u t t o d e v e l o p i n g t a r g e t e d i n t e r v e n t i o n s t r a t e g i e s i n s u p p o r t o f t h e N a t i o n a l C o n t r a c t o r Developm e n t p r o g r a m m e ( N C D P ) . T h e c i db Q u a r t e r l y M o n i t o r f o c u s e s o n p u b l i c s e c t o r s u p p l y a n d demand a t a p r o v i n c i a l l e v e l , a n d c u r r e n t l y d e a l s o n l y w i t h t h e G e n e r a l B u i l d i n g ( G B ) a n d C i v i l Engineerin g ( C E ) c id b C l a s s o f W o r k s . Details of c o n t r a c t a w a r d s a r e o b t a i n e d f r o m t h e c id b i T e n d e r R e g i s t e r o f P r o j e c t s s u p p o r t e d b y the Industr y I n s i g h t P r o j e c t D a t a b a s e . ( Th e s u p p o r t o f I n d u s t r y I n s i g h t i n p r o v i d i n g t h i s i n f o r m a t i o n i s gratefully a c k n o w l e d g e d . ) C o n t r a c t o r i n f o r m a t i o n i s o b t a i n e d f r o m t h e c i db R e g i s t e r o f C o n t r a c t o rs. A specific f o c u s o f t h e c id b Q u a r t e r l y M o n i t o r h a s b e e n o n o b t a i n i n g a d e t a i l e d a n a l y s i s o f c o n t r a ctor upgrades, d o w n g r a d e s , a n d n e w r e g i s t r a t i o n s . T h e c id b Q u a r t e r l y M o n i t o r a l s o m o n i t o r s e m p o w e r ment trends: Ownership : A r o u n d 8 0 % o f c id b r e g i s t e r e d G e n e r a l B u i l d i n g ( G B ) a n d C i v i l E n g i n e e r i n g ( C E ) c o n t r a ctors in Grades 2 t o 4 a r e b l a c k o w n e d ( d e f i n e d a s 5 0 % o r m o r e o w n e r s h i p c o n t r o l ) . F u r t h e r m o r e , a r o u nd 70% to 80 % o f a l l G r a d e 5 & 6 G e n e r a l B u i l d i n g a n d C i v i l E n g i n e e r i n g c o n t r a c t o r s a r e b l a c k o w n e d, while arou n d 5 0 % t o 6 0 % o f a l l G r a d e 7 & 8 G e n e r a l B u i l d i n g c o n t r a c t o r s a r e b l a c k o w n e d . Contracts A w a r d e d : E s t i m a t e s o f t h e v a l u e o f p u b l i c s e c t o r c o n t r a c t s a w a r d e d t o b l a c k o w n e d companie s d u r i n g 2 0 1 0 / 1 1 s u g g e s t t h a t a r o u n d 7 5 % t o 8 0 % o f t h e v a l u e o f G r a d e 2 t o 4 t e n d e r s have been awar d e d t o b l a c k o w n e d c o n t r a c t o r s . I n t e n d e r G r a d e s 7 & 8 , t h e v a l u e a w a r d e d t o b l a c k o wned contractor s i s s i g n i f i c a n t l y l o w e r – n a m e l y a r o u n d 5 0 % . Ownership H i s t o r y : T h e c h a n g e i n b l a c k - o w n e r s h i p o v e r t h e p a s t t h r e e y e a r s ( 2 0 0 8 Q u a r t e r 2 t o 2 0 11 Quarter 1) f o r g e n e r a l B u i l d i n g i s s h o w n i n t h e a d j a c e n t F i g u r e . O f c o n c e r n i s t h a t b l a c k - o w n e r s h i p in Grades 2 t o 4 , 5 & 6 , a n d 7 & 8 h a s i n f a c t d e c r e a s e d o v e r t h i s p e r i o d . S i m i l a r r e s u l t s a r e o b t a i n e d for Civil Engin e e r i n g , a l t h o u g h b l a c k o w n e r s h i p i n G r a d e s 7 & 8 h a s i n c r e a s e d o v e r t i m e . A N NU A L REP OR T 2 0 10 / 1 1

Upgrade History: T h e p e r c e n t a g e o f c o n t r a c t or s u p g r a d i n g p e r q u a r t e r i n t h e G e n e r a l B u i l d i n g C l a s s o f Works and from G r a d e s 1 , 2 t o 4 a n d 5 & 6 i s s h o w n i n t h e a d j a c e n t F i g u r e . I t i s s e e n t h a t t h e n u m b e r o f upgrades per qu a r t e r f r o m G r a d e s 1 , 5 & 6 ( a n d f r o m G r a d e s 7 & 8 w h i c h i s n o t s h o w n ) h a s d e c r e a s e d over the period 2 0 0 8 Q u a r t e r 2 t o 2 0 1 1 Q u a r t e r 1 . S i m i l a r t r e n d s a r e o b s e r v e d w i t h C i v i l E n g i n e e r i n g . It is likely that thi s d e c r e a s i n g t r e n d i n c o n t r a c t o r u p g r a d e s i s d u e l a r g e l y t o t h e n e g a t i v e e c o n o m i c conditions being e x p e r i e n c e d ( s e e b e l o w ) . This understandin g o f c o n t r a c t o r p r o g r e s s i o n o n t h e c id b r e g i s t e r o f c o n t r a c t o r s i s b e i n g u s e d a s a p r o x y for measuring co n t r a c t o r d e v e l o p m e n t a n d a n i n p u t t o d e v e l o p i n g t a r g e t i n g s t r a t e g i e s f o r c o n t r a c t o r development. The cidb SME Bus i n e s s C o n d i t i o n s S u r v e y m e a s u r e s c o n t r a c t i n g b u s i n e s s c o n d i t i o n s a m o n g s t c i db registered contra c t o r s a t a p r o v i n c i a l l e v e l a nd i n v a r i o u s c o n t r a c t o r g r a d e s . T h e S M E B u s i n e s s Conditions Surve y i s u n d e r t a k e n b y t h e B u r e a u f o r E c o n o m i c R e s e a r c h ( B E R ) f o r t h e c i db. T h e S u r v e y measures, amon g s t o t h e r s , t h e b u s i n e s s c o n f i d e n c e , c o n s t r u c t i o n a c t i v i t y , t e n d e r i n g c o m p e t i t i o n , employment and l a b o u r c o n s t r a i n t s a m o n g s t c id b r e g i s t e r e d c o n t r a c t o r s , p r e d o m i n a n t l y i n c i db G r a d e s 3 to 8. The results of the B u s i n e s s C o n d i t i o n s S u r v e y s s h o w t h a t , b u s i n e s s c o n f i d e n c e i n t h e G e n e r a l B u i l d i n g and Civil Enginee r i n g s e c t o r s h a s d e c r e a s e d s i g n i f i c a n t l y o v e r t h e p e r i o d 2 0 0 8 Q u a r t e r 3 t o 2 0 1 1 Quarter 1 – but in d i c a t i o n s a r e t h a t b u s i n e s s c o n d i t i o n s c o u l d n o w b e i m p r o v i n g .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Construction Quality in SA; A C lient Perspective Value to c l i e n t s i s a v e r y c o m p l e x a n d o f t e n s u b j e c t i v e i s s u e , b u t i t i s r e c o g n i s e d t h a t q u a l i t y o f constructio n i s a k e y c o m p o n e n t o f p e r c e i v e d v a l u e t o c l i e n t s . A s n o t e d b y F I D I C , “ l a c k o f q u a l i t y in construc t i o n i s m a n i f e s t e d i n p o o r o r n o n - s u s t a i n a b l e w o r k m a n s h i p , a n d u n s a f e s t r u c t u r e s ; a n d i n delays, co s t o v e r r u n s a n d d i s p u t e s i n c o n s t r u c t i o n c o n t r a c t s ” . V a l u e a n d q u a l i t y o f c o n s t r u c t i o n i s of concern to b o t h p u b l i c a n d p r i v a t e s e ct o r c l i e n t s . Against thi s b a c k g r o u n d , t h e c id b u n d e r t o o k a s t u d y o n t h e q u a l i t y o f c o n s t r u c t i o n i n S o u t h A f r i c a . The report show s t h a t , o v e r a l l , c l i e n t s a r e s a t i s f i e d w i t h t h e q u a l i t y o f c o n s t r u c t i o n i n S o u t h A f r i c a , b u t that the quality o f c o n s t r u c t i o n d o e s v a r y b e t w e e n c o n s t r u c t i o n p r o j e c t s . H o w e v e r , c l i e n t s i n g e n e r a l , and in particular p u b l i c s e c t o r c l i e n t s , s h o u l d n o t b e c o m p l a c e n t w i t h t h i s , a n d s h o u l d s t r i v e f o r b e t t e r v alue and highe r q u a l i t y c o n s t r u c t i o n . This report h i g h l i g h t s t h a t t h e m a j o r c o n t r i b u t o r s t o p o o r q u a l i t y o f c o n s t r u c t i o n i n S o u t h A f r i c a a r e likely to be proc u r e m e n t r e l a t e d b a r r i e r s . S u c h p r o c u r e m e n t r e l a t e d b a r r i e r s i n c l u d e : • fraud a n d c o r r u p t i o n , o r ’ p o l i t i c a l i n t e r f e r e n c e ‘ ( i n c l u d i n g c r o n y i s m a n d n e p o t i s m ) ; • the pro c u r e m e n t a n d d e l i v e r y m o d e l ; • the use o f p r o c u r e m e n t s y s t e m s b a se d o n p r i c e a n d p r e f e r e n c e o n l y , a n d n o t t a k i n g i n t o a c c ount functio n a l i t y ( o r q u a l i t y ) ; • and/or i n s u f f i c i e n t i n f o r m a t i o n t o b e a b l e t o s e l e c t p r o f e s s i o n a l s e r v i c e s a n d / o r c o n t r a c t o r s b a sed on qua l i t y c r i t e r i a . The report c o n c l u d e s w i t h s p e c i f i c r e c om m e n d a t i o n s t h a t t h e c id b a n d o t h e r s t a k e h o l d e r s c o u l d action to support e n h a n c e d c o n s t r u c t i o n q u a l i t y i n S o u t h A f r i c a ( s e v e r a l o f w h i c h t h e c i db h a s h a d a l r e a dy initiated), i n c l u d i n g : Strong con s i d e r a t i o n s h o u l d b e g i v e n b y t h e c id b t o i n t r o d u c e r e q u i r e m e n t s f o r i n t e g r i t y a n d transparen c y i n c o n s t r u c t i o n p r o c u r e m e n t ; Strong con s i d e r a t i o n s h o u l d b e g i v e n b y t h e c i db t o a d v o c a t e f o r p r o c u r e m e n t a n d d e l i v e r y m o d els promoting c o l l a b o r a t i v e r e l a t i o n s h i p s a n d i n t e g r a t e d s u p p l y t e a m s ( i n c l u d i n g d e s i g n a n d b u i l d contractin g s t r a t e g i e s ) ; The cidb n e e d s t o c o n t i n u e t o a d v o c a t e f o r a n d t o s t r e n g t h e n r e q u i r e m e n t s f o r t h e a p p o i n t m e n t of profession a l s e r v i c e s a n d c o n t r a c t o r s b a s e d o n q u a l i t y c r i t e r i a – s u p p o r t e d b y p e r f o r m a n c e a s s e s sment reports for p r o f e s s i o n a l s e r v i c e p r o v i d e r s a n d c o n t r a c t o r s ; a n d The ci db m u s t c o n t i n u e t o a d v o c a t e f o r a b u i l d i n g a n d c o n s t r u c t i o n c o m p o n e n t t o b e i n c o r p o r a t ed into the South A f r i c a n W o r l d S k i l l s a c t i v i t i e s – a n d s h o u l d a c t i v e l y s e e k t o i n c o r p o r a t e a c o n s t r u c t i o n s k i lls componen t i n t o t h e S o u t h A f r i c a n d e l e g a t i o n .

Progress with the cidb Best Practice Project Assessment Scheme The cidb A c t r e q u i r e s t h a t t h e B o a r d m u s t e s t a b l i s h a B e s t P r a c t i c e P r o j e c t A s s e s s m e n t S c h e m e b ased on the bes t p r a c t i c e s i d e n t i f i e d b y t h e B o a r d . A l l c o n s t r u c t i o n c o n t r a c t s a b o v e a p r e s c r i b e d t e n d er value will t h e n b e s u b j e c t t o a n a s s e s s m e n t o f c o m p l i a n c e w i t h b e s t p r a c t i c e s t a n d a r d s a n d g u i d elines published b y t h e B o a r d . Several ke y b e s t p r a c t i c e s a r e c u r r e n t l y b e i n g f i n a l i s e d b y t h e c id b t o g e t h e r w i t h i n d u s t r y s t a k e h o l ders for possibl e r o l l - o u t a s p a r t o f t h e B e s t P r a c t i c e P r o j e c t A s s e s s m e n t S c h e m e : Enterprise D e v e l o p m e n t : G r o w t h o f t h e e m e r g i n g s e c t o r c a n b e f a c i l i t a t e d t h r o u g h a n u m b e r o f mechanism s , i n c l u d i n g :

• •

directl y t h r o u g h s t r u c t u r e d p u b l i c o r p r i v a t e s e c t o r c o n t r a c t o r d e v e l o p m e n t p r o g r a m m e s t o g e ther with a p p r o p r i a t e p r e f e r e n c e m o d e l s ; o r indirec t l y t h r o u g h a p r o c u r e m e n t m o d e l w i t h t a r g e t e d d e v e l o p m e n t o u t c o m e s . Indirec t t a r g e t i n g i n c l u d e s m e c h a ni s m s s u c h a s t h o s e w h e r e a c o n d i t i o n o f c o n t r a c t i s f o r t h e main contra c t o r t o d e v e l o p j o i n t - v e n t u r e p a r t n e r s a n d / o r s u b - c o n t r a c t o r s .

A N NU A L REP OR T 2 0 10 / 1 1

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A Focus Group ha s c o m p l e t e d t h e d e v e l o p m e n t o f d r a f t r e q u i r e m e n t s a n d g u i d e l i n e s f o r i n d i r e c t targeting to prom o t e e n t e r p r i s e d e v e l o p m e n t . T h e s e r e q u i r e m e n t s p r o v i d e f o r a m i n i m u m o f 5 % o f the total project v a l u e o n s e l e c t e d c o n t r a c t s t o b e u n d e r t a k e n b y j o i n t - v e n t u r e p a r t n e r s o r t o s u b contracted to de v e l o p i n g c o n t r a c t o r s t h a t a r e a l s o t o b e b e n e f i c i a r i e s o f e n t e r p r i s e d e v e l o p m e n t support from the m a i n c o n t r a c t o r . The draft require m e n t s w i l l b e s u b m i t t e d t o t h e B o a r d i n 2 0 1 1 / 1 2 f o r p o s s i b l e s u b m i s s i o n t o t h e M i n i s t e r of Public Works a n d f o r s u b s e q u e n t r o l l - o u t . I f i m p l e m e n t e d , i t i s e s t i m a t e d t h a t t h e r e c o m m e n d a t i o n s could result in ar o u n d : R4,6b of contrac t s t o d e v e l o p i n g e n t e r p r i s e s p e r y e a r ; a n d 7 0 0 c o n t r a c t o r s r e c e i v i n g d e v e l o p m e n t a l support per year . Construction Skill s P o l i c y : A F o c u s G r o u p h a s c o m p l e t e d t h e d e v e l o p m e n t o f d r a f t r e q u i r e m e n t s a n d guidelines for wo r k p l a c e t r a i n i n g o f i n t e r n s a n d u p - s k i l l i n g o f c o m p a n y e m p l o y e e s i n p r o g r a m m e s t h a t result in nationall y a c c r e d i t e d o u t c o m e s , s u c h a s , l e a r n e r s h i p s a n d a c c r e d i t e d s k i l l s p r o g r a m m e s . The draft require m e n t s p r o v i d e f o r 0 , 5 % o f t h e t e n d e r v a l u e o f G e n e r a l B u i l d i n g ( G B ) c o n t r a c t s a n d 0,25% of the ten d e r v a l u e o f C i v i l E n g i n e e r i n g c o n t r a c t s ( C E ) t o b e a l l o c a t e d t o w o r k p l a c e t r a i n i n g o n public sector con t r a c t s i n t e n d e r G r a d e s 7 t o 9 . I t i s e s t i m a t e d t h a t t h i s w i l l t r a n s l a t e t o a r o u n d : R 2 8 0 m spend on workpla c e t r a i n i n g p e r y e a r ; a n d 3 0 0 0 l e a r n i n g o p p o r t u n i t i e s p e r y e a r . The draft require m e n t s w i l l b e s u b m i t t e d t o t h e B o a r d i n 2 0 1 1 / 1 2 f o r p o s s i b l e s u b m i s s i o n t o t h e M i n i s t e r of Public Works a n d f o r r o l l - o u t . Energy Efficient B u i l d i n g s : A F o c u s G r o u p h a s e n d o r s e d t h e G r e e n S t a r S A r a t i n g t o o l s o f t h e G r e e n Building Council o f S o u t h A f r i c a ( G B C S A ) a s a b e s t p r a c t i c e f o r p u b l i c a n d p r i v a t e s e c t o r b u i l d i n g s – which has subseq u e n t l y b e i n g g a z e t t e d b y t h e c i db . The Board also a p p r o v e d t h e r e q u i r e m e n t s a n d g u i d e l i n e s d e v e l o p e d b y t h e F o c u s G r o u p , r e q u i r i n g t h a t all public buildin g s ( i n c l u d i n g P P P s ) f o r w h i c h t h e p l a n n i n g p h a s e i s b e g u n ( i n c l u d i n g m a j o r r e n o v a t i o n s for which plannin g a p p r o v a l i s r e q u i r e d ) s h o u l d b e d e s i g n e d a n d / o r c o n s t r u c t e d t o a c h i e v e , a t a minimum, 4 Star G r e e n S t a r S A c e r t i f i c a t i o n . T h e s e r e q u i r e m e n t s a n d g u i d e l i n e s f o r e n e r g y e f f i c i e n t public buildings w i l l b e s u b m i t t e d t o t h e M i n i s t e r o f P u b l i c W o r k s i n 2 0 1 1 / 1 2 f o r p o s s i b l e r o l l - o u t . I f implemented, it i s e s t i m a t e d t h a t t h e r e c o m m e n d a t i o n s c o u l d r e s u l t i n a r o u n d : • R850m pa sav i n g s i n c o s t o f c a r b o n f o r n o n - r e s i d e n t i a l b u i l d i n g s ; a n d • R55m pa savi n g s i n c o s t o f c a r b o n f o r t h e n a t i o n a l D P W p o r t f o l i o .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Progress with the c id b Best Practice Contractor Recognition Scheme The Constr u c t i o n I n d u s t r y D e v e l o p m e n t B o a r d A c t ( A c t 3 8 o f 2 0 0 0 ) r e q u i r e s t h e B o a r d t o e s t a b l i s h a Best Practice C o n t r a c t o r R e c o g n i t i o n S c h e m e w h i c h : a) enables o r g a n s o f s t a t e t o m a n a g e r i s k o n comple x c o n t r a c t i n g s t r a t e g i e s ; a n d b) promote s c o n t r a c t o r d e v e l o p m e n t i n r e l a t i o n t o b e s t p r a c t i c e s t a n d a r d s a n d g u i d e l i n e s d e v e l o ped by the B o a r d . Work is pro g r e s s i n g w e l l w i t h t h e d e v e l o p m e n t o f t h e c i db B e s t P r a c t i c e C o n t r a c t o r R e c o g n i t i o n S c heme, and frame w o r k d o c u m e n t s h a v e b e e n d e v e l o p e d a n d e n d o r s e d b y i n d u s t r y f o r k e y c o m p o n e n t s o f the Best Practi c e C o n t r a c t o r R e c o g n i t i o n S c h e m e . M o s t o f t h e s e f r a m e w o r k s a r e n o w i n a p i l o t i n g p h a se before pos s i b l e f i n a l e n d o r s e m e n t b y s t a k e h o l d e r s a n d r o l l - o u t : Contractor P e r f o r m a n c e A s s e s s m e n t : A F o c u s G r o u p h a s d e v e l o p e d a n d e n d o r s e d r e c o m m e n d a t i ons that Contr a c t o r P e r f o r m a n c e A s s e s s m e n t r e p o r t s w i l l b e r e q u i r e d t o b e s u b m i t t e d b y t h e e m p l o y e r to the ci db o n p r a c t i c a l c o m p l e t i o n o f a l l p r e s c r i b e d p u b l i c a n d p r i v a t e s e c t o r p r o j e c t s . T h e s e r e p o r ts will provide a t r a c k r e c o r d o f t h e p e r f o r m a n c e o f c o n t r a c t o r s w h i c h c a n b e u s e d f o r : • assessin g t h e s u i t a b i l i t y o f c o n t r a c t o r s f o r r e g i s t r a t i o n , p r e - q u a l i f i c a t i o n , s e l e c t i v e t e n d e r l i s t s o r express i o n s o f i n t e r e s t ; • adjudic a t i o n f o r t h e a w a r d o f a c o n t r a c t ; o r t e r m i n a t i o n o f c o n t r a c t . A pilot pro j e c t t o e v a l u a t e t h e C o n t r a c t o r P e r f o r m a n c e A s s e s s m e n t r e p o r t s w a s i n i t i a t e d w i t h t h e Western Ca p e D e p a r t m e n t o f R o a d s a n d W o r k s i n 2 0 0 9 / 1 0 . T o d a t e , a t o t a l o f 1 2 6 C o n t r a c t o r Performan c e A s s e s s m e n t f o r m s c o v e r i n g m a i n l y m a i n t e n a n c e a n d r e n o v a t i o n s o n b u i l d i n g p r o j e c t s have been eval u a t e d , c o v e r i n g p r o j e c t s r a n g i n g i n v a l u e f r o m R 2 0 0 k t o R 2 8 m . T h e p i l o t i s p r o g r e s s i n g well, and it has b e e n r e c o m m e n d e d t h a t t h e p i l o t c o n t i n u e t h r o u g h 2 0 1 1 / 1 2 . Discussion s a r e c o n t i n u i n g o n e x t e n d i n g t h e p i l o t t o o t h e r p r o v i n c e s a n d t o s e l e c t e d m e t r o s .

cidb Com p e t e n c e A c c r e d i t a t i o n : A F o c u s G r o u p h a s d e v e l o p e d a n d e n d o r s e d r e c o m m e n d a t i o n s that will pr o v i d e f o r a n a s s e s s m e n t o f t h e c o m p e t e n c i e s o f a c o n t r a c t i n g e n t e r p r i s e m e a s u r e d a g ainst acceptabl e s t a n d a r d s n e c e s s a r y f o r r u n n i n g a c o n t r a c t i n g e n t e r p r i s e a n d f o r s u p e r v i s i n g b u i l d i n g and constr u c t i o n w o r k s – t a r g e t i n g G r a d e 2 t o 4 c o n t r a c t o r s . I n t e r m s o f t h e r e c o m m e n d a t i o n s , once inco r p o r a t e d i n t o t h e c idb B e s t P ra c t i c e C o n t r a c t o r R e c o g n i t i o n S c h e m e , c l i e n t s w i l l t h e n b e encourage d t o p r o c u r e w o r k f r o m c o n t r a c t o r s t h a t p o s s e s s s u c h m i n i m u m s t a n d a r d s . A N NU A L REP OR T 2 0 10 / 1 1

A draft fra m e w o r k f o r e x t e r n a l a s s e s s m e n t ( R P L e q u i v a l e n c e ) h a s b e e n d e v e l o p e d t o a c c r e d i t t h e s e competen c e s i n c o n t r a c t o r s w h o d o n o t h o l d a n y f o r m a l q u a l i f i c a t i o n s . T h i s f r a m e w o r k w i l l b e p i l o ted in 2011/12.

In addition, a ski l l s s u r v e y o f a s a m p l e o f G r a d e 2 t o 6 c o n t r a c t o r s h a s a l s o b e e n c o m p l e t e d t o a s s e s s the level compe t e n c i e s t h a t c o n t r a c t o r s c u r r e n t l y p o s s e s s , a s a n i n p u t i n t o a s s e s s i n g t h e r e s o u r c e requirements an e x t e r n a l a s s e s s m e n t o f a c o n t r a c t o r ’ s c o m p e t e n c i e s w h e r e t h e c o n t r a c t o r o r h i s nominated repre s e n t a t i v e d o e s n o t h o l d t h e r e q u i r e d m i n i m u m f o r m a l q u a l i f i c a t i o n s . A survey of busin e s s m a n a g e m e n t c o u r s e s f o r c o n t r a c t o r s c o m p l e t e d i n 2 0 1 0 / 1 1 , a n d r e q u i r e m e n t s f o r Unit Standards in b u s i n e s s m a n a g e m e n t a r e a l s o c u r r e n t l y b e i n g f i n a l i s e d . ci db Standard fo r C o n s t r u c t i o n M a n a g e m e n t S y s t e m : T o p r o m o t e a n d r e c o g n i s e p e r f o r m a n c e improvement by c o n t r a c t o r s i n , t y p i c a l l y , G r a d e s 5 t o 7 , t h e c i db h a s d e v e l o p e d a c u s t o m i s e d s t a n d a r d for Construction M a n a g e m e n t S y s t e m s ( C M S s ) b a s e d o n r e c o g n i s a b l e c o n s t r u c t i o n i n d u s t r y m i n i m u m standards coverin g : • health and sa f e t y m a n a g e m e n t ; • quality manag e m e n t ; a n d • environmenta l m a n a g e m e n t ( c o v e r i n g a i r , w a t e r , l a n d a n d w a s t e ) . This cidb standar d a l l o w s f o r e x p a n s i o n a n d c o n v e r s i o n t o m e e t I S O o r O H S A S r e q u i r e m e n t s i n t h e f u t u r e . In terms of the re c o m m e n d a t i o n s d e v e l o p e d a n d e n d o r s e d b y a F o c u s G r o u p , o n c e i n c o r p o r a t e d i n t o the ci db Best Pra c t i c e C o n t r a c t o r R e c o g n i t i o n S c h e m e c l i e n t s w i l l b e a r e e n c o u r a g e d t o p r o c u r e w o r k from contractors w i t h c idb a c c r e d i t e d C o n s t r u c t i o n M a n a g e m e n t S y s t e m s . A pilot project wa s i n i t i a t e d i n 2 0 1 0 i n t h e W e s t e r n C a p e i n w h i c h 1 5 c o n t r a c t o r s w e r e e n r o l l e d t o b e trained and evalu a t e d o n t h e c id b C M S s t a n da r d o v e r a 1 - y e a r p e r i o d . T h e p i l o t i s c u r r e n t l y d r a w i n g t o conclusion, and a s i m i l a r p i l o t p r o j e c t i s b e i n g i n i t i a t e d i n G a u t e n g f o r 2 0 1 1 / 1 2 .

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

cidb Industry ESDA The cidb in p a r t n e r s h i p w i t h i n d u s t r y p a r t n e r s h a v e e s t a b l i s h e d a n E m p l o y m e n t S k i l l s D e v e l o p m e n t Agency (ES D A ) t o p r o v i d e w o r k p l a c e m e n t o p p o r t u n i t i e s t o F E T c o l l e g e l e a r n e r s t o g a i n v i t a l w o r k p lace experience . T h e c id b i n d u s t r y E S D A i s c u r r e n t l y r o l l i n g o u t a p i l o t p r o j e c t w i t h 2 0 l e a r n e r s w h o h a v e completed t h e i r N a t i o n a l C e r t i f i c a t e V o c a t i o n a l ( N C V ) L e v e l 4 i n C i v i l E n g i n e e r i n g a n d B u i l d i n g Constructio n . The candid a t e s a r e e m p l o y e d b y t h e c id b i n d u s t r y E S D A a n d p l a c e d w i t h c o n s t r u c t i o n c o m p a n i e s for relevant p r a c t i c a l e x p o s u r e a n d c o a c h i n g i n b r i c k l a y i n g , p l a s t e r i n g a n d c o n c r e t i n g . T h e E S D A p a y s the learner stip e n d ; p r o v i d e s p e r s o n a l p r o t e c t i v e c l o t h i n g a n d b a s i c t o o l s f o r t h e i r r e s p e c t i v e t r a d e s . The ci db indus t r y E S D A a l s o t a k e s c a r e o f t h e d m i n i s t r a t i v e b u r d e n s t h a t c o m e w i t h t a k i n g o n i n t e r n s . T he ESDA also t r a c k s t h e i r p r o g r e s s w i t h t h e a s s i s t a n c e o f t h e o n s i t e c o a c h a n d F E T l e c t u r e r s . The ESDA w i l l b e i n t e g r a l t o t h e r o l l - o u t o f t h e C o n s t r u c t i o n S k i l l s P o l i c y ( s e e p a g e 5 5 )

cidb Doctoral Workshop A one day c id b d o c t o r a l w o r k s h o p w a s h e l d i n C a p e T o w n i n O c t o b e r 2 0 1 0 , o r g a n i s e d j o i n t l y b y UCT and C P U T . T h e a i m o f t h e o n e - d a y w o r k s h o p w a s t o d r a w t o g e t h e r s t u d e n t s r e g i s t e r e d t o w a r d s a research d e g r e e ( t y p i c a l l y P h D â&#x20AC;&#x2122; s D T e c h a n d M S c a n d M T e c h ) w i t h t h e i r s u p e r v i s o r s a n d f o r t h e students to p r e s e n t t h e i r w o r k ( i n p r o g r es s ) , f o c u s i n g o n d e p l o y e d r e s e a r c h m e t h o d o l o g i e s b u t a l s o on theoretica l f r a m e w o r k s i n u s e i n f r o n t o f t h e i r p e e r s , s u p e r v i s o r s a n d o t h e r a c a d e m i c s . F i v e s t u d e n ts from four u n i v e r s i t i e s p r e s e n t e d t h e i r w o r k . Very inform a t i v e i n t e r a c t i o n s w e r e h a d b e t w e e n t h e c i db , a c a d e m i c s t a f f a n d s t u d e n t s r e g a r d i n g their research d u r i n g t h e w o r k s h o p , a n d u s e fu l f e e d b a c k w a s g i v e n t o s t u d e n t s r e g a r d i n g p r e s e n t a t i o n skills and resea r c h m e t h o d o l o g y . It was also c l e a r f r o m t h e w o r k s h o p t h a t t h e b a s e o f e x p e r i e n c e d s u p e r v i s o r s w i t h i n t h e b u i l t environme n t c o m m u n i t y n e e d s t o b e g r o w n , a n d s u g g e s t i o n s a r e m a d e t o e n c o u r a g e a c t i v e c r o s suniversity c o - s u p e r v i s i o n â&#x20AC;&#x201C; p a r t i c u l a r l y t o s u p p o r t a c a d e m i c s f r o m p r e v i o u s l y d i s a d v a n t a g e d i n s t i t utions.

A N NU A L REP OR T 2 0 10 / 1 1

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

CORPORATE SERVICES

A N NU A L REP OR T 2 0 10 / 1 1

T h e C o r p o r a t e S e r v i c e s u n i t o f t h e c i db e n c o m p a s s e s f o u r separate units, namely: Human Resources, Information and Technology, Supply Chain and Management and Finance. A n o v e r vi e w o f t h e s t a t u s o f t h e s e u n i t s d u r i n g 2 0 1 0 / 1 1 f o l l o w s .

Human Resources A nd Organisational Management O verview, Activities and Responsibilities The activities and responsibilities of the Human Resources (HR) unit are driven from within the Corporate Services cluster, while a number of HR activities have been devolved to Business Units. Some of the HR activities handled by the unit include recruitment and selection, placement and induction, performance management, employee relations, human resources planning as well as training and development. T h e o r g a n i s a t i o n a l s t r u c t u r e o f t h e c i db g r o u p s v a r i o u s f u n c t i o n s o r activities together to avoid duplication and unintended overlaps. Below are different programmes and units that are supported by the HR department. It is on the basis of this cohesive structure that strategic decisions are taken at a centralised point thus creating a systematic and effective flow of work in response to the organisationâ&#x20AC;&#x2122;s legislative mandate and strategic imperatives focus areas. CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

CHIEF EXECUTIVE OFFICER

PROGRAMME MANAGER: GROWTH AND CONTRACTOR DEVELOPMENT

PROGRAMME MANAGER: CONSTRUCTION INDUSTRY PERFORMANCE

PROGRAMME MANAGER: PROCUREMENT AND DELIVERY

PROGRAMME MANAGER: CONSTRUCTION REGISTERS SERVICES

CHIEF FINANCIAL OFFICER: CORPORATE SERVICES

Programme Functional A reas Programm e 1 : Growth an d C o n t r a c t o r D e v e l o p m e n t Focus: Promotion o f e n t e r p r i s e d e v e l o p m e n t , i n v e s t m e n t a n d s p e n d i n g a s t h e b a s i s f o r a s t a b l e , d e v e l o p ing industry an d t h e p a r t i c i p a t i o n o f t h e e m e r g i n g s e c t o r . Programm e 2 : Constructi o n I n d u s t r y P e r f o r m a n c e Focus: Improved p e r f o r m a n c e a n d b e s t p r a c t i c e f o r a n i n d u s t r y t h a t d e l i v e r s r e l i a b l e v a l u e t o c l i e n t s , i n v estors and end-u s e r s , i n f o r m a t i o n o n c o n s t r u ct i o n i n d u s t r y i n d i c a t o r s t o i n f o r m c i db s t r a t e g y , p o l i c y m a k ers and stakeh o l d e r s . Programm e 3 : Procureme n t a n d D e l i v e r y M a n a g e m e n t Focus: Enhanced p u b l i c s e c t o r c o n s t r u c t i o n p ro c u r e m e n t a n d i n f r a s t r u c t u r e d e l i v e r y m a n a g e m e n t c a p a bility of public s e c t o r c l i e n t s e n a b l i n g e f f i c i e n t a n d e f f e c t i v e d e l i v e r y o f q u a l i t y i n f r a s t r u c t u r e t o t h e p u blic. Programm e 4 : Constructi o n R e g i s t e r s S e r v i c e Focus: Registratio n o f c o n t r a c t o r s a n d b o t h p ub l i c a n d p r i v a t e s e c t o r p r o j e c t s ; Regulation t o e f f e c t i m p r o v e d p e r f o r m a n c e a n d b e s t p r a c t i c e o f c l i e n t s a n d s u p p l i e r s . Programm e 5 : Office of t h e C h i e f E x e c u t i v e O f f i c e r Focus: Overall stra t e g i c l e a d e r s h i p a n d g o v e r n a n c e i n s u p p o r t o f t h e B o a r d ; Stakeholde r c o n s u l t a t i o n s a n d c o m m u n i c a t i o n s .

A N NU A L REP OR T 2 0 10 / 1 1

Programm e 6 : Corporate S e r v i c e s Focus: Financial m a n a g e m e n t i n c l u d i n g r e g i s t e r s f e e s ; Informatio n t e c h n o l o g y Human res o u r c e m a n a g e m e n t a n d a d m i n i s t r a t i o n ; Supply cha i n m a n a g e m e n t ;

100

Staff recruitment Through the hum a n r e s o u r c e p l a n n i n g p r o c e s s , c r i t i c a l p o s t s a r e g i v e n p r i o r i t y t o e n s u r e t h a t p o s t s d o not remain vacan t f o r t o o l o n g . During the period u n d e r r e v i e w , c id b h a s m a d e s t r i d e s i n e n s u r i n g t h a t v a c a n c i e s a r e f i l l e d t i m e o u s l y especially in are a s w h e r e o u t g o i n g s t a f f m e m b e r s h a d t o b e r e p l a c e d . A s a t 3 1 M a r c h 2 0 1 1 , c i db h a d only 8 vacant pe r m a n e n t p o s i t i o n s w h i c h w e r e o c c u p i e d b y t e m p o r a r y s t a f f m e m b e r s . ci db has signed S L A s ( S e r v i c e L e v e l A g r e e m e n t s ) w i t h a l l r e c r u i t m e n t a g e n c i e s o n i t s d a t a b a s e w h e r e rates have been n e g o t i a t e d a n d s e t a t a n a g r e e d m i n i m u m o f 1 2 % i n r e s p e c t o f a l l t h e p l a c e m e n t s regardless of the l e v e l o f t h e p o s i t i o n t h a t i s t o b e f i l l e d .

Staff Complement For the period un d e r r e v i e w , t h e t o t a l s t a f f c o m p l e m e n t w a s 1 6 3 o f w h i c h 1 3 9 w e r e p e r m a n e n t employees while 2 4 w e r e e m p l o y e e s o n f i x e d t e r m c o n t r a c t s . Below is the brea k d o w n o f h u m a n c a p i t a l a c r o s s t h e o r g a n i s a t i o n b a s e d o n g e n d e r a n d r a c e cl assifications:

Representivity : ( 0 1 / 0 4 / 2 0 1 0 – 3 1 / 0 3 / 2 0 11) RACE

FEMALE

MALE

Asian

Coloured

African

White

TOTAL

Staff Movement : ( 0 1 / 0 4 / 2 0 1 0 – 3 1 / 0 3 / 2011) During the period u n d e r r e v i e w , c id b e x p e r i e n c e d s t a f f m o v e m e n t b e t w e e n p r o g r a m m e s a n d a t t i m e s where employee s w e r e l e a v i n g t h e o r g a n i s a t i o n . B e l o w i s a s u m m a r y o f t h e s t a f f m o v e m e n t d u r i n g t h e period in questio n .

STAFF COMPLIMENT (31/03/2010) PERMANENT CONTRACT

CONTRACT TERMINATIONS

CONVERSION (FTC – PERM)

NEW STAFF 01/04/10 – 31/03/11)

TOTAL AS AT 31/03/2011)

120

139

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

101

J ob Evaluation As one of t h e m e a n s t h r o u g h w h i c h a n o m a l i e s r e l a t i n g t o j o b l e v e l s a n d r e m u n e r a t i o n , c i db managem e n t a p p r o v e d t h a t a J o b E v a l u a t i o n s y s t e m b e i n t r o d u c e d a s a w a y o f e n s u r i n g t h a t w o rk of the sam e v a l u e i s r e w a r d e d / r e m u n e r a t e d a t t h e s a m e o r e q u a l p a y s c a l e . T h i s p r o c e s s s t a r t e d in December 2 0 1 0 a n d w i l l b e c o m p l e t e d i n t h e f o l l o w i n g y e a r . T h e i n t e n d e d o u t c o m e o f t h i s p r o c e ss is to ensure tha t a l l j o b s a r e p r o p e r l y e v a l u at e d a n d l i n k e d t o a p p l i c a b l e p a y s c a l e s .

Human Resource D evelopment For the pe r i o d u n d e r r e v i e w , c id b c o n t i n u e d o n i t s c o m m i t m e n t t o t r a i n a n d d e v e l o p i t s p e r s o n n e l in areas th a t r e q u i r e t e c h n i c a l s k i l l s a s w e l l a s s o f t s k i l l s . O f t h e a n n u a l p a y r o l l b u d g e t , 1 . 9 2 % w a s committed t o h u m a n r e s o u r c e s d e v e l o p m e n t ( H R D ) a s g u i d e d b y e m p l o y e e s P D P s a s w e l l a s o u t c omes from staff p e r f o r m a n c e a s s e s s m e n t s .

Human Resources C hallenges The cidb c o n t i n u e s t o e x p e r i e n c e c h a l l e n g e s i n t e r m s o f a t t r a c t i n g a n d r e t a i n i n g h u m a n r e s o u r c e s with specia l i s e d s k i l l s a n d c a p a b i l i t i e s . D u r i n g t h e p e r i o d u n d e r r e v i e w , s o m e o f t h e h u m a n r e s o u r ces challenge s e x p e r i e n c e d w e r e : • S taff at t r a c t i o n : G o o d c a n d i d a t e s n o t k e e n t o r e s p o n d t o j o b a d v e r t s w h i l s t o t h e r s a r e t u r n i n g down offers m a d e ; • Staff re t e n t i o n : r e s i g n a t i o n b y k e y p e r s o n n e l t o j o i n o t h e r o r g a n i s a t i o n s t h a t h a v e b e t t e r i n c e n t i ves scheme s

E mployment E quit y ci db’s com m i t m e n t t o E m p l o y m e n t E q ui t y c o n t i n u e s t o y i e l d p o s i t i v e r e s u l t s . N o t o n l y a r e w o m e n i n the majority, 4 1 % o f s u p e r v i s o r y a n d m a n a g e r i a l p o s i t i o n s a t c i db a r e c u r r e n t l y o c c u p i e d b y w o m e n while black wom e n r e p r e s e n t 8 1 % o f t h e t o t a l n u m b e r o f w o m e n e m p l o y e d b y t h e c i db. ci db has a t o t a l n u m b e r o f 3 9 m a n a g e r s a n d s u p e r v i s o r s 6 o f w h i c h o c c u p y s e n i o r p o s i t i o n s i n t h e organisatio n a n d 1 6 o f t h e m a r e w o m e n ( p l e a s e s e e b e l o w b r e a k d o w n ) : MANAGERS AND SUPERVISORS RACE

MALE

FEMALE

Indian

White

Coloured

African

A N NU A L REP OR T 2 0 10 / 1 1

102

Below is the Emp l o y m e n t E q u i t y s t a t u s o f t h e c i db a s a t 3 1 M a r c h 2 0 1 1 p e r O c c u p a t i o n a l L e v e l :

OCCUPATIONAL LEVELS

MALE

FEMALE

FOREIGNERS

TOTAL

MALES

FEMALES

Top Manageme n t

Snr. Manageme n t

Professionally qu a l i f i e d a n d experienced spe c i a l i s t s a n d mid-manageme n t . Skilled technica l a n d academically q u a l i f i e d workers, junior m a n a g e m e n t , s upervisors, fore m e n a n d s uperintendents .

Semi-skilled

163

172

Unskilled TOTAL PERMANEN T Temp Employee s TOTAL People with disa b i l i t i e s

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

103

E mployee Relations and D isciplinary M atters During the p e r i o d u n d e r r e v i e w , t h e c id b h a d t o a d d r e s s i s s u e s r e l a t i n g t o a l l e g a t i o n s o f i m p r o p e r conduct b y s o m e o f t h e s t a f f m e m b e r s . T h e t a b l e b e l o w s h o w s a s u m m a r y o f s t e p s t a k e n b y managem e n t t o a d d r e s s t h e a l l e g e d m i s c o n d u c t .

Steps taken to address misconduct

WRITTEN WARNING

PRECAUTIONARY SUSPENSIONS

UPLIFTED SUSPENSIONS

Construc t i o n Registers Services

Corporat e Services

PROGRAMME

DISCIPLINARY HEARINGS

CHARGES WITHDRAWN

DISCIPLINARY HEARINGS IN PROGRESS

DISMISSALS

Staff against w h om disciplinary actions h ave been taken EMPL O Y E E R A N K

PROGRAMME

NATURE OF MISCONDUCT

SANCTION

Call Cen t r e A g e n t

Construction Registers Services

Absent without permission

W r i t t e n W a r n i ng

Assessor

Construction Registers Services

Absent without permission

W r i t t e n W a r n i ng

Admin. C l e r k

Construction Registers Services

Absent without permission

W r i t t e n W a r n i ng

Call Cen t r e A g e n t

Construction Registers Services

Absent without permission

W r i t t e n W a r n i ng

Corporate Services

Absent without permission

W r i t t e n W a r n i ng

General O f f i c e A s s i s t a n t

O ccupational Health and Safety ci db mana g e m e n t c o n t i n u e s t o e n c o u r a g e s t a f f m e m b e r s t o a d o p t a p o s i t i v e a t t i t u d e t o w a r d s t h e fight against HI V / A I D S a n d t o w a r d s t h o s e p e r s o n s w h o a r e i n f e c t e d a n d a f f e c t e d b y H I V / A I D S p a n d e mic. During the y e a r u n d e r r e v i e w , t h e f o l l o w i n g s t e p s w e r e t a k e n t o a d d r e s s o c c u p a t i o n a l r i s k a n d e x p osure to HIV / AID S : o Awaren e s s c a m p a i g n s ( d i s t r i b u t i o n o f b a n n e r s a n d i n f o r m a t i o n b o o k l e t s t o a l l c i db c e n t r e s a n d head office); o Continu o u s s u p p l y o f p r o t e c t i v e m a t e r i a l s ( c o n d o m s ) w h i c h a r e p l a c e d a t s t r a t e g i c p o i n t s f o r s taff to help th e m s e l v e s ; o Review o f H I V / A I D S p o l i c y b y O c c u p a t i o n a l H e a l t h & S a f e t y c o m m i t t e e .

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INFORMATION AND TECHNOLOGY The Information a n d T e c h n o l o g y u n i t i s c o m m i t t e d t o c o n t i n u o u s i m p r o v e m e n t a n d p r o v i d i n g a s e r v i c e that fully support s a n d e n h a n c e s t h e d e l i v e r y o f t h e v a r i o u s b u s i n e s s u n i t s w i t h i n t h e c i db. A s t r o n g f o c u s on business align m e n t a n d i m p r o v e m e n t o f p r o c e s s e s i s t h e d r i v i n g f a c t o r o f t h e u n i t a n d w i l l c o n t i n u e to ensure the del i v e r y o f s u c c e s s f u l s e r v i c e s an d s o l u t i o n s . The IT unit is succ e s s f u l l y d e l i v e r i n g a n d s u p p o r t i n g i n f o r m a t i o n s y s t e m s i n f r a s t r u c t u r e , c u s t o m b u i l t applications and “ o f f t h e s h e l f ” p r o d u c t s f o r n i n e p r o v i n c e s f r o m a s i n g l e l o c a t i o n i n G a u t e n g . T h e forward looking a p p r o a c h e n s u r e s a l l s o l u t i o n s a r e s c a l a b l e , e a s y t o m a i n t a i n a n d f l e x i b l e t o a d a p t t o the changing env i r o n m e n t b o t h i n t e r n a l l y a n d e x t e r n a l l y . T h e u p t i m e o f m e a s u r e d , c r i t i c a l s e r v i c e s w a s in excess of 99% f o r t h e y e a r . The following hig h l i g h t s g o v e r n a n c e r e v i e w s a n d i m p r o v e m e n t s t h a t h a v e t a k e n p l a c e d u r i n g t h e period; • A risk assessm e n t e x e r c i s e h a s b e e n c o m p l e t e d a n d l i n k e d t o t h e v a r i o u s c a p a b i l i t i e s w i t h i n t h e u n i t ; this is being m o n i t o r e d a n d m a i n t a i n e d o n a n o n - g o i n g b a s i s . • The ci db’s ca p a b i l i t y r e q u i r e m e n t s h a v e b e e n r e v i e w e d a n d f u l l y d o c u m e n t e d a n d i n i t i a t i v e s f o r improving the I T u n i t ’ s s e r v i c e d e l i v e r y a r e c o n t i n u o u s l y b e i n g i m p l e m e n t e d . • A King III read i n e s s r e v i e w h a s b e e n c o m p l e t e d a n d t h e c i db i s s u f f i c i e n t l y p r o v i d i n g g o v e r n a n c e within the gui d e l i n e s o f K i n g I I I , a d d i t i o n a l r e c o m m e n d e d i m p r o v e m e n t s w i l l b e r e v i e w e d a n d implementatio n w i l l b e d o n e w h e r e a p p r o p r i a t e i n t h e c o m i n g y e a r . • Follow up aud i t s , r e l a t i n g t o t h e p a s t t h r e e f i n a n c i a l y e a r s , o n b o t h e x t e r n a l a n d i n t e r n a l a u d i t w o r k have been co m p l e t e d a n d t h e r e q u i r e d c o n t r o l s h a v e b e e n i m p l e m e n t e d s a t i s f a c t o r i l y . • Various Softwa r e D e v e l o p m e n t L i f e c y c l e r e v i e w s h a v e t a k e n p l a c e a n d r e c o m m e n d a t i o n s h a v e b e e n implemented a n d w i l l c o n t i n u e t o p r o v i d e i m p r o v e d d e l i v e r y o f s o l u t i o n s t o b u s i n e s s a n d e x t e r n a l stakeholders • The IT unit’s p r o j e c t m a n a g e m e n t f r a m e w or k h a s b e e n f i n a l i s e d a n d h a s s h o w n a m a r k e d improvement i n d e l i v e r y o f s o l u t i o n s o n t i m e a n d w i t h i n b u d g e t . These reviews an d i n i t i a t i v e u n d e r t a k e n h a v e a l l o w e d t h e I T u n i t t o i m p l e m e n t f u r t h e r i m p r o v e m e n t s a n d will continue to s u p p o r t t h e u n i t i n d e l i v e r i n g a q u a l i t y s e r v i c e w i t h i n b u s i n e s s e x p e c t a t i o n s o n a r e g u l a r basis. The planning and p r o c u r e m e n t p h a s e s f o r t h e r e w r i t e o f t h e E D M S a n d C R S a p p l i c a t i o n s h a v e b e e n completed and t h e p r o j e c t i s n o w u n d e r w a y . T h e d e l i v e r y o f t h e p r o j e c t , w h i c h i s e x p e c t e d t o m e e t the requirements o f t h e b u s i n e s s a n d r e l e v a n t s t a k e h o l d e r s , i s e n v i s a g e d t o t a k e p l a c e i n t h e f o l l o w i n g financial year. There has been im p r o v e d s y s t e m s e c u r i t y , m o n i t o r i n g a n d d i s a s t e r r e c o v e r y s o l u t i o n s i m p l e m e n t e d a n d these will continu e t o b e r e v i e w e d a n d i m p r o v e d o n d u r i n g t h e c o m i n g y e a r .

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Supply Chain Management (SCM) R eport The Supply C h a i n M a n a g e m e n t u n i t b e c a m e f u l l y o p e r a t i o n a l d u r i n g t h e 2 0 0 8 / 0 9 f i n a n c i a l y e a r a nd continues t o g r o w f r o m s t r e n g t h t o s t r e n g t h . T h e c o n t r o l e n v i r o n m e n t c o n t i n u e s t o i m p r o v e s i g n i f i c antly, with all the c r i t i c a l p o s i t i o n s f i l l e d a c c o r d i n g l y , a n d t h e s t r u c t u r e s w i t h i n t h e S u p p l y c h a i n m a n a g e ment process fu n c t i o n i n g e f f e c t i v e l y t h r o u g h o u t t h e y e a r . The cidb h a s i n i t s e n d e a v o u r t o c o m p l y w i t h t h e K i n g I I I R e p o r t , T r e a s u r y R e g u l a t i o n s , P r e f e r e n t i a l Procureme n t P o l i c y F r a m e w o r k A c t a n d P u b l i c F i n a n c e M a n a g e m e n t A c t , d e v e l o p e d a c o m p r e h e nsive Supply Cha i n M a n a g e m e n t P o l i c y t h a t s u p p o r t s B r o a d B a s e d B l a c k E c o n o m i c E m p o w e r m e n t . T h e policy is reviewed a n n u a l l y t o i n c o r p o r a t e t h e c h a n g e s a n d l e g i s l a t i o n s p e r t a i n i n g t o B r o a d B a s e d B l a c k Economic E m p o w e r m e n t t h a t a r e p r o n o u n c e d r e g u l a r l y . The unit en s u r e s t h a t t h e c idb p r o c u r e s g o o d s a n d s e r v i c e s i n a m a n n e r t h a t i s c o n s i s t e n t w i t h f a i r ness, equitabilit y , t r a n s p a r e n c y a n d c o s t e f f e c t i v e n e s s b y a d h e r i n g t o t h e r e l e v a n t l e g i s l a t i o n s , i m p l e m enting efficient a n d e f f e c t i v e p r o c u r e m e n t p r a c t i c e s i n a n i n t e g r a t e d m a n n e r a c r o s s a l l e l e m e n t s o f t h e supply cha i n a n d d e v e l o p a p p r o p r i a t e s y s t e m s t h a t w o u l d g i v e e f f e c t t o t h e p r i n c i p l e s o f f a i r d e a l ings and provid i n g c id b w i t h t h e b e s t v a l u e f o r m o n e y w h i l s t i m p r o v i n g s e r v i c e d e l i v e r y . The ci db d i s c h a r g e s i t s p r o c u r e m e n t d u t i e s t h r o u g h t h e f o l l o w i n g m a i n s t r u c t u r e s :

• • • •

The The The The

Sup p l y C h a i n M a n a g e m e n t f u n c t i o n ; Bid S p e c i f i c a t i o n C o m m i t t e e ; Bid e v a l u a t i o n C o m m i t t e e ; a n d Bid A d j u d i c a t i o n C o m m i t t e e .

All these s t r u c t u r e s a r e k e p t i n d e p e n d e n t f r o m e a c h o t h e r i n l i n e w i t h m a i n t a i n i n g a d e q u a t e segregatio n o f d u t i e s a n d i n o r d e r t o u p h o l d t h e m a i n k e y s t o n e s o f g o o d g o v e r n a n c e .

Bid Adjudication Committee The Bid Ad j u d i c a t i o n C o m m i t t e e ( B A C ) w a s e f f e c t i v e t h r o u g h o u t t h e y e a r . T h e c o m m i t t e e i s a permanen t s t r u c t u r e , w i t h m e m b e r s h i p r o t a t e d o n a n a n n u a l b a s i s . T h e c o m m i t t e e h a s a c r o s s functional r e p r e s e n t a t i o n w i t h d i v e r s e l y q u a l i f i e d o f f i c i a l s w h o h a v e a d e q u a t e s u p p l y c h a i n a n d constructio n r e l a t e d e x p e r i e n c e . T h e s e i n d i v i d u a l s a l s o h o l d s e n i o r p o s i t i o n s i n t h e i r r e s p e c t i v e programm e s . T h e c o m m i t t e e i s g u i d e d b y t h e t e r m s o f r e f e r e n c e a l i g n e d t o t h e S C M p o l i c i e s t h a t specify the i r c o d e o f c o n d u c t a m o n g s t o t h e r t h i n g s . A l l B A C m e m b e r s a r e r e q u i r e d t o d i s c l o s e t h eir interest pr i o r t o a n y e v a l u a t i o n m e e t i n g .

Bid Evaluation C ommittee The Bid Eva l u a t i o n C o m m i t t e e ( B E C ) o v e r s e e s t h e e v a l u a t i o n o f a l l p r o c u r e m e n t s e r v i c e s a b o v e R30,000.0 0 a n d p r e s e n t s a d e t a i l e d r e p o r t f o r a d j u d i c a t i o n t o t h e B A C . c i db’ s B E C i s k e p t a s a f l o ating structure t o a l l o w s p e c i a l i s t p a r t i c i p a t i on .

Irregular E x penditure The Supply C h a i n M a n a g e m e n t u n i t m a i n t a i n s a r e g i s t e r o f a l l i r r e g u l a r e x p e n d i t u r e a n d a c t i o n s t aken in line with N a t i o n a l T r e a s u r y P r a c t i c e N o t e 4 o f 2 0 0 8 / 2 0 0 9 . A l l r e l e v a n t d i s c l o s u r e r e q u i r e m e n t s h a v e been complied w i t h a s r e p o r t e d i n t h e c id b ’ s A n n u a l F i n a n c i a l S t a t e m e n t s .

E xpenditure

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The cidb w i l l e n d e a v o u r t o p r o m o t e B r oa d B a s e d B l a c k E c o n o m i c E m p o w e r m e n t i n i t s s o u r c i n g and relate d s p e n d w i t h o u t c o m p r o m i s i n g q u a l i t y . O f t h e t o t a l s p e n d o f R 3 7 , 8 9 4 , 9 1 2 ( 2 0 0 9 / 1 0 : R 37,715,836 ) f o r t h e 2 0 1 0 / 1 1 f i n a n c i a l y e a r , 3 1 % ( 2 0 0 9 / 1 0 : 3 0 % ) w a s s p e n t o n h i s t o r i c a l l y d i s a d v a n taged individuals , w i t h 2 0 % ( 2 0 0 9 / 1 0 : 7 % ) o f w h i c h w a s s p e n t o n w o m e n o w n e r s h i p . 9 % ( 2 0 0 9 / 1 0 : 8 % ) o f the total spen t w e n t t o r e l a t e d p a r t i e s . c id b i n t e n d s g r o w i n g t h e H D I s p e n t t o 5 0 % w i t h i n t h e n e x t 2 y e ars.

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SC M Projects P rojects during t h e year SCM embarked o n a c l e a n - u p p r o j e c t i n a n e f f o r t t o i d e n t i f y a l l i r r e g u l a r e x p e n d i t u r e i n c u r r e d d u r i n g the financial yea r w h i c h p r o j e c t f o c u s e d a t c o n d u c t i n g t h e r e v i e w o f t h e s u p p l y c h a i n m a n a g e m e n t process. The pro j e c t w a s s u c c e s s f u l l y c o m p l e t e d a n d a l l i r r e g u l a r e x p e n d i t u r e h a s b e e n d i s c l o s e d i n t h e annual financial s t a t e m e n t s . The cidb supplie r d a t a b a s e p r o j e c t w h i c h i s a i m e d a t u p d a t i n g t h e s u p p l i e r i n f o r m a t i o n o n o u r s y s t e m has also been co m p l e t e d w i t h s u c c e s s a n d i s w o r k i n g e f f e c t i v e l y . T h r o u g h t h i s s y s t e m , a l l p r o s p e c t i v e and existing serv i c e p r o v i d e r s w i l l n o w b e g i v e n a n e q u a l o p p o r t u n i t y a n d a s s u r a n c e t h a t t h e S C M processes are fa i r , t r a n s p a r e n t , c o s t - e f f e c t i v e , c o m p e t i t i v e a n d e q u i t a b l e .

U pcoming projects Training of SCM o f f i c i a l s a n d S t a f f : T h i s w i l l b e d o n e d u r i n g t h e 2 0 1 1 / 2 0 1 2 f i n a n c i a l y e a r t o e n s u r e that the supply c h a i n u n i t i s o p e r a t i n g a t i t s p e a k i n a l l a s p e c t s o f t h e s u p p l y c h a i n . W o r k s h o p s w i l l b e conducted durin g t h e y e a r t o e n s u r e t h a t a l l o f f i c i a l s i n v o l v e d i n t h e S C M p r o c e s s a r e f u l l y a w a r e o f t h e procedures and p r o c e s s e s i n o r d e r t o m i n i m i s e i r r e g u l a r e x p e n d i t u r e w i t h i n t h e o r g a n i s a t i o n . Supplier perform a n c e : T h e p u r p o s e o f t h i s i s t o m o n i t o r s u p p l i e r p e r f o r m a n c e a g a i n s t t h e a g r e e d service level agr e e m e n t a n d m a k e s u r e p u b l i c f u n d s a r e s p e n t w i s e l y o n s u p p l i e r s t h a t w i l l a d d v a l u e for money to the o r g a n i s a t i o n . I t a i m s t o i m p r o v e p e r f o r m a n c e o f a l l p a r t i e s i n v o l v e d i n t h e c o n t r a c t b y measuring suppli e r â&#x20AC;&#x2122; s a b i l i t y t o c o m p l y w i t h a n d o r p r e f e r a b l y e x c e e d t h e i r c o n t r a c t u a l o b l i g a t i o n . SCM automation : A u t o m a t i n g t h e s u p p l y c h a i n m a n a g e m e n t p r o c e s s w i l l h e l p t h e p e r s o n n e l i n t h e u n i t to execute their r e s p o n s i b i l i t i e s i n a n e f f e c t i v e a n d e f f i c i e n t m a n n e r . T h e S C M i s o f t h e v i e w t h a t o n c e procurement mo d u l e i s i n p l a c e , i t w i l l s c a l e d o w n m o s t o f t h e w o r k t h a t a r e p e r f o r m e d m a n u a l l y a n d reduce the risk o f n o n - c o m p l i a n c e a n d e r r o r s .

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ACCOUNTING AUTHORITY’S REPORT FOR THE YEAR ENDED 31 MARCH 2011

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ACCOUNTING AUTHORITY’S REPORT for the year ended 31 March 2011

NATURE OF BUSINESS The Construction Industry Development Board (cidb) is a Schedule 3A public entity established in terms of the cidb Act, 2000 to provide strategic leadership to stakeholders to stimulate sustainable growth, reform and improvement of the construction sector and the industry’s enhanced role in the country’s economy, as well as regulate the industry. The cidb is under the Executive Authority of the Department of Public Works.

OBJECTIVES AND TARGETS The objectives and targets of the cidb are summarised in the organisation’s Strategic Plan, Business Plan and the performance summary, which is included in the two documents. In terms of the external strategic context the activities of the cidb were focused on Public Sector Procurement reform and Delivery Management, facilitating training and fast tracking Contractor Development, Infrastructure Delivery Skills as well as improved stakeholder relations. The capacitation of public sector clients continued on an “as required” basis. Public sector delivery has been enhanced through the Infrastructure Delivery Improvement Programme (IDIP) that is run in partnership with the National Treasury and the DBSA. The National Contractor Development Programme (NCDP), a contractor development framework, was identified as a national priority. It was supported by the establishment of the Steering Committee between the cidb and the National Department of Public Works. Already, the cidb has worked with the provincial departments of Public Works to acquire their statistics on contractor development, an activity that was difficult to accomplish in the past. The cidb /industry ESDA (Employment Skills Development Agency) was kick-started through a pilot phase using internal resources. The first group of learners was inducted and placed with various companies in the industry. The absorption capacity of this initiative will depend on funding. During the year under review, the cidb appointed Wits University and NMMU (Nelson Mandela Metropolitan University) as its Centres of Excellence to drive the research agenda and improve academic excellence. Again this has been achieved with limited resources from the cidb. There was a further delay in the construction of the permanent Construction Contact Centre (CCC) office in the North West province, the last one to be officially opened. The North West CCC will continue to operate from the temporary premises that have been used so far. The official opening will now be in the financial year 2011/12. The cidb Register of Professional Service Providers (RoPSP) could not be implemented as previously envisaged but the Board approved that this register be implemented as a pilot from the year 2011/12. The implementation plan will be finalised and rolled out during the year 2011/12. The National Stakeholder Forum was successfully held in October 2010. It was supported by the Provincial Stakeholder Workshops in six provinces by the end of March 2011. The remaining provinces were KwaZulu-Natal (KZN), Limpopo and the Free State. The KZN workshop was re-scheduled to April 2011 due to other commitments by the provincial Department of Public Works. Also, the cidb cohosted the international 2010 Construction Summit with the CIOB (Chartered Institute of Building) in May 2010. The Best Practice Schemes have progressed further in that the piloting of the prioritised components has moved to the final stages with participants. The pilot outcomes will inform how and when the next stages of implementation will be developed. CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The review of the registration criteria was concluded and the proposed amendments to the regulations are ready for submission to the Minister to publish for public comments and further processing. This will see many changes aimed at improving the registration process being implemented. The initial phase of the registration software rewrite has been started in a project that will create a new platform for the Registers Programme over the next three years. In terms of corporate governance, the term of the 3rd Board of the cidb ended on 12 December 2010. The Board appointment process was finalised in April 2011, with the first meeting scheduled for 30 May 2011. During the period from 13 December 2010 to 31 March 2011 the CEO acted as Accounting Authority, based on the PFMA Section 49(2)(b), a position that the Minister concurred with during the period under review.

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ACCOUNTING AUTHORITY’S REPORT for the year ended 31 March 2011

FINANCIAL PERFORMANCE The Register of Contractors’ previous growth momentum has levelled off in the current year. During the year under review actual total revenue raised amounted to R45.1m. Of this revenue, R21.4m was realised from annual fees of new contractor registrations, upgrades and renewals, the balance of R23.6m was generated from administration fees and other related income (all classified as “the rest”). All compliant applications were processed and communication requesting outstanding information was sent out for non-compliant applications. Refunds of annual fees become due to contractors who qualify for grades lower than that applied for, and also for applications that are not processed due to non-compliance by contractors. The cidb managed to process refunds amounting to R3.9m. In order to action any refunds cidb prompts contractors by sending refund request forms for contractors to complete. This is done in order to ensure that refunds are processed to correct and up to date banking accounts. Total revenue budget was exceeded by R8.8m of which R6.8m relates to registers revenue and the balance is for interest and other revenue. The surplus for the year amounts to R10.0m and accumulated reserves total R52.6m. Of the accumulated surpluses, R1.2m will be utilised for the future amortisation of the lease rentals on the office building and the balance will be used mainly to fund the development of the EDMS and Registration systems, special projects such as communication, research & development, green star rating, contractor development and fraud prevention. Cash and cash equivalents balance for the year amount to R80.8m.

EVENTS SUBSEQUENT TO STATEMENT OF FINANCIAL POSITION DATE No events took place between the year-end date (31 March 2011) and the date on which the financial statements were signed that were sufficiently material to warrant disclosure to interested parties.

AUDIT COMMITTEE The Audit Committee consists of external members and two Board members. The external members, namely Ms Shelley Thomas (Chairperson), Victor Nondabula and Bryan Chaplog (resigned in August 2010 and replaced by Nala Mhlongo in January 2011), are supported by two Board members: Messrs Marten Govender and Lwandile Kona both of whose terms of office expired in December 2010. A new rotation system was adopted during the current period whereby the current members of the committee are replaced in a staggered approach over the next three years in order to ensure continuity within the committee. The charter has been amended accordingly in this regard. The committee meets at least twice per annum as per its approved terms of reference. Appointed by the Board from 1 July 2007, the Committee met ten times in the current year, five of the meetings were special meetings. The Audit Committee is chaired by an independent chartered accountant who is neither an executive nor a Board member of the cidb. Committee meetings are attended by members of the Auditor-General’s office and the internal auditors.

INTERNAL AUDIT UNIT

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The internal audit unit is outsourced to KPMG Chartered Accountants. Their function is mandated by the Audit Committee. The internal audit unit measures and evaluates the effectiveness and application of policies, procedures, systems and processes designed to fulfil the requirements of the risk management policy, and general compliance with governance principles, regulation and the safeguarding of assets. In the year under review internal audit focused on the Construction Registers Service (CRS), Finance, IT and Human Resources.

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ACCOUNTING AUTHORITYâ&#x20AC;&#x2122;S REPORT for the year ended 31 March 2011

REMUNERATION COMMITTEE The Remuneration Committee comprises three Board members appointed by the Board, namely Ms Nyeleti Charmaine Makhubele (Chairperson), Messrs Nazir Alli and Cannon Noyana. This committee is tasked with the evaluation and review of human resource strategy and operations. The committeeâ&#x20AC;&#x2122;s terms of reference include considering and making recommendations to the Board on matters relating to general staff policy, remuneration, bonuses, review of service contracts and other benefits. The Remuneration Committee also evaluated and approved staff salaries during the current period and its term of office came to an end in December 2010. The evaluation of performance bonuses for the period ending 31 March 2011 was conducted by the Leadership and approved by the CEO as the standing Accounting Authority while the Board was still being appointed.

PROPERTY, PLANT AND EQUIPMENT The cidb adopted the policy as prescribed by GRAP 17 relating to the assessing of useful life and residual value of property, plant and equipment. Residual values and useful life are assessed at the end of each financial year. There has been no change in the policy relating to the use of property, plant and equipment.

MATERIALITY FRAMEWORK The cidb in line with the Public Finance Management Act has updated its materiality framework. The framework has been presented to the Board for their approval.

RISK ASSESSMENT AND INTERNAL CONTROLS The cidb endeavours to minimise risk by ensuring that appropriate systems, policies, personnel and controls are in place throughout the organisation. A risk assessment exercise was performed during 2009/2010 financial year to identify areas of risk and to map appropriate controls over the past financial year. The process was facilitated by the Risk and Governance manager and was aimed to determine the material risks to which the cidb was exposed and to evaluate the strategy for managing these risks. The cidb relied on the outsourced internal audit function and external auditors for independent appraisal of the adequacy and effectiveness of the internal controls. The Audit and Risk Committees, with extensive input by the internal and external auditors, played a role in assisting management to assess the adequacy and effectiveness of the accounting system, records and internal control.

ENTITY DOMICILE AND LEGAL FORM Block N & R, SABS Campus No 2 Dr. Lategan Road Groenkloof, 0027 Pretoria

Business Address and Registered Office: P.O Box 2107 Brooklyn Square 0075

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Website address: www. cidb.org.za Telephone: (012) 482 7200 Fax: 086 680 8569

Ronnie Khoza CEO

Accounting Authority

Date: 28 July 201 1

Date: 28 July 2011

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STATEMENT OF RESPONSIBILITY AND GOING CONCERN

STATEMENT OF RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENT FOR A GOING CONCERN At the time of preparation of Annual Financial Statements for the period under review, the Board members believed that the cidb will be a going concern in the foreseeable future. For this reason they continue to adopt a going concern basis in the preparation of these annual financial statements.

RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS The members of the Board are responsible for the preparation of the Annual Financial Statements.

APPROVAL OF cidb ANNUAL FINANCIAL STATEMENTS The Annual Financial Statements for the year ended 31 March 2011, set out on pages x to x, have been approved by the Board in terms of section 51(1) (f) of the Public Finance Management Act (PFMA), No 1 of 1999 on 31 May 2011. However the financial statements were materially revised as a result of the audit findings and the final approved financial statements were signed on 28 July 2011 on behalf of the Board by:

Ronnie Kho z a CEO

Bafana Ndendwa Board Chairperson

Date: 28 J u l y 2 0 1 1

Date: 28 July 2011

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114

ANNUAL FINANCIAL STATEMENTS as at 31 March 2011

Contents

Page

Statement of financial position 120 Statement of financial performance 121 Statement of changes in net assets 122 Cash flow statement 123 Notes to the financial statements 124-151 The annual financial statements were approved by the Accounting Authority and the Chief Executive Officer and are signed below:

Ronnie Khoza CEO

Bafana Ndendwa Board Chairperson

Date: 28 July 201 1

Date: 28 July 2011

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

115

STATEMENT OF FINANCIAL POSITION as at 31 March 2011

2011 2010 NOTES R R ASSETS CURRENT ASSETS 83 686 629 66 740 755 Cash and cash equivalents Receivables : exchange transactions Operating lease asset

2 3 4

80 811 763 1 682 109 1 192 757

62 313 159 1 118 822 3 308 774

NON-CURRENT ASSETS

14 764 827

15 827 805

Property, plant and equipment Intangible assets Operating lease asset

5 6 4

12 617 297 2 147 530 -

13 083 841 1 551 207 1 192 757

TOTAL ASSETS

98 451 456

82 568 560

LIABILITIES CURRENT LIABILITIES

45 744 200

39 575 264

Payables: exchange transactions Income received in advance Finance lease liability

8 9 10

19 085 819 26 336 614 321 768

15 261 849 24 030 828 282 587

NON-CURRENT LIABILITIES

90 134

411 902

Finance lease liability

90 134

411 902

TOTAL LIABILITIES

45 834 334

39 987 166

NET ASSETS

52 617 122

42 581 394

REPRESENTED BY: Accumulated Surpluses 11

52 617 122 42 581 394

A N NU A L REP OR T 2 0 10 / 1 1

116

STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 March 2011

2011 2010 NOTES R R REVENUE Non exchange transactions Grants received 12, 30.1 63 665 000 59 269 000 Exchange transactions 50 046 576 50 846 841 Registers revenue 13 45 073 460 47 059 809 Finance income 14 4 131 542 3 733 289 Other income 15 841 574 53 743 113 711 576 110 115 841 EXPENDITURE Administrative expenses 17 (9 672 160) (7 738 124) Staff costs 18 (52 867 578) (44 285 120) Marketing costs 19 (2 898 103) (2 432 705) Audit fees 20 (1 469 479) (1 476 977) Other operating expenses 21 (36 694 166) (32 997 386) Finance costs 22 (74 360) (108 803) TOTAL EXPENDITURE (103 675 846) (89 039 115) SURPLUS FOR THE YEAR 10 035 730 21 076 726

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117

STATEMENT OF CHANGES IN NET ASSETS for the year ended 31 March 2011

NOTES

Balance at 31 March 2009 Prior year adjustment 23 Balance at 31 March 2009 as restated Surplus for the period Surplus for the period as previously stated Prior year adjustment 23 Balance at 31 March 2010 as restated Surplus for the period Balance at 31 March 2011

R 21 519 880 (15 214) 21 504 666 21 076 726 21 026 367 50 359 42 581 392 10 035 730 52 617 122

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118

CASH FLOW STATEMENTS

for the year ended 31 March 2011

2011 2010 NOTES R R CASH FLOWS FROM OPERATING ACTIVITIES Operating activities Receipts 24 112 324 941 107 067 752 Registers income 47 818 367 47 745 009 Grants received 63 665 000 59 269 000 Other receipts 841 574 53 743 Payments 25 Compensation to employees 18 Payments to suppliers and other

(94 861 421) (52 867 578) (41 993 843)

(82 000 955) (44 285 120) (37 715 834)

Cash generated from operations

17 463 520

25 066 797

Finance income 15 Finance costs 22 Net cash inflow from operating activities

4 131 542 (74 360) 21 520 703

3 733 289 (108 803) 28 691 283

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 5,1 (1 736 641) Purchase of intangible assets 6,1 (1 002 872) Net cash outflow from investing activities (2 739 513)

(1 596 562) (331 326) (1 927 888)

CASH FLOWS FROM FINANCING ACTIVITIES Finance lease repaid (282 586) (248 144) Net increase in cash and cash equivalents

18 498 604

26 515 25

Cash and cash equivalents at beginning of the year

62 313 159

35 797 908

80 811 763

62 313 159

Cash and cash equivalents at end of the year

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ACCOUNTING POLICIES

1. ACCOUNTING POLICIES 1.1. BASIS OF PREPARATION The annual financial statements have been prepared in accordance with Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 89 of the Public Finance Management Act (Act No. 1 of 1999). The annual financial statements have been prepared on the historical cost basis unless otherwise indicated. The principle accounting policies adopted in the preparation of these financial statements are set out below. Assets, liabilities, revenues and expenses have not been offset except where offsetting is required or permitted by a Standard of GRAP. The principle accounting policies are applied consistently with those used to present the previous yearâ&#x20AC;&#x2122;s financial statements, unless explicitly stated. The details of any changes in principle accounting policies are explained in the relevant policy.

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The principle accounting policies for material transactions, events or conditions not covered by the GRAP reporting framework, as detailed above, have been developed in accordance with paragraphs 7, 11 and 12 of GRAP 3 and the hierarchy approved in Directive 5 issued by the Accounting Standards Board. The following GRAP standards have been issued but are not yet effective and have not been early adopted by the Construction Industry Development Board: GRAP 21: Impairment of non-cash-generating assets (effective date 1 April 2012) GRAP 23: Revenue from non-exchange transactions (taxes and transfers) (effective date 1 April 2012) GRAP 24: Presentation of Budget Information in Financial Statements (effective date 1 April 2012) GRAP 25: Employee Benefits (not yet announced) GRAP 26: Impairment of cash-generating Assets (effective date 1 April 2012) GRAP 103: Heritage Assets (effective date 1 April 2012) GRAP 104: Financial Instruments (not yet announced) IGRAP 2: Changes in Existing Decommissioning, Restoration and Similar Liabilities (effective date 1 April 2011) IGRAP 3: Determining whether an Arrangement contains a lease (effective date 1 April 2011) IGRAP 4: Rights to interests arising from decommissioning, restoration and environmental rehabilitation funds (effective date 1 April 2011) IGRAP 7: The limit on a defined benefit asset, minimum funding requirements and their interaction (not yet announced) IGRAP 10: Assets received from customers (effective date 1 April 2011) IGRAP 13: Operating leases - Incentives (effective date 1 April 2011) IGRAP 15: Revenue - Barter transactions involving advertising services (effective date 1 April 2011) GRAP 18: Segment Reporting (not yet announced) IGRAP 5: Applying the restatement approach under the standard of GRAP on financial reporting in hyperinflationary economies (effective date 1 April 2011) IGRAP 6: Loyalty Programmes (effective date 1 April 2011) IGRAP 8: Agreements for the construction of assets from exchange transactions (effective date 1 April 2011) GRAP 9: Distributions of non-cash assets to owners (effective date 1 April 2011) GRAP 14: Evaluating the substance of transactions involving the legal form of a lease (effective date 1 April 2011)

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ACCOUNTING POLICIES (continued)

1.2. PRESENTATION CURRENCY The financial statements are presented in South African Rand, which is the functional currency of the entity, and are rounded off to the nearest Rand.

1.3. GOING CONCERN ASSUMPTION These annual financial statements have been prepared on the assumption that the entity will continue to operate as a going concern for at least the next 12 months.

1.4. COMPARATIVE INFORMATION When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current year, the correction is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. 1.5. PROPERTY, PLANT AND EQUIPMENT An asset of property, plant and equipment is recorded on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition. An asset is recognised when it is probable that there will be an inflow of future economic benefits associated with it and its cost or fair value can be measured reliably.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

All property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes the cost of replacing a portion of equipment only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. Subsequent costs and additions are included in the assetâ&#x20AC;&#x2122;s carrying amount or are recognised as a separate asset, as appropriate. All other repairs and maintenance are charged to the statement of financial performance during the financial period in which they are incurred. All property and equipment are depreciated. Depreciation of property, plant and equipment begins when it is available for use, ie when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognised. Property, plant and equipment are depreciated on the straight-line basis to write of the cost of each asset to its residual value over its estimated useful life. The depreciation rates applicable to each category of property, plant and equipment are as follows: Computer equipment 8 years to 12 years Office equipment 8 years to 12 years Furniture and fittings 10 years to 14 years The residual values and the useful lives of property, plant and equipment are reviewed at each balance sheet date and, if expectations differ from the previous estimates, the changes are accounted for as a change in an accounting estimate in accordance with standard of GRAP. An item of property, plant and equipment is scrapped upon disposal or when no future economic benefits and service potential are expected from its use or disposal. Any surplus or deficit arising on scrapping of the assets (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of financial performance in the year the asset is derecognised.

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ACCOUNTING POLICIES (continued)

1.5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Surpluses and deficits on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating surplus. 1.5.1 Impairment of Property, Plant and Equipment At each financial position date or more frequently where events or changes in circumstances dictate; indicators of impairment of property and equipment are assessed. If there is an indication of impairment, a review is performed which includes a comparison of the carrying amount of the asset with its recoverable amount which is the higher of the asset’s or the cashgenerating unit’s fair value less costs to sell, and its value in use. Fair value less costs to sell is calculated by reference to the amount at which the asset could be disposed of in a binding sale agreement in an arm’s length transaction evidenced by an active market or recent transactions for similar assets. Value in use is calculated by discounting the expected future cash flows obtained as a result of the asset’s continued use, including those resulting from its ultimate disposal, at a market based discount rate on a pre-tax basis. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised. The carrying values of property, plant and equipment are written down by the amount of any impairment and this loss is recognised in the statement of financial performance in the period in which it occurs. Repairs and maintenance are charged to the statement of financial performance during the financial period in which they are incurred.

1.6. INTANGIBLE ASSETS An intangible asset is recorded on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition . An intangible asset is recognised when it is probable that there will be an inflow of future economic benefits or service potential associated with it and its cost or fair value can be measured reliably.

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Costs associated with developing or maintaining computer software programmes are recognised as an expense when incurred in the statement of financial performance. Costs that are directly associated with the production of identifiable and unique software products controlled by the Construction Industry Development Board, and that will probably generate economic benefits and service potential exceeding costs beyond one year, are recognised as intangible assets. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each reporting date and any changes are recognised as a change in accounting estimate in the Statement of Financial Performance. Amortisation is charged so as to write off the cost or valuation of intangible assets over their estimated useful lives using the straight line method. Amortisation commences when the asset is available for use, ie when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortisation ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognised. The annual amortisation rates are based on the following estimated average asset lives: Computer software 5 years to 10 years

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ACCOUNTING POLICIES (continued)

1.6. INTANGIBLE ASSETS The entity tests intangible assets with finite useful lives for impairment where there is an indication that an asset may be impaired. An assessment of whether there is an indication of possible impairment is done at each reporting date. Where the carrying amount of an item of an intangible asset is greater than the estimated recoverable amount (or recoverable service amount), it is written down immediately to its recoverable amount (or recoverable service amount) and an impairment loss is charged to the Statement of Financial Performance. A previously recognised impairment loss is reversed when there is an indication that it may no longer exist or may have decreased, however not to an amount higher than the carrying amount that would have been determined (net of amortisation) had no impairment been recognised in prior years.

1.7. TRADE AND OTHER RECEIVABLES Trade and other receivables are categorised as financial assets: loans and receivables and are initially recognised at fair value and subsequently carried at amortised cost. Amortised cost refers to the initial carrying amount, plus interest, less repayments and impairments. An estimate is made for doubtful receivables based on a review of all outstanding amounts at year-end. Impairments are determined by discounting expected future cash flows to their present value. Amounts that are receivable within 12 months from the reporting date are classified as current. An impairment of trade receivables is accounted for by reducing the carrying amount of trade receivables through the use of an allowance account, and the amount of the loss is recognised in the Statement of Financial Performance within operating expenses. When a trade receivable is uncollectible, it is written off in the Statement of Financial Performance . Subsequent recoveries of amounts previously written off are recognised as income in the Statement of Financial Performance.

1.8. TRADE PAYABLES Financial liabilities consist of trade payables. They are categorised as financial liabilities held at amortised cost, are initially recognised at fair value and subsequently measured at amortised cost which is the initial carrying amount, less repayments, plus interest.

1.9. CASH AND CASH EQUIVALENTS

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash equivalents are shortterm highly liquid investments, readily convertible into known amounts of cash, which are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held on call with banks. The entity categorises cash and cash equivalents as financial assets: loans and receivables. 1.10. IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including the PFMA. Fruitless and wasteful expenditure means expenditure that was made in vain and would have been avoided had reasonable care been exercised. All irregular and fruitless and wasteful expenditure is charged against the respective class of expenditure in the period in which they are incurred and disclosed in a note in the period that it is identified.

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ACCOUNTING POLICIES (continued)

1.11. REVENUE RECOGNITION

1.11.1 Revenue from non-exchange transactions Revenue from non-exchange transactions refers to transactions where Construction Industry Development Board received revenue from another entity without directly giving approximately equal value in exchange. Revenue from non-exchange transactions is generally recognised to the extent that the related receipt or receivable qualifies for recognition as an asset and there is no liability to repay the amount. Revenue takes the form of grants from the Department of Public Works and is received on a quarterly basis and raised as revenue on receipt. 1.11.2 Revenue from exchange transactions Revenue from exchange transactions refers to revenue that accrued to the Construction Industry Development Board directly in return for services rendered, the fair value of which approximates the consideration received or receivable. Revenue from exchange transactions is measured at the fair value of the consideration received or receivable and is recognised when it is probable that future economic benefits or service potential will flow to the Construction Industry Development Board and these benefits can be measured reliably. The Construction Industry Development Board receives income by way of registration of contractors in accordance with the Construction Industry Development Board Act, Act 38 of 2000. Due to the nature of the registration of contractors, the Construction Industry Development Board only recognises this income once a contractor has been assessed with the exception of administration fees. Revenue from administration fees is recognised once an application has been received by Construction Industry Development Board and is based on the grade applied for.

1.12. FINANCE INCOME Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable.

1.13 LEASED ASSETS Finance leases refers to a contract that transfers the substantial risks, rewards, rights and obligations incident to ownership to the lessee and is recorded as a purchase of equipment by means of long-term borrowing. All other leases are classified as operating leases. 1.13.1 Operating Leases â&#x20AC;&#x201C; expense Lease payments under an operating lease are recognised as an expense on a straight-line basis over the term of the relevant lease.

1.14. Financial Instruments

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1.14.1 Financial Assets Financial assets are initially measured at a fair value plus transaction cost. However, transaction costs in respect of financial assets classified as at fair value are expensed in the statement of financial performance.

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ACCOUNTING POLICIES (continued)

1.14. Financial Instruments (continued) 1.14.1 Financial Assets (continued) - Cash and cash equivalents Cash and cash equivalents are subsequently measured at armortised cost. - Interest received Interest is recognised on the time apportion basis using the effective rate applicable over the period of investment. 1.14.2 Financial Liabilities Financial liabilities are initially measured as at fair value plus transaction costs. However, transaction costs in respect of financial liabilities as at fair value through profit or loss are expensed. Recognised on the statement of financial position include trade and other payables. Financial liabilities that are not designated on initial recognition as financial liabilities at fair value through profit or loss are measured at amortised cost. Financial liabilities that are designated on initial recognition as financial liabilities at fair value through profit or loss are measured at fair value, with changes in fair value being recognised in profit or loss.

1.15. Accrual for Leave Pay Employee entitlements to annual leave are recognised when they accrue to employees. An accrual, based on total cost to company, is raised for the estimated liabilities as a result of services rendered by employees.

1.16. Employee Benefits Employee benefits comprise of leave entitlements, and performance bonuses. There are no post-retirement benefits currently with the Construction Industry Development Board.

1.17. Provisions, contingent assets and contingent liabilities

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Provisions are recognised when Construction Industry Development Board has a present obligation as a result of past event, when it is probable that an outflow of resources embodying economic benefits or service potential will be required to settling the obligation when a reliable estimate can be made of the obligation The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

125

ACCOUNTING POLICIES (continued)

1.17. Provisions, contingent assets and contingent liabilities (continued) Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if Construction Industry Development Board settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or services potential will be required, to settle the obligation. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense. Provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating losses. If the Construction Industry Development Board has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed unless the possibility of an inflow/ outflow of resources embodying economic benefits is remote.

1.18. Related parties Construction Industry Development Board operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the national sphere of government are considered to be related parties. Key management is defined as being individuals with the authority and responsibility for planning, directing and controlling the activities of Construction Industry Development Board, including those charged with the governance of the entity in accordance with legislation in instances where they are required to perform such functions. Construction Industry Development Board regards all individuals at senior management per the definition of the financial reporting standard. Close members of the family of key management personnel are considered to be those family members who may be expected to influence, or be influenced by, management in their dealings with Construction Industry Development Board. Only transactions with related parties not at armâ&#x20AC;&#x2122;s length or not in the ordinary course of business are disclosed.

1.19. Cash flow Statement The cash flow statement is prepared on the direct method.

1.20. Significant Judgments and Estimates A N NU A L REP OR T 2 0 10 / 1 1

The preparation of annual financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingents assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Although these estimates are based on managementâ&#x20AC;&#x2122;s best knowledge of current events and actions that Construction Industry Development Board may undertake in the future, actual results ultimately may differ from those estimates.

126

ACCOUNTING POLICIES (continued)

1.20. Significant Judgments and EstimateS (continued) The presentation of the results of operations, financial position and cash flows in the financial statements of the Construction Industry Development Board is dependant upon and sensitive to the accounting policies, assumptions and estimates that are used as a basis for the preparation of these financial statements. Management has made certain judgments in the process of applying the accounting policies. These, together with the key assumptions concerning the future, and other key resources of the estimation uncertainty at the financial position date, are discussed below: - Property,Plant and Equipment The useful lives of assets are based on managementâ&#x20AC;&#x2122;s estimation. Management considers the impact of changes in technology, customer service requirements, availability of funding to determine the optimum useful life expectation of each individual item of property and equipment. The estimation of residual values of assets is also based on managementâ&#x20AC;&#x2122;s judgment whether the assets will be sold and what their condition will be at that time.

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 R

2010 R

2. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of cash on hand and balances with bank including investments in call accounts. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts: Bank 1 641 770 991 212 Cash on hand 14 343 8 960 Investments 79 155 650 61 312 987 80 811 763 62 313 159 3. RECEIVABLES: EXCHANGE TRANSACTIONS Trade receivables 506 803 1 328 187 Add : Reversal of bad debts provision 456 491 Less : Provision for bad debts (216 013) (456 491) 747 281 871 696 Prepayments 934 828 247 126 1 682 109 1 118 822

4. OPERATING LEASE ASSET Lease improvements: Current : Non-Current

1 192 757 - 1 192 757

3 308 774 1 192 757 4 501 531

Operating lease asset are in respect of a lease agreement entered into with SABS, for the occupation of office buildings, whereby cidb undertook to renovate the office buildings and in return future lease rentals will be offset against the total cost of renovations over 3,5 years. The lease period is five years. Refer to Note 27.2.

A N NU A L REP OR T 2 0 10 / 1 1

128

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

5. PROPERTY, PLANT AND EQUIPMENT Year ended 31 March 2011 2011 2010 Cost Accumulated Carrying Cost Accumulated Depreciation Value Depreciation R R R R R Computer equipment Furniture and fittings Office equipment Office equipment leased

8 970 884 5 126 007 5 622 241 1 307 320 21 026 452

(3 501 000) (1 882 531) (2 019 115) (1 006 509) (8 409 155)

5 469 884 3 243 476 3 603 126 300 811 12 617 297

8 016 221 4 896 022 5 305 811 1 307 320 19 525 374

(2 691 153) (1 485 862) (1 519 473) (745 045) (6 441 533)

Carrying Value R 5 325 068 3 410 160 3 786 338 562 275 13 083 841

5.1 Carrying values of property, plant and equipment can be reconciled as follows: 2011 Opening Additions Write-offs Depreciation Carrying balance amount R R R R R Computer equipment 5 325 068 1 083 103 (65 158) (873 129) 5 469 884 Furniture and fittings 3 410 160 240 888 (4 773) (402 799) 3 243 476 Office equipment 3 786 338 412 650 (37 418) (558 444) 3 603 126 Office equipment leased 562 275 - - (261 464) 300 811 13 083 841 1 736 641 (1 180 839) (2 095 836) 12 617 297

Computer equipment Furniture and fittings Office equipment Office equipment leased

2010 Opening Additions Write-offs Depreciation balance R R R R 6 308 818 3 299 015 3 910 382 823 739 14 341 954

391 962 602 920 601 680 - 1 596 562

(502 038) (96 272) (188 764) - (787 074)

(873 674) (395 503) (536 960) (261 464) (2 067 601)

Carrying amount R 5 325 068 3 410 160 3 786 338 562 275 13 083 841

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

129

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

6. INTANGIBLE ASSETS Year ended 31 March 2011 2011 2010 Cost Accumulated Carrying Cost Accumulated Depreciation Value Depreciation R R R R R

Carrying Value R

Computer software

3 719 951

(1 572 421)

2 147 530

2 717 079

(1 165 872)

1 551 207

3 719 951

(1 572 421)

2 147 530

2 717 079

(1 165 872)

1 551 207

6.1 Carrying values of property, plant and equipment can be reconciled as follows: 2011 Opening Additions Write-offs Depreciation balance R R R R Computer software 1 551 207 1 002 872 - (406 549)

2 147 530

1 551 207

2 147 530

2010 Opening Additions Write-offs Depreciation balance R R R R

Carrying amount R

Computer software

1 677 656

331 326

(38 536)

(419 239)

1 551 207

1 677 656

331 326

(38 536)

(419 239)

1 551 207

1 002 872

(406 549)

Carrying amount R

7. Change in Accounting Estimate During the current financial period, management revised the estimated useful lives of computer equipment and office equipment to twelve years, furniture and fittings to fourteen years and computer software to ten years. In prior periods, management had estimated the useful lives of computer equipment and office equipment to be eight years, computer software to be five years and that of furniture and fittings to be ten years. The revision of these assets’ useful lives has been treated as a change in estimate in line with GRAP 3. This has resulted in adjustments to the current depreciation of R 76,055.65

A N NU A L REP OR T 2 0 10 / 1 1

130

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 R

2010 R

8. PAYABLES: EXCHANGE TRANSACTIONS Trade and other payables 13 569 853 - Trade payables 7 141 058 - Accruals 5 097 995 - Accrual for leave pay 1 330 800 Unallocated deposits 5 515 966 19 085 819

10 060 535 4 489 150 4 362 577 1 208 808 5 201 314 15 261 849

9. INCOME RECEIVED IN ADVANCE Contractors not assessed (work in progress)

26 336 614 26 336 614

24 030 828 24 030 828

356 947 92 408 449 355 37 453 411 902 90 134 321 768 411 902

356 947 449 355 806 302 111 813 694 489 411 902 282 587 694 489

10. FINANCE LEASE OBLIGATION Minimun lease payments due - within one year - in second to fifth year inclusive Less: Future finance charges Present value of minimum lease payments Non-current liabilities Current liabilities

cidb leases the photocopying machines on the finance lease, the average lease term is five years and the average effective borrowing rate of 13%. The organisation’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer to Note 5

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

131

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

11. CONTINGENT LIABILITIES Sections 53(3) of the PFMA states that a public entity may not accumulate surpluses unless prior written approval of the National Treasury has been obtained. The approval of accumulated surpluses for the period ending 31 March 2010, to be rolled over to the following financial year was obtained after comparative year end. At the time of reporting the approval for the period ending 31 March 2011 were not yet obtained. 2011 2010 R R Liable to: National Treasury 52 617 122 42 581 394

12. TRANSFERS AND SUBSIDIES Grants received

63 665 000

59 269 000

13.REGISTERS REVENUE Annual fees Assessment fees Contractor fines

21 424 664 23 072 141 576 655 45 073 460

24 681 523 21 966 783 411 503 47 059 809

14. FINANCE INCOME Interest on - cash and bank deposits 4 131 542 4 131 542

3 733 289 3 733 289

15. OTHER INCOME Proceeds on insurance claims Sponsorship received Reversal of provision for bad debts Sundry income

40 228 341 500 456 491 3 355 841 574

52 093 1 650 53 743

A N NU A L REP OR T 2 0 10 / 1 1

132

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 R

2010 R

16. IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE Components

16.1 Fruitless and wasteful expenditure Bad debts written off * Cell phone airtime paid for stolen cell phone Storage fees paid in excess of the agreed limit

45 580 13 913 202 659 262 152

70 976 70 976

*Erroneous refunds relating to periods prior to September 2007. Subsequent to September 2007 controls were put in place to prevent these errors from occurring.

16.2 Irregular expenditure 16.2.1. R econciliation of irregular expenditure Opening balance 1 717 210 Add: Irregular expenditure - current year 9 265 765 10 982 975 Less: Amount condoned (10 982 975) Amount not condoned -

621 834 1 095 376 1 717 210 1 717 210

16.2.2. Details of irregular expenditure not recoverable INCIDENT

DISCIPLINARY STEPS TAKEN/CRIMINAL PROCEEDINGS

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Five year lease not initially approved by the National Treasury

No disciplinary action required against any staff member. This was subsequently confirmed by National Treasury that, there was no impropriety in the transaction which requires action to be taken against anybody. The condonation was granted by National Treasury.

1 335 728

978 781

Transactions where notice was not given to Treasury and Auditor General

Written warning has been issued against the responsible staff member. No losses were incurred by the cidb as a result of this expenditure.

2 266 283

Extensions of contracts

No disciplinary action required against any staff member. These contracts relate to old tenders, before the establishment of the SCM unit. The responsible staff members have left the employment of the cidb. Extensions were in line with business needs while tenders were being processed. New tenders awarded in May 2011

5 286 944

738 429

8 888 955

1 717 210

133

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

16.2.3. Details of irregular expenditures under investigations INCIDENT

DISCIPLINARY STEPS TAKEN/CRIMINAL PROCEEDINGS

Appointments made on the basis of the cidb’s framework agreement structure.

Matter still under investigation

1 297 571

Transactions procured without obtaining three quotations

Matter still under investigation

796 449

2 094 020

NOTES

2011 R

2010 R

17. ADMINISTRATIVE EXPENSES Fees for services - Board members 258 542 322 112 - Audit committee fees 599 053 462 825 Legal fees 182 472 29 072 Provision for bad debts 216 012 456 491 Bad debts written off 332 741 138 489 Entertainment 2 500 588 Stationery and printing 3 270 251 2 535 978 Venues and facilities 2 072 381 1 251 886 Bank charges 351 048 364 811 Training and staff development 2 387 160 2 175 871 9 672 160 7 738 124

18. STAFF COSTS

Basic salaries - Executives 33 5 866 230 5 379 105 - Other 29 42 716 081 34 461 782 Performance award - Executives 33 393 433 413 394 - Other 29 2 812 428 1 957 030 Temporary staff 859 616 1 710 693 Leave payment 29 219 790 363 116 52 867 578 44 285 120 19. MARKETING COSTS Advertising 2 898 103 2 432 705 2 898 103 2 432 705

A N NU A L REP OR T 2 0 10 / 1 1

134

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 R

2010 R

20. AUDIT FEES

External audit fees 714 147 Internal audit fees 755 332 1 469 479

757 489 719 488 1 476 977

21. OTHER OPERATING EXPENSES Consultants, contractors and special services Insurance Membership fees Security Maintenance, repairs and running costs -Property and buildings -Computer equipment and consumables -Other maintenance, repairs and running costs Depreciation Amortisation Loss on assets written off Municipal services Sponsorship Travel and subsistence Courier and delivery charges Communication costs Rentals -Property and buildings -Furniture and fittings -Office equipment -Other rentals

15 520 121 816 437 32 826 657 076 1 807 416 27 246 1 116 182 663 988 2 095 836 406 549 107 375 757 610 1 905 702 4 301 038 554 280 3 476 917 4 254 984 3 377 961 893 332 (17 509) 1 200 36 694 166

12 748 406 435 984 584 177 567 785 1 537 808 27 576 871 693 638 539 2 066 204 419 239 776 652 955 313 237 753 4 095 992 514 740 3 884 393 4 172 939 2 894 322 1 288 109 (11 762) 2 270 32 997 386

22. FINANCE COSTS Interest expense -Finance lease 74 360 74 360

108 803 108 803

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

135

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

23. Prior period errors Property, Plant and Equipment

23.1 Assets incorrectly written-off in the prior year In the comparative year, cidb incorrectly wrote off assets that were located in the current financial year. The assets have been included in the current financial year’s fixed asset register. The comparative figures have been adjusted to correct the error.

23.2 Accumulated depreciation of leased asset were incorrectly disclosed In the comparative year, cidb incorrectly disclosed the accumulated depreciation of office equipment leased. The error have been corrected in the current financial year and comparatives adjusted accordingly. Effect on the statement of financial position Computer Furniture Office Office Computer Total Equipment and Fittings equipment equipment Software leased R R R R R R Recognise assets (cost) Balance per the prior year audited financial statements at 31 March 2009 8 643 717 4 454 053 4 999 721 1 307 320 2 495 963 21 900 774 Correction of error 23.1 - - - - - Correction of error 23.2 - - - - - Restated balance at 31 March 2009 8 643 717 4 454 053 4 999 720 1 307 320 2 495 963 21 900 773 Balance per the prior year audited financial statements at 31 March 2010 8 016 221 4 882 839 5 239 161 1 307 320 2 717 079 22 162 619 Correction of error 23.1 - 13 183 66 650 - - 79 833 Correction of error 23.2 - - - - - Restated balance at 31 March 2010 8 016 221 4 896 022 5 305 811 1 307 320 2 717 079 22 242 452

A N NU A L REP OR T 2 0 10 / 1 1

136

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

23. Prior period errors (continued) 23.2 Accumulated depreciation of leased asset were incorrectly disclosed (continued) Computer Furniture Office Office Computer Total Equipment and Fittings equipment equipment Software leased R R R R R R Recognise assets (accumulated depreciation) Balance per the prior year audited financial statements at 31 March 2009 2 334 899 1 161 170 1 133 563 468 367 818 309 5 916 308 Correction of error 23.1 - - - - - Correction of error 23.2 - - - 15 214 - 15 214 Restated balance at 31 March 2009 2 334 899 1 161 170 1 133 563 483 581 818 309 5 931 522 Balance per the prior year audited financial statements at 31 March 2010 2 691 153 1 478 811 1 497 048 729 832 1 165 872 7 562 716 Correction of error 23.1 - 7 051 22 425 - - 29 476 Correction of error 23.2 - - - 15 214 - 15 214 Restated balance at 31 March 2010 2 691 153 1 485 862 1 519 473 745 046 1 165 872 7 607 406 Restated carrying amounts - 31 March 2010

5 325 068

3 410 160

3 786 338

562 274 1 551 207 14 635 046

Effect on accumulated surpluses – 31 March 2009 Effect on accumulated surpluses – 31 March 2010

(15 214)

35 143

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

23.3 Permanent staff incorrectly disclosed as temporary staff. cidb incorrectly disclosed permanent staff relating to construction contact centres under temporary staff in the prior years. The error has been corrected in the current financial year for comparability. 23.4 Operating lease commitments incorrectly disclosed cidb incorrectly disclosed the operating lease commitment in the previous financial year. The amount that was suppose to be disclosed in the current financial year were disclosed in the prior year. The error had been corrected in the current financial year and prior year figures adjusted accordingly.

137

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 R

2010 R

24. CASH RECEIPTS FROM STAKEHOLDERS Revenue per statement of Financial Performance 113 711 576 Finance income (4 131 542) Movement in receivables 2 744 907 112 324 941

110 115 841 (3 733 289) 685 201 107 067 753

25. CASH PAID TO STAKEHOLDERS, SUPPLIERS AND EMPLOYEES Expenses per statement of Financial Performance Movement in payables Finance cost Scrapping of assets Depreciation, amortisation and Impairment

103 675 846 (6 130 305) (74 360) (107 375) (2 502 385) 94 861 421

89 039 115 (3 667 264) (108 803) (776 652) (2 485 443) 82 000 955

26. RECONCILIATION OF SURPLUS TO CASH GENERATED BY OPERATIONS Operating surplus 10 035 730 21 076 726 Adjustment for item not affecting the movement of cash - Depreciation, amortisation and Impairment 2 502 385 2 485 443 - Finance cost 74 360 108 803 - Finance income (4 131 542) (3 733 289) - Loss on disposal of assets 107 375 776 652 Operating surplus before working capital changes 8 588 308 20 714 333 Working capital changes 8 875 212 4 352 465 (Increase) / decrease in accounts receivable and lease improvements 2 744 907 685 201 Increase / (decrease) in accounts payables 6 130 305 3 667 264 Cash generated from operations 17 463 520 25 066 797

27.1 COMMITMENTS Amounts approved and contracted - outstanding contractual obligations at year-end

57 235 036

16 076 188

A N NU A L REP OR T 2 0 10 / 1 1

27.2 OPERATING LEASE COMMITMENTS The future minimum lease payments under non-cancellable operating lease are as follows: - within one year 3 573 475 3 308 773 - in second to fifth year inclusive 4 901 379 8 474 854 8 474 854 11 783 627

138

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

28. INCOME TAX EXEMPTION The cidb is exempt from Income Tax in terms of section 10 (1) (cA) (i) of the Income Tax Act 29. EMPLOYEE BENEFITS 2011 2010 R R All employees are employed on a contract basis on a cost to board package and are not entitled to any other benefits. Salaries 42 716 081 25 976 014 Leave entitlement 219 790 363 116 Performance bonus 2 812 428 1 957 030 45 748 299 28 296 160 30. RELATED PARTIES 30.1 Department of Public Works The following is a summary of transactions with DPW: Statement of financial performance amounts during the year: Transfer from Department of Public Works 63 665 000 59 269 000

30.2 Provincial departments of Public Works The cidb has entered into an arrangement with the Provincial department of Public Works whereby the departments will provide office space for the cidb operations for free. The cidb operates out of the following provincial offices: - Eastern Cape Department of Roads and Public Works - Western Cape Department of Transport and Public Works - KwaZulu-Natal Department of Public Works - Free State Department of Police, Roads and Transport - Mpumalanga Department of Public Works - Limpopo Department of Public Works - North West Department of Public Works, Roads and Transport - Northern Cape Regional Department of Roads and Public Works

30.3 Green Building Council of South Africa

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

The cidb donated an amount of R1,482,000 to the council during the financial year under review. Although the council is not part of the government but it is a related party to the cidb in that one of cidb’s senior manager is a board member of the council.

30.4 Sponsorships received 2011 2010 R R The cidb received the following sponsorships from the fellow public sector entities : - Department of Public Works 110 000 150 000 - Industrial Development Corporation 30 000 30 000 - COEGA Development Corporation 20 000 - Department of Communication - 30 000 - Department of Housing - 85 000 - Independent Development Trust - 1 250 - Small Enterprise Development Agency 20 000 - Chris Hani Disctrict Municipality 50 000 -

139

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

31. FINANCIAL RISK MANAGEMENT The main risks arising from the cidb’s financial instruments are market risk, liquidity risk and credit risk. Credit risk The cidb trades only with recognised, creditworthy third parties. It is the cidb’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivables balances are monitored on an ongoing basis with the result that the cidb’s exposure to bad debts is not significant. The maximum exposure is the carrying amounts as disclosed in Note 5. There is no significant concentration of credit risk within the cidb. With respect to credit risk arising from the other financial assets of the cidb, which comprise cash and cash equivalents, the cidb’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. The cidb’s cash and cash equivalents are placed with high credit quality financial institutions therefore, the credit risk with respect to cash and cash equivalents is limited. Exposure to credit risk The maximum exposure to credit risk at the reporting date from financial assets was: Cash and cash equivalents Other receivables Total

2011 R 80 811 763 1 682 109 82 493 872

2010 R 62 313 159 1 118 822 63 431 981

Concentration of credit risk The following table provides information regarding the credit quality of assets which may expose the cidb to credit risk

2011

Cash and cash equivalents

NEITHER PAST DUE NOR IMPAIRED R

PAST DUE BUT NOT IMPAIRED – LESS THAN 2 MONTHS R

80 811 763

Cash and cash equivalents Other receivables

1 682 109 NEITHER PAST DUE NOR IMPAIRED R

CARRYING VALUE R 80 811 763

Other receivables

2010

PAST DUE BUT NOT IMPAIRED – MORE THAN 2 MONTHS R

PAST DUE BUT NOT IMPAIRED – LESS THAN 2 MONTHS R

PAST DUE BUT NOT IMPAIRED – MORE THAN 2 MONTHS R

62 313 159

1 682 109

CARRYING VALUE R 62 313 159

118 160

1 000 662

1 118 822 A N NU A L REP OR T 2 0 10 / 1 1

140

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

31. FINANCIAL RISK MANAGEMENT (CONTINUED) The maximum exposure to credit risk for financial assets at the reporting date by credit rating category was as follows: 2011

Cash and cash equivalents

AAA

UNRATED

80 811 763

Other receivables

1 682 109

2010

Cash and cash equivalents

AAA

UNRATED

62 313 159

Other receivables

1 118 822

Market risk Market risk is the risk that changes in market prices, such as the interest rate will affect the value of the financial assets of the cidb. Interest rate risk The cidb is exposed to interest rate changes in respect of returns on its investments with financial institutions and interest payable on finance leases contracted with outside parties. The cidb’s exposure to interest risk is managed by investing, on a short term basis, in current accounts and the call accounts. Sensitivity Analysis A Change in the market interest rate at the reporting date would have increased/ (decreased) the surplus for the year by the amounts below:

31/3/2011

CHANGE IN INVESTMENTS

INCREASE/(DECREASE) IN NET SURPLUS FOR THE YEAR UPWARD CHANGE R

Cash and cash equivalents

DOWNWARD CHANGE R

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

80 811 763

(808 118)

62 313 159

(623 132)

31/3/2010 Cash and cash equivalents

141

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

31. FINANCIAL RISK MANAGEMENT (CONTINUED) Liquidity risk Liquidity risk is the risk that the cidb would not have sufficient funds available to cover future commitments. The cidb regards this risk to be low; taking into consideration the cidb’s current funding structures and availability of cash resources. The following table reflects the cidb’s exposure to liquidity risk from financial liabilities: 2011

Other financial liabilities 2010

Other financial liabilities

CARRYING AMOUNT

TOTAL CASH FLOW

CONTRACTUAL CASH FLOW WITHIN 1 YEAR

45 834 334

45 744 201

CARRYING AMOUNT

TOTAL CASH FLOW

CONTRACTUAL CASH FLOW WITHIN 1 YEAR

39 987 166

39 575 264

CONTRACTUAL CASH FLOW BETWEEN 1 AND 5 YEARS R 90 134 CONTRACTUAL CASH FLOW BETWEEN 1 AND 5 YEARS R

39 575 264

411 902

Financial instruments The following table shows the classification of the cidb’s principal instruments together with their carrying value: FINANCIAL INSTRUMENT

CLASSIFICATION

CARRYING AMOUNT 2010

CARRYING AMOUNT 2009

Cash and cash equivalents

Loans and receivables

80 811 763

62 313 159

Receivables

Loans and receivables

1 682 109

1 118 822

Payables

Financial liabilities

45 834 334

39 987 166

A N NU A L REP OR T 2 0 10 / 1 1

142

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

31. FINANCIAL RISK MANAGEMENT (CONTINUED) Net gains and losses on financial instruments The following table presents the total net gains or losses for each category of financial assets and financial liabilities:

2011

LOANS AND RECEIVABLES R

Interest income

4 131 542

Finance charges Total net gains recognised in the statement of financial performance 2010

4 131 542 LOANS AND RECEIVABLES R

Interest income

3 733 289

TOTAL

R 4 131 542

(74 360)

4 057 182

FINANCIAL LIABILITIES AT AMORTISED COST R

3 733 289

Finance charges Total net gains recognised in the statement of financial performance

FINANCIAL LIABILITIES AT AMORTISED COST R

TOTAL

R 3 733 289

(108 803)

3 624 486

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

143

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

2011 2010 R R 32. RECONCILIATION OF BUDGET SURPLUS Net surplus/deficit per statement of financial performance 10 035 730 21 076 726 Adjustment for: - Depreciation, amortisation and Impairment 2 502 385 2 485 443 - Provision for bad debts 216 012 456 491 - Bad debts written off 332 741 138 489 - Reversal of bad debts provision (456 491) - Amortisation of prepayment 3 307 619 3 063 679 - Loss on disposal of assets 107 375 776 652 Over recovery of revenue (9 354 576) (14 533 840) Revenue per budget 104 357 000 95 582 000 - Transfer and subsidies 63 665 000 59 269 000 - Registers income 38 272 000 34 113 000 - Finance income 2 420 000 2 200 000 Revenue per statement of financial performance (113 711 576) (110 115 840) - Transfer and subsidies (63 665 000) (59 269 000) - Registers income (45 073 460) (47 059 809) - Finance income (4 131 542) (3 733 289) - Other income (841 574) (53 743) Under utilisation of expenditure (6 690 796) (13 463 640) Expenditure per budget (104 357 000) (95 582 000) - Administrative expenses (26 251 827) (27 587 068) - Staff cost (56 019 352) (49 402 131) - Equipment - (3 070 000) - Professional services (22 085 821) (15 522 801) Expenditure per statement of financial performance 97 666 204 82 118 360 - Administrative expenses 29 278 505 23 819 598 - Staff cost 52 867 578 44 285 120 - Equipment - 1 265 235 - Professional services 15 520 121 12 748 406 Net surplus/deficit per approved budget - -

A N NU A L REP OR T 2 0 10 / 1 1

144

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

33. Directors’ Emoluments 31 March 2011 No. of Meetings Fees as member Salary Travel Performance Total Name Sched. Other Sched. Other allowance bonus Board Committee Chairperson R Nkado 4 21 14 968 54 727 40 600 110 295 Deputy chairperson Risk Com CA Rose 4 7 12 716 22 253 82 774 117 743 Member G Strydom 1 0 2 909 - 25 324 28 233 Member G Steele 3 2 8 727 5 818 19 887 34 432 Member L Mchunu # 3 0 - - - Mem/Aud Com L Kona 5 6 14 545 14 727 7 632 36 904 Member ST Bogosing 4 4 11 636 6 000 15 116 32 752 Member N Alli # 2 0 - - - Member M Mabuza # 4 0 - - - Mem/Aud Com/Risk Com M Govender 5 13 12 545 32 727 130 810 176 082 Member S Ngebulana 2 0 5 818 - - 5 818 Member N Makhubele 5 0 - - 38 094 38 094 Member M Noyana 3 1 8 727 727 6 974 16 428 92 591 136 979 367 211 596 781 Remuneration Committee Chairperson N Makhubele 1 0 - - - Member N Alli 0 0 - - - Member M Noyana 1 0 2 909 - - 2 909 2 909 - - 2 909 Audit Committee Chairperson S Thomas 10 23 167 520 48 162 5 942 221 624 Member V Nondabula 9 4 143 568 7 976 4 910 156 454 Member B Chaplog * 7 0 111 664 - 1 188 112 852 Member N Mhlongo ^ 2 0 31 904 - 600 32 504 454 656 56 138 - 12 641 - 523 435 Risk Committee Member V Nondabula 4 0 63 808 - 1 637 65 445 Member N Mhlongo ^ 1 0 9 573 - 600 10 173 73 381 - - 2 237 - 75 618

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D

Executives Chief Executive Officer R Khoza 1 143 430 91 474 1 234 904 Chief Financial Officer P Mongwenyana 929 373 78 067 1 007 440 Growth & Contractor Dev. G Naidoo 920 304 73 624 993 928 Constr. Industry Perform. R Milford 1 024 239 90 133 1 114 372 Procurement & Delivery I Thumbiran 921 300 75 547 996 847 Contractor Registers Service E Moola 927 584 76 062 1 003 646 - - 5 866 230 - 484 907 6 351 137 Totals emoluments March 2011 1 075 284 249 255 5 866 230 394 729 484 907 8 070 406 Totals emoluments March 2010 530 982 216 987 5 379 105 445 649 413 394 6 986 118 * ^ #

Bryan Chaplog resigned from audit committee on 31 August 2010 Nala Mhlongo joined the audit committee on 03 January 2011 Lungile Mchunu, Nazir Alli and Mandla Mabuza are not entlitled to remuneration as they are public servants

145

NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2011

34. World Cup Expenditure 2011 2010 Quantity R Quantity R Bafana Bafana Supporter T-shirts 214 78 190 - TV Plasma Screens “42” 2 4 400 - 82 590 The cidb incurred the above expenditure to acquire cidb-branded soccer shirts in Bafana Bafana colours to show support to the national team and to adapt the event for team building purposes. In addition, two TV Plasma screens “42” were rented for the duration of the World Cup for staff members.

A N NU A L REP OR T 2 0 10 / 1 1

146

CO NS T RU CT IO N I N D US T RY DE VEL OP M EN T B O AR D