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ByMr A. Visser
Chief Director Strategic Management
15 March 2005
PRESENTATION TO PORTFOLIO COMMITTEE ON
DEFENCE
DOD STRATEGIC BUSINESS PLAN FY2005/06
DOD
AIM
To brief the PCD/JSCD on the DOD Strategic Business Plan for FY05/06 before it is tabled in Parliament in
April 2005
DOD
SCOPE
• Timelines
• Background
• DOD Programmes
• Risks per Programme
• Options for Funding
• Discussion DOD
TIMELINES
DOD
Cycles vs. Financial Years
2002 2003 2004 2005 2006 2007
0-2 0-1 0 0+10-2 0-1 0 0+1
0-2 0-1 0 0+10-2 0-1 0
Cycles
Legend:
0 = Year of Expenditure
0-1= One Year prior to Year of Expenditure
0-2 = Two Years prior to Year of Expenditure
0+1 = One Year after Year of Expenditure
PLANNING CYCLE - EXAMPLES
0-2
[2003]
0-1
[2004]
0
[2005]
0+1
[2006]• Environmental
Analysis
• Worksessions:
– MinDef W/session (Guidelines
– DOD W/session
– DefSec & SANDF w/session
• Planning & Budgeting Seminar (September)
• Jan Lekgotla, SONA & Budget Speech
• May DPBEC (Plans & Budgets)
• MTEC & MinComBud
• Medium-term Budget Policy Statement (MTBPS)
• Allocation & Adjust plans
• Table Plan in Parliament
• Execute Plan
• Quarterly Reports
• Annual Report (FY2004/05)
• Prepare Plan for FY2006/07)
• Prepare Guidelines for FY2007/8
Annual Report (2005/06)
BACKGROUND
• The earliest draft DOD Strategic Business Plan FY05/06 was presented to the Portfolio Committee on Defence on 01 Feb 05.
• Plan was presented to and approved by the Defence Staff Council (DSC) on 23 Feb 05.
• DOD Budget presented to Portfolio Committee on Defence on 08 Mar 05
• Plan will be tabled in Parliament on 08 Apr 05.
• Programme Structure remains generally the same, except Force Employment (formerly called Command & Control - Joint Ops)
DOD
Background…
• Focus:– Conclusion of the First Decade of Democracy– First Year of Second Decade of Democracy– Progress on Strategic Defence Package (SDP) weapon systems
• Overview by the SecDef & CSANDF separate.• Reference to Parys Resolutions (Strategic Decisions),
including new DOD Vision & Defence Update• Minister of Defence’s Strategic Guidelines• Defence Strategy is still in process• Plan is in process of being printed DOD
DOD PROGRAMMES
DOD
RmDefence Administration 681Landward Defence 3 575
Air Defence 2 395Maritime Defence 1 212
Military Health Service 1 578Defence Intelligence 149Joint Support 2 490
Force Employment 1 364Special Defence Account 9 015Total 22 459
RISKS PER PROGRAMME
PROGRAMME RISKS MITIGATING ACTIONS
DEFENCE ADMIN
• Funding for the servicing of MOUs
• Funding for IT-based internal control systems (HR, finance and procurement)
Reprioritisation
FORCE EMPLOYMENT
Operational risk – gap between funding of force-providing services and ordered commitments.
Reprioritisation
LANDWARD DEFENCE
• Capabilities for external ops & joint/combined trg requirements – due to health status and ageing HR profile of serving members.
• Provision for the renewal of SA Army prime mission equipment
• Deteriorating facilities
MSDS intakes & reprioritisation
RISKS PER PROGRAMME
PROGRAMME RISKS MITIGATING ACTIONS
AIR DEFENCE - Deteriorating main equipment, weapon systems & ground- support infrastructure
- Decline of suitably qualified and experienced personnel
- Loss of local industry expertise
- Delay in the delivery of Agusta helicopters
Implementation of SAAF Strategic Transformation Plan Towards Vision 2012; SAAF HR Strategy; & penalties on supplier for late delivery
MARITIME DEFENCE
Costs associated with acceptance and qualification of SDP vessels
MSDS intakes, additional funding that has been provided by Treasury and Risk Abatement Plan
RISKS PER PROGRAMME
PROGRAMME RISKS MITIGATING ACTIONS
MILITARY HEALTH SERVICE
- Deterioration of hospital buildings, facilities and equipment- High medical inflation rate- Compliance with legislation in respect of depots and warehousing
Limited additional funding provided by NT and reprioritisation
DEFENCE INTELLIGENCE
- Deteriorating Defence Intelligence HQ building
- Outdated IT-systems, esp in collection
- Outflow of skilled and experienced personnel
Reprioritisation
RISKS PER PROGRAMME
PROGRAMME RISKS MITIGATING ACTIONS
JOINT SUPPORT
- Maintenance and repair of facilities, vehicles and
equipment- Unsafe and unstable ammunition due to lack of
disposal plant- IT-based internal control
systems (PERSOL, FMS, etc) need upgrade
Reprioritisation and limited funding from NT
SPECIAL DEFENCE ACCOUNT
- Adequacy of funding levels and local industrial
capabilities
- Ageing of SA Army prime mission equipment
-
FUNDING OF RISKS FY2005/06
DOD
BACKGROUND
• 316 Risks listed in SBPs• 76 Identified as DOD risks• 37 Identified as critical • 14 Options based on 37 risks developed• Options prioritised and top 4 selected• Presented to MTEC• Partially funded by NT
DOD
NATIONAL TREASURY FUNDING
Option 05/06 06/07 07/08
Req Allo Bal Req Allo Bal Req Allo Bal
Ammunition Disposal 10 5 5 50 10 40 50 50 0
Maintenance of Facilities
275 10 265 440 50 390 620 250 370
Integration of SDPs 47 26 21 40 22 18 31 13 18
Health Legislation 152 20 132 146 12 134 139 14 125
Peace Support Operations
300 300 300
IMPLICATIONS
• Ammunition Disposal – Lack of safety of depots and personnel due to unstable ammunition.
• Maintenance of Facilities - Non-compliance with Occupational Health and Safety Act, which may result in closure of facilities.
• Integration of SDPs – SDP vessels not fully accepted to design specifications.
• Health Legislation – Cannot comply with pharmaceutical regulations and building of depots.
DOD
OPTIONS NOT FUNDED
• DFR – MA Alignment (RM28)• SAAF – Inkwazi (RM20)• Spec Forces – Recruiting and equipping (RM6)• SA Army – MSDS (RM107)• SA Army – Ammo stock levels (RM93 or RM332)• SA Navy – Compliance with stat prescripts (RM80)• SAAF – Air base infrastructure (RM157)• MLS – Pers retention (RM8)• SAAF – YPT runway (RM25) DOD
REQUIREMENTS: MTEF 2005/06
• Additional RM183, RM254 and RM288 provided by NT.• Four options developed
Requirement FY2005/06
(Rm)
FY2006/07
(Rm)
FY2007/08
(Rm)
SITA 37 39 41
DIDTETA 1 2 3
BPST 4 0 0
Special Forces Recruiting and Equipping 6 6 6
Inkwazi 20 21 22
IT Investment 80 84 88
Pharmaceuticals 40 42 44
Scarce Skills & Rural Allowance 95 38 40
SA Army (Ammunition) 44 46 49
SAAF (Air Base Infrastructure) 16 17 18
SA Navy (Statutory Requirements) 40 42 44
E-Procure 6 2 2
Total 389 339 357
ALLOCATIONS 05/06Requirement FY2005/06
(Rm)
FY2006/07 (Rm)
FY2007/08
(Rm)SITA 37 39 41
DIDTETA 1 2 3
BPST 4 0 0
Special Forces Recruiting and Equipping 6 6 6
Inkwazi 20 21 22
IT Investment 80 84 88
Pharmaceuticals 40 42 44
Scarce Skills & Rural Allowance 95 38 40
SA Army 15 33 44
SAAF 16 17 18
SAN 15 30 40
E-Procure 6 2 2
Total 335 314 348
INTERNAL FUNDING
DOD
Source FY2005/06 FY2006/07 FY2007/08
Capital 60 60 60
Merit Bonus 92 0 0
National Treasury 183 254 288
Total 335 314 348
OPTION 1 - AMMUNITION DISPOSAL
Additional Funding of Rm5 to be utilised as follows:
• Registration of project for Disposal Plant
• Disposal of critically unstable ammo iaw approved disposal plan
• Preparation of dilapidated demolition ranges and capabilities
The ammunition will be disposed of through conventional methods at approved demolition ranges. However, in the continued absence of a dedicated Disposal Plant the serious risks at Jan Kemp Dorp and De Aar still remain
OPTION 2 - FACILITIES
Additional Funding of Rm10 to be utilised as follows:
• Priorities were indicated to National Department of Public Works
(NDPW)
• NDPW will propose options to DOD in April 2005
• DOD will then instruct NDPW on utilisation of funds
The following risks still remain:• Lack of operational readiness and service delivery
• Possible closure of units due to Occupational Health and Safety Act
• Low morale due to unsafe and unsatisfactory working conditions
OPTION 3 - INTEGRATION OF SDPs (SA Navy)
Additional Funding of Rm26 to be utilised as follows:
Corvettes• Support contracts Rm1
• Qualification and acceptance trials Rm10
• Running costs Rm5,5
• Facility upgrades Rm3,5
Submarines• Additional spares and support equipment Rm2,5
• Support contracts Rm3,5
Total Rm26
Balance of risks to be managed through Risk Abatement Plan
RISK ABATEMENT PLAN
• Operational units at lower levels of readiness
• Disposal sale of OTQ (RM 50) to operating budget
• Strict discipline with ammo and fuel usage
• Non-replacement of missiles fired
• Re-phasing of activities
OPTION 4 - HEALTH LEGISLATION
Additional Funding of Rm20 to be utilised as follows:
• Changes to the Medical Health Depot to comply with the Pharmacy Act – Rm10
• Changes to pharmacies to comply with the Pharmacy Act – Rm10
The following risks still remain:• Depot not fully compliant with legislation
• Shortage of ambulances and vehicles required for clinical care
• Non-replacement of main medical equipment (Sonars, X-rays, scanners, etc)
• Security at facilities
These risks will be mitigated to some extent through internal reprioritisation
SUMMARY
• Alignment with Government Priorities (Ten-Year Review and SONA)
• Maintenance of the SANDF core capabilities• Strategic Defence Packages (Integration into SANDF)• Peace Support Operations(Support Govt Initiatives
and ASF) • Departmental Risks(37 risks -14 Options - 4 funded by
NT)• Strategic Decisions (Parys Resolutions)
DOD
DISCUSSION
DOD