“Partnering for Growth: Consulting Engineers and Local Government”

Yunus Carrim
Deputy Minister of Cooperative Governance and Traditional Affairs

PARTNERING FOR GROWTH: WORKING TOWARDS A SUSTAINABLE FUTURE CONFERENCE
East London
14 November 2011

Need for Activism
Sensibly, I was not your first choice to do this opening address. But the Minister you invited couldn’t make it after all. So the organizers, who had me down for another slot with a more direct focus on local government issues, asked if I would do this opening address instead. I explained I am not the right person to do this overview – but I was told, well, we heard you at the AGM of the Institute of Local Government Managers, and you’ll do fine. But speaking at the Institute is more up my street, I said, but the organizers persisted – and I said, okay, okay. So here I am! And if I add little value, you’ll know who to blame!....
But let me begin, by congratulating you on your Conference and wishing you well. I think the theme of your Conference ‘Partnering for Growth: Working together towards a Sustainable Future’ is very apt. I will focus on this theme mainly as it applies to local government.  So the title of this input is: “Partnering for Growth: Consulting Engineers and Local Government”.  But quite a bit of what I say might also be relevant to other spheres of government and the state as a whole.

The theme of your Conference on partnerships echoes CoGTA’s belief that “local government is everybody’s business”. And it is this in your case, both as engineers and residents of municipalities.  In any case, we all have to work together to make local government work. Partnerships in many forms are necessary to do this.
The National Planning Commission’s just released Draft National Development Plan calls for an active citizenry, partnerships and all of us pulling together to ensure significant development in our country over the next two decades. The draft plan is up for discussion for the next few months. As CESA, you should actively participate in this process and contribute to improving the draft plan.

There is also the New Growth Path that could do with your active cooperation and participation.
And we must not forget COP 17 about to be held on our shores. You too, like every other organisation, have a role to play in reducing climate change.
I think that if you are serious about wanting partnerships, you must become an activist professional organisation. You can’t just sit back and lament. You must get actively involved in advancing your needs and interests, and you must engage more with the relevant stakeholders in your sector.
You are very important to our infrastructure development goals in this country.  Unfortunately, the role of engineers in municipalities, I know, is often not appreciated. Yet, without qualified, experienced, committed engineers, municipalities will not be able to provide basic infrastructure or deliver key services. We thank you for the good work you do, and we appeal to you to do even more.

Of course, we know this is not easy, given the political, economic, financial, managerial and other challenges municipalities face that impede your ability to function more effectively. You are, as I see it, both a business and  professional organisation, and I know that you must find the political and other challenges in the municipalities you work in or with very frustrating. As CoGTA, we introduced the Local Government Turnaround Strategy (LGTAS) to address these challenges. We will not turn around municipalities overnight, but working together, not least with you, we can, over time, significantly improve the functioning of municipalities. We are certainly committed to doing so.
We know what you are capable of. We saw in the major contribution you made to building the world class infrastructure for the World Cup. And we thank you for this.

We know that your sector has been declining since then. I’m told that construction activity has declined by 35% since 2009. This has led to a significant decline in jobs. And with the current global economic crisis there are concerns about what the future holds for this sector.
Importance of Infrastructure
But the government has a huge infrastructure development programme of over R800 billion. We are aware that we not rolling out this programme fast enough, and this was a major concern of the July Cabinet Lekgotla.  It was decided that the President should head a Cabinet Infrastructure Commission to accelerate this programme.

Among the decisions taken were:
    •    There should be a greater focus on coordinating and integrating service delivery in priority areas where backlogs are the highest and on transforming apartheid special development patterns. These include 21 rural districts. It was noted that less than 30% of the people have access to basic services in these districts, which are in 6 provinces.
    •    The projects to be implemented will address water, sanitation, electricity, waste management and access roads. Other very important services such as education, health, policing and housing will also be included.
    •    The infrastructure cluster service delivery task team will compile a set of integrated project plans for each district by end of 2011.
The Lekgotla also focussed on focus on metros, large towns and cities with large informal settlements, and it was agreed:
• There will be an informal settlement upgrading plan in 45 metro, large cities and towns. Projects will cover security of tenure, water, sanitation, public transport, area lighting, electrification and waste management.  There will also be provision of social services and amenities, including public open spaces and recreational facilities.
• There will be a focus on improving the infrastructure delivery management process, eradicating under-expenditure and improving value for money.
• All provinces and relevant national departments will participate in the Infrastructure Delivery Improvement Programme.
• All struggling municipalities will participate in the COGTA special purpose vehicle to address key blockages in service delivery.
• There will be a focus on accelerating the building of infrastructure delivery skills and capacity where it is lacking in government and municipalities.
• National government will put in place stronger norms and standards for infrastructure delivery and monitor and enforce these measures.

Of course, the State-Owned-Entities also have to play an important role in accelerating the infrastructure roll-out.
It is estimated that meeting the infrastructure backlogs in local government would cost at least R495 billion. Part of this backlog would be addressed when the overall infrastructure programme of government referred to above is met. But it will be difficult to meet the entire backlog.

Improving Infrastructure Delivery
Obviously, we have to develop the country’s infrastructure faster to ensure significant improvements in economy growth, job-creation and service delivery. But we should also accept that since 1994 there have been major advances in the poor’s access to electricity, water, sanitation and other services. Our housing delivery too has been impressive. However, there are questions about the quality and consistency of these services. Statistics do not say all. As government we are also increasingly focussing on quality, on outcomes.  
We are also aware of the high levels of corruption in infrastructure projects. As many of you may know, National Treasury is leading the government effort to tighten the procurement and tendering process. The Human Settlements Department has also launched a major investigation into houses that are not of the necessary quality or have not been built at all even where government has already paid the developers.
And we think you can help in this regard. You could do more to encourage your members to be more professional and deliver infrastructure of the required quality, and to expose corruption.

Part of the problem in the procurement process sometimes, we know, is the focus of government departs and municipalities on price rather than quality in the procurement criteria.  We need, we agree, to get the balance right.
But we also need in government to have more skilled people to manage procurement more efficiently and effectively.
We are working with National Treasury to encourage municipalities to spend a percentage of their budgets on the maintenance of infrastructure.
And we are also working towards ensuring the Municipal Infrastructure Grant (MIG) is more effectively spent. Among the issues being addressed in this regard are:
    •    Better planning cycles taking into account the financial year, the five-year IDP and longer term plans.
    •    CoGTA providing more assistance to provinces to assist municipalities with implementing MIG.
    •    Working more cooperatively with other sector departments to ensure that they finalise their norms and standards on infrastructure and also monitor the projects more actively.

During the past financial year, municipalities spent 86% of their R9,9 billion MIG allocation. Obviously, a 14% under-spend is not acceptable, but it’s an improvement on previous years.
CoGTA is also finalising arrangements for the establishment of a ring-fenced government component called the “Municipal Infrastructure Support Agency” (MISA). It will assist municipalities, particularly low and medium capacity municipalities, with technical support and building capacity relating to municipal infrastructure. The technical experts who are part of the Siyenza Manje programme of the DBSA have been transferred to CoGTA to serve in MISA.
A key focus of MISA will be to transfer technical and other skills to municipalities to ensure that over time they build their internal capacity to provide infrastructure. The usual parachuting of projects from national or form provinces without the input and support of partners often doesn’t yield good results. As we have previously noted, sustainable service delivery cannot happen with once-off, hit-and-run, shoot-from-the-rooftop approaches.
As CoGTA, we need to engage with you effectively about MISA and commit ourselves to doing so. I spoke with your leadership this morning, and suggested that our officials engage with you on some of our thinking on MISA. I could speak to our officials, and perhaps you could meet with them within the next two weeks?

As many of you would be aware, parliament passed the Municipal Systems Amendment Act earlier this year. A key aim of the amendments is to professionalise the local government administration. As COGTA, we feel that there are six critical posts in a municipality which should be filled by professionals – the Municipal Manager, Chief Financial Officer, Town Planner, Engineer, Human Resources Manager and Communications Head. Obviously, all professional positions should be filled by professionals, but these six are crucial.
The Amendment Act prohibits office-bearers of political parties serving as senior managers in municipalities.
The Act also provides for the Minister to regulate the minimum qualifications for senior municipal managers. We are presently working on draft regulations, and have been engaging with relevant professional organisations on this. CESA is welcome to participate in the process.  Here again, I understand from your office-bearers that you have not been consulted. I will speak to the relevant officials, and perhaps you can meet with them within the next two weeks?

As you are in a sense a business and professional body, we would be looking to you, to through your norms and standards, regulating the conduct of your members.
We are aware that the Construction Education and Training Authority (CETA) is dysfunctional. The Department of Higher Education is focusing on the challenges of SETAs generally and needs to give more attention to the Construction SETA.
One of the reasons our infrastructure development programme is not moving fast enough is that we do not have the necessary technical skills in government. This applies to all spheres of government, not just local government. One report suggests that in the past ten years the number of technical professionals in government has been reduced from 5 500 to about 1 800. Senior technical positions, especially in local government, are filled by people who are not technically qualified or experienced enough. Sometimes they are there mainly because of their political connections.
It is also difficult to draw senior technical professionals to local government in particular because they are often offered 5-year contracts instead of permanent jobs.

We are of course concerned about the lack of engineering skills in this country, and the challenges our universities are experiencing in producing enough engineers.
As for engineers working in local government, I am told that there are only 381. The distribution favours metros, with 63% of them working there.
The demographics are also far from satisfactory, with too few African engineers.
I know it can be challenging, but there are not enough Africans in CESA too.
We all – government, schools, tertiary institutions, CESA  and professional organisations  - need to work together to address issues of demographic representation in the engineering sector. This then is another form of a partnership that we need to fulfil. 

    
CESA Initiatives
There are various initiatives, I know, that have been launched to create the conditions for better partnerships between government and those of you in the private sector involved in infrastructure development and service delivery.
Among them are:
    •    Discussions on alternative delivery mechanisms.
    •    The Construction Industry Development Board (CIDB) Integrity Pact.
    •    The CIDB Register of Professional Service Providers.
    •    The CIDB-CESA Memorandum of Agreement on Procurement issues.
    •    The procurement Guidelines for Consulting Engineering Services
    •    The Construction Industry Charter
    •    The identification of engineering work project.   

    •    The Candidate Academy launched in cooperation with the South African Institute of Civil Engineers.

It seems to me that there is a need for greater progress in regard to these intiatives. Several of them fall beyond the scope of our Department, but if there are things we could help with, please let us know. At the meeting this morning with your office bearers we discussed some practical issues fleetingly. You should write to me on the basis of that brief exchange, and we will raise the issues with the decision-makers. I promise we will forward the isssues you raise, but I can't be held to account for the outcomes. If they are issues that fall within our portfolio as CoGTA, I will, of course, raise them with Minister Richard Baloyi. So please feel free to reach us.

I end on the note I began. You need to see yourself more as activists, even if you are a business and professional association. In a vibrant democracy like ours, with competing demands and interests such as we have, and limited resources, you need to, at least in some sense, be more activist-oriented. I leave you with that. 

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