Minister and Department of Public Works Presentation of Strategic Plan and Budget 2010-2013

Meeting report

Department of Public Works (DPW): Strategic Plan and Budget presentation
The Minister of Public Works, Hon Geoff Doidge, led a delegation from the Department of Public Works (DPW). He thanked the Chairperson for the opportunity to interact with the Committee, which the Department of Public Works (DPW) regarded as important. The Committee had raised very specific issues which the team would try to address.

The Minister was at pains to explain that his Department wished to reclaim its mandate. Whilst the key functions of DPW were procurement and asset management, its original mandate stemmed from the White Paper published by the then-Minister Hon Jeff Radebe, even before the election of 1999. This White Paper sketched the roadmap for the DPW but had unfortunately been gathering dust. This mandate was further defined by the recent electoral mandate with its five priorities and the twelve outcomes emanating from these five priorities. DPW had been charged with three of those outcomes. The performance agreement with the President spoke to those and the Department would give a sense of what those outcomes were during this presentation, and also the budget speech. The Minister said the performance agreement was signed with confidence that the way DPW had geared itself it would respond successfully to those outcomes.

The Department needed to look at a structure that could support service delivery. DPW wanted a structure that would be able to respond to the core functions. Its client departments were not happy and the DPW was looking at why that unhappiness existed and how it could respond to those issues. This involved an examination of whether the Department’s business model was correct and whether it was structured to respond to that business model to ensure it could deliver on service.

Its goals included the improvement of its management and decision-making structure and its entire organisational structure, more efficient service delivery, with the necessary systems to support that goal, and the Department becoming proactive rather than reactive. There was a desire to turn around performance. The current IT system was not up to scratch and a new IT system to support the Department’s goals of improved monitoring as well as providing improved accountability to parliament was being sought. One of the main criticisms related to so many government buildings being vacant, unoccupied, dilapidated and under-utilised. DPW also wished to turn this around, even if it meant leasing space to the private sector. He believed the large asset base could be turned into a real money spinner for the economy.

The Minister was convinced that the Department would have to be ready to review, reshape and rejuvenate, if it was to achieve its targets. Closely linked with this was the need to create stability. Much work had already gone into this. One of the improvements was the establishment of the Property Management Trading Entity.

The Department had made extensive progress since 2008 but this was not something to be resolved overnight. Already the Audit Report for 2009 showed signs that the DPW had made great strides in improving its financial and other management systems, including the collection of rent from MPs using government residences, as well as other client departments. 

The DPW had had interactions with the Council for the Built Environment (CBE), Independent Development Trust (IDT), Agrément South Africa (ASA) and the Construction Industry Development Board (CIDB), all of whom accounted to it, because it also wanted them to adopt the outcomes-based thinking and performance-based agreements in government.

The Minister thanked the Departmental team, many of whom were with him, for their sterling work thus far. He commended them for accepting the call to act in their present capacities, and to enter what was at times a hostile environment. He was happy to report that through their efforts already he could report a 97% success rate on the target of 500 000 jobs for the previous year. For the current year, the target was creation of 550 000 jobs. That target was being exceeded already, with 604 000 work opportunities created so far. Despite the fact that many of the staff were in acting positions, they had done a tremendous job, were aware of their shortcomings, but were working well to overcome them.

At this point the Minister interrupted his presentation to welcome the Deputy Minister. Hon Hendrietta Bogopane-Zulu.

The Minister outlined the key pillars for growth in DPW. He admitted the DPW was not doing too well in Black Economic Empowerment (BEE), where there was much room still for improvement still existed. Linked to this was the commitment to pay contractors 30 days from invoice. Although skills development now resided with the Department of Higher Education (DHE), the DPW was a contributor to the national skills development programme. Already the Minister had had talks with the Minister for DHE about how to work together to improve the delivery forum for skills provision. He stated that although the entities like CIDB and CBE were mandated to drive skills development, new energy was urgently required.

In the same vein as BEE, DPW also needed to look at the Contractor Development and Property Incubator Programmes. These were crucial in creating further access and opportunities for the previously disadvantaged. It was not an easy task because these two industries were dominated by the bigger companies.

The IDT was capitalised some 20 years ago with R2 billion and it had done great work to assist with the transformation of South Africa, but now needed to be re-capitalised. DPW had submitted a request to National Treasury and hoped for a positive response. The IDT had spent millions of its own resources to eradicate some of the mud schools, but the Department and other funding institutions needed to become more involved for more progress. The uptake in provinces was very good but the numbers of mud schools had to come down.

The Expanded Public Works Programme (EPWP) was a key programme that had already made great strides in providing opportunities for the unemployed. The media was briefed the previous day on the EPWP where its successes, including the 100% achievement rate for the year, were reported. The impact was beginning to be felt broadly. Some of the beneficiaries gave a good reference when they were allowed to speak to the media about the benefits derived from the EPWP.

The DPW was looking at a Green strategy, and for this to work a mindset change would be absolutely necessary.

Another area of great importance was the asset portfolio and how DPW was managing it. Technical teams were busy compiling up to date statistics on exactly what was owned, by whom and where it was situated. Once this was completed DPW could begin the process of what to do with the various assets, in particular the buildings that were of no use to the government or that did not fall within the DPW’s mandate. In many instances, moveable property such as furniture was stored at a cost. In order to support this process of disposal of state property a Disposal Policy was being drafted and would soon be tabled.

Investments were also made into refurbishment of Land Ports of Entry, Embassy buildings and a technical school in Uganda opened by President Zuma. This was a flagship project, the first of its kind in Africa and it was hoped that through such projects South Africa could grow its footprint in international relations.

The Minister hoped that by establishing the Property Management Trading Entity the DPW would finally remove the uncertainties about responsibilities for government buildings and upkeep.

He reiterated that there had been great improvements in the DPW’s financial systems, with significant strides being made with the debtors’ book and revenue management. He thanked the Chief Financial Officer for her interventions to bring about the various improvements, and to enable reduction of the DPW overdraft.

The Minister expressed DPW’s intention to achieve an unqualified audit report. He stated that the Special Investigating Unit (SIU) had been asked to assist to clean up any hidden matters that compromised the DPW’s vision to reshape, review and rejuvenate.
 
Mr Sam Vukela, Acting Director General, DPW, continued to present some key details. He referred to slide 16 and stated that the Community Work Programme (CWP) had been transferred to the Department of Cooperative Governance and Traditional Affairs (COGTA).

Ms Cathy Motsisi, Chief Financial Officer, DPW, tabled and explained the financial slides in the presentation (see attached document).

Discussion
Ms L Mabija (ANC, Limpopo) asked what determined the differences in allocations to respective provinces as reflected on slide 19. As an example, she quoted the amounts of R13,7 million to Limpopo and R268,8 million to the Western Cape.

Ms Motsisi explained that provincial allocations were determined after analysis of the asset register and therefore closely linked to the property assets located in a province. 

Ms Majiba acknowledged the benefits of the Extended Public Works Programme (EPWP) but bemoaned the fact that that the short term nature of the jobs created rendered the beneficiaries jobless once the term of the EPWP job had ended. She asked whether the Department had any plans to change this scenario.

Mr Stanley Henderson, Acting Deputy Director-General: EPWP, DPW, responded that there were both short and longer term opportunities within the EPWP programme and they ranged from jobs lasting for four months to two years across various sectors. Many opportunities were project-based, so job opportunities would cease once the project had ended. In some sectors, like the social sector, longer term opportunities were available. With regard to the sustainability of the jobs, he stressed the importance of understanding the role of the EPWP programme. He emphasised that although the jobs themselves were not sustainable, there were nonetheless elements of sustainability built in. EPWP was intended not to displace existing jobs, so the programme was geared to draw the unemployed into the world of work, where they could be given the opportunity to acquire skills that could prepare them for more permanent jobs elsewhere. DPW had a tracking system to track learners in these programmes, based on Learner Identity Numbers. This system could report on how many learners were in a programme, how many had exited early or completed a programme, and even how many had been shifted between programmes. DPW could not directly assist with absorption into the formal labour market but numerous examples existed of trainees who had become self-employed contractors when spurred on by the skills they had gained on EPWP programmes.

Ms M Themba (ANC, Mpumalanga) wanted more details about the provinces’ involvement in the Community Work Programme (CWP).

Mr Henderson reminded Members that the Community Work Programme was a Presidential programme started a while back with four pilots. Since then these pilots had been formalised and it was now under the Department of Cooperative Governance and Traditional Affairs (COGTA). The CWP aimed to mobilise communities to get involved in various projects to address their needs. Projects could involve physical infrastructural provision and maintenance, social sector issues, or environmental sustainability issues. Communities should work through COGTA to get involved.

Ms Majiba said it would be helpful if Members could receive relevant documents well in advance, in order to prepare better for these meetings. For instance, the many acronyms used throughout documents presented huge challenges.

Ms Themba echoed her sentiments regarding the liberal use of acronyms.

The Acting Chairperson suggested that acronyms be explained by posting of footnotes on each page.

Mr Lucky Mochalibane, Acting Deputy Director General: Corporate Services, DPW, apologised, but referred Members to the Glossary in the Strategic Plan, where most of the acronyms were explained.

Mr H Groenewald (DA, North West) remained unsure about precise accountability for government buildings asking if this fell to the provincial or national departments. He said that in his province some buildings were incomplete, and the contractor had gone missing. No one in his province wanted to take responsibility.

Ms Majiba complained that in her province, Limpopo, there were many buildings that once were beautiful but now had become ugly through disrepair and vandalism. She stressed that such scenes reflected negatively on the new Cabinet and administration. In her opinion more attention seemed to go towards the upkeep of buildings in the larger cities, like Cape Town.

The Minister explained in detail why some buildings were in bad shape. He said that historical events meant that many properties were now the responsibility of provinces, who wished to hand that back to the national departments. After the dissolution of the former homelands and the creation of the new provinces, there was haste by some provinces to claim as many properties as they could, without regard for the financial and managerial implications, with the result that, with the benefit of hindsight, they now wished national government to take back these buildings. A lack of capacity also resulted in many of these buildings falling into disrepair. The situation was exacerbated by maintenance of some buildings not forming part of the core mandate of the provinces. At the last Cabinet Lekgotla, it was decided that the Minister of Finance, the Minister of Public Works and the Minister of Rural Development and Land Reform should form an Inter-Ministerial task team to look at these grey areas. This task team would also comprise the Premiers, relevant MECs, the Auditor-General as well as the Accountant-General. The task team would look at the properties referred to by Members, as well as other buildings, and determine finally who was deemed the owner and who was responsible for the buildings. He added that although a property may belong to a province, the province might dispute that maintenance of that building fell within its core mandate. The task team then needed to assist the province. The Disposal Policy would clearly outline what was to happen with such a building. Either it may be disposed of and the monies transferred to the fiscus, or a decision could be taken that the building was still part of the core mandate, in which case funds would need to be identified to repair the building to serve its purpose. It may be that some buildings, like royal houses and traditional palaces, were handed to COGTA, whilst others devolved to the provinces. These uncertainties could all be addressed in a cooperative manner when the Select Committee visited the Department.

Mr Groenewald believed every province should have an asset register. He also asked whether the Department had a plan in place to coordinate and oversee such asset registers. It was important for the public to know the value of government buildings and how much was spent on such buildings.

Ms Sasa Subban, Acting Deputy Director General: Asset Management and Investments, DPW, explained that in both provinces and national departments there were no standard systems in place to manage asset registers. Some were using the Property Management Information System whist others used the Access Database. However, the DPW was close to establishing a common platform across government departments.  

Mr Groenewald asked how many training centres existed nationally. He had a problem with many people being trained without sustainable job prospects afterwards.

The Chairperson asked if there was a record of all the learners who passed through the EPWP programmes and how Members could assist such learners.

Mr Mochalibane mentioned that the issue of training came under severe scrutiny in government recently, when the issue of training was discussed extensively. Even the Government Management Development Agency entrusted with training within government acknowledged the importance of training. The DPW’s training plan was also in place. Funding remained a huge challenge. However, DPW was forging ahead with a model to expedite training within the Department. He shared with members some of the key initiatives. There was a bursary scheme for students, from within as well as outside of the DPW, with a focus on core areas in the Department, such as property management and professional services like architecture, and engineering. The Department had accordingly established a close working relationship with a number of tertiary institutions that offered these courses. A further initiative was that of internships and learnerships, where the Department had taken in interns with the necessary technical background who could gain experiential training as well as further development. Nearly 100 learners were currently enrolled in learnerships with the DPW in various artisan fields. Furthermore, the Council for the Built Environment (CBE) engaged daily with various stakeholders about the training of people as well as the availability of skills. The DPW was also engaged in efforts to help resuscitate the workshops that formally helped train artisans. Mr Mochalibane could not provide information as to the availability or the number of training centres nationally but could confirm that there was ongoing cooperation with the EPWP and the FET colleges on the issue of skills provision.

Mr Groenewald raised serious concerns about the dolomite areas like Carletonville and Khutsong, and asked how the Department was involved in the assessment of the ground, and the re-location of the thousands of people.

Referring to slide 21, Mr Groenewald asked what the budget was for the Human Resources Management Plan in the Khutsong area.

Mr Rachad Samuel, Acting Chief Operating Officer, DPW, said he assumed Mr Groenewald was referring to the movement of the 20 000 people affected by the dolomitic risks. He explained that the DPW was responsible for the risk analysis and then advised the relevant parties, but that the responsibility to move the people would be that of the Department of Human Settlements. Overall, in relation to buildings, he stressed that responsibility would usually lie with the custodian. Where DPW was the custodian it would liaise with the client department.

Mr Groenewald was concerned about the monitoring of funds allocated to provinces.

Ms Themba asked when the Incentive Grant would be implemented.

The Acting Chairperson asked how the funds allocated to provinces and municipalities were monitored, and what capacities were devolved to provinces and municipalities in the event of unused funds.

Ms Motsisi explained that funds were allocated by way of conditional grants and that both provinces and municipalities were required to submit quarterly reports. In addition, reports from National Treasury also reflected how funds were employed by provinces and municipalities. The EPWP grant scheme had a full Monitoring and Evaluation Unit that looked at how money was spent. It also monitored the targets set for these provinces and municipalities. Monies were only released upon the recipient successfully meeting agreed targets. The Department also had a fraud prevention unit to deal with malpractices.  

Mr Samuel added that funds were not directly transferred to provinces but were rather given to DPW’s regional offices. A management plan, supported by various professional business systems, was in place to both manage and monitor all transfers. The Public Finance Management Act (PFMA) regulated the environment under which the DPW operated.

Mr Groenewald mentioned a police station in Carletonville, which was built at great expense, only subsequently to be left unoccupied and vandalised. This building lay in a dolomite area. He asked what was happening there.

Mr Samuel replied that the police station was in a dolomitic area and that the building was declared unsafe. He said that there would be a plan in place to look at alternative sites as well as the demolition of the building. He would revert once he had the full details.

Mr Peter Chiapasco, Acting Deputy Director-General: Inner City Regeneration, Project Management & Professional Services, DPW, said that dolomite was an issue of national concern and that it was very dispersed across the country. The most important role player was the Department of Mineral Resources through its agency, the Council for Geosciences. There was currently a Bill that was to amend the Council for Geosciences Act, in order that better control could be exercised over developments, to avoid cases like Khutsong. This would ensure that both the public and private sector were well aware of their responsibilities before beginning a project. He noted that DPW was establishing its own system to identify dolomitic areas under its own land. In fact, the DPW had built up such a vast body of expertise in this regard that it was regularly consulted for advice from both the public and private sectors.

Mr Chiapasco said that he had just received an SMS about the Carletonville Police Station, reporting that the cell block had a sinkhole underneath it. The problem had been addressed and a new cell block was currently being planned by the Mmbatho regional office.

Ms Themba said she was deeply concerned that many of the Department’s top officials were in acting capacities and asked when this would be addressed.

The Minister responded that the “acting” status of some employees was a deliberate move by the DPW to expose, share and empower managers from more junior levels. The Minister reported that the posts of Director General, Chief Operating Officer and Deputy Director General were still vacant and that Cabinet would finalise appointments within a week or two. Short listing for the post of Chief Operating Officer was already under way.

Ms Themba asked the Department if it had a specific gender focus and whether it had a breakdown of figures across all job levels. She requested more information of the uptake of women and the disabled in the Department’s programmes.

Mr Mochalibane reported that the DPW had a well staffed Gender Unit, headed by a Chief Director, and supported by two or three Directors. He also referred members to Part D of the Strategic Plan for a complete breakdown of the gender distribution within the DPW. There were clear plans in place and this gender unit was constantly busy streamlining ways to implement policy to address gender equity. DPW was the only department that recently received an award for gender transformation. There were still challenges in meeting disability transformational targets, hampered by the fact that the DPW was competing with other departments.

Ms Themba asked for a more detailed breakdown of the transformational and developmental achievements of the Department. She asked to see figures for all job levels, as well as how staff from the lowest levels had progressed through the ranks.

Ms Majiba used the gender enquiry of Ms Themba as an example of the lack of action. She mentioned that this question was asked previously but no response was forthcoming. She urged officials to be honest and produce visible action.   

Ms Themba asked for statistics reflecting the buildings the national Department owned in each of the provinces. She emphasised that this Committee represented provinces and it was important for such presentations from national Departments to include reporting on the provincial picture as well.

Mr Rachad Samuel, Acting Chief Operating Officer, DPW, explained the value chain within the Department. The Head Office was responsible for strategic planning, conceptualisation and investment analysis. Execution, operations and disposal took place at regional offices with respect to national assets, with the main ones being Correctional Services, Police and the Justice Department. Provincial assets were mainly in the hands of provincial Departments of Public Works.

Ms Themba enquired whether the Department had a report on the accessibility levels of all its buildings.

Ms Subban replied that DPW had a listing of all the buildings under its custodianship that needed to be made more accessible. She added that a comprehensive audit was completed and that DPW was busy rolling out programmes in response to that. The audit showed that there were 22 buildings in planning, 114 buildings under construction, 38 buildings completed in the last financial year, and a further 38 new buildings were being planned depending on availability of budgets. The DPW also had a listing of all unutilised buildings under its custodianship, and a rehabilitation programme was in place, with progress dependent on availability of funds. She envisaged that over 100 buildings would be fully refurbished by 2014, again depending on budget.

The Acting Chairperson asked how far the Minister had progressed to reclaim the mandate as alluded to in his opening remarks.

The Minister replied that he would briefly explain the Department’s mandate again, given the fact that this Committee differed from the Portfolio Committee in terms of its oversight. A clause under Schedule Four of the Constitution clearly set out the difference in mandate between his and other departments. He used the Department of Human Settlements as an example of the concurrent functions that existed between province and national, within most departments. Funds were allocated via the national departments to the provinces. If a province had unused funds, these could be redeployed to another province. He emphasised that DPW’s transfers were different.

The Minister stated that another difference was that certain functions in the public works sphere, for example roads, were the exclusive domain of the province whilst others were a function for national alone. He stressed that certain questions asked by the Members covered functions mandated to provinces. It had taken him a while to get to grips with the mandate, and the concepts were not easy. He proposed that perhaps DPW should host the Committee for a whole day, and work through some key issues that needed more discussion. The Department would also benefit from being able to engage with the Select Committee on its specific mandate. Through cooperative efforts, many of the grey areas could be identified and hopefully cleared.

The Acting Chairperson referred to new malls, and bemoaned the fact that often no public transport was provided for shoppers coming from the townships.

Mr Samuel reminded Members that projects such as malls should have done an Environmental Impact Assessment, which included aspects such as transport services to and from the mall, and if this was not addressed, it meant that the work had not been properly done.

The Minister asked that if there was a particular mall with this problem, it should be referred to the Department. Reporting specific cases to the Department from time to time gave the DPW a sense of what was problematic on the ground.

The Chairperson asked whether the plan to develop new head offices was in anticipation of Parliament moving to Tshwane in the near future.

Mr Samuel responded that a Cabinet resolution in 1998 determined that all departments in Tshwane should be located in the CBD.  The resolution still stood and had its own challenges. He did not want to comment on Parliament moving to Pretoria. The reason for procuring buildings in Tshwane was to serve clients’ needs. The City of Tshwane was becoming extremely overcrowded and a review was needed soon. Any changes would be reported back to the Members.

The Chairperson asked why it was necessary to have a rehabilitation plan. He felt that the existence of an efficient maintenance plan would avoid sophisticated and costly rehabilitation plans.

Ms Subban appreciated the comment. The DPW had a Planned Maintenance Programme which worked well in certain areas and hoped eventually to extend this to each of the 75 000-plus government buildings. This was a long process. In the interim, DPW was dealing with matters on an ongoing basis as and when the technical team submitted the audits.

The Acting Chairperson asked for more details of the new Expropriation Act.

Ms Lydia Bici, Deputy Director General: Policy, DPW, explained that the current Expropriation Act dated back to 1975. The Act guided and regulated the expropriation of properties by expropriation authorities, which may be government or even State Owned Entities. Members would appreciate that the Act was outdated and not aligned with the Constitution. However, it detailed the process to be followed when an expropriation authority needed to expropriate. The current cause for conflict lay with compensation issues. The Act also allowed for the establishment of a Technical Board to assist with expropriation.

The Acting Chairperson asked what the differences were between Agrément South Africa (ASA) and the South African Bureau of Standards (SABS).

Mr Mandla Mabuza, Deputy Director General: Special Projects, DPW, responded that the SABS was a statutory body established by the Standards Act of 1945 and the Standards Act of 2008 (as amended). It had been established as an institution to promote and maintain standardisation, as well as provide quality and services. It took responsibility for testing and certifying products, looking after technical regulations and the promotion of design excellence. Although SABS was mandated to cater for certain sectors, the construction industry was not included under its mandate. Therefore, Agrément SA was created. This took responsibility for the certification of non-standardised material in the built environment, developed and certified alternative construction materials. Agrément SA was to the construction industry what the SABS was to the sectors mandated by its own legislation. Perhaps a debate was needed to clarify exactly where Agrément South Africa (ASA) should be located. It may not be within Public Works.

Ms Majiba commented that politicians come and go whilst officials stayed longer. She pleaded with DPW for more visible action and service delivery.

The Acting Chairperson echoed Ms Majiba’s sentiments and pleaded that officials not make these meetings a routine matter. He hoped that at the next meeting there would be positive reports on visible delivery. He reiterated that the issue of transport to malls seemed to indicate that some department in the value chain perhaps had not done its job properly.

The meeting was adjourned.