Ministerial briefing, New Prison Feasibility Studies & Department’s Annual Report 2005/06

CORRECTIONAL SERVICES PORTFOLIO COMMITTEE
22 May 2007
MINISTERIAL BRIEFING, NEW PRISON FEASIBILITY STUDIES & DEPARTMENT’S ANNUAL REPORT 2005/06: DEPARTMENT BRIEFINGS

Chairperson:  Mr D Bloem (ANC)

Documents handed out:
Management Response to Portfolio Committee Report DCS: Annual Report 2005/06

SUMMARY
The Minister of Correctional Services addressed the Committee on the priorities for the Department and the Committee. He informed the Committee that Mr Schabir Shaik had been returned to jail after consideration of the medical report. He set out the primary goals of the Department in building the new correctional centres, and stressed the aim of rehabilitation, which was not fully realised in the current structures. He urged that plans be approved so that the building could begin.

The new Commissioner of Correctional Services noted the focus and commitment of the Department and indicated the five focus areas in the building of new prisons. The Kimberley centre was on track and due for completion in November 2008. The transactional advisors had prepared reports on the cost, design and locations for the centres and indicated that there were a number of options. The information related to models only and therefore was not final. The Public Private Partnership option seemed to be the most feasible and the Departments of Correctional Services and Public Works, together with National Treasury had been involved in the studies. The Committee felt that it needed further time to study the bulky document and commented that this was not the first time that documents from the Department had not arrived in good time. Members asked for clarity on the term of the contracts, clarification on staff accommodation being included in the budgets, and the use of 12-person cells, the timing of the projects, the difference in costs related to the physical conditions affecting the building, and the land issues at Polokwane. The Committee supported the need to build the centres urgently but would study the documents before asking more questions.

The Department tabled its responses to various issues arising out of the 2005/06 Annual Report, as requested at an earlier meeting of the Committee. The briefing addressed matters in the audit report raised by the Auditor General, updates on accommodation, overcrowding, the report of the Jali Commission, and the information system audit. As at February the expenditure was at 81.6% of budget, due to the non-filling of vacant posts, and a backlog in care and development programmes. Permission was requested to roll over funds to the next financial year. The current status reports of prisons at Kimberley, Polokwane, Leeuwkop, Klerksdorp, Nigel, Allandale, East London and Port Shepstone was tabled. Members asked questions on the reasons for the qualified reports, the poor state of staff accommodation, the need to address salaries, the rescheduling of funds, the debate on Leeuwkop, and payment of officials who were suspended.

MINUTES
Introductory remarks
The Chairperson introduced the new Commissioner for the Department of Correctional Services Mr Vernie Petersen. He expressed his confidence in the Commissioner and that he was sure that he would take the department far.

The Chairperson reminded the Committee of the 6 March meeting, and that it had been decided that another meeting would be scheduled to discuss the issues raised by the Auditor-General. The Committee must keep a check on the spending patterns of the Department, and to this end there had been 15 meetings with the Minister, Deputy Minister, Department of Correctional Services (DCS), Department of Public Works (DPW), National Treasury (NT) and other interested parties since 2005. The matter of building prisons was one of the key issues yet to date there had been no clarification on the way forward. It was his view that the Committee and the Department should be cautious, should have excellent reasons for building any prisons, and then not build the old style of prisons but rather rehabilitation centres. The present prisons were not designed for and could not rehabilitate people, although this was the core function for the Department. Those awaiting trials should not be in prisons.

Hon Minister Ngconde Balfour (Minister of Correctional Services) thanked the Committee members for the way they handled the budget vote. They had moved a step closer to their goal achievement. He also realised that they had to work with DPW. He appreciated the foundation laid by the Chairperson in his opening remarks.

The Minister added that after reading the medical report from a doctor in Kwazulu-Natal, he had order that Mr Schabir Shaik be returned to jail. The report from the doctor would remain confidential because it would be unethical to release its contents. He stated that there was no preferential treatment.

The Minister mentioned the new structures and confirmed that the primary purpose behind the Department was that of rehabilitation. Department of Public Works and National Treasury had been given the design and between them and with consultation from DCS the structures would be built so that DCS could concentrate on its core job. He was pleased to have had had sight of the report to be discussed today and would like to urge DPW and NT to get the project done. He confirmed that the current quality of structures did not lead to rehabilitation, and this could not happen in prisons like Pollsmoor. The centres needed to be of good quality that suited the unit management system, matters had to be rationalised properly and it must be understood that building several centres would not solve the problem of overcrowding. South African resources should not be wasted on building of the wrong type of prisons, but on housing and health. NT stated that they had funds available and therefore the needs should be addressed and centres started.

The Chairperson concurred that it was the correct decision to replace Mr Shaik in prison. This decision was based on medical reports and not on outside opinion. He fully supported the Minister and the fact that he had illustrated that there was no preferential treatment.

Department of Correctional Services (DCS): Briefing
Mr Vernie Petersen, Commissioner of Correctional Services, noted his gratitude for the words of encouragement. DCS was a complex organisation with many challenges. However, it worked within the context of an integrated government and he hoped that it would become integral to their engagement. The key to approaching these challenges would be to build partnerships, and this would also serve to improve the conditions within the Department. It was common knowledge that DCS was faced with competing resources and choices had had to be made on the model of procurement. The DCS understood the dilemma and therefore the debate was much broader. DCS remained quite serious about building centres.  In essence infrastructural development programmes could only be defined in multi-year stages and even though there might be some anxiety DCS had committed itself to the move forward. It wanted results that had been committed to in the White Paper and placed more focus on them. Good governance issues would have to be reported on in relation to the findings of the Auditor-General.

In regard to building of prisons DCS would be focusing largely on five areas. The viability study included issues such as environment analysis, traffic, and health. The study was still in progress. The Committee was aware that in order to build confidence several issues had to be clarified. One of them was the centre in Kimberley, and he would like to confirm that this was on track and due for completion in November 2008. Progress was being made in the development of issues around planned maintenance. DCS would share in the process with the Committee.

Transactional Advisors Report on new centres
The Transactional advisors for the new centres circulated a set of confidential documents to the Committee, and indicated that the cost, design and location for the centres were included. Several options were given in the documents. Recommendations on the preferred options were given.

Mr Petersen stated that it was always difficult to measure how much information should be provided at this stage. He emphasised that it was a model only, and that he had a responsibility not to allow false information to be released to the media.

L Van Heerden, Department of Public Works, stated that DPW had been involved in the Public Private Partnership (PPP) investigation from the start. They were in agreement that this was the most feasible option to support, as it had fully integrated all the maintenance of the facilities. Maintenance programmes had been scheduled and would be monitored. DPW had finished the first dilapidation survey on Bloemfontein, which showed that the facility had been well maintained according to the provisions in the contract.

Mr Jabu Moleketi, Deputy Minister for Finance, indicated that National Treasury viewed this as a major priority. NT and DCS were viewed as partners. He added that the advisors to the department were objective and independent. Their analysis stated that there was one particular procurement option that gave best value for money, and indicated that for the same costs a better service would have been received. A particular recommendation was put forward, which was a model based on certain figure assumptions. Whichever procurement route was chosen there needed to be a competitive bidding process, because only then would the importance be realised.

The Minister stated that the three departments were here and the matter had been raised in the budget vote. The decision had to made so that the process could begin. As Minister, he had come under some pressure. In the State of the Nation Address the President stated that there needed to be expansion of the infrastructure of Correctional Services. The recommendations were clear, regarding the best route to go, and now this should be followed as necessary.

Discussion
The Chairperson mentioned that that this was a very bulky document that had been received only on the morning of the meeting. It would only be fair to give the Committee time to scrutinise the documents and come to the same conclusions. The Committee was considered the guardian of the budget for the Department and did not want to make the same mistakes as with the two other prisons. Members had to make a decision based on fact so that every stakeholder could be held accountable.

The Chairperson indicated that the Committee would need some clarity. He noted that the budgets for Mangaung and Louis Trichardt were R3.1 million each. He asked how much had government spent from 1998 to the present for those two prisons, and the remaining prisons.

Ms W Ngwenya (ANC) stated that she required a clarification on the explanation of the recommendations.

Mr N Fihla (ANC) stated that he did not understand the long-term contract issue and suggested that perhaps five years would be more appropriate.

Mr Moleketi stated the 25-years provision was established under the Correctional Services Act. If the private sector were guaranteed business for a longer period they would have an incentive to be more flexible in the contract. The government would have to spend the money anyway and this looked at the best way to obtain value for money.

Mr J Selfe (DA) stated that this was the first time the Committee had ever seen a comparison. Many costs were included that had not previously been brought into account. He required clarification regarding staff accommodation as it had been thought that the Department was moving away from this area of staff condition.

Mr Petersen replied that DCS regarded staff accommodation as unsustainable but minimum requirements would have to be added as a factor, as part of the assumptions made for the model. Staff accommodation remained the subject of negotiations with the unions, and was something that the Department may have to retain.

Mr Selfe inquired on the move from one or two person cells to 12 person cells.

Mr Stoltz, DCS, answered that there had been discussion on this issue, and DCS had tried to accommodate more offenders in one cell. DCS had used a similar design in Mangaung and it would basically attain more value for money.

Mr Selfe understood why economies were grouped according to scale, but asked for some clarity on groupings mentioned in the document for Western Cape and Gauteng.

Mr Stoltz stated that grouping was a suggestion and not a final decision. DCS would give an indication on the type of grouping and how the prisons would be grouped.

The Chairperson pointed to some of the costs from 2003 onwards. He wanted to know what was the cost of the centre in Kimberley to date.

Mr Motseke stated that DCS did have a general figure but that it required confirmation. That figure was R862million, which included both construction and security.

Mr Petersen gave a rough estimate, still to be confirmed, for Kimberley and noted the figure for the successful tender. He indicated that the construction period was scheduled for 24 months and that breakdowns were available over that period. These figures excluded other operational costs.

Mr Motseke commented on two prisons and said that a study was produced, in collaboration with the DPW  on 12 November 2002. The study had answered all questions.

Mr Stoltz commented on the phasing of the projects and stated that it would be better to start all five projects simultaneously.

Mr Petersen confirmed the figure for Kimberley as R862 million.

Ms Ngwenya stated that this was the third time the Committee had needed documents before the meeting but had not received them. She agreed with the Chairperson that the Committee needed to have a chance to peruse, then discuss the report. She stated that the Committee still needed a detailed answer on the 25-year contract.

Mr Xolo asked why the single unitary payments differed from centre to centre.

Mr Stoltz responded that although each centre would be designed in the same way the building conditions would be different and that would impact upon the cost.

Mr B Tolo (ANC) stated that the announcement had been made that there had been no land to build a facility in Polokwane. He remembered that he had told DCS that there was land available. He suggested that DCS take a look at the land that was available.

The Minister stressed his apologies for late documents. He clarified that fixing a contract period over 25 years added incentives during the negotiations, and the private sector tended to be more flexible if they realised that the government would be happy to commit to being a continued source of business over an extended period. The issues of land and its attainment was in the public works arena. DCS would identify the place and hand over the information to DPW, who would then have to deal with whatever other issues might arise. He also stated that transactional advisors only proposed grouping of the facilities. Feasibility studies still needed to be done, and the building of the centres would then only follow. However, inspecting the area chosen would be the responsibility of the DPW.

The Chairperson stated that the centres had to be built urgently and that the Committee would support these endeavours.

The Minister stated that for the past two weeks he had been travelling to each of the branches of all of the provinces and had spread the message that the practice of qualified reports could not continue. He had insisted that the right people be hired for the right positions. The only way to improve audit reports was for DCS and all its divisions to comply with the recommendations that had been suggested

The Chairperson thanked the Minister and the Department for their commitment. He also stated that if sensitive information were to come before the Committee, it would then have a closed meeting, while ensuring that all relevant parties were included.

Department of Correctional Services Management Response to Portfolio Committee on issues raised in 2005/05 Annual Report
Ms Nandi Mareka, Deputy Commissioner: Financial & Management, DCS presented the report- back to the Committee as stipulated in the previous meeting. The report covered the progress on the action plan on the audit qualifications and other compliance matters, the current state of expenditure, the formulation of targets in the strategic plan, project performance, vetting of officials, management of HIV/AIDS and construction of new correctional centres. Full details under each area were included in the presentation document.(see attached document)

The report dealt with the public private partnerships, receivables, asset management, audit management, medical expenditure, housing loan payments, and internal controls. These covered the detailed areas of the Basic Accounting System and PERSAL interface, journals, outstanding issues, suspensions, performance agreements, budgets, vacancies, the vehicle fleet and accruals, all of which had been matters raised by the Auditor General. An update was included on accommodation, overcrowding, the report of the Jali Commission, and the information system audit. It was indicated that as at February the expenditure was at 81.6% of budget, lower than the ideal, but that this was due to the non filling of vacant posts, and that there remained 1 718 vacancies at end of February. Low expenditure in care and development programmes resulted from a backlog. Permission would be sought to roll over funds to the next financial year. There had been improved alignment of the planning processes and the strategic plans up to 2011 had been finalised. A table of the current status of various projects was presented. Vetting of officials and management of HIV and Aids was described

Ms Mareka stated that the construction for the Kimberley New Correctional Centre (NCC) started on 14 November 2006 and completion would be November 2008. The Polokwane NCC has been suspended due to delayed negotiations on land issue. A viability study was ongoing on the  Leeuwkop NCC. The feasibility studies by the Transaction Advisor for Klerksdorp; Nigel; Allandale; East London and Port Shepstone NCCs were received during April 2007.

Discussion
The Commissioner stated that the two reports had been prepared separately. There was just one small correction, and that was that the certification of the amending legislation was en route from DCS to the Speaker and Chairperson of NCOP.

Ms L Chikunga (ANC) asked why DCS continued to receive qualified reports, yet was able to give an explanation each time. Several departments were getting qualified reports because of bad systems. She wanted to know what exactly were the reasons for the qualified reports and if there were systems in place to undertake proper monitoring.

The Commissioner stated that the problem around the qualification was multifaceted. Part  related to the fact that DCS had been involved in the process of transformation, which created uncertainty. DCS was a huge nationally-structured department and unlike other departments had grown from 32 000 to 42 000 staff. DCS had started to deal with this in many different ways. It had recognised that sufficient training was important, as one of the weaknesses lay in not having sufficient junior and supervisory staff. Systems were difficult to implement as technology was constantly changing. DCS had made progress in some areas but had regrettably neglected other areas.

Mr Tolo stated that it seemed as if the Department took more care of the inmates than of the officials. He stated that the state of staff accommodation was quite distressing. He noted that very little had been said about salary raises for the staff.

On this issue, the Chairperson responded that it was not proper to say that the Committee and Department were more concerned with inmates than staff. A speech the past Friday had specifically informed the Department of the living arrangements concerning staff. On the issue of the salaries, the Committee would intervene and plead with the Commissioner to address this issue. Negotiations were going on but this was a sensitive issue and the Committee should give the negotiations a chance. He did not think it would be wise for the Commissioner to respond to these issues now.

The Commissioner responded that DCS had shared some of their plans with the Committee and should receive acknowledgement for some of the efforts made to raise salaries. There had been consistent attempts to improve salary levels. In regard to accommodation, the Department was only able to provide for 35% of the accommodation and had encouraged officials to obtain their own housing. It was concerned when staff insisted on living in conditions that were not healthy to them.

Mr Tolo was concerned that some of the studies were still outstanding. He had been told that one of the studies had highlighted the problem of indigenous frogs in the area, but he still did not understand what that had to do with the building of the prisons.

Mr Tolo was also worried that a figure of R1.2 billion remained unaccounted for, and pointed out that this could have been put to good effect .

The Commissioner responded that the money was re-scheduled and that as soon as the Department was ready and able to spend it, it would be reallocated to DCS.

Ms Ngwenya stated that she was satisfied with the report that had included everything that had been asked for.

Ms Z Nawa (ANC) stated that she was not satisfied with the Leeuwkop issue, and the land matter. The DCS seemed to have an ongoing problem of DPW not sending their billing on time, and she asked if it had been resolved.

The Commissioner responded that the debate on Leeuwkop had shifted slightly and that it had moved in the direction of a viability study of the building of an entirely new facility at Leeuwkop. This study would address all issues.

Ms Nawa was pleased to note that there was now a suspension register to give an update of those who were under disciplinary action, but she hoped that they were not being paid.

The Commissioner replied that unfortunately labour legislation stated that the employee only stopped receiving salary once he or she had been dismissed.

The Chairperson indicated that the Committee had returned to many of the same issues raised in the previous year. He indicated however that this had been a well prepared document that clearly highlighted that work had been done in Correctional Services. There was an ongoing need for the DCS and the Committee and other stakeholders to work together to address collective problems. 

The meeting was adjourned.