The Standing Committee on
Appropriations, having undertaken an oversight visit to the
1. Introduction
In the
2009/10 Division of Revenue Act (DORA), the Expanded Public Works Incentive
Grant to provinces and municipalities was introduced with the aim of creating
labour-intensive employment opportunities and skills development in line with
the Expanded Public Works Programme (EPWP) guidelines. In its observations
during public hearings, the Standing Committee on Appropriations noted that the
Province of KwaZulu-Natal (KZN) had been identified as leading province in
implementing this programme. Notably, the EPWP in KZN is located under the
Department of Transport and not under the Department of Public Works, as is the
case in other provinces. Appropriate spending on the EPWP incentive grant, both by
provinces and municipalities, is a matter that the Committee considers crucial.
This view emanates from the fact that the creation of employment opportunities
is one of the key priorities of the current government. Moreover, the President
of the
Against this background, the
Committee undertook a visit to the
Various sector departments
were invited to be part of this visit. These included: eight provincial
departments of Public Works, the National Department of Public Works,
provincial departments of Transport and Public Works in KZN as well as the
National Treasury.
2. Provincial
Department of Transport of
The Provincial Department of
Transport of KwaZulu-Natal (DoT) reported that one of the measures it used to
drive spending on the grant was that it ensured that all contractors it dealt
with for its projects made use of labour-intensive methods. It added that its
agreements with the respective contractors took this into account. The labour-intensity
element in its projects was thus enforced. The DoT reported that the focus of
its efforts in implementing the programme was on Programme 2: Development and Maintenance
of Road Infrastructure. Approximately 40 000 full-time equivalents (FTEs) jobs were
created by the DoT.
The DoT had various institutional
arrangements in place to ensure a smooth running of the programme. These included:
the Provincial Steering Committee (PSC) which is convened by the DOT on a
quarterly basis; a sector coordinating committee convened by sector departments;
and a monitoring and evaluating provincial structure convened by the DOT.
The Provincial Steering Committee (PSC)
was a platform for sharing and raising issues regarding the implementation of
the EPWP. All sector departments were represented in this body by senior
managers who had decision-making powers. It was reported that the non-state
sector had recently joined the PSC as a stakeholder that implemented that the
EPWP within Non-Governmental Organisations (NGOs) and Non-Profit Organisations
(NPOs).
As the coordinating department, the DoT
established a monitoring and evaluation structure. Its role was that of
consolidating and verifying reports from the various sector departments and
then submitting them to the National Department of Public Works (NDPW). The
exercise was noted to be time-consuming but necessary for the DoT to verify
figures and identify errors. The Committee was informed that the structure met
at the start of every quarter.
The DoT provided support to public
bodies in the following manner:
The following challenges were
reported in relation to the implementation of the programme:
A further challenge reported by the DoT
was that once it submitted its quarterly reports, the province had to wait to
be informed about how much it would get on the EPWP and further wait for the
actual transfers. This, in turn, delayed the implementation (and spending) on projects.
3. Zibambele
Project
The Zibambele Project was a labour-intensive
road maintenance programme which was initiated by the DoT. A total of 40 000
contractors had been provided with employment opportunities as at July 2010. The
programme started before the inception of the EPWP Phase 1. It was reported
that beneficiaries on the programme earned R470 per month. Some participants
had been part of the programme for longer than two years. Despite the fact that
there had been replacements since the inception of the programme, it was
reported that there was no clearly defined exit strategy and some participants had
stayed on the programme for longer than two years. The DoT explained that,
since the Zibambele programme had been in existence prior to the inception of
the EPWP, its beneficiaries did not have to exit the programme after 24 months
as was the case with the EPWP. There was also no age restriction for
participants.
Participants received training at
the point of entry into the programme. This training included instruction on
safety-related issues. The DoT reported that participants were given protective
clothing such as boots and gloves, and tools such as shovels, hacksaws, and so
forth. The Zibambele Project was targeting women deliberately, but with the
changes in the social fibre, men were being incorporated into the programme as
well.
The Committee was concerned that
generally, across most provinces, EPWP budgets were shrinking. If the budgets
were not growing, this would reduce the number of decent work opportunities that
were created through the EPWP. Questions were raised as to whether there were
any efforts by the National Treasury to assist the under-performing provinces
in this regard, with a view to ensuring that EPWP’s budgets grew.
Furthermore, the Committee was
interested in the expenditure of what had already been allocated to the
provinces. It noted that, before questions could be raised about the shrinking
budgets, due regard needed to be given to existing expenditure patterns by the
provinces and whether they warranted increased budgets.
It was reported that the
The Committee noted that, in the
past, the Division of Revenue Act (DORA) had a clause that compelled
departments to spend, at least, 4 per cent of their allocations for capacity
building. This clause had since been removed.
The grants aimed at building capacity were not being adequately utilised
by the departments, e.g. Financial Management Grant. The consequence of this
was that there were capacity constraints across departments and provinces.
Inevitably, this has affected service delivery. Furthermore, the Committee was
of the view that if it was left to the respective provinces to decide on whether
infrastructure projects should be machine or labour intensive, the EPWP would
not achieve its objectives. Labour-intensive
projects were not necessarily sub-standard.
Although the
The Committee was concerned that the
Provincial Department of Public Works had a 1 per cent achievement in placing
disabled persons in work opportunities. In its view, disabled people also
needed employment opportunities. Appropriate and creative means needed to be
applied to accommodate them.
It was the view of the Committee
that there was a lack of co-ordination and consistency in implementing the EPWP
among the different provinces. However, other provinces could learn from the
practice observed in the
It was reported that seven days
after the creation of FTEs, the provinces had to submit reports to the NDPW.
This information had to be verified before any money could be disbursed. The National
Treasury reported that the NDPW had funding to capacitate itself to implement
the EPWP effectively.
It was reported that, for rural municipalities,
the bar has been set lower and therefore expected expenditure outcomes were at
the same level. The data on the performance of municipalities in this respect could
be made available by the National Treasury.
One of the concerns was that the budget
was not fixed. While the department could qualify for a given amount, it could
be that the actual transfer of the money occurs outside of the financial year
in question. This made budgeting difficult. The Committee noted that
predictability needed to be worked into the processes of the incentive grant.
The cost-cutting measures in the
province were not from the National Treasury but from the Provincial Treasury.
The Treasury had identified areas where expenses needed to be reduced not only
within the public works but in other areas as well. This was in October 2009
and ended on 31 March 2010. It was reported that the instruction was no longer
in place. Projects that were supposed to
proceed to construction were put on hold and resumed in April 2010. EPWP
targets were affected by these developments.
The National Treasury and the Committee
had a responsibility to ensure that appropriated funds were used effectively,
efficiently and economically. The recession was not an event but an occurrence
that the country will have to deal with over time. To this end, the Minister of
Finance had requested that all departments should indicate their areas of
savings. It could therefore not be correct that the essence of the information
carried in the Provincial Treasury circular had changed the need to be prudent
in dealing with finances.
The Chairperson thanked the Head of the
Department of Transport, Mr initial Hlabisa, for the presentation made to the
Committee and its guests. It was noted that the
The Committee visited the following
projects as part of the oversight visit:
The
The
The City
also implemented a project known as the Green Corridor which started in
September 2009. Its aim was to facilitate economic development in the uMngeni
valley from Drakensberg to
4. Sites and Projects
4.1 Site 1: P100 Ndwedwe Construction Site
The
Committee visited the African Renaissance Road Upgrading Programme (ARRUP).
This was a road construction site with 33 kilometers to be surfaced by the end
of the project. At the time of the visit, 16.08 km had been surfaced by
emerging contractors from the Vukuzakhe Programme. The road surfacing was
taking place in an agricultural area which meant that there was an extensive
use of the road by heavy vehicles such as trucks. A total of 1 379 job
opportunities had been created with 96 161 person days created. The Committee
was informed that 45 contracts had been awarded to emerging contractors ranging
between grade 1 and grade 6. It was
reported that the consultants responsible for the project met with the DoT on a
monthly basis.
Community
development projects implemented by the consultants included a total of 133
learnerships in construction and road works. Learners obtained drivers’ licences
and computer skills which they paid for themselves. Some of the emerging
service providers that trained the learners were Bafana Trading and Igagasi
Training. Participants in the learnership received a stipend of R1600 while doing
theory and R3200 when doing site experience. The learnership saw the
participants obtain National Qualification Framework (NQF) Level 4 after which
they could proceed to tertiary institutions if they so desired. It was reported
that the DoT provided bursaries for interested persons. The Consultants also
selected two top scholars from the two schools in the area and paid for their
schooling throughout high school. Furthermore, consultations had taken place
with the head masters of two schools to avail funding to scholars who wished to
pursue studies in engineering. Approximately eleven students had been taken
through tertiary education by the consultants.
Given the
frequency of heavy vehicles on the road in question, the consultants reported
that they had opted not to make use of paving as a way of surfacing the road. Construction
costs per kilometre were reported to be approximately R5.5 million on a flat
surface and approximately R12 million per kilometre on sloped surface. At the
time of the visit, approximately R404 million had been spent on the project.
The Committee was informed that of this amount, the consultant’s fee was capped
at 18 per cent.
On visiting
the site, the Committee interacted with the beneficiaries who were on
learnership at the construction site. This was a group of ten women who were to
graduate at the end of October 2010. While they were happy with the quality of
skill they were obtaining from the training, they reported that one of their
concerns was that they often worked far from their homes depending on where
they were placed for practical experience. Furthermore, they were of the view
that the stipend received was less than adequate.
The
Committee was concerned about the absence of toilet facilities where the
contractors were working. This, in the view of the Committee, had to do with
the dignity of the workers. It was reported that there were toilet facilities
at the site office which was about three kilometres from where the actual work
was taking place. According to officials who were on site, there was a vehicle
on site to shuttle the workers to and from the site office. The Committee was,
however, adamant that the vehicle could not go to the site office every time someone
needed to respond to nature. A further matter of concern was that the
contractor responsible for the road construction was not on site and could thus
not respond to the questions raised.
4.2 Site 2: Roadside Clean-up Operations
At this site,
the Committee met four women who worked along the road. These were Zibambele
women who were on the EPWP. Fundamentally, their duty was to ensure that there
were no papers along the road. It was reported that these women worked two days
per week from 09h00 to 16h00. They were supported by Filed Support Officers from
the department who supervised their work. Beneficiaries at the site lamented
that the stipend was not adequate. They further reported that exorbitant bank
charges were making the stipend even less. The Zibambele women were reported to
be participating in a saving scheme that had saved approximately R12 million at
the time of the visit.
The
Committee was concerned that none of the workers on site were wearing
protective clothing nor were they using the tools that the DoT had reportedly
issued them. A further concern was that there was no provision for toilet
facilities in the area for the workers.
4.3 Site 3:
The
The
Committee was informed that interaction with the communities was done through three
Community Liaison Officers (CLO) whose role was to report to the ward committee
on progress made at the hospital. The project was being implemented in line
with the guidelines of the EPWP and has created 397 job opportunities. Furthermore,
nine candidates from the FET’s and Durban University of Technology were
undergoing in-service training at this project.
Out of 34
contracts, a total of 13 had been completed at a cost of R270 million. It was
reported that local people employed on the project were paid an amount of R90
per day. Questions were raised on whether the amounts claimed by consultants as
labour costs were the same amount that eventually got paid to the workers. It
was the perception of the Committee that the real beneficiaries in the project
were the contractors.
The
Provincial Department of Public Works was requested to submit to the Committee
a detailed report on the number of beneficiaries in the project and the skills
and traits obtained during participation. The report was to provide a breakdown
of the 397 jobs created, outlining the areas they were in.
4.4 Site 4:
Mowleni is a
village situated in ward 9 of
A total of
96 jobs had been created by the project which was being implemented in
accordance with the EPWP guidelines. A total of three candidates, from the
Durban University of Technology and other FETs, were undergoing in-service
training at the school.
5. Findings
The
following findings have been identified by the Standing Committee on
Appropriations during its oversight visits to the above-mentioned sites in the
6. Recommendations
The Standing
Committee on Appropriations, having conducted an oversight visits to the
6.1 The Department
of Transport should coordinate regular engagements with the Provincial Department
of Public Works with the view to co-ordinating projects to avoid duplication
while ensuring consistency in the application of the Expanded Public Works Programme
guidelines.
6.2 The Department
of Transport should conduct regular visits to projects sites to ensure that
contractors were adhering to applicable legislation such as the Health and
Occupation Safety Act and that basic needs of workers were met as well as to
ensure that specifications were being followed.
6.3 The
National Treasury should investigate the extent to which bank charges could be
reduced for the EPWP beneficiaries and submit a report to Parliament within
three months after the adoption of this report by the House.
6.4 The Provincial
Department of Public Works should provide a detailed report on the
Report to be
considered.