STRATEGIC PLAN AND APP
PRESENTATION TO
PORTFOLIO COMMITTEE
02 JULY 2014
PRESENTATION OUTLINE
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Introduction
Programmes and their functions
Organisational structure
Strategic context
Vision and mission
Strategic objectives
Approach to implementation
Key performance areas
Budget overview
Capacity of the Department
SWOT Analysis
Conclusion
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INTRODUCTION
 The Department is required by legislation to develop a Strategic Plan that outlines
the objectives to be pursued by the Department over the MTSF period
 The Strategy development was informed by the following principles:
 Coordination and coherence with government overarching policy frameworks
 Identifying clear outcomes to be pursued by the Department
 Delivering in the constrained economic environment
 Focusing on cross-cutting outcomes within the Department and Government
 The Strategy has been presented to the Executive Authority and extensively
discussed with senior management
 The focus is now on the implementation through the Annual Performance Plan
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INTRODUCTION
Who is DPE
 The DPE through the Minister is the shareholder representative for government,
with oversight responsibility for eight State Owned Companies (SOC)
 The 8 SOC are Eskom, Denel, SAFCOL, Broadband Infraco, Alexkor, Transnet,
South African Airways (SAA), and South African Express Airways (SAX)
 The mandate of the Department is embedded in the founding legislation of the
SOC and PFMA
 The mandate of the Department is to ensure that the SOC within its portfolio are
directed to serve Government’s strategic objectives as outlined in the NDP and
further articulated in the New Growth Path, and the Industrial Policy Action Plan.
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PROGRAMMES’ FUNCTIONS
PROGRAMME 1: ADMINISTRATION
•The purpose of the programme is to:
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Provides strategic management, corporate management and administrative support to the
Department, which enables the Department to meet its strategic objectives, and
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Over and above the administration function, the programme also comprises of units that
are critical for the development of systems, plans and processes that will aid the
Department in executing its mandate and enhancing coordination in the delivery of its
plans.
PROGRAMME 2: LEGAL AND GOVERNANCE
•The purpose of the programme is to:
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Provides legal services and corporate governance systems, and facilitates the
implementation of all legal aspects of transactions that are strategically important to the
Department and the SOC, and
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Ensure alignment with Government’s strategic intent by, amongst others, monitoring key
risk factors that may affect the achievement of key performance indicators contained in
the shareholder compacts.
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PROGRAMMES’ FUNCTIONS
PROGRAMME 3: PORTFOLIO MANAGEMENT AND STRATEGIC PARTNERSHIPS
•The purpose of Programme is to:
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Align the corporate strategies of the SOC with Government’s strategic intent, and monitor
and benchmark their financial and operational performance and capital investment plans
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Contribute to the implementation of overarching economic, social and environmental
policies focused on building strategic partnerships between SOC, strategic customers,
suppliers and financial institutions
•The programme comprises of the following sub-programmes:
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Energy and Broadband Enterprises is responsible to oversee Eskom and Broadband
Infraco
Manufacturing Enterprises is responsible to oversee Alexkor, SAFCOL and Denel
Transport Enterprises responsible is to oversee Transnet, SAA and SAX
Strategic Partnerships’ main role is to develop innovative models to ensure financial
sustainability of SOC; as well as project oversight for infrastructure projects
Economic Impact and Policy Alignment aims to build the capacity to monitor national
economic policies to determine areas in which the SOC can make strategic contributions
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ORGANISATIONAL STRUCTURE
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STRATEGIC CONTEXT
700000
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New Growth Path
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National Infrastructure Plan (SIPs)
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Industrial Policy Action Plan
100000
0
2013
Medium Term Strategic Framework of the
new administration
200000
2012
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Private sector
2011
National Development Plan
300000
2010
•
Public Corporations
2009
The Strategic Plan is informed by this
overarching objective as outlined in the:
Government
2008
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400000
2007
The government has develop a suite of policy
interventions targeted to accelerate growth, and
ensure that its inclusive (Investment driven
growth)
2006
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500000
2005
While significant progress has been made to
transform the economy, there are major structural
constraints that exist
2004
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600000
2003
This has resulted in slower employment growth
and the economy’s ability to absorb more people
into the labour market has been limited
2002
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Investments in the economy
2001
The South African economy remains constrained
and growth over the past 5 years has been low
2000
•
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VISION AND MISSION
VISION:
To drive investment, productivity and transformation in the Department’s portfolio of
State Owned Companies (SOC), their customers and suppliers so as to unlock
growth, drive industrialisation, create jobs and develop skills.
MISSION
To provide decisive strategic direction to the SOC, so that their businesses are
aligned with the national growth strategies arising out of the NDP
KEY OUTCOMES TO BE SUPPORTED
•Unlock economic growth and employment
•Industrialisation
•Transformation
•Regional Development
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DPE STRATEGIC OBJECTIVES
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Review the shareholder oversight to ensure alignment of SOC to
developmental outcomes
Promote good corporate governance
Build internal capacity to enhance Department’s ability to execute its
strategic plan and fulfill its mandate
Stabilise our SOC looking at strengthening of balance sheets and funding
options
Drive economic infrastructure investment to enhance the capacity of the
economy with emphasis on the Strategic Integrated Projects
Leverage SOC procurement spend to support industrialisation and
transformation
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APPROACH TO IMPLEMENTATION
• The Department has clearly defined its
objectives over the MTSF period
Agreed
strategic
objective
s
Linking projects
to objectives
Implementation
Framework
(Roadmap)
Strategic
capabilities
Implementation
to be driven at
the top
Enhanced
coordination
and
collaboration
• Key strategic initiatives or areas
defined within the current fiscal
framework
• Engagement with Executive
Authority to ensure alignment
• To achieve the objectives, the
Department would need to enhance
coordination and collaboration with
other Departments and state entities
• Ensuring that the Department is
appropriately resourced to execute
the strategy
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 1: Review the
shareholder oversight to
ensure alignment of SOC to
development outcomes
Key Performance Areas
Issues to Address
 Government Shareholder
Management Bill developed
 Strengthening of legislation that
foregrounds Department’s mandate
 Review Logical Planning,
Monitoring and Evaluation
Framework (LPMEF)
 Streamline the logical planning framework
 Enhance Isibuko Dashboard
 Enhance compliance to current legislative
framework
 Enhance rapid access to accurate
information
 Modernisation of the oversight function
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KEY PERFORMANCE AREAS
Strategic Objective
Key Performance Areas
 Objective 2: Promote good
governance
 Enhance compliance with
legislation
 Improve level of compliance within the
Department and its SOC to PFMA
provisions
 Business Processes Mapped,
re- engineered and automated
 Integrate business processes
 Annual Plan for public participation
programme
 Taking DPE to the people and ensure
increased accountability
 Provincial engagements
 Coherence of SOC Plans to
provincial economic
development strategies
Issues to Address
 Improve efficiency within the
organisation
 Enhancing inter-governmental
relations
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 3: Build internal
capacity to enhance
Department’s ability to
execute its Strategic Plan and
fulfill its mandate
Key Performance Areas
 Human Resources Plan
Issues to Address
 Continuous repositioning of DPE as an
employer of choice
 Maintaining vacancy rate below 10
percent
 DPE Competency Model
 Define critical capabilities
 Re-alignment of talent development
initiatives
 DPE Leadership Framework
 Mentorship and Coaching
 Enhance the learning culture within the
organisation
 Culture & Diversity
Management
 Accelerate implementation of actions
identified in the Climate survey
 Review values and define
organisational identify and culture
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KEY PERFORMANCE AREAS
Strategic Objective
Key Performance Areas
 Objective 4: Stabilise our
SOC looking at strengthening
of balance sheets and funding
options
 Funding strategy for SOC
developed
 There is a need to assist SOCs mobilize
additional funding from outside the state
 Monitor implementation of the
Long Term Turnaround
Strategy (LTTS)
 There is a need to ensure commercial
and financial sustainability of the stateowned airlines by 2017
Issues to Address
 Enhanced monitoring
 SAFCOL Strategy developed
 Improve financial viability of the company
 Expansion of operations through vertical
integration
 Land Claims Model
 Alexkor Strategy developed
 Refocusing of the company
 Sustainability of the Pooling and Sharing
JV
 Diversification and revenue growth
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 5: Drive economic
infrastructure investment to
enhance the capacity of the
economy with emphasis on
the SIPs
Key Performance Areas
 Monitor delivery of the build
programme focusing on key
projects outlined in the MTSF
Issues to Address
 Invest in capacity and ensure that it
enhances efficiency and overall
competitiveness of the economy
 Timely delivery of projects within budget
 Implementation of Africa
Strategy
 Coordinate investment activities of SOC
into the continent
 Promoting regional development
 Develop Private Sector Participation
Framework
 Augment investing capacity of the SOC
 Develop a Project Management
Framework and Process for Mega
Projects oversight
 Project life cycle mapping
 Define, Select, Plan,
Implement, Evaluate
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 6: Leverage SOC
procurement spend to support
industrialisation and
transformation
Key Performance Areas
Issues to Address
 Establishment of
Maintenance, Repair and
Operations (MRO ) Hub for
the airlines industry
 Promote locally manufactured
components (maintenance, repair and
operations)
 SAA/SAX aircraft acquisition
 Promote acquisition from local advanced
manufacturing entities
 Special Development Zone (SDZ) for
manufacturing of timber and timberframe products
 Need to establish downstream
enterprises in partnership with SAFCOL
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 6: Leverage SOC
procurement spend to support
industrialisation and
transformation
Key Performance Areas
Issues to Address
 Review procurement rules to
aggressively implement the
Competitiveness Supplier
Development Program
(CSDP)
 Maximise the spend on domestic
products and services
 Develop SOC Transformation
Strategy, Plan and
Measurement Tool
 Economic transformation objectives not fully
met by SOC
 Develop a DPE
Transformation Plan to
achieve the 75 percent
expenditure target on
domestically produced
products and service
 Enhance demand for domestic products
and services
 Support development of industrial
capabilities
 Better leverage SOC procurement
expenditure
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KEY PERFORMANCE AREAS
Strategic Objective
 Objective 6: Leverage SOC
procurement spend to support
industrialisation and
transformation
Key Performance Areas
Issues to Address
 Develop M&E tool for Youth
Empowerment Program
 Enhance alignment of SOC Youth
Intervention to the national youth
development agenda
 Optimise SOC training
facilities and enhance
partnership with other
Departments
 Increase training capacity of SOC to lead
in the delivery of Skills Accord
commitments
 Develop a tool to measure SOC
Contribution to economic growth and
job creation
 Develop Guidelines for SOC
Corporate Social Investment (CSI)
 Support implementation of the National
Skills Development Strategy
 Maximise contribution towards
developmental outcomes
 CSI programmes and impact
by SOC not fully understood
and consolidated
 Alignment with developmental
goals
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BUDGET OVERVIEW
Components
R’000
2013/14
Actual
2014/15
Forecast
2015/2016
Budget
2016/17
Budget
Compensation of
employees
127 771
149 600
159 500
169 900
Good and services
144 697
110 200
119 800
115 700
272 468
259 800
279 300
285 600
Total
• The Department's budget has decreased from R1.4 billion in 2012/13 to R259 million in 2014/15. However it
continues to increase by 9.9% to 2016/17. The decrease from R1.4 billion was the result of transfers to the
SOC's.
• Over the medium term, Compensation of Employees is expected to increase from R149.6 million in 2014/15
to R169.9 million in 2016/17 as a result of the expansion of the establishment over this period
• Goods and Services including Payments for Capital Assets is expected to increase from R110 million in
2014/15 to R115.7 million in 2016/17 to support the increased establishment
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STRENGTHENING CAPACITY
250
Staff Complement
200
150
Total posts
100
Filled posts
50
0
09/10
10/11
11/12
12/13
13/14
Total posts
168
185
189
210
220
Filled posts
140
163
168
185
216
Vacancy Rate (%)
12
10
8
6
4
2
Rate
• The Department has also
succeeded in reducing its vacancy
rate from 11.9% in March 2013 to
1.8%.
• The increased scope requires the
Department to enhance its
capacity
14
0
• The structure of the Department
increased from 168 in 2009 to 210
in the 2012/13 financial year and
will increase to 227 over the MTEF
period
11/12
12/13
13/14
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12
1.8
• The Department still faced with
challenges in respect of retention
of specialists skills
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SWOT
The Department must leverage its Strengths and Opportunities to overcome
threats and weaknesses
Weaknesses
Strengths
 Dedicated and competent workforce
 Shareholder management model not finalised
 Overseeing companies that are the corner stone
of the economy
 Lack of common view on shareholder oversight
Internal
 Duplication of effort among some units
 Strong financial management systems and
practices
‘Assets ‘
 Lack of clarity on roles and responsibilities
S
W
Opportunities
 Position DPE as an “activist” shareholder
representative
‘Liabilities
Threats
O
T
 Not all enabling sector policies and legislations
are in place
 Drive industrialisation and localization
 Burden on fiscus (financial sustainability of SOC)
 Drive SOC transformation
 Slow economic growth
 Drive new built programme
 Absence of a clear legislative framework setting
out the DPE’s shareholder mandate
 Stimulate economic growth through infrastructure
rollout programme
External
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CONCLUSION
•The SONA has re-emphasised the Government’s commitment to address
the developmental challenges
•The NDP provides the long term vision and the Department will ensure
alignment of SOC activities to support the achievement of the vision
•Over the medium term, implementation of actions aligned to the NDP
contained in the NGP and IPAP to deliver on the radical socio-economic
transformation programme
•The Department continues to improve its oversight mechanisms to ensure
implementation of MTSF targets by SOC
•The Department will work with SOC and DFIs to improve its project
management capacity to improve monitoring of the build programme
•The resourcing of the Department remains a challenge that needs to be
addressed as the scope continues to expand
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