Department of Public Works: Additional Strategic Plan presentation & progress report

Meeting report

Department of Public Works additional Strategic Plan presentation & progress report
Mr Siviwe Dongwana, Director General, Department of Public Works, introduced himself, saying that he was newly appointed, and also introduced other new appointees in the Department of Public Works (DPW or the Department).

Ms Cathy Motsisi, Chief Financial Officer, Department of Public Works, gave a brief progress report on some of the activities in the Department, indicating that it had managed to exceed its targets in the sub-programmes for Finance and Supply Chain management. The Business Case, and the terms of reference for implementation of the Action Plan for compliance with Generally Recognised Accounting Practices in respect of the Property Management Trading Entity (PMTE) were completed. There was improved revenue and debtors management in the PMTE. Management on movable assets had also improved by 90%, since the Department had cleaned up its Movable Asset Register. The Department was also piloting a system that would monitor invoices on monthly basis. The Supply Chain Management Service Level Agreement had been finalised.

Mr Mandla Mazibuko, Deputy Director General: Special Projects, Department of Public Works, outlined the progress in respect of Corporate Management. He said that the integration of asset registers for national and provincial projects (iE-Works) was at 85% completion and was progressing as planned. The structure of Human Resource Management had been reviewed and 453 critical posts were identified and approved. Twelve draft Memorandums of Understanding (MoUs) on infrastructure development were under discussion or consideration. Special projects, such as the building and upgrading of 2010 stadiums, and projects from other countries, including in Namibia and Mozambique, had been completed.

He noted that the Property and Construction Charters were gazetted by the Minister of Public Works in 2009, and the Department was going to publish a notice on the amendments to the Construction Charter. The review of Chapter 4 of the Ministerial handbook was under way, relating to construction and property policies. Terms of reference had been developed on the DPW White Paper. The Construction Charter Constitution had been amended as per DPW requirements. The process of launching the Charter’s Council was under way.

Ms Sasa Subban, Deputy Director General: Asset Investment Management, Department of Public Works,  stated that the Department had completed 80% of its Immovable Asset Register, compared to the 90% completion target. The National Vesting Plan had been completed and circulated for implementation, and 52 contract workers would resume duty in mid September 2010. The Amnesty Call Strategy was completed and was at the draft stage. Service Level Agreements (SLAs) had been submitted to 41 client departments. The Human Sciences Research Council (HSRC) and South African Revenue Services (SARS) had signed the SLAs. The Department was hoping to put more pressure on the energy projects, as they did not perform as expected.

Most of the Immovable Asset Investment Management projects were completed, even though some were slow and needed acceleration. Thirteen foreign properties were approved for disposal, while fourteen were disposed of, for commercial purposes. DPW had disposed more than 1 000 hectares of land that it had targeted for the purposes of Human Settlements.

Mr Richard Samuel, Deputy Director: Inner City Regeneration, Department of Public Works, said that in respect of the revitalisation and development of rural towns to serve as centres for rural economies, there would be a focus on Tswane Salvokop, as there was no budget allocation to extend the programme. He explained that the DPW had planned 28 Construction Maintenance projects. It also had three Border Control Operations Coordinating Committee (BCOCC) capital projects, which were in the construction stage. Special research had been done, in the areas of maximising utilisation of State properties within major cities, for the towns of Matatiele and Mthatha, with a view to developing Government precincts.

Mr Samuels said that delay in payment of DPW’s contribution to the replacement of the Research Base on Marion Island, and projects that were rolled over to the year, had resulted in under spending on the infrastructure budget. There had been cancellation of some South African Police Services facilities works, as part of the programme due to devolution process. There were delays in Skilpadhek Landport Entry, due to negotiations for acquisition of a portion of property in the middle of the border-post footprint, as well as the Libombo border post, as the initial plan of restructuring was now to be done in phases, owing to financial constraints. Delays were also experienced in the acquisition of Prestige Housing, due to price negotiation processes, and the suitability and availability of houses.

Funding of R150 million was made available for the infrastructure budget on micro re-organisation of the State, of which R130 million was allocated for provisions of accommodation and R20 million was allocated for procurement of furniture of houses and offices. A request for R800 million over the Medium Term Expenditure Framework (MTEF) period was included in the Department’s policy options submitted to National Treasury, for the funding of the Independent Development Trust (IDT). This money was divided into amounts that were paid for three different financial years. The Department had also emphasised, in its presentation to the Medium Term Expenditure Committee (MTEC), that IDT was one of its funding priorities. It was currently awaiting the decision of that Committee.

Discussion
Mr S Masango (DA) wanted to know if the Department had a strategy in place to ensure that the funds were properly used. He pointed out that there were only six months to the end of the financial year.

Mr Dongwana assured the Committee that by November 2010 the Department would have the funds, so IDT could continue with its projects from other Departments.

Ms L Jacobus (ANC) wanted to know in which provinces the hectares of land disposed of for Human Settlements were based. The Department of Rural Development and Land Reform had said there was no State land available.

The Chairperson asked that the Department compile an explanatory document on the land that had been disposed for Human Settlements purposes, and the time frame for disposal.

Ms Jacobus also sought clarity what criteria were used in the corporate services division in regard to the International Relations Memorandums of Understanding.

Mr Mazibuko explained that the Department was finalising the MoU’s with India on exchange relations, and that these MoU’s included the provision of skilled engineers. He also stated that there was improvement in the registration of the Cuban engineers, who would in future be registered, similar to the Cuban health professionals.

The Chairperson suggested that Mr Mabuza had to give a detailed report that expanded upon the time frame within which the Department must register Cuban skilled engineers. This report should also indicate whether any assistance was needed from the Committee, as the Engineering Council had stated that there was resistance to registration.

Mr Dongwana confirmed that it was hoped that registration would be finalised by the end of February 2011.

Ms Jacobus asked what measures were taken by the Department to cut its costs, particularly in view of the recent public servants’ strikes.

Mr Dongwana said that the Minister was now flying economy class instead of business class, and the meetings in Parliament were scheduled to start later so that the delegates could take morning flights, instead of having to fly in the previous night and pay for hotel accommodation. A memorandum had been circulated in the Department about the transport costs.

Mr M Rabotapi (DA) wanted clarity on the deciding factors for prioritisation of rural cities.

Mr Stanley Henderson, Acting Deputy Director General: Expanded Public Works Programmes (EPWP), Department of Public Works, explained that the Department looked at the needs of the clients as one of the deciding factors.

Mr K Sithole (IFP) asked if the Department had buildings that it had targeted for Inner City Regeneration.

Ms D Ngcengwane (ANC) suggested that in respect of the large projects funded by government the DPW should ensure that a certain percentage was given to Black Economic Empowerment owners.

Mr Masango wanted clarity as to why the Department underspent the R130 million it had received. He also wanted to know the progress on the SAPS R500 million lease matter, and whether the DPW had been involved in the lease agreement.
 
Ms Motsisi explained that R130 million related to infrastructure and R20 million related to furniture costs. The delay in this project was due to the fact that the project started in October 2009 and had overlapped to the current financial year.

Mr Dongwana confirmed that the Department was involved with the lease agreement. However, certain issues were picked up and the Minister had appointed an Investigation Team. The parties were awaiting the report from the Investigation Team, since the decision of the Department would hinge on the outcome of the investigation. The last person who needed to be questioned on this matter was to be questioned that day, and he hoped that the report from the Investigating Team might be provided by the end of the week.

The Chairperson wanted to know the time frame for the investigation.

Mr Dongwana stated that the time frame would expire as soon as the investigation was completed.

Mr P Mnguni (COPE) wanted clarity on the delays at the Libombo border post, and why the project was done in phases.

Mr Mabuza explained that the project had to be done in phases because of financial challenges. In addition, it must be remembered that this properly lay partly in the foreign territory of Mozambique. The previous Annual Report, as well as page 11 of this presentation, touched on this point. However, there was reference on page 6 of this presentation that the project was now completed. He explained that the project had rolled over from the previous financial year to this financial year. However, it was completed in May 2010.

The Chairperson asked what system was used by the Department to dispose of property.

Ms Subban stated that the DPW followed National Treasury regulations, and disposed of the property for market value. If the price agreed upon was less than market value the Department would consult with the National Treasury before disposal.

Mr Masango wanted to know the status of the 52 contractors.

Ms Subban explained that 52 contractors were contract workers who were going to help the Department in the vesting at the Deeds Office. They were individuals.

Ms Ngcengwane wanted clarity as to whether the Construction and Property Charters were finalised, as stated in the previous year’s Annual Report.

Mr Mabuza explained that the proposed amendments to the Construction Charter were gazetted in 2007, amendments had now been completed and the Department was ready to present them before Parliament. He also explained that there were differences between the versions of the Charters before and after they were gazetted, incorporating the changes that may have been made.

Mr Sam Vukela, Deputy Director General, Department of Public Works, who had previously been an Acting Director-General, explained that the Property Charter was delayed because the Council for the Built Environment (CBE) decided to do further research on it.

Mr Dongwana informed the Committee that the Department had, as promised, visited the new Kimberley Correctional Centre, but the Department of Correctional Services had cancelled the meeting that was scheduled to take place between the two departments. It had been suggested that the hospital at the new centre in Kimberley had to be in full use in order to identify the changes that had to be made. He thanked the Committee for its support and constructive criticism, which had given the Department much information.

The Chairperson noted that the Department’s Annual Report would be presented on 5 October 2010.

The meeting was adjourned.