Minister of Public Works Budget speech, response by DA

Minister of Public Works, Mr Nathi Nhleko, gave his Budget Vote Speech on the 16 May 2017.

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House Chair
Chairperson of the portfolio committee on Public Works
Honorable members of Parliament MECs for Public Works
DG of the Department and his management team
Chairpersons of the Boards and Entities Esteemed guests
Fellow South Africans

The African National Congress back in 1994 and in other previous policy instruments declared that:

“No political democracy can survive and flourish if the majority of its people remain in poverty, without land, without their basic needs being met and without tangible prospects for a better life. Attacking poverty and deprivation will, therefore, be the first priority of the democratic Government” (African National Congress, 1994: 5).

This Budget Vote takes place against the backdrop of the President of the Republic, His Excellency J G Zuma, having implored us in his State of the Nation address to ensure that Radical Economic Transformation takes centre stage in our departmental activities.

This in itself is in response to the policy positions of the African National Congress.

It is the African National Congress that declared that the democratic government shall strive to develop a sustainable economy and state infrastructure that will progressively improve the quality of life of all South Africans.

It further resolved in a number of its National Conferences that government should establish a mechanism to report on efforts it has made in facilitating employment creation.

The focused outcomes of infrastructure development must be job creation, poverty eradication and income generation through an Expanded Public Works Programme approach, using labour intensive methods of construction, development and maintenance.

The ideals of our Radical Economic Transformation requires employment multipliers as well as skills transfer programmes that are dedicated at enhancing our democracy and building an equitable society.

We have committed to the creation of 6 million work opportunities by 2019 through EPWP and other public employment programmes such as Operation Phakhisa. We aim to develop and rehabilitate 333 harbour and coastal properties along the coastal area of our country.

In this regard, capital and maintenance projects to the tune of R400 million has been identified focusing on the spatial and economic development imperatives. 

We will, in the upcoming period undertake the repair and maintenance work in three small harbours of Hout Bay, Gordons Bay and Kalk Bay as part of the first phase of the project. The work entails dredging and removal of sunken vessels. These projects will assist in creating additional work opportunities to improve the quality of lives of our people in the Western Cape Province.

Through EPWP, we have facilitated a total of 2,3 million work opportunities in the infrastructure, social, environment, culture and the non-state sectors. In the financial year under review a total of 660 000 work opportunities were created in all spheres of government. In the 2017/2018 financial year, we have set a target for ourselves to facilitate an additional 1, 4 million work opportunities.

In furtherance of the objectives of the programme, we will disburse the EPWP Integrated Grant worth R 1 billion to eligible public bodies and incentivize Non-Profit Organizations (NPO’s) among other implementers. This will also allow the poorest members of society to generate income by providing services to their communities.

We are implementing a special programme aimed at providing socio economic infrastructure to our rural communities. This effort includes the implementation of Rural Bridges Programme in partnership with the Department of Defence and Military Veterans. The project is intended to provide Bailey-type Bridges to the needy communities.

We piloted the project in the Eastern Cape Province and delivered four (4) bridges bringing to eleven (11) bridges that were under taken during the period under review. These bridges are cost effective and highly useful in the rural areas as they connect villages and create access to amenities for socio-economic development. Bridge sites have been identified in Limpopo, Mpumalanga and the Eastern Cape for prioritization.

On the 14 of May 2017, we officially unveiled the Cerhu River memorial stone in Bawa Village in Mnquma Municipality in the Eastern Cape. The memorial stone is in honour of Ten (10) women who died when the vehicle they were travelling in was washed away trying to cross the flooded Cerhu River in 1993. One of the survivors of the tragedy who also assisted the police in the recovery of bodies, Mr Mhlangabezi Qutu is sitting in the gallery today as our special guest. We applaud his bravery in the service of human kind.

His Excellency the President of the Republic of South Africa in his State of the Nation Address provided us with guidance and leadership on the policy position of the African National Congress on Radical Economic Transformation.

Radical Economic Transformation is a fundamental change in the structure, systems, institutions and patterns of ownership, management and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female.

The central question to us as a Department of Public Works is how we respond to this challenge and directive.

In response to this we are focusing on the transformation in the Construction and Property Sector which has started in earnest and is gaining momentum. In order for us to speed up efforts on the the radical economic transformation agenda, we will during this financial year move from planning to implementation by:  

• Finalisation of the Baseline Study on the Transformation of the Property Sector
• Obtaining approval on the Sector Codes from the Ministry of Trade and Industry
• Launching of the Construction Sector Codes and Charter
• Integrating all initiatives aimed at transforming the procurement processes to be in line with the Charter

In the built industry we are focusing on promoting skills development through the Skills Pipeline Strategy in order to support the roll out of infrastructure delivery in the country and address skills shortage in the built environment which remains a challenge.

We also implemented in the financial year under review a programme to place interns for work place training working in partnership with the Universities of Technologies and the private sector.

As part of strengthening our work and supporting our mandate, professional councils and entities have been established; and among others we have passed the CBE Act, CIDB Amendment and other pieces of legislation over the years to professionalize the construction and built environment sector.

Key to this is the need for us to deal with the challenges that we still need to overcome in the governance framework. To this end the Council for the Built Environment (CBE) will be hosting a Transformation Indaba on 29 August 2017 at the CSIR International Convention Centre in Gauteng.

The Independent Development Trust (IDT) is undergoing financial, operational and structural challenges. An interim solution is been found together with National Treasury to sustain the entity in the short to medium term while we are working on long term sustainability measures going forward.

Though strides have been made in the redistribution of land over the past 23 years, there is a need for us to accelerate progress to overcome challenges. However, there is still a need for us to finalise the Expropriation Bill with a view to realize land redistribution and disposal for socio economic development.

The distribution of agricultural land is still skewed and not representative of the demographics of the country. In South Africa today only 7.4% of agricultural land is in the hands of black people while Africans only own 1% of agricultural land.

As a democratic government we recommit ourselves to develop a sustainable economy and state infrastructure that will progressively improve the quality of life of all South Africans. In this regard, State infrastructure serves as an important socio-economic lever to exert visible impact in driving capital formation, investment growth and social development. 

As a catalyst to development, the State’s immovable assets and lease portfolios, continue to hold extensive benefits and opportunities in respect of Government’s broader developmental agenda and socio-economic transformation.

Our immovable asset portfolio, is constituted of 30 097 land parcels on which 95 164 improvements are located (buildings and structures) valued at R 117 billion (excluding completed projects and assets under construction) as at January 2017. Our total lease portfolio comprises 2597 leases, with an annual projected expenditure of approximately R4 billion.

We believe that unaccounted for properties could still be traced and brought back where they belong; the State. We therefore call upon members of the public to volunteer any information they have on illegally occupied buildings, stolen and illegally transferred buildings as well as pieces of land. This will assist the government towards updating our asset base.

We have implemented a turn-around programme since 2012 to address the governance and operational challenges of the Department. The programme has started to yield results as the majority of the project deliverables are visible in the public domain. As a result of which we have achieved an improvement in the audit outcomes and levels of governance have also improved.

The Departmental total budget for 2017/2018 is R7 Billion and R22, 5 Billion in the Medium Term Expenditure Frame Work period. An amount of R6 Billion is earmarked for transfers and subsidies in the current financial year, while the remaining R1, Billion will be used for Compensation of Employees and Goods and Services.

In the upcoming weeks, the Minister will as part of familiarizing himself with his portfolio, visit Regional Offices of the Department of Public Works, Entities and Boards, Professional Bodies and Provincial political management structures. Such engagements will assist the Minister to appreciate the kind of challenges faced by our clients as well as our delivery partners.

In conclusion, let me to take this opportunity to thank the Portfolio and Select Committees on Public Works and the Deputy Minister for a warm welcome and their support to the Department in the past financial year;

The Director-General and his management team and to the department and all committed employees for their dedication and commitment to serve ordinary South Africans.

Our efforts as the Department of Public Works must be understood to be about nothing else but honour and dignity for our people.

Thank You.
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Responses

Millions in taxpayer money to be spent on Nkandla

Note to Editors: The following speech was delivered in Parliament today by the DA Shadow Deputy Minister of Public Works, Dianne Kohler Barnard MP, during the Budget Vote on Public Works.

Colleagues,

There are massive issues in the Department of Public Works, but Minister Thulas Nxesi and his team were slowly but surely turning this shipwreck of an entity they inherited from the previous Minister, around.

Sadly the current President decided to shift this man behind the success story and put in his place South Africa’s Cecil B. DeMille award-winning producer of the world famous 2015 Nkandla Firepool movie.

It’s difficult not to wonder just how handy it will be for this Minister to finally control exactly how much more of taxpayers’ money will be spent on the KZN palace of corruption.

Indeed just 24 days after his appointment his department were frantically denying a Times newspaper story about further plans to lavish more as-yet unknown millions on the Nkandla homestead, which has already been upgraded at a cost of R246-million.

As a committee we’ve seen the sad departure of our stellar chairperson, the now Deputy Minister Ben Martins, congratulations on your promotion, Sir. But we do have a newly elected chairperson who for some bizarre reason is an acting-chair – why?

Just for once, please appoint an eminently suitable chairperson without first waiting month-after-month on permission from Luthuli House.

A year ago I raised the issue of 24 affidavits where individuals were refused EPWP jobs by three ANC Councillors, two men and a woman, from Illovo and uMlazi – because they didn’t have ANC membership cards.

This is of course just the tip of the iceberg, but I received from the Department a carefully worded letter in answer.

However, I know full well that Ward Councillors across ANC run municipalities, and certainly in eThekwini, are mandated to and do hand out EPWP job opportunities.

Further proof of the corruption and political influence that permeates the EPWP, certainly in one of the last few Metros the ANC still controls for now – eThekwini – was proven when a DA Councillor walked into an EPWP meeting at the ICC on the 7th March. He was ordered to leave by the eThekwini mayor, as it was “an ANC caucus meeting”!

Despite the fact that I have been assured over and over again by Deputy Minister Cronin that the EPWP does not see work opportunities given only to ANC cadres, what happened in Durban indicates that I have been misled. All eThekwini EPWP workers were in the meeting, and the Mayor, we are informed, went on to promise to extend the EPWP contracts until the work opportunities became permanent jobs.

It is abuse, clear and simple.

The proliferation of EPWP job opportunities for the people of all the DA-run metros is a priority. Tshwane’s new DA Mayor is determined that the EPWP does not repeatedly benefit the same group of individuals to the exclusion of others. In Johannesburg, Mayor Herman Mashaba is determined that the EPWP does not repeatedly benefit the same group of individuals to the exclusion of others.

His approach completely excludes councillors from involvement in the recruitment process. This is a DA solution to avoid any possibility of the programme being abused by certain parties for political purposes and vote-buying.

The ability to work is key to personal dignity, and DA Metros are committed to creating opportunities for more people to find jobs, earn money and support their families.

Then there are the construction site invasions of KwaZulu-Natal. There is a feeling that the Police have done virtually nothing about this. Both government and private construction sites are invaded, and, for example, the R8-billion residential and hotel resort project near Sibaya Casino was shut down by armed invasions.

Over and over, at site after site, the perpetrators arrive lead by Delangokubona – 15 vehicles, 50 heavily armed people – invade, and demand that 40% of the work of a legally appointed tender be handed over.

It is irrelevant to them that construction companies have followed all protocols promoting opportunity for community upliftment and skills development. The invaders announce that they will not allow work to continue until they are handed the tender.

The installation of bulk sewage and water services was stopped. Construction at the Sibaya project stopped. Construction at the R1,8 billion Sun Coast development has been abandoned. Business operations are simply being shut down all across KZN, and these invasions, it is claimed, will soon reach the EC and Gauteng.

As long as these invasions are swept under the carpet, jobs will be lost.

Now to look at the Property Management Trading Entity, and the Immovable Assets Register. The national register is getting there. But to track down the ownership of an abandoned Government building is an exercise in chasing your own tail.

The Province hands your query to a municipality, who hands it to national, who hands it back to the Province. These are the buildings which are 15% of the immovable assets which should basically be condemned. That is some 17 000 buildings – abandoned, invaded, rat and lice infested, or sold by criminals using fake papers which has led to over 1200 properties lost altogether.

Having such a building in a residential area ensures that a slum is created and property prices destroyed. Finding out which level of Government owns it is a massive undertaking.

I revealed a year ago that there were rather strange co-ordinates for many of the listed properties: I had details of over 200 such properties with GPS co-ordinates showing them settled at the bottom of the Atlantic Ocean. Those I referred to were from a single province.

Of course the Department frantically denied all this, but I know what I have. I also know there is a dedicated team trying to make a credible database of state-owned properties.

Operation Bringback is underway – nationally and provincially. 10 illegally transferred properties have been located; 10 other properties were referred to Gauteng government – where valuable properties were simply fraudulently exchanged for cheap properties.

The team has also examined the deeds records to look at 41 DPW employees who actually bought DPW properties, and have determined there are 2000 illegally occupied properties. Yet we rent buildings for departmental offices.

Possibly one of the most shocking facts revealed to the committee has been that R212m per MONTH is what we pay on leases.

1200 lost buildings, 17 000 derelict buildings, and we fork out R2,5 billion each year on renting private buildings – rentals paid to unknown bodies – unknown because I have asked but never received a reply as to who these property owners are.

The ANC government is making a connected few millionaires while Government-owned properties rot.

Finally the issue of no rates or services having been collected from certain government buildings over the past nine years. The debt nationally came to over R5,241-billion running back to 2008.

A year on and the DA now heads up numerous metros and municipalities, and has discovered that as with Cape Town when we took it over, no rates or services had been collected from government buildings. Money in terms of rates, equals the ability to deliver services. So we are collecting them, and we are delivering.

Much work needs to be done, much corruption needs to be rooted out, but meanwhile I’ll await the new movie: Nkandla – the Sequel.

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DPW budget will not benefit the poor, it will benefit the President: DA Shadow Minister of Public Works Patricia Kopane MP

Honourable Chairperson, allow me to use the words of wisdom by, Caesar Chaves:

“History will judge societies and governments — and their institutions — not by how big they are or how well they serve the rich and the powerful, but by how effectively they respond to the needs of the poor and the helpless”.

Honourable Chairperson, on the 1st of April 2017, South Africa woke up to an unprecedented cabinet reshuffle.

To our dismay, unfit, notorious, and corrupt ANC Ministers remained in the cabinet while competent and incorruptible Ministers were substituted with the young lions with no teeth.

To us it has become clear that the redeployment of Minister Nathi Nhleko to this department is to continue with the second phase of Nkandla.

This is a testament that the budget of this Department will not benefit the poor and the vulnerable people of South Africa but only the President and his ANC cronies.

It is actually regrettable that the Department of Public Works is permanently under a cloud of corruption scandals. This is a great pity, seeing as this department has the potential to contribute to the built environment and the economy of this country.

Minister, you and your predecessor were amongst President Zuma’s men, in the Nkandla cover up scandals and you continue to do so.

The DA finds it highly suspicious that the new Minister, mysteriously cancelled a press briefing scheduled for the 25 April 2017, which was supposed to explain the new upgrades and improvements planned at President Zuma’s private homestead in Nkandla.

Despite the confirmation from both senior Public Works officials and the Minister of Police that these upgrades are going ahead.

The public needs to be taken into confidence, they have the right to know how their tax money is spent. They also need the assurance that there will be no further upgrades at all at Nkandla.

This “Mantashing” by the Minister is very suspicious and strongly suggests that there is something to hide. South Africans have not forgotten the role you played in defending the Nkandla scandal from the beginning, most notably your infamous innovation of the ‘Fire pool’.

The DA strongly urges you to avoid a similar performance going forward.

Honourable Chairperson, in a written response to a DA parliamentary question, Minister Nhleko has revealed that 8 of the 14 companies contracted to carry out the notorious upgrades to Nkandla have since been rehired by the Department to perform other work. It would seem then that there has been no accountability.

He also confirmed that not a single one of the 14 companies involved in these upgrades have been blacklisted. This is a shocking revelation considering that the Constitutional Court found these upgrades to be fraught with corruption and unlawful enrichment. It clearly proves that the more connected and corruptible you are, the more valuable to the ANC government you become.

Honourable Chairperson, one of the Department’s entities, the Property Management Trading Entity was established in April 2006, with the prime focus of executing all property management related functions, such as maintenance of properties and property rate payment on behalf of the Department of Public Works.

However, it took the Department of Public Works 9 years to operationalise this entity.

The Department indicated that this entity has a 39% vacancy rate in critical positions. It does not have the specialist skills to ensure the sustainable operationalization of excellent property management.

This entity of the South African government can make the most appropriate property investment for a developing country.

The DA calls on the new Minister to make sure that this important entity is well resourced with the specialised skills required, to fulfil its mandate. This is an entity that accounts for half of the budget of the Department.

Honourable Chairperson, it is really disturbing that another entity of the department; the Independent Development Trust is in a crisis. This trust plays a crucial role in the delivery of social infrastructure in provinces, where there is a dire need and substantial backlog of facilities such as schools and clinics.

However since 1997 this entity:

• Has had a number of leadership challenges.
• Loss of critical staff in key areas of financial administration and management and as a result the entity struggled to collect management fees for all the projects it has been involved in.
• The frequent changes in leadership of client departments threatens the continuity in the IDT’s delivery of programmes and meeting of obligations to service providers.
• The budget cuts and the deliberate delays in transfer of funds by the clients’ department exposes the IDT to litigations due to late processing of service providers.
• For the past three financial years this entity has received a negative audit opinion/ disclaimer from the Office of the Auditor- General.
• The entity does not show any profit.

Honourable Minister, the DA is calling on you to transform this entity so that it can fulfil its mandate or we should scrap it once and for all. Let’s make sure that the tax payer’s money is used effectively.

Honourable Chairperson, when the DA gets into government we will make sure that state resources are used in a responsible and transparent manner. We are already doing this in the cities where we govern.

We will make sure that state resources benefits the poor and vulnerable people of this country. Leaders will not use their positions of power and state resources for self-enrichment when the DA governs.