Public Works Minister on budget and strategic plan 2009/2010

NCOP Public Services

22 June 2009
Chairperson: Mr M Sibande (ANC)
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Meeting Summary

After presentations by the DPW Minister on its Strategic Plan, its budget and Phase II of the EPWP (Extended Public Works Programme), the Department answered questions by members of the Select Committee. The Minister was praised for his personal presentation of the Strategic Plan. Questions covered a range of issues including:
- the additional 500 000 jobs the President, in his recent State of the Nation address, had said the government was committed to creating by December;
- the DPW’s reclaiming of its mandate from other departments;
- the distribution and responsibility for EPWP projects and the sustainability of such projects;
- the quality of materials used for construction and the use of sub-standard materials;
- the poor condition of many state buildings, especially schools and hospitals all over South Africa;
- the monitoring of expenditure allocated to local government;
- asset management and the monitoring of the Department’s asset register;
- the eradication of mud schools in areas such as the Eastern Cape;
- land and farm transfer to the needy;
- the NYS and traineeships and learnerships for the youth;
- gender “mainstreaming” in the Department;
- fiscal dumping;
- vacancies arising from insufficient funds;
- non-payment by the DPW for services rendered;
- the “cushioning” of the poor during the global recession;
- the leasing of buildings and properties by the DPW;
- intergovernmental forums;
- the eradication of acting appointments.

Meeting report

The Minister of the Department of Public Works (DPW), Mr Geoff Doidge, thanked the Select Committee for giving the Department the opportunity to make its presentation. There was a good understanding between the Select Committee and the DPW, and his Department took its obligations seriously and valued having oversight of their functioning, without which they would be unaware of their shortcomings.

He then took the Committee through the key documents, which included the strategic context and the Department’s strategic goals.

Key strategic priorities were as follows:
- Speeding up growth and transforming the economy to create decent work and sustainable livelihoods;
- A massive programme to build social and economic infrastructure;
- A comprehensive development strategy linked to land and agrarian reform and food security;
- Strengthening the Department’s skills and human resources base (major renewal of its skills and education system);
- Intensifying the fight against crime and corruption;
- Pursuing African advancement and enhanced international co-operation;
- Sustainable resource management and use;
- Building a developmental state including improvement of public services and strengthening democratic institutions.

The Chief Operating Officer and Acting Director General of the DPW, Mr Nchaupe Malebye, outlined the Proposed Programme of Action (POA) projects for implementation as well as the presentation of the Strategic Plan, which included key deliverables for the:
- Asset Management Branch;
- Inner City Regeneration Projects,
- Operations Branch Projects;
- EPWP (Extended Public Works Programme) Branch Projects; 
- The Policy Branch;
- The Director General’s Office;
- The Corporate Services Branch;
- The Finance and Supply Chain Management Branch;
- Insufficiently Funded Programmes.

Finally The Chief Financial Officer (CFO), Ms Cathy Motsisi, took the Committee through a presentation of the 2009/10 – 2011/2012 MTEF budget.

Mr D Feldman (ANC) introduced the discussion by saying that it was unfair to expect the Committee to absorb all the material in under an hour and a half, especially as there were new members.

The Chairperson said he agreed with Mr Feldman but suggested they use the present opportunity to ask whatever important questions they were already in a position to ask, knowing that they would have another bite at the cherry in the near future.

Mr M Jacobs (ANC) referred to the President’s State of the Nation address in which he stated that the Government wanted to create an additional 500 000 jobs by December. He had not heard any specifics in this regard, saying that he was under the impression that the DPW would create the bulk of these jobs. He also asked whether these would be “decent and sustainable jobs”. He said that coming from the working class, he knew what ‘decent and sustainable jobs’ meant. He was uncertain about the EPWP, saying that most of the time these were temporary jobs. He wanted to know about the DPW’s reclaiming of services from other departments and said he had not heard housing mentioned. The DPW needed to reclaim that area of service delivery so as not to repeat the RDP mistakes of the past and so as to be able to provide “decent houses to our people”. He asked how farms would be transferred to those who most needed the land, as most of this land still resided in the DPW.

Minister Doidge replied that the DPW was sometimes the owner together with other departments such as the Department of Land Affairs and could not dispose of the land unilaterally. There were certain long leases which were of concern such as at Hout Bay Harbour where one business had a 99-year lease to carry on a business totally unrelated to fishing and which precluded locals from using the land for a more appropriate and useful purpose. The DPW was beginning to approach such cases by asking what value the particular business had for the local community. A distinction should also be drawn between land belonging to the national DPW and that which belonged to the provincial Department. Also, many properties belonged to former homelands. On the matter of rates being withheld, this was not deliberate but the result of various complex issues.

On the subject of human resources development, Mr Jacobs asked if there was a programme in the budget, which gave bursaries to people in need of certain skills, especially at the level of local government, where the need was greatest.

Mr Doidge replied that the economic downturn should be borne in mind. Budgets were about projected income and sometimes projections had to be adjusted accordingly.

Mr Z Mlenzana (ANC) said that at some stage he would want to know about the monitoring of the use of DPW buildings especially houses. With regard to the DPW taking over and erecting structures, he wanted to know whether this was mandatory or did it depend on the wishes of the particular department?  He was happy that the biggest chunk of EPWP went to local government but wanted to know how the quality of work was monitored and what the penalty for non-spending was.

Mr Doidge agreed that there were several problems. The Department owned many residential properties in King William’s Town for instance and these vested in the province. When the latter ran into trouble, these properties vested in the national Department but many of the tenants worked in Bisho and the DPW could not simply evict them. Often there was confusion as to whether the national Department or the province owned the property.

Mr H Groenewald (DA) said that at the end of the day what was important was the quality of service delivery. If one looked at the condition of state buildings all over South Africa, it was manifestly clear that quality had been lacking and buildings especially schools were often falling apart. Also, what was being done about state hospitals, which were in a state of serious disrepair.

Mr Doidge replied the maintenance of these hospitals were provincial competences but the national Department had on occasion intervened such as in the case of a specific Durban hospital.
Mr Groenewald asked about the 500 000 jobs referred to by the President in his State of the Nation address and asked if all of them were for skilled people or whether training would be offered. He said that better control was needed over asset registers as corruption was rife in this regard.

Ms R Rasmeni (ANC) asked the Department about the monitoring of expenditure allocated to local government as there were problems in these departments with financial mismanagement. The Department should present a plan on EPWP Phase II to the Committee and also asked for more detail on the new models referred to, for accommodating people trained in EPWP, suggesting that the process ought to be speeded up. She also asked what had happened to students and trainees who had concluded learnerships.

Acting Director General, Mr Nchaupe Malebye, replied that most learners took between three and six months to complete their learnerships and while some were absorbed into the department, others were absorbed by independent contractors.

Ms Rasmeni asked about the asset register and how provinces were being helped to manage the register properly. With regard to the list of projects, she said she had not seen any listed under Health and Education.

Mr Malebye replied that there was an asset management system and register and the Department “interacted with” the Department of Land Affairs in this respect.

Ms M Themba (ANC) asked about the mud schools in the Eastern Cape, saying that on their recent visit there, it had been very encouraging to see that they were being replaced. She asked, however, by when this process could be expected to be completed.

Mr Doidge replied that this was a “matter close to our hearts” and the DPW would be “looking at the R787 billion (in the budget) with a magnifying glass” to try and assist in eradicating these. The eradication of these mud huts had actually been one of the resolutions taken at Polokwane, adding that perhaps it was also high time for Parliament to put its foot down and insist that all departments do their bit to ensure that these huts were finally eradicated.

As for learnerships and internships, Ms Themba said that in the near future, it might be a good idea to break down the figures according to each province so as to make monitoring progress easier. She asked about the many state buildings that had been vandalised and what was being done about the problem either by national or provincial government. An audit was needed of those buildings which belonged to the DPW.

Ms Themba asked about “the mainstreaming of gender” and gender distribution within the Department and how this was monitored.

Mr Malebye replied that the Gender Unit was headed by a Director and said the DPW regularly issued reports on what was happening both nationally and within SADC and would gladly make these reports available to the Committee.

Mr O De Beer (COPE) asked for a breakdown of vacancies within the Department arising from insufficient finance, so that the Committee could see the most prevalent type of vacancy. He asked about the so-called “dumping” of money (that is, money allocated in a particular financial year for infrastructure development that could not be spent in the different spheres of government and the possibility of redirecting its allocation to other spheres of government).

The Department’s CFO, Cathy Motsisi, assured the Committee that she “could comfortably say” there was no fiscal dumping. 

With regard to provision of land and accommodation, Mr De Beer said that in the past, other spheres of government had complained about non-payment by the DPW for services rendered and asked whether there had been any improvement in this.

Ms Motsisi replied that the matter had to be “placed in context”. The devolution of the budgets meant that some properties belonged to the national Department while others belonged to the provincial Department.  Municipalities often confused the two and billed the one Department when in fact the money was owed by the other. The Department’s engagement with the CFOs of municipalities about this had confirmed this confusion and had also revealed invoicing delays caused by municipalities themselves. In two provinces – Western Cape and North West -  the devolution of the budget had resulted in shortfalls of funds to pay municipalities. The DPW had made it clear to the latter that they should request either the national or provincial Treasury to make up these shortfalls. The matter had also been discussed at MINMEC and Treasury would be approached about the resolution of this problem.

Mr Doidge added that with regard to the rates issue, even if the DPW had the money, it would be illegal for it to “top up” because it could only pay what it received from Treasury. The Department’s CFO had begun to engage with municipalities about this and was trying to sort out the problem, which often had to do with billing complexities.

Mr De Beer also asked about the sustainability of EPWP Phase II programme and said the time had perhaps come to engage both the private and public sectors to come to the table about this. Skills played a fundamental role at present, especially in the building sector, where an effort was being made to assist Government in dealing with EPWP so as to make it sustainable, as the building sector was a source of millions of jobs. He asked how the DPW used the intergovernmental relations forum to speed up service delivery and spending, as this was a useful tool for dealing with this issue.

Mr Doidge agreed that that was a “very important aspect of our function, not only between ministers and MECs at MINMEC but also how those structures relate to the Presidential Co-ordinating Committee – the top national structure”.

Mr R Tau (ANC) congratulated the Department, saying that this was the first time that a minister had made such a presentation to the Select Committee and this would hopefully encourage other ministers to do likewise. Referring to the President’s State of the Nation address in which he had referred to the “Hollywood style” of the previous administration, Mr Tau asked why the DPW had an acting DG as opposed to a permanent DG at present.

Mr Doidge replied that there was an acting DG because the former DG had resigned in April and COO (Chief Operating Officer) Malebye had very graciously agreed to “hold the fort” by assuming the acting position. The closing date for application for a permanent position was the end of June and the process would then begin to finalise the position. Mr Stanley Henderson was acting DG for the EPWP as the previous DG had been seconded to the Eastern Cape to assist with managing this particular programme in that province.

Mr Doidge said that Public Works was a “very complex mandate” and one had to understand “the constitutional framework within which the Department functions”. Schedule Four made it clear that Public Works was a “concurrent function with a qualification”. The Department had “no mandate or say over” how to build a hospital or a school for example. In the context of the new parliamentary building for instance, it was Parliament that would receive the money and Public Works would then facilitate the process of construction. But last year the DPW intervened because it knew that Parliament had not asked Treasury for the money and it was asked to intervene on behalf of Parliament.

Mr Doidge said the DPW wanted to have some stake in housing so as to increase its labour intensity and skill requirements as housing construction was an ideal training ground for the National Youth Service (NYS). The new cluster system in Cabinet allowed it to do just this. In terms of the intergovernmental forums, national ministers set norms and standards and the DPW then saw to what extent it could conform to these. The DPW’s mandate was to provide the necessary infrastructure and it would support the provinces in this.

With regard to the second phase of EPWP, Mr Tau asked how it was possible to cushion people in the midst of such a serious global economic downturn. He applauded the DPW for deciding to affirm its “rightful mandate” by reclaiming it from other departments. In the past there had been unnecessary fragmentation with each department having its own separate asset register. To what extent had the DPW done a reconciliation of its assets, in the light of assets previously claimed by the Department of Land Affairs.

Mr Doidge replied that with regard to the mandate, the DPW had taken the initiative in trying to reclaim this. As the landlord, the DPW was now taking a proactive role in meeting client departments and had already met several such as the Department of Defence and that of Home Affairs to discuss rentals and office space. The Deputy Minister was the person responsible for asset management and would come before the Committee to explain what steps had been taken in connection with asset management. But, the DPW was “not happy with what we see” and felt that it needed a better long-term programme to better manage its assets.

Mr Tau then asked how as a Committee it could assist local municipalities. He thought that as a Select Committee on Public Services it could perhaps assist because of its relationship with the Select Committee on Finance in tracking and monitoring the extent to which provinces were using their conditional grants. He said that that was where, as a Select Committee, it could play an effective role in helping municipalities to apply their allocated budgets judiciously.

Mr Tau asked about the NYS. What happened to those young people who had been recruited and had completed the practical part of the NYS programmes and had then to do the theoretical component? That was when SETAs played their role but there seemed to be some conflict between the different departments such as the DPW and the DoL when it came to SETAs. How did the SETAs complement the work done by the DPW in the NYS.

Mr Tau noted that according to the presentation by the Department, figures showed that 8% of national state buildings were found to be a in a very good condition but asked what the Department intended doing “aggressively” so as to increase that figure, or put another way, decrease the 20 percent reported to be in a poor condition. He asked for information about the commitment made by the DPW last year to budget for building extra offices for Parliament. Referring to the 500 000 jobs referred to in the State of the Nation address, he agreed that it was a good idea to get a breakdown on those jobs according to each province’s expected contribution, so as to make monitoring and oversight possible. He also asked what the Department’s policy was on the building and support of co-operatives, especially in the construction sector.

Mr K Sinclair (IFP) asked about access to parliamentary villages, saying that many new members struggled to gain access because certain former members seemed to think they had life access.

Mr Doidge replied that there was a “clearcut policy” that gave members a certain time within which to vacate, but this became a little more complex because political parties took over the mandate from Public Works.

Mr Sinclair also asked about the new building for Parliament, saying it did not seem to be in the strategic plan. What was the Departmental policy on leasing office space? Before the elections, there had been much debate in the media about allegations that price per square metre had been artificially inflated as a result of BEE policy.

Mr Doidge replied that an investigation was underway and the result pending.

Mr Sinclair said, with good reason, many remained skeptical about the 500 000 jobs by year end, which had been referred to in the State of the Nation address.  The majority of local governments were not in a position to create those jobs and he wanted to know what monitoring mechanisms were in place to assist local government in reaching those goals.

Mr Doidge replied that the 500 000 jobs should be seen as part and parcel of the four and a half million Government aimed at creating by 2040. He pointed out that funds for job creation did not lie with the DPW but with the line function departments concerned. But the DPW would return to Cabinet in two months and report on which departments were participating in this and which not.

Mr Sinclair asked whether the importance of energy and water saving did not warrant the Department developing a subsection to deal exclusively with energy saving. With regard to deteriorating government buildings, Mr Sinclair suggested that buildings and houses owned by parastatals and mining houses, which had been vandalised, could be a source of assistance to address the housing backlog. Would a partnership with parastatals such as Transnet and the mining houses in this regard not be a good idea?

Mr Malebye replied that the Department was very open to such partnerships.

The Chairperson asked the Minister whether the systems of the various departments were “able to speak to each other” so as to facilitate monitoring.

The Chairperson said he found it disturbing that 15 years into the tenure of the new government, they were “singing the same song” when it came to assisting people with disabilities. He asked what still needed to be done to accommodate people with disabilities. On the use of sub-standard materials, he asked what steps had been taken about this and what various provinces still needed to do.

Mr Malebye replied that there was a budget of R35 million to make government buildings more accessible to disabled persons.

Mr Doidge said that Agrimore developed innovations in building technology and together with the CSIR, it certified materials used for building. He said the broad principle of supporting and empowering local manufacturers was a good one but there was probably room for improvement in ensuring the quality of materials used for building.

The Chairperson said a distinction needed to be drawn between long- and short-term infrastructure.
Finally he asked whether there was any plan for a turnaround strategy, so that the Committee could have some timeframe to work with.

Mr Malebye replied that documents would be made available to the Committee.

The Department’s Acting DG for EPWP (Extended Public Works Programme), Mr Stanley Henderson, then made a presentation to the Committee on Phase II of the EPWP (see document).

In conclusion, the Minister said that because it was in everyone’s interest to fully understand what EPWP was all about and the Committee was running out of time at this meeting, the DPW would make an electronic version of the presentation available to the Committee. He stressed the distinction between additional jobs that the economy was expected to generate and those expected as a result of the DPW’s EPWP interventions.

The Chairperson thanked the Department for its presentation and Committee members for their participation and closed the meeting.

The meeting was adjourned.


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