Government Immovable Asset Amendment Bill: adoption of Bill and Committee Report

PUBLIC WORKS PORTFOLIO COMMITTEE
20 March 2007
GOVERNMENT IMMOVABLE ASSET AMENDMENT BILL: ADOPTION OF BILL AND COMMITTEE REPORT

Chairperson: Mr F Bhengu (ANC)

Documents handed out:
Government Immovable Asset Amendment Bill (Final version)
Portfolio committee report on the Government Immovable Asset Management Bill [available at Tabled Committee Reports once adopted]
Department’s Proposed changes to the Bill (handed to Members only, not for publication)

SUMMARY
During the morning session the Department presented a document containing some proposed changes to the wording of the Bill, in line with the suggestions made at earlier Committee meetings, and reported on the outcome of discussions with National Treasury. The proposed amendments dealt with the definitions of “disposal”, “immovable asset” and “strategic plan”. Further changes were made to the application. The Committee agreed to incorporate suggestions in relation to the operation of the Bill to the local sphere in the Report. A formal proposal was made, and adopted that the Department be given a period of three years to report back on local government and five years on public entities. The wording relating to public private partnerships had been changed, and there had been a change in the description of “non-asset solutions: to bring this in line with the rest of the Bill. The wording of “maintenance and management plan” had also been changed and there were further changes to the reference to annual submissions and requirements.  The Department summarised the estimated costs of the implementation. The issue of moratoriums was raised and it was agreed this would be at the discretion of the Minister and Department.After the lunch break the Chairperson reported that he had received a call from Minister Didiza who was concerned that the Committee might have been suggesting that local government fall within the ambit of the legislation. He emphasised that the Committee had accepted that the legislation would, at this stage, not include the local government sphere. After making some minor changes, members unanimously adopted the Bill. They also adopted the Committee report.
 
MINUTES
Government Immovable Asset Management Bill (GIAM): Further briefing by Department of Public Works (DPW)     
The Chairperson asked the Department to brief the Committee about the rates and services, and how the process would be monitored by the Department.

Mr Zingi Ntsaluba, Acting Director General and CFO, Department of Public Works (DPW),  stated that Section 38 of the Public Finance Management Act (PFMA) put the responsibility on the accounting officer. National Treasury (NT) had its own way of dealing with matters, which was classified under the administration cluster. NT found it difficult to give funding to departments involved in administration work, feeling rather that priority be given to those involved in Social Development. The trading account was used as a form of achieving transparency and accountability. All the reporting was done outside of the DPW to achieve the issues of transparency.

Mr Ntsaluba stated that some concerns had been expressed by National Treasury. A Border Control Operational Coordinating Committee operated, to tighten security around the ports of entry to South Africa. Money had been allocated to various departments and Public Works was allocated as the developer. There had been a reconciliation of the R1.3 billion with Treasury. In so far as property management was concerned, National Treasury lamented that the Department was heading for a qualified audit report at the end of the financial year. The department had thus far received exemption from National Treasury on complying with all regulations, due to the systematic challenges. Transversal systems for department use were owned by the Department of Public Service and Administration (DPSA) and implemented by Treasury. The final point related to security and prestige buildings. This was a matter dealt with primarily by the Presidency. DPW was involved as a project manager.

Discussion
Mr B Radebe (ANC) commented that it was unfortunate that government departments would have comments like that in public. 

Ms Lydia Bici, Deputy Director General: National Public Works Programme & Policy, DPW, stated that the Department had discussions with state law advisors to deal with some of the Amendments made in the bill. Those discussions resulted in the documents circulated. There were also discussions with National Treasury, particularly on the asset management plan and public private partnerships (PPP). The Department also continued to engage with Gauteng. In the process of incorporating amendments into the Bill, the Department had engaged with the HOD’s of provincial departments. On the issue of costing, the Department now had an educated estimate.

Further amendments proposed by DPW
Mr Buks Annandale, Director: Legal Services, DPW, proposed that Members must look at the proposed Amendment Bill which incorporated key issues emanating from the discussion last week. He pointed out the section of the document (which was not for public distribution) that dealt with matters on which the Committee needed to agree. He then summarised those matters.

Definition of “disposal”
Mr Annandale said that the insertion of references to provincial administration law would be sufficient to deal with the issue of disposal.

Definition of Immovable Asset
Mr Annandale had stated that the initial definition had referred to property owned or leased by government. He felt it was more correct to change this to acquired or owned, to clarify the definition.

Definition of Strategic Plan
Mr Annandale said that after discussion with National Treasury the word “annual” would be removed, and there would be references incorporated to the PFMA.

Application clause
Mr Annandale said that the Department would be clarifying the clause to make it clear that Subsection 1 was subject to Subsection 2. Subsection 2 would also bring in portions of the PFMA as there were more entities listed here than in the Constitution. 

He added that whenever the Minister was to publish a notice or a regulation, he would follow a dual consultation process. This was already listed in other sections, for instance Sections 22. The same process would apply here. 

The committee members agreed to these changes.

Mr S Opperman (DA) mentioned that the Committee had agreed at the last meeting that it could not interfere in the local sphere of government. He asked whether the Minister could not make the Bill applicable to local sphere, and whether this should not perhaps be done from the start of the process.

The Chairperson responded that there had been agreement that there should be a parallel process, which would involve going back through the previous Acts, and referring back to the 1961 Act. The process has begun to tie in with the local government. The bill, as it now stood, applied to the national and provincial governments. The point raised by Mr Opperman would be included in the recommendations to the Department.

Mr Radebe stated that the Bill as currently framed also included the public stakeholders, and so he felt it was necessary to given the Department time frames in regard to the recommendations. He suggested that possible time frames might be a period of three years, or five years for public entities.

Public Private Partnerships, Dealings between custodian and user
Mr Annandale said that the NT was now comfortable with the wording of the clause as tabled, as it was in line with Treasury Regulation 16.

Mr N Gogotya (ANC) suggested a change to the wording as the use of the word “revert” would mean that the word “back” was no longer required.

Alteration of description of “non-asset solution”
Mr Annandale suggested that the wording referring to “non-asset solution” should be changed to bring this in line with the rest of the Bill. It would therefore be amended to “non-immovable asset solution”.

He further mentioned that the principles applied before, as with Section 22, would be incorporated into subparagraph 5 of page 5 of the document.

Alteration of wording “maintenance and management plan”
Mr Annandale stated that the wording as stated on page 7, clause 8 would now be amended from “Maintenance and management plan” to “Operation plan”.

Removal of word “annually”
Mr Annandale stated that in Clause 9 the word “annually” should be removed as it appeared in both subsections. This was now in line with Treasury Regulations.

Phrase “Minimum requirements”
Mr Annandale stated that there had been some discussions on the word “minimum requirement” and it had been decided that there should merely be a reference to “requirements”

Ms C Ramotsamai (ANC) believed that the requirements should be explained somewhere because the term “requirements” was far too open. 

Mr Annandale said that this could be included in the Regulations.

Finally Mr Annandale noted that the Bill currently reflected that it was a 2006 Bill, and this would be corrected.

Discussion
Mr Radebe suggested that the members deal with the memorandum first before going to the formatting of bill clause by clause.

Mr Ntsaluba summarised the estimated cost of implementation of GIAM as per request. The Department had worked on certain assumptions. These included that only one custodian would be appointed per province. The calculation had investigated the immovable asset management within the sphere of national and provincial government and had taken into account the manpower and overheads associated with that manpower. The cost was estimated at a total of R180 million, broken down into manpower, condition assessment every five years, workshops, evaluation and monitoring.

Mr Radebe appreciated this estimate but suggested that it would be useful to be presented in a complete breakdown, so that each part could be interrogated.

Mr Opperman asked if the costs were broken down per annum

Ms Bici responded that the cost would be reduced due to the condition assessment done every five years.

The Chairperson suggested that the members look at the committee report on the GIAM, their recommendations and also the minutes of recommendations given by the Department.

Mr Radebe wanted to make recommendations around the application of the Act in regard to the local spheres of government. He proposed that within a period of three years, the Department must have dealt with the processes relating to local government. He also suggested that pressure be exerted on the issue of public entities and state enterprises, and that within a period of 5 years the Department of Public Works and Department of Public Enterprises must come with something to be applied in future.

The members agreed with the proposal by Mr Radebe and agreed that it should be included in the recommendations.

Mr Maduma asked whether there was not some reference to a twelve month period, which contradicted with what was now being stated.

The Chairperson stated that the recommendation had been altered to three years because twelve months was too short.

Mr Opperman asked for assurance that there would no clashes between GIAM and the 1961 Act.

The Chairperson stated that there would not be clashes except in relation, possibly, to the new disposal part that was acknowledged in GIAM. He also suggested that the report be adopted on Thursday when the Committee met again so that everyone would have time to look at it, with all the amendments. He also stated that the Committee could not look at the Budget Vote Report because it has not been tabled yet, and this would have to be engaged at another time.

Mr H Cupido (ACDP) asked how the change of date from 2006 to 2007 legislation would be achieved.

The Chairperson stated that the Department would be asked to deal with that.

Ms Ramotsamai (ANC) asked on the issue of Moratorium and Disposal and suggested that it was too open. She said the moratorium should have a definite time period attached.

The Chairperson stated that this issue could be determined by the Department and Minister. 

Ms Ramotsamai agreed that this was acceptable, but that there should be a specific statement of the time frame, perhaps by way of wording that stated that the moratorium would last until the Minister was ready to proceed.

Mr Opperman asked if the disposal of state owned assets was included in GIAM. He also asked why it was now included in the recommendations.

The Chairperson answered that there was no policy.

The Department added that there was no policy when it was put in place first in 1961.

Ms Ramotsamai agreed with Mr Opperman that there was some problem with the wording on the issue of state owned assets. It was supposed to mean government assets and not state owned assets.

Mr Gogotya asked if the references to the moratorium applied to properties that were illegally occupied by people, not to parastatals. Clause 2 of Bill referred to twelve months and extended to local government after that time. He found the disposal period of six months that was mentioned also problematic.

The Chairperson reminded him that the Members had just agreed on a three year period, which was the date by which the Department must report back to the Committee, so that there would not be the excuse that the matter vested with local government.

Mr Radebe suggested that when the Department had its Strategic Planning session it should give a report on the implementation of GIAM.

Ms Ramotsamai, suggested that the wording on the last page, in relation to point 2, could be improved by insertion of the word “complete” so that it referred to having “a complete asset register”. She pointed out that the asset register could be changed from year to year.

Mr Opperman agreed and stated that when the asset register was complete, it contained all properties of government.

Mr L. Maduma (ANC) stated that at some point there was an idea on a moratorium amnesty and wondered if there should not be a clause specifically inserted. This could help on the assets that were not known by the government.

The Chairperson stated that this was a point that the Committee could look into further.

The meeting adjourned for lunch.

After the lunch break the Chairperson announced that he had received a telephone call suggesting that it was understood that the Committee intended to amend the legislation so as to incorporate the local government sphere. He emphasised that the Committee did not, at that stage, intend to do so. The Committee had taken into consideration everything the presenters had raised and had also made its own recommendations.

The Chairperson added that some members had wondered why the Bill was numbered 2006. The explanation he had received was that the Bill, having been introduced in 2006, would be numbered thus, but that the Act, once promulgated, would be assigned a 2007 number.

Ms Ramotsamai asked the Chairperson to give details of the telephone call that had queried whether the Committee intended to include the local government sphere.

The Chairperson said that he had received a call from Minister of Public Works, Ms Thoko Didiza in which she indicated that she was “uncomfortable” with the proceedings regarding the amendments to the legislation, as they appeared to indicate that the Committee would be introducing the concept that the legislation would be applicable to the local government sphere. He did not ask her where she had received such information, but merely explained the Committee’s position.

Ms Ramotsamai said that the Committee’s function was to legislate. She had been under the impression that the Committee and the Department were in agreement as to how far things had proceeded. The Committee’s position on the inclusion of local government was clear. She was curious as to who could have misrepresented the Committee’s views. That misrepresentation was an undermining of the Committee, to which she took exception.

Mr Radebe concurred and said that the Committee had approached the amendments in the spirit of wanting to promote a better life for all South Africans. He felt that misrepresenting the Committee’s views was malicious and should be condemned.

Ms Bici felt it necessary to indicate that none of the officials present had communicated such information to the Minister. It was the first time that the Department had heard of this suggestion. The Committee had been very cooperative. She knew where the debate originated and also knew that everyone had worked together to arrive at an amicable solution. The Department was pleased with how things had developed. She made clear that the matter should be taken up with the Minister.

Adoption of Bill
The Committee went through the clauses of the Bill.

Mr Opperman (DA) said that in terms of parliamentary procedure members were allowed to go back to their caucuses to get a final mandate.

The Chairperson said that the ANC members already had a mandate. Unless there was a disagreement, Parliamentary rules did not require parties to return to receive a party mandate. The amendments would still be debated in the National Assembly. The Committee had the previous Thursday agreed that it would on that day vote on the Bill.

Ms Ramotsamai felt that since there had been no fundamental or policy related changes to the Bill, the Committee should vote on it. She pointed out that members were supposed to have kept their caucuses up to date as the amendments progressed.

Mr Maduma felt that confusion could have been avoided if there had been better continuity of the DA’s attendance at meetings, and suggested that each of the DA members could have kept the other up to date.

The Chairperson agreed, and ruled that there was no need for further caucus.

The Committee, having gone through and assented to each of the Clauses, then adopted the Bill.

The Chairperson read out and signed the report that would be sent to the National Assembly confirming that the Committee adopted the Bill.

The Chairperson congratulated the Committee and the Department on all the work they had done on the Bill.

Ms Ramotsamai thanked the Chairperson for his leadership during the process, and also thanked the officials from the Department. She thought that the Bill had changed for the better and in the interest of all South Africans. The legislation would enable the government to better manage all its scattered assets. She hoped that the Chairperson would be able to interact with the Chairperson of the NCOP Committee so that the process of adopting and enacting this vital legislation would not be delayed unnecessarily. Regardless of its need for the third sphere of Government to be included, the Committee had decided to go along with the current amendments, in the knowledge that at some stage local government would need to be included.

Ms Ramotsamai also expressed thanks for the past and present Members, the researchers, committee assistants and support staff. She also gave tribute to the late Minister Stella Sigcau, who had started the process and was confident that she would have been pleased with the outcome.

The Chairperson added thanks to the current Minister, Ms Didiza.

Adoption of the Committee Report on the Government Immovable Asset Amendment Bill
The Chairperson said that the researcher was in the process of incorporating the amendments the Committee had made to its report. The Committee had already dealt with the bulk of the report. Members adopted the report with the amendments.

The meeting was adjourned.