Meeting SummaryThe Committee was briefed by the Department of Rural Development and Land Reform, the Department of Public Works and the Department of Water Affairs, following the presentation of the Medium Term Budget Policy Statement (MTBPS).
The Department of Rural Development and Land Reform indicated that the budget allocated to the Department by National Treasury was less than half of the amount it had requested and as a result it had already exhausted its budget in certain areas, having already spent 99.9% on restitution. Funds had been shifted from some other programmes. National Treasury had informed all departments that they must adjust their budgets, to take account of the financial constraints in which South Africa found itself. Finally, the Department had been allocated an additional R292 million, most of which was needed for the establishment of the new Department. The Department had condensed its seven programmes into five. The Department was also given an additional amount of R2.34 million from the Department of Co-operative Governance and Traditional Affairs for the Integrated Sustainable Rural Development programme. The main cost drivers related to land acquisition. Members asked for an indication of the relationship between this Department, and the Departments of Agriculture and Department of Human Settlements, and what programmes they were running together. The principle of willing buyer and willing seller was discussed, and the Department clarified its difficulties with the concept of “market value”. Members questioned how many of the agreements signed in the previous year were likely to be honoured and paid for, and noted that some other agreements had not resulted in signed Deeds of Sale. Members questioned how the Department was expected to fulfil its role of carrying out priority work for government without funding, and suggested this point be stressed to National Treasury. Members noted that the target dates for acquisition of land had now been shifted, questioned whether the programmes of agriculture and land reform overlapped, questioned the priorities allocated to the programmes, and asked whether there had been value for money in the restitution process. They also asked to what extent the Department was involving traditional leaders, whether there was sufficient human resource capacity in the Department, and noted that there were a number of issues that would need to be further pursued.
The Department of Public Works noted that it had received R751 million, which represented an increase of 14.8% to the base line. That additional funding related to unforeseen and unavoidable expenditure, including the roll-over that it requested in terms of the capital budget. The reasons for both were explained. The Department had managed to form forums with municipalities and the provinces to get reports on what was outstanding, and had a fairly good idea of which provinces would be experiencing shortfalls. The rollover related to the funds that could not be paid to the trading entity before the end of the financial year, although the work had been done. It was accepted that further capacity must be built in the Department, particularly in technical skills, needed additional funding for the incentives for the Expanded Public Works programme and for additional allocations to the Border Control Operational Coordinating Committee, upgrades to the Parliamentary precinct, and for increasing disabled access and improving water management in all State owned buildings. The Council for the Built Environment, previously funded through the Goods and Services budget, and Agrément SA also needed extra capacity. As at September, the Department had spent about 46% of its budget, and was projecting to over spend, but had also instituting savings measures. Members questioned the spending to date, noting that infrastructure was where most jobs would be created, yet it had achieved only 25% after two quarters. Members asked when the Expropriation Bill was likely to be re-submitted to Parliament, whether there would be more shifting of funding, whether posts had been filled, what was being done about the asset register, whether labour-intensive methods were successful, and whether this Department envisaged any Occupation Specific Dispensation. Members also wanted to know about any checks and balances on “unforeseen circumstances”, questioned the spending and shifts on certain programmes, the numbers of jobs already created, in view of the slow uptake by municipalities, and interrogated the Department’s views on under spending and savings.
The Department of Water Affairs noted that it had not received confirmation of its final allocation but presented the requested figures. It too had been asked to revise the initial figures, and it had altered its original programme plans. The Department was contributing to jobs through the Working for Water Programme and the Working for Fire Programme. It was trying to fill its internal vacancies and was using small, medium and micro enterprises (SMMEs) to create jobs and to trigger economic growth. It was mostly focusing on those in rural areas. It provided skills for engineers through the learning academy and hired interns. It was also working in the preventative health fields and was very concerned that the cuts should not affect water quality, and to this end it had budgeted for substantial allocations to the infrastructure and its proper maintenance. Members queried the water research projects, what was being done about flooding in the Southern Cape, questioned the numbers of jobs created and the vacancy rate, and questioned whether the Department would be budgeting for Occupation Specific Dispensation. Specific projects also were questioned and explained. Members also asked about the non-payment of invoices on time, how the Department was working with municipalities, what was being done to give communities access to dam water, the reasons why the administration figures were so high, and noted the need to address other issues at a later meeting.
Medium Term Budget Policy Statement (MTBPS): Public hearings
Department of Rural Development and Land Reform (DRDLR or the Department)
Mr Thozi Gwanya, Director General. Department of Rural Development and Land Reform, indicated that even with an expenditure rate of 99.9%, the Department did not have sufficient funds to achieve all its objectives. The Department had requested a budget of R18.3 billion over a three year period. National Treasury had only allocated a budget of R6.3 billion over this period. The Department had then requested an additional amount of R4.4 billion which was largely for restitution. National Treasury told the Department that it must adjust its budget down, so that it could fall within its financial constraints which it was experiencing as a result of the current economic climate. The Department then re-calculated, and put in an adjusted request for an additional R1.6 billion but was only given R292 million, most of which was needed for the establishment of the new Department.
With the reduced amount the Department had received, it was forced to condense its programmes from seven to five programmes for the period 2010-2013 (see attached document). The expenditure for the second quarter showed that the Department was already at 57% expenditure overall, with expenditure on restitution being at 91% and land tenure at 42%.
The main cost drivers for the Department were the programme on Land Redistribution for Agricultural Development (LRAD), the Pro-active Land Acquisition Strategy (PLAS), under Act 126 of 1993, and the Commission on Restitution of Land Rights (CRLR), which was settling the restitution claims. The fourth area was the Comprehensive Rural Development Programme (CRDP). The Department was also given an additional amount of R2.34 million from the Department of Co-operative Governance and Traditional Affairs for the Integrated Sustainable Rural Development programme.
There was a clear indication that sufficient funds were not provided to the Department in order for it to carry out all its main objectives.
The Chairperson wanted to know whether there was a relationship between the Department of Rural Development and Land Reform and the Department of Human Settlement. He was aware of people in the rural areas who benefited from Reconstruction and Development Programme (RDP) houses, which cost R55 000 each, yet were using them as storerooms while living in homesteads, because these homesteads were bigger than the RDP houses. R55 000 was a lot of money to spend on a RDP house that would then be used as a storeroom. He suggested that the two departments together needed to address that issue.
Mr Gwanya said that his Department had a relationship with the Department of Human Settlements, and the two were working together in some areas. The design and structure of the RDP houses were left flexible to reflect the preference of the people in the rural areas concerned. Here, there may not have been the same situation as in the urban centres, where the floor area of the houses was smaller because more supplies were built into those houses such as pipes and toilets, which required additional costs.
Mr M Swart (DA) said that it had heard a lot about the principle of the willing buyer and willing seller situation. He wanted to know how it went about determining the prices of a farm it wished to buy and the process which was followed.
Mr Gwanya explained that the process that the Department followed was in line with the Constitution. The Constitution said that the Department had to investigate, and then purchase land, for transfer to the people. The historical cost of the land, how it was acquired, how it was purchased, whether there were any improvements made to the land and what the market value of the land was were some of the factors that the Department had to take into consideration before buying the land.
The process that was followed was the Department then appointed valuators. Some of the high costs reflected for consultants were the costs of the valuations that had to be done with almost every transaction. The Department was experiencing challenges regarding the valuators because they came up with different amounts. The Department had a number of court cases in the Land Claims Court where it had differed with the land owners and the valuators. The Land Claims Court had made many statements that valuation was not an exact science, so it was possible for valuators to come up with different valuations. The problem was also that it was common for those who knew that they were selling to the Government to demand a higher price.
The Chairperson asked where the word “market place” came in and whether it was in the Constitution.
Mr Gwanya replied that Section 25 of the Constitution referred to the “market value”. He said that the difficulties in interpretation were that this then went back to the practice of determining the price which was set out in the Expropriation Act of 1975. The Act provided for the willing buyer and willing seller principle, which was taken into account.
Mr J Gelderblom (ANC) said that he was aware of the fact that there were many agreements signed between the owners and the new farmers. He wanted to know how many of the contracts were signed, because many of the farmers were promised money in the last year. He wondered if there would be sufficient funding for paying for those agreements already signed, and if it would be possible for those farmers to get their money in that financial year.
Mr Gwanya said that he unfortunately was not in possession of the lists and of the number of farmers at the present time, but the analysis for R486 million was based on the value of those agreements. Of the R486 million, R220 million represented specific signed agreements, and the balance related to general agreements. He added that the reason why the Department had shifted funds from the redistribution to the CRLR, to the value of R220 million, was to be able to honour the agreements that had already been signed. The other agreements were based upon the value of the land but the Department had not signed any deeds of sale in relation to this, because the Public Finance Management Act (PFMA) prevented the Department from doing so where it did not have the money to meet the agreement.
Mr L Ramatlakane (COPE) noted that the Department had requested R18 billion to carry out its priorities but was given less than half of that amount, and as a result the Department could not achieve many of its objectives. He noted that the government had rural development as one of its key priorities. The Minister of Finance, when presenting the budget, had alluded to that as one of the key areas of work. He asked whether the Department was satisfied with the amount that was allocated in order to carry out the rural development programme as outlined by the Minister. There was no point in the Department having a brilliant strategy describing how it planned to carry out the objectives, if it lacked the funds to do so. He felt that the Department should be taking up with National Treasury the point that it did not make sense if insufficient funds were allocated to carry out what had been named as a key priority.
Mr Gwanya said that in terms of the CRDP, the Department did have a strategy in place. It had asked for feedback from all the provinces and national departments on a plan for this programme. The Department was hoping to make a Green Paper available for public debate early next year. That framework outlined exactly what it was it would like to do in the implementation of rural development.
The Chairperson referred to the main cost drivers of the Department and said that the budget did not really reflect land redistribution as its expenditure was already at 91%. That meant that at the end of the third term the Department would have spent over 100% of the allocation, and would then have to shelve all the other commitments until the next financial year. He asked whether the Department had a plan for that.
Mr Gwanya said that the Department had tried to address that question by reprioritisation. Reprioritisation was looking internally at the existing funds, because National Treasury had made it clear that there was no new money, on the basis that it did not believe that the Department had the capacity to spend. The Department had even provided National Treasury with the schedule of those agreements, so it was not a theoretical request. National Treasury said that the Department should instead reprioritise, which was what the Department did. In doing that, it had re-allocated amounts from redistribution, to try to honour the agreements. The Department had then exhausted its budget on buying 443 000 hectares, short of its plans to acquire 680 000 in this year, in pursuance of the overall mandate to acquire 1.5 million hectares by 2014, and this also meant that the target date for acquisition also had to be changed.
The Chairperson also asked what the difference between the Comprehensive Rural Development Programme and the Department of Agriculture programmes were, and whether these two departments would be working together. He also asked whether the Department had finalised its CRDP.
Mr Gwanya said that the Department of Agriculture had its own programmes. That department’s input on issues which directly fell under the Department of Rural Development and Land Reform were linked to agricultural aims. For example, the DRDLR did not have extension officers. These officers were on the pay-roll of the Department of Agriculture, Forestry and Fisheries (DAFF). However, DRDLR and DAFF had an agreement that those extension officers must be retained to provide services for the improvement of agriculture in general. That was where the link between the respective departments lay.
Ms B Ngcobo (ANC), referring to the two out of the seven programmes that were removed, asked what prompted the Department to remove those two programmes specifically.
Mr Gwanya said that the Department had not simply removed any programme but rather it had combined them with other programmes. For example, programme seven was now combined with programme six which was the Geospatial and Cadastral Services.
Ms Ngcobo also wanted to know whether the Department was looking at value for money and asked what value for money had there been in the Restitution Programme.
Mr Gwanya said that the Department bought very valuable assets. He said that some of farms that it had bought were initially run down but were currently exporting. Many of the projects were working very well and the land that DRDLR had bought for the people was useful land.
Ms D Mavundla (ANC) said that the rural areas were mostly under traditional leadership and therefore it was appropriate to involve the traditional leaders and the local government on issues of rural development. Ms Mavundla asked whether the Department had a strategic plan in this regard.
Mr Gwanya said that DRDLR spoke to the House of Traditional Leaders in Limpopo to introduce the concept of rural development programmes. The Department had appealed for its assistance. The Department gave the House the concept document of the CRDP and had challenged the leaders to tell the Department how they could optimise the youth and get the support of the traditional leaders in realising the goals of the rural development programme.
In the structure of the CRDP there was a council of stakeholders. This operated at a local level and involved the municipality and the traditional leaders. It involved a group of farmers, school governing body and health committees and the Department had representatives on the council of stakeholders, thereby determining the manner in which it engaged with the needs of the people and what its priorities were.
Ms R Mashigo (ANC) asked the Department how it was able to carry out many of its matters relating to land and agriculture when it clearly did not have the necessary human resource capacity, especially for the evaluation and monitoring of those matters. Ms Mashigo also stated that the land bought in the first term was very expensive and she wanted to know what was involved in the purchase, and what strategies the Department had to monitor and evaluate.
Mr Gwanya answered that the Department did not have the ideal numbers of staff, which had been calculated at 1224. It did an analysis of its staff structure and was in discussion with National Treasury and the Department of Public Service and Administration (DPSA). The Department had calculated that for the ideal staff structure it would have needed an extra R500 million on the budget over a three to five-year period. Last year, when it did the determination of what capacity was required, it tried to adjust the new structure to the new mandate. National Treasury and the DPSA had approved the macro-structure with the five components.
The Chairperson asked how far the Expropriation Bill was.
Mr Gwanya said that the Expropriation Bill was referred by Parliament back to the Department of Public Works, and that Department would need to answer the question. However, the two departments had formed a task team that looked at the reasons for the referral back from Parliament, which were basically concerns on constitutionality, consultation and determination of compensation. The Departments had to review, restructure and resubmit it.
Mr M Swart (DA) noted that land acquisition was 30% completed against the targets for 2014, and asked for further detail on this.
Mr Gwanya replied that this target of 30% translated to 24.4 million hectares of agricultural land. So far the Department had bought 5.5 million hectares, which translated to an estimated 5% progress. The Department was left with 19 million hectares still to obtain.
The Chairperson said that there were a number of issues that the Committee had requested be followed up, and these would have to be revisited shortly.
Department of Public Works (DPW)
The Chairperson noted that he would like the Department to give information on the devolution of property rates. He was under the impression that a large amount of money was provided for, but would like to hear of any monitoring or evaluation mechanisms in place to check whether that money reached the municipalities. Constituencies had a negative perception of property rates and his impression was that the money was not reaching them.
The Chairperson also said that the Department needed to address the President’s statement about job creation, more specifically the 500 000 jobs that were promised this year, and enquired how far the Department was in reaching this. He also said that the Department would need to speak to progress on the Expropriation Bill.
Ms Cathy Motsisi, Chief Financial Officer, Department of Public Works, started off by saying that the Department received R751 million, which represented an increase of 14.8% to the base line. That additional funding related to unforeseen and unavoidable expenditure, including the roll-over that it requested in terms of the capital budget.
With regard to this unforeseen and unavoidable expenditure, the Department received R524 million. In February, when the Minister of Finance announced the budget, he made mention of R114 million that was supposed to go to three institutions, namely the Independent Development Trust (IDT), Community Works Programme (CWP) and Trade and Industry Policy (TIP). That money, however, was not yet allocated in the budget. The adjustment estimates were now broken down. The IDT would get an amount of R5 million, which related to the operational costs for the work that it was doing in assisting the Department in managing the incentives and also in creating the 500 000 jobs. CWP was going to receive R51 million for the contribution towards the Expanded Public Works Programme (EPWP) initiative. TIP would receive R58.5 million for creation of the jobs. Those funds related not to incentives, but to the operational funding to enable the institutions to initiate projects. The Department also received R150 million for the residential accommodation for the new ministers and deputy ministers, including allocations for furniture and security for those houses.
The Department also received an increase to the Devolution of Property Rates Grants of R353 million, and a general salary adjustment of R21,7 million. Gauteng received the biggest share of the R353 million to the Devolution of Property Rates Grants, with R209 million, because of the short fall from the previous years and the increase in property rates. For the current financial year the Department managed to form forums with municipalities and with the provinces. The Department met with municipalities and received reports from them on what was outstanding. The Department was able to determine which provinces were going to experience a shortfall.
The funds rolled over related to the capital budget. DPW had a trading entity, Public Management Trading Entity (PMTE) from which it managed devolutions. Work had been done by PMTE, for which the Department needed to pay, but because of the timing differences the payment could only be done in April, meaning that the Department had to request a rollover to be able to make the payment.
The policy supporting the request for additional funding for 2010/11 was submitted to National Treasury. The first option was additional funding for Compensation of Employees. The Chairperson had raised a critical issue, and the Department agreed, that it needed to build capacity within the DPW, particularly in the technical field. The Department had to look at skills building. It had prioritised R150 million from the base line to be moved to Compensation of Employees, to begin creating the necessary capacity building.
The Department then requested R835 million as a top up to the R433 million for EPWP that it received in the financial year, for the incentives.
The third policy structure related to infrastructural capital budget. The Department requested R451 million for the Border Control Operational Coordinating Committee (BCOCC). DPW was the custodian of immovable assets at 54 land ports of entry, on behalf of the BCOCC, which was responsible for the co-ordination of strategic and operational management of the South African border environment (see document).
With regard to the Parliamentary Precinct, two or three years ago it was decided that Parliament was overloaded and overcrowded. There was a need to expand and build a precinct that would have to meet with Operational Health and Safety requirements, and with international standards. The extension of Parliament would also cater for public participation, as this had not been done prior to 1994. Comparisons with other countries showed that the present Parliament was not as functional as it should be, in terms of conditions and size. After engagement with Parliament, it was agreed that that project must be started.
Policy option 3 related to accessibility. The Department requested R16 million for 2010/11, in order to make all State owned buildings accessible to those with disabilities and therefore help to make government accessible to all. It also aimed to minimise risks to citizens and to government which resulted from claims for damages and non-compliance (see document).
The Department had also requested R214 million in line with life cycle management for water efficiency. The project aimed to address problems of old and inefficient water works systems in the State owned buildings, in order to address water shortage.
Ms Motsisi outlined that the Council for the Built Environment (CBE) had a current budget of R24 million. The Department had previously requested R30 million. The CBE had previously been funded through the Goods and Services budget of the DPW. An amount of R24 million was budgeted in the 2009/10 financial year. During the course of the previous financial year 2008/09, the CBE realised that, in order for the institution to effectively deliver on its mandate, additional capacity would have to be obtained. That resulted in seven new posts being created and filled. This institution was one of the most critical institutions of the DPW and it was critical that it should get the necessary capacity.
The Department's third entity was Agrément SA, which currently only received R8 million from the Department. It had requested a top up of R42 million for the next financial year. The main objective of Agrément South Africa was to support and promote the process of integrated socio-economic development in South Africa (see document). If there was any equipment that needed to come into the country for the use of construction, it would assist in assessing the quality that would be safe for use in South Africa. This entity was grossly under resourced and it was trying to effectively discharge its mandate.
The financial implications of the fourth option for the Medium Term Expenditure Framework (MTEF) that was presented for 2010/11 amounted to R3.3 billion, with an additional R2.7 billion for 2011-12 and R3.6 billion for 2012-13, totaling R9.7 billion over a period of three years.
Ms Motsisi presented the financial performance of the Department as at 30 September 2009. The baseline target for this date was 50%, and she noted that the Department had spent almost 46% of the budget, a 5% difference. The Department would probably overspend, but with the cross-cutting measures that it implemented since the beginning of the financial year, it had projected a savings of R63 million under Goods and Services. Under Property Management, it had projected a savings of R20 million, amongst others (see document). All of those savings would be shifted to the compensation line to address the projected overspending.
Mr Swart said that the expenditure on infrastructure at that stage was only at 25% after two quarters. He said that this was worrying, as this was where jobs were created.
Ms Motsisi said that the Department did not measure infrastructure in terms of a linear target. It normally used an s-curve. It also went according to the project plan of what was going to be built. The curve actually showed 27% as at the end of September, which was not too much different from the 25%.
Mr Swart said that he was aware that the amendments to the Expropriation Bill were ready for submission to Cabinet, and wanted to know when it was to be referred to Cabinet and when the public hearings would commence.
Ms Motsisi said that there was a working team from DPW’s policy unit that was working on the Bill. The Department planned to bring it to Parliament in the next financial year.
Ms Ngcobo said that the issue of reprioritisation of R150 million was addressed. She asked whether that was the final shifting which was done, or would there be more shifting.
Ms Motsisi said that it was not just a case of shifting under spending. The Department had to interrogate its budgets thoroughly to try to mitigate some of the challenges it faced because, depending on the activities of the Department, if there was something new and urgent that came on board, then the Department would have to revisit its budget, within the limits of the PFMA.
Ms Ngcobo said that mention was made of the seven posts. She wanted to know whether these were already filled or were still to be filled.
Ms Motsisi said that those posts had not yet been filled as DPW was awaiting funds for that purpose.
Mr Gelderblom wanted to know what the situation was with the asset register and whether there was money made available for that.
Ms Motsisi said that she had not mentioned it specifically, but that the DPW had created a Chief Directorate that would focus on the asset register.
Mr Ramatlakane referred to page 4 and questioned the labour-intensive methods. There had been much debate on this. There was a degree of reluctance from the Department of Trade and Industry about the replacement of people for machines, because machines were faster, and he questioned the way forward on this issue.
Ms Motsisi said that it was her understanding that one of ways that the government was trying to enforce labour intensive methods for the municipalities and for provinces was with the introduction of the incentive scheme, so that they could do away with the machines and instead look at the empowerment of people.
Mr Ramatlakane asked what the Occupation Specific Dispensation (OSD) entailed in the DPW.
Ms Motsisi replied that DPW did make provision for OSD for the architects, quantity surveyors and others working in the built environment. The Department was also looking at returning people to doing technical work, in order to retain them.
Mr Ramatlakane said that the “unforeseen circumstances” was a catch- phrase and wanted to know how the figures for this were being monitored.
Ms Motsisi said that that was something National Treasury guarded very closely in case the Department wanted to ascribe poor planning to “generally unforeseen or unavoidable circumstances”.
Ms Mashigo said that the Department referred to money being spent in relation to compensation for employees. The Department had already submitted a request for Goods and Services but then on the next page there was already an overspending because of the functions and the funeral, which amounted to R50 million, which were reflected as being taken from Goods and Services.
Ms Motsisi said that part of the R63 million would be shifted to programme 4. She indicated that the Department only had one Goods and Services line item, which was included in the R63 million. This was why the Department was going to rationalise and try to assist programme 4 with its expenditure (see document).
Mr Ramatlakane asked whether there were figures as to how many jobs were created.
Ms Motsisi said that the Department had mentioned that the municipalities were picking up slowly. She would make the figures available to the Committee.
The Chairperson said that he felt that there was often some confusion on terminology and asked whether the Department saw a difference between savings and under spending.
Ms Motsisi said that there was under spending, and there were savings. That was why, when she spoke to Goods and Services, she indicated that it was at 36% spending against a target of 59%, even though it tried to achieve savings by cutting down on travel and entertainment and cell phone allowances.
Department of Water Affairs (DWA)
Mr Onesmus Ayaya, Chief Financial Officer, Department of Water Affairs, said that the Department had already engaged with National Treasury for the MTEF process, and was presenting in terms of this engagement, although there had not yet been an actual allocation.
He noted that the priorities of the government were in more or less five areas, in which the Department felt it could contribute. One of them was the area of job creation. The Department contributed to that particular goal through the expansion of its public works programmes, the Working for Water Programme and the Working for Fire Programme. The Department could not talk about creating jobs internally until vacant positions had been filled, and it had embarked on a campaign to ensure that positions were funded and filled. It had also used small, medium and micro enterprises (SMMEs) to create jobs and to trigger economic growth.
In regard to Government’s priority to focus on rural development, DWA’s targeted procurement to support economic opportunities was focused mostly on historically disadvantaged individuals (HDIs), most of whom were in rural areas. The Department had benefited from an additional amount for the increased allocation for the Working for Water Programme (see document). The Department also invested in the infrastructure which encouraged more water to be made available in those areas.
The Department's contribution with relation to skills development was through the learning academy, for which an estimated R5 million was provided. That amount went to bursaries for engineers. Together with that, the Department had 24 interns that it had hired. The Department was exposing those interns to the water environment and was hoping to absorb them into the Department as positions became available.
Water went hand in hand with preventative health. When there was cholera in the Limpopo region last year, the Department had spent a large amount of money to fight against the outbreak of cholera. With regard to the implementation of water conservation and demand management, R63 million had been earmarked to enhance the practices in municipalities. The quality of water however would be compromised, since the Department had only been allocated R53.7 million for certain drought stricken areas.
Due to the changes that had taken place in government, the Department was forced to reorganise its programmes. It previously had four programmes, and it currently had five (see document).
Mr Ayaya outlined that the indicative budget figures, before the allocations were given to the Department, were R7.6 billion in 2010, rising to R9.1 billion in 2012/13 for the respective programmes.
In terms of the roll-over, funds were given to the Department for enhancing learning capacity, especially specialising in engineering skills. The Department expected to spend R20 million on those engineers to ensure correct capacity in the Department.
In the next financial year the Department had a total budget allocation, before other funding options were considered, of R7.6 billion. Out of that, R4.8 billion was earmarked for certain activities, and could not be shifted for other purposes before consulting with National Treasury.
Requests for additional funding for the 2010 MTEF were met with the remarks that the Department must be realistic as to what could be expected, in light of the current economic recession. The Department had asked National Treasury for additional funds for the Conservation Demand Management for Rain Water Harvesting and for Working for Water Programmes. The Department also needed additional funding for a Deputy Minister. However, it had then tried to scale down the requests, and had come up with some different funding options. Prior to the requests to downscale, the Department had wanted to implement Refurbishment of Regional Structures and Regional Bulk programmes, amongst others. After scaling down, the Department requested a budget of R125 million for 2010/11, rising to R168 million for 2011/12 and R198 million for 2012/13. It did not yet have confirmation on this.
Mr Gelderblom said that he agreed with the fact that water would be a scarce item in the next years to come but wanted to know where the programme was for water research.
Mr Trevor Balzer, Manager, Department of Water Affairs, said that the water research project sat with the Water Research Commission. It was one of the entities that reported to the Minister. There was a levy that applied to every kilolitre of water sold. That funding went back to the Department and the Department then made a transfer to the Water Research Commission.
Mr Gelderblom also asked what the Department was doing with regard to the floods which were experienced in the Southern Cape.
Mr Balzer said that it was very difficult to budget for extreme events. Obviously, in terms of climate change mitigation programmes, the Department was looking at how it could mitigate the impact of climate change in areas where there might be higher rainfall or lower rainfall.
Ms Ngcobo asked whether the Department could tell the members how many jobs had been created in order to address the 500 000 jobs to be provided by the end of the year by expanded public works programmes.
Mr Balzer said that the Department had created 2 100 jobs and each one of those jobs equated to 100 person days of work in a year.
Ms Ngcobo asked whether the Department could tell the Committee about the current vacancy rate and how many personnel it was planning to have in the Department.
Mr Ayaya said that he needed to get back to the members on that issue, as he did not have the exact figures at that moment. He said that that figure changed constantly, due to the fact that staff were being shifted to municipalities.
Ms Ngcobo said that compensation for OSD was not being catered for. She wanted to know the reason for that, and which scarce skills the Department required.
Mr Ayaya replied that there was a matter discussed with the Bargaining Council, in relation to the municipality strategies. The 2009 MTEF did not specifically cater for the OSD but rather catered for the normal employment of staff without having a super-skilled category. That was why, when compiling the budget for 1 April, the Department had requested R50 million, because it did not know precisely which levels and numbers it should budget for. However, for the current financial year, it came up with an estimated budget of R24 million for salary increases. The Department was therefore not ignoring the reality that it needed certain skills. Within the Department there were scientists, hydrologists and engineers, among other professionals.
Ms Mashigo stated that she was concerned about the rivers that ran through most of the disadvantaged areas, and asked whether the Department would be able to fund some of its projects.
Mr Ayaya noted that the Department had been speaking of the projects established by the government, with two main aims; namely, to raise funds, mainly for bulk water infrastructure, and to ensure that there was project implementation of those projects which had been funded outside of the fiscus.
Ms Mashigo asked, in relation to the invoices that the Department had not received on time, what action the Department had taken to ensure that invoices were submitted on time, as non-payment affected service delivery as well.
Mr Ayaya said that when it came to invoices generally there were certain that required certification on the work done. Although the Department expected the invoices, it would not pay them until its civil engineers had been on site and certified that the work was done to the standards that the Department had expected. That was one of the reasons for the delay which resulted in under spending.
Ms Mavundla asked whether the National Department had a national programme that could guide the local government programme on how to provide the mechanisms for water provision, and whether there were also programmes to accelerate the provision of water in rural areas.
Mr Balzer said that there were a number of dams that did not service the community in the immediate surroundings. The Department was busy with an assessment of all those dams, in order to put a programme together that would ensure that those communities adjacent to the dams were brought on board and supplied with water.
Mr Ramatlakane noted the statement that South Africa would run into serious problems if it did not take action on the shortage of water. Some of the Department’s scale downs of programmes probably affected the projects that attempted to address the water crisis, and he asked how the Department could scale down in the face of such a serious problem.
Mr Balzer said that this question had been partially addressed by Mr Ayaya, but that the Department was trying to avert any crisis by making substantial budget requests to handle the asset management and protection of assets. It had requested R300 million in 2010/11, rising to R600 million in 2012/13. This sought to protect the infrastructure to ensure that it was still capable of doing what it should.
The Chairperson said that he was aware of restructuring taking place. He wanted to know whether this would extend also to the programming. He had looked at the SMME’s national expenditure, but the way in which this budget was structured made it difficult for those outside the Department to determine where the funds were going.
Mr Ayaya said that the Department had tried to use an approach that would enable government to see which priority was being attended to, and to have specific funding available for that, so that focus could be directed to certain matters, which would be managed in a more organised way.
The Chairperson noted that the Administration programme had a budget allocation of R795 million for 2010/11, to reach R900 million by 2012/13, and wanted to know why that figure was so high.
Mr Ayaya said that there were a number of things included in the Administration, such as the funds for the deputy minister, the CFO's and CEO’s salaries, the salaries for the team of 380 people.
The Chairperson said that there were a number of items from the presentation which still needed responses and that the Committee would attend to this at a further meeting.
The meeting was adjourned.
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- Public Hearings on Medium Term Budget Policy Statement & Adjustments Appropriations Bill with following national departments [P
- Public Hearings on Medium Term Budget Policy Statement & Adjustments Appropriations Bill national departments [Part 2]
- Medium Term Budget Policy Statement: Departments of Rural Development & Land Reform, Public Works & Water Affairs [Part 2]
- Medium Term Budget Policy Statement: Departments of Rural Development & Land Reform, Public Works & Water Affairs [Part 1]
- Public Hearings on Medium Term Budget Policy Statement & Adjustments Appropriations Bill with national departments [Part 1]
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