Limpopo Education Infrastructure Procurement Strategy

A project of the Support Programme for Accelerated Infrastructure Development (SPAID)


Client: The Business Trust
Sector: Infrastructure
Services: Service Delivery Support
Date: August 2006 to current

Context

2005 and President Mbeki launches the Accelerated and Shared Growth Initiative for SA (AsgiSA) with the intention to boost the country’s economic rate and halve levels of unemployment and poverty.

AsgiSA initiatives fall into several categories, one of which is a massive three year public sector investment programme in infrastructure. The programme is to invest in infrastructure in the transport, energy and communication sectors, as well as addressing municipal service backlogs. A central objective of the programme is to mobilise private sector resources and know-how.

The Business Trust, an organisation that “combines the resources of business and government in areas of common interest to accelerate the achievement of national objectives”, is approached to establish a joint Task Team with government to identify creative ways in which the public and private sectors can come together to support the implementation of the infrastructure development targets set by AsgiSA which amount to over R410 billion over three years.


Support Programme for Accelerated Infrastructure Delivery (SPAID)

On the 10th March 2006, the Business Trust establishes the Support Programme for Accelerated Infrastructure Development, known as SPAID, with a budget of R4,5 million. In August 2006, the Business Trust appoints Shisaka to manage the Support Programme.

SPAID begins in 2006 with an inception phase to build understanding of the current status of national infrastructure.

Three dedicated sub-programmes are created out of the findings of the inception phase. Of these, programme 2 of SPAID focuses on improved service delivery through municipal and provincial levels through project preparation and sector procurement strategies.


The Need for a procurement Strategy

SPAID undertakes a number of research studies and engages with various stakeholders in the infrastructure sector. The research identifies the absence of a rational procurement strategy. Public sector procurement is governed by legislation and the Construction Industry Development Board Act, but the framework allows for a flexible approach to procurement and contracting.

The absence of processes and procedures to support government bodies in their procurement approach means that time honoured and familiar procurement approaches are used and these tend to be highly resource intensive for the client and inefficient. The research identifies the need for a sector procurement strategy to support government bodies to implement the planned infrastructure spend in a manner that expedites delivery, maximises value for money, delivers on the outcomes and ensures long-term sustainability.


The Limpopo Province Education Department Pilot Project

It is agreed that a pilot project be undertaken to test the benefits of a sector specific procurement strategy. Given the priority status of Education, the Education Sector is chosen as the one in which the pilot is to be undertaken.

The Limpopo Province Education Department is selected for this purpose. It has established a dedicated education infrastructure unit in its Education Department tasked with the procurement and delivery of all education facilities. This unit has prepared initial requirements for some R7 billion in education infrastructure and rehabilitation.


Project Structure

The pilot project is structured into four phases of work:

  • An assessment of Limpopo Department of Education’s infrastructure plan
  • Development of a generic methodology to identify suitable infrastructure procurement strategy
  • Application of the methodology to produce a infrastructure procurement strategy for the Limpopo Department of Education
  • Develop an implementation framework for the procurement strategy

Project Deliverables

The project is undertaken during 2009 and delivers the following to the Limpopo Department of Education:

  • A generic methodology and analytical framework for a procurement strategy
  • A specific education infrastructure procurement and contracting strategy
  • An implementation Plan

Feedback

The strategy is well received and accepted by the Limpopo Education Department as well as Limpopo Treasury.

The project identifies a range of work packages as well as Public Private Partnership options that should result in expedited education infrastructure delivery.


Key Learnings

  • Introducing Public Private Partnerships enables the department to access private sector finance and capacity. This contributes to maximising finance available in the light of the backlogs.
  • The use of framework agreements for works contractors ensures quicker response times. Appointments from framework agreements reduce the normal procurement period from approximately three months to a few days, critical for projects such as repairs to storm-damaged schools and maintenance.
  • Appointment of professional service providers was from a panel with appointments on a percentage fee basis and without competitive tendering. The Framework Agreement introduces competitive tendering with a reduction in costs of professional service providers and savings estimated at R350 million over the five years.
  • Fewer procurement processes and contracts to manage results in more efficient and faster procurement processes.

Next Steps

A second phase of the project is currently underway (during 2010) and is providing technical support to the Limpopo Department of Education to implement the strategy developed. Engagements are underway with National Treasury, the National Department of Education, the National Department of Health, the CIDB and IDIP to ensure policy alignment and endorsement for application on a broader basis

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