Government Immovable Asset Management Bill: Department response to submissions
PUBLIC WORKS PORTFOLIO COMMITTEE
13 March 2007
GOVERNMENT IMMOVABLE ASSET MANAGEMENT
BILL: DEPARTMENT RESPONSE TO SUBMISSIONS
Chairperson: Mr F Bhengu (ANC)
Documents handed out:
Government Immovable Asset Management Bill
[B1-2006]
Department's response to public submissions on Government
Immovable Asset Management Bill: Part1, Part2 & Part3
SUMMARY
The Department briefed the Committee on its response to the public
hearings on the Government Immovable Asset Management Bill. The Department
had prepared a schedule setting out the submissions received
and its response to these, indicating why it accepted
or rejected the proposed amendment.
Members did not discuss the clauses in depth. They raised queries in relation
to the phasing in process, the public/private partnerships and the way in which
public entities would be dealt with. A further meeting would be held the
following week to clarify these issues and to give a more in-depth study on the
Bill.
MINUTES
Government Immovable Asset Management Bill (the Bill) [B1-2006]: Briefing by
the Department of Public Works
The Chairperson reminded the Committee that they would be required to
engage in discussion of the Bill clause by clause.
Mr ZingiNtsaluba, Acting Director General and CFO: Department of Public Works
(DPW) stated that the Department of Public Works (DPW) had noted the concerns
of the committee on the scope of the Bill. As a means of finding a practical
approach to responding to the submissions made on the Bill the Department had
therefore prepared a summary or audit trail, which would clarify the concerns
and responses. He noted further that DPW noted the concerns around the need to
work with the municipalities and local government and had engaged with the
Department of Provincial and Local Government (DPLG) to look into the matter.
The Chairperson commented that he was very pleased that the Department had
addressed the issue of the scope of the bill because the Systems Act was never
looked at previously and the committee was worried as to what the DPLG might
do. He asked when this process would take place.
Ms Lydia Bici, Deputy Director General, National Public Works Programme &
Policy, answered that
it would happen in a month’s time. All comments received had been incorporated.
Clause by Clause clarification
Clause 1: Definitions
”Acquire” and “Immovable Asset”:
Mr Buks Annandale, Director: Legal Services, DPW, presented the comments on the
definitions of "acquire" and "immovable asset" There had
been a proposal from Gauteng Provincial Department that the definition be
amended to distinguish immovable assets under the control of the state and
immovable property that was outside the control of the state. The Council for
the Built Environment,
the Doyle/Rivett Carnac Partnership and Lamacs Solutions had also
commented on the terms. Mr Annandale said that a new definition of
"custodianship" was now included to meet the concerns of the Gauteng
Department.
The Chairperson asked the Department why there was no uniformity with the
definitions. Some of the comments indicated that some of the concepts appeared
to be interchangeable.
Mr Andre Meyering, Director: Property Owner Activities, DPW, stated that
certain concepts of acquisition were not captured in the old laws that governed
national government. Some functions had been performed by common law. In later
legislation the acquisitions were specifically detailed, and hence there were
differences in terminology. The implementation remained the same.
Mr Annandale added that Samuels Consulting had said that it considered that
“immovable asset” was incorrectly defined and there should be changes. The DPW
set out that immovable assets included all building used by a department,
including specific functional buidings and infrastructure, land, with or
without structures, and rights such as servitugddes and other intangible
rights. The Department did not wish to further define the rights, as there was
a danger of erroneous exclusion..
Mr Meyering stated that as a means of informing the reader, the Department
would include a more detailed explanation in the guidelines, but this did not
necessarily have to be included in the legislation.
Ms C Ramotsamai (ANC) sought clarity on the infrastructure and non-
infrastructure assets and their classifications.
Mr Meyering said that they would be classified together. The principles of
drafting required the law to be concise but to ensure that something would not
be excluded because it had not been mentioned in a list. The Department had
therefore decided to opt for general classification, and this would be
explained in more detail in the guidelines.
Ms Ramotsamai noted that generalisations might be too wide and not have a focal
point.
”This Act”:
On the definition of "this Act" Mr Annandale reported that the
State Law Advisors had advised DPW to narrow the definition to regulations and
standards only. They believed that it should not be wider and could not include
management guidelines that did not have the power of legislation. Therefore the
definition was now limited to "any regulation or standard".
”User”:
The definition of "user" had been amended following comment from the
Gauteng Provincial Department, in order to align the definition with the
wording of Clause 6 (1)(ii). The words” hich it uses or intendes to use in
support of its own service delivery objectives” was inserted.
”Performance”
Mr Annandale stated that the Council for the Built Environment had suggested
that a definition of performance must be included. The Department did not
agree. The ordinary dictionary definition sould apply, and where the word
appeared in a specific context, that context was made clear by the surrounding
words.
”Best Use”
Doyle/Rivett-Carnac Partnership had suggested that there must be a
definition of “best use”. The Department felt that the principles set
out in Clause 5 already comprehensively dealt with the strategic approach, and
there was therefore no need to include a definition.
Clause 2: Application of Act and Clause 3: Objects of Act
Mr Annandale stated that the Council for the Built Environment had made a
comment that the Bill was read as excluding public entities and local spheres
of government, who were charged with service delivery. They suggested that if
immovable property management at this sphere were included, it would enhance
service delivery.
The DPW noted that in terms of Batho Pele all sphere of government were
responsible for service delivery, not only local government. Whilst it was true
that the scope of the Bill was limited to national and provincial government,
Cabinet had instructed that the prcinciples of sound immovable asset management
should be extended to all spheres of government in a phased approach. There was
not seen to be a need for an amendment.
Ms Ramotsamai agreed with the statement that all spheres of government were
involved in the service delivery, but stated that there was a perception that
this was not so on the ground. This was the reason for the concern.
Mr B Radebe (ANC) noted that the Council for Built Environment was a statutory
body. The issue of the Cabinet approval of the scope to national and provincial
government was important. The main question related to who would be ensuring that
service delivery took place. He agreed that there was a social need but there
was no link between the government and State-owned Enterprises (SOE). He
enquired how SOEs would make use of assets for the distribution of wealth or
development. He suggested that there should be a Clause that ensured that this
issue was referred to the local government. A clear line of responsibility
should be drawn so that it could be maintained.
Mr Ramotsamai agreed with Mr Radebe and argued that this was a means of ensuring
safety. She further suggested that there must be time frames put in place.
The Chairperson stated that the Committee also had a responsibility because
they would have to come up with the recommendations.
Mr Ntsaluba stated that the Department recognised the concerns of the Committee
on this matter. Earlier on the DPW had held a meeting with the DPLG. The
Departments had proposed that it could be possible to include wording along the
lines of: ” the Minister may, after due consultation,
and by notice in the Government Gazette, make certain or all of the provisions
applicable to all spheres of government.”.
Mr Annandale stated that since the Department had only come up with this idea
on that morning, as a possible means of addressing the concerns, the State Law
Advisors would still have to work on the clause and formulate a proper wording,
and also consider the practicality of the clause.
Clause 2: “public entities”
Mr Annandale stated that a comment had been raised by the Gauteng
Provincial Department that for the sake of clarity, the “public entities”
referred to in this section should be defined, by referring to the definition
in the Public Finance Management Act (PFMA). DPW was in agreement and had
therefore drawn up a new definition.
Mr Annandale stated that the Development Bank of South Africa had commented
that they believed there should be clarity in the Bill on the roads
administered by the National Roads Association, the airports administered by
the Airports Company and the dams to be transferred to the National Water
Resource Agency. The Department noted that these types of assets were not
directly owned or leased by the national or provincial government, and
therefore the Bill did not apply to them.
Mr N Gogotya (ANC) asked whether there was a specific reason why ACSA was
excluded from the Bill, and, if so, how the Bill would be framed in regard to
similar entities.
Mr Annandale replied that all the public entities were currently excluded from
the application of the Bill due to various reasons. Proper investigations would
be done on the pieces of legislation that applied to those institutions.
Mr Gogotya asked whether the amnesty moratorium would apply to public entities
under the terms of disposal in the meantime.
Mr Annandale replied that they would not.
Mr Mandala (Ministry) stated that institutions had their individual legislative
frameworks. They might use disposal for purposes of improving their balance
sheets, rather than for the purposes envisaged in the Bill.
A National Treasury representative needed clarity on the inclusion or exclusion
of Chapter 9 Institutions in the Bill, as she noted that there was no specific
reference to them.
Ms L Bici stated that Chapter 9 institutions were national government assets
and the provisions of this legislation should also apply to them. The normal
measures of management and application of the legislation to all would apply.
The Treasury representative also asked about the custodianship of foreign
assets, stating that this function seemed to reside with the Department of
Foreign Affairs, although the DPW was the Department which would influence and
work with this Bill. She asked who would take responsibility if the Department
of Foreign Affairs was not able to comply with the provisions of the Bill.
Mr Meyering replied that the Minister of Public Works, in consultation with the
Ministers of Finance and Public Service and Administration, would assign
custodianship. The issue of Foreign Affairs taking custodianship of foreign
assets abroad would be dealt with in similar terms. He also mentioned that
currently the Department of Safety and Security took limited custodianship of
certain assets, and the same principles would apply to this Department.
Mr Ntsaluba added that DPW would find a way of incorporating this into the
Bill.
The Chairperson commented that it seemed that this was still a grey area and
the Department should look further into the matter and come up with a clear
answer when it met with the Committee again the following Tuesday.
A member asked about specific assets. He enquired if they were not state assets
and if so, why they were not included.
Mr Meyering stated that the examples given were state assets. They were
effectively assigned to the South African Police Services (SAPS) but SAPS could
not dispose of those properties because they belonged to the Department.
Mr Blanche (DA) asked if this meant that SAPS were also responsible for houses
that their staff occupied.
Mr Ntsaluba stated that the Department was concerned with the functional
buildings, and houses were not functional buildings. The Department was in the
process of correcting or rectifying the problem raised.
Mr Radebe asked who was maintaining properties outside the country,
and asked where the Department of Foreign Affairs (DFA) would fit into the
whole picture.
Mr Ntsaluba stated that DFA were asset managers and the DPW were the project
managers. However, this situation was in the process of being reversed.
Mr Maduma (ANC) asked about the issue of traditional assets, which had been
raised at a previous meeting. The Department had not replied how the process
would unfold and he asked for clarity now.
Mr Ntsaluba responded that there was a Communal Land Act already in place. The
Department would have to ensure that the various sets of legislation did
complement each other.
Clause 4
Mr Annandale stated that the Gauteng Provincial Department had said that it
seemed anomalous that a provincial department could acquire and dispose of land
but not manage it. The DPW felt that this was a valid comment and included the
word “manage” after the word “acquire”
The Provincial Department had also commented that the language used might be
inconsistent with the definition of “immovable asset”. This concern had already
been addressed under the revised definitions.
The Development Bank had suggested that there should perhaps be a requirement
for users and custodians to enter into an agreement for setting out the
responsibilities. The DPW indicated that this was intended, but it would be
dealt with under the Regulations. .
Clause 5: Principles of Immovable Asset Management
Mr Annandale said that the Gauteng Provincial Department had suggested that
principles should be developed in consultation with provincial governments, and
that the Minister should be required to consult with them. DPW agreed that this
was a sound comment. There was a consultation process already provided for, but
other relevant clauses would be amended to refer specifically to the consultative
process.
Comments had also been made by the Construction Education and
Training Authority, and by the Development Bank but DPW was of the view
that their suggestions should not be incorporated in the legislation. The
reasons were fully set out in the tabled document.
Clause 6: Immovable asset Management Plan
Mr Annandale pointed out that the Council for the Built Environment had
expressed concern that there did not seem to be a need for two plans. It had
also commented that there was no provision in the Bill for dispute resolution.
Mr Annandale said that there was a reason for the two plans, and the Minister
would be able to prescribe the minimum requirements. In regard to the dispute
resolution, he pointed out that this would be covered in the Intergovernmental
Relations Framework Act.
Gauteng Provincial Department had also made some comments, but as these were
based on a mistaken interpretation of the two plans, it was not necessary to
make any amendments.
The Provincial Department had also asked that guidelines be drawn to
distinguish more clearly between the plans and to avoid duplication. DPW
indicated that they would provide comprehensive guidelines but no specific
amendments would be made to the wording of the Bill.
Mr Meyering indicated that the Gauteng Provincial Department had further
commented on planning provision and said that there had ben no provision for
user plans in public/private partnerships (PPPs). He stated that there had been
interaction between the Department and National Treasury on that issue. The
Department would deal with the PPPs separately. Custodians and users would be
required to reflect the contractual provisions. A further report would be made
to the Committee on the following Tuesday on this issue.
Mr Radebe stated that sometimes contracts are not uniform. He suggested that
even PPPs must meet a certain standard. He requested the Department to engage
with Treasury further.
Mr Meyering stated that the concern from Treasury is that PPPs should not have
too many role players. There would be an additional role player now, which was
the Department, to
play these roles.
The Chairperson asked the Members to come back with comments on the PPPs and
also to comment on Clause 19(1)(a).
The Treasury representative enquired what would happen after 25 years, and
specifically if the property reverted back to the State.
Mr Annandale replied that after that period the property would revert back to
the State and the Bill would be applicable to the custodians.
The representative said that she would like clarity also on prestige buildings.
Clause 5 and following: disposal
The Chairperson asked the Department if it was not necessary to have a
definition for disposal of assets.
Mr Annandale agreed that it might be good to make cross references.
Mr Radebe expressed the view that disposal and transfer meant the same.
However, he agreed that it would be useful to provide a definition.
Clause 6: references to strategic plan
Ms Mariam stated that a strategic plan could not cover only an annual period.
She pointed out that a proper strategic plan would be geared over a number of
years.
Ms Bici stated that there may be certain aspects which might not change. Others
would change for purposes of budget.
The Chairperson asked the Department also to engage on this issue and revert
back to the Committee.
Vesting of properties
The National Treasury representative needed clarity on the issue of vesting
properties and wondered which Department was responsible, querying whether it
would fall under the Department of Land Affairs. She also enquired who would
take ownership under this Bill.
Mr Meyering answered that vesting was a transitional arrangement. He also
mentioned that there were a few properties that could not be concluded, as
there was still uncertainty as to who owned them. That was an issue between
provincial and local government.
The Treasury representative mentioned that the Western Cape disputed that half
of the properties allegedly owned by them were in fact so owned. She asked what
would happen in these cases.
Ms Bici stated that this problem did not run across all provinces. Gauteng and
some other provinces were ready for implementation of this system and the
functions seemed to be more clearly delineated.
The Treasury representative stated that there seemed to be a problem of
communication because there were properties falling into disrepair, and
apparently not owned either by provincial or national government. She mentioned
that the greatest problem was the lack of an Asset Register.
Ms Bici stated that vesting was an administrative issue and could be dealt with
at a later stage. It did not change the essence of the Bill.
The Chairperson stated that the question of uncertainty as to ownership was a
concern to the Committee and the Department must ensure that it was not taken
by surprise. He noted that later in the year the Committee would require an
update from the Department on this matter.
Mr Radebe agreed that the issue of an Asset Register was important and would be
dealt with.
Clause 22
Mr Gogotya noted that the Gauteng Provincial Department had believed that until
the certification process, which would confirm ownership of vested assets, the
Bill could not be implemented. It was suggested that the Bill be introduced in
phases. He asked how this would apply.
Mr Annandale pointed out that Clause 22 had envisaged that there would be a
phased approach, since the Minister would have the power to suspend
requirements for a transitional period in order to facilitate implementation of
the legislation.
The Chairperson stated that the Committee would be studying the Bill in far
more detail the following Tuesday. He asked that Members be prepared to submit
their proposed amendments to the Department for consideration by no later than
Thursday.
The meeting was adjourned.