Lebombo Port of Entry Progress Report: Department of Public Works briefing; Impact of State of Nation address on public works: Parliamentary Research Unit briefing

Meeting report

Chairperson’s opening remarks
The Chairperson noted that there were three issues where the Committee wished to have a report. The R500m lease of the South African Police Service (SAPS) was still under investigation. The Committee had set a date for a meeting with the Department of Public Works (DPW) for a briefing on the suspension of the Director-General of the Department Public Works. On 22 March 2011 the Committee would hold a meeting to discuss the salaries of the executive management of the Department.

In terms of the agenda, the chairperson stated that they have only two items namely, a Public Works Perspective on the 2011 State of the Nation Address, and the presentation by the Department on the Progress Report on the Lebombo Port of Entry. She asked the delegation from the Department to make their presentation to the committee.

Lebombo Port of Entry Progress Report: Department of Public Works (DPW) briefing
Ms Lydia Bici, Acting Chief Operations Officer, Department of Public Works, provided a progress report on the Lebombo Port of Entry (border post), following the visit to Mpumalanga.

She outlined that this project was started in 2007, at an estimated cost of R300 million. There were four areas of the project identified, which included the main border facility, the freight facility, the KM 4 road and the railway station. An exercise aimed at determining the actual needs of respective government departments in both South Africa and Mozambique, was carried out. Those consulted included South African Revenue Services (SARS), South African Police Service (SAPS), the National Intelligence Agency (NIA), the Department of Home Affairs (DHA) and the Departments of Agriculture and Health. The consultation exercise for the one stop border post was concluded in September 2008, and there was then approval of the Master Plan and space needs document. In December 2008 a further estimate was given of the cost at that stage, including professional fees. The Department held a meeting on 4 December 2008 to advise the consultants about the financial constraints involved in carrying out the entire development simultaneously, and therefore the main border facility was prioritised, at an estimated cost of R400 million.

By January 2009 it became clear that National Treasury (NT) would not adjust the Medium Term Expenditure Framework (MTEF) allocation for Lebombo. A decision was therefore taken to limit the implementation to the civil works Project (Project N), on the South African side of the border, with minor renovations for processing offices in preparation for the 2010 World Cup. The implementation of that project would also serve as Phase 1 of the One Stop Border Post. Executive Management from the Department of Public Works (DPW) met with Mozambique government officials about this decision and its implications. Mozambique was advised to prioritise and undertake the same kinds of improvements on that side of the border.

The total funding for Project N was R175.1 million, which was based on the recommendable bidder’s price. However, the confirmed allocation for that current financial year was R75.8 million. The DPW and NT Treasury Regulations emphasised that no bids should be awarded without confirmation of the required funds being available.

In September 2009, both South Africa and Mozambique agreed that each party should develop the required infrastructure for the purposes of the 2010 World Cup. There was emphasis placed on the construction of a bypass road for freight transport, pedestrian facilities, capacity for co-location and joint operations. In October 2009, the DPW advertised the tender of the project to address the upgrade of the border, construction of bypass road, and redevelopment of temporary pedestrians’ building to become the permanent operations office for pedestrians. In January 2010, the successful bidder came on site, with clear instructions to prioritise the bypass road, and other civil structures. In June 2010, the bypass road was handed over to the Border Control Operations Coordinating Committee (BCOCC), while the contractor in Mozambique handed over the road to the Mozambique border post authorities.

Additional work or changes to align the buildings to operational requirements were requested, and these, at the time of the tender, were provided as: |
Information Technology Civil Infrastructure in all new buildings;
Installation of Air-conditioning Unit for the Server Room in the Pedestrian Building;
Burglar Proofing and Ramps at the allocated offices (which were previously houses);
Changes to SAPS Offices in the Pedestrian Buildings;
Installation of Security Fence (as advised by NIA and the SAPS Report) towards the border line for pedestrians;
Installation of Boom Gate and Spikes at the bypass road;
Installation of Toilet facilities at the Canopies.

All of these were receiving attention from the contractor. The instructions that were issued in December 2010 were due to be completed by 25 February 2011. Other external works awaited authorisation by the Bid Committee.

During the last visit of the Portfolio Committee to the Lebombo Port of Entry, a concern was raised about the appearance of the precinct. The Portfolio Committee asked the DPW to initiate a programme to improve the landscaping and general cleaning of all port of entries, which were “the face of the country” for visitors. The DPW had accepted that request, and had discussed it with the Minister of Public Works, which resulted in the decision to start a job creation programme at all ports of entry. With the assistance of the Mpumalanga Provincial Department of Public Works and the local municipality, the Department had recruited 80 youths, who would be direct employees of the DPW for a period of twelve months. The youths would be divided into service categories in general cleaning, and in horticulture. The Department would provide all the necessary resources, in the form of cleaning equipment, protective clothing, cleaning consumables, vehicles and operation flow manuals. During the twelve-month period, the Expanded Public Works Programme (EPWP) Co-operatives Desk would establish a co-operative. Its members would be selected from the group, based on the selection criteria of EPWP. EPWP would further ensure the registration of that co-operative with the Department of Trade and Industry (dti) and DPW would enter into a three-year deal negotiating contract with co-operatives. The launch project would be the Lebombo Port of Entry. By April 2011 the services would expand to all border posts between South Africa and Swaziland.

Ms Bici said that the mandate of the DPW in relation to the development and improvement of ports of entry was tied into a fixed infrastructure. Each individual department who had a presence in the port of entry would remain responsible for installation of computer hardware, data cabling, movable furniture and stocks, purchasing of goods’ scanners, and relocation programmes and procedures.

Ms Bici stressed that if this was not attended to by the BCOCC then the completed buildings might not be operational by 23 April 2011.

Ms Bici then noted that when the project started in the 2008/9 financial year it was decided to relocate all staff accommodation from the border precinct to Komatipoort. The Department had developed temporary accommodation facilities, consisting of single quarters and married quarters. It was envisaged that the development of permanent accommodation facilities would resume in 2012/13, when appropriate land rights and funding were finalised.

The Chairperson interjected that she was concerned that the Committee had requested also a follow up on the Inkomazi Municipality, and what Department had done to consult stakeholders, after its meeting with the Committee. She hoped that the participation of stakeholders could also be described when the Department next gave a follow-up.

Mr Mandla Mthombeni, Deputy Director General: Projects, DPW, stated that the DPW had held a meeting with the Inkomazi Municipality, at which the Mayor was present, as also the Mpumalanga EPWP representatives. At that meeting, a decision was taken to employ local people.

Discussion
Mr L Gaehler (UDM) asked the delegation about the percentage spending by the Department. He also asked what amount was named, when the Department re-tendered in 2010.

Ms P Ngwenya-Mabila (ANC) needed clarification, saying that Ms Bici had, in the document, mentioned that 80 youths were recruited by the Department, yet later in her presentation had mentioned the figure of 53 youths. She also asked if and when the Department would buy equipment for the Inkomazi project, and how many wards were represented in that project. She complained that there were no specifics in the report about the items that were needed for the project, and there were also no details provided around the award of the tender, or when it was awarded.

Ms N Madlala (ANC) asked for clarity on the taxi ranks, and asked when they would be addressed by the Department.

Mr K Sithole (ANC) asked for clarity on the timeframe for the selection of EPWP members. He also asked the difference between data cabling and data capturing.

The Chairperson asked whether the estimate of costs for Project N were given only in respect of that project, and what the project entailed. She also asked whether if there were any land agreements with Mozambique, and, if so, whether funding was involved. She noted that no details of the financial year that the funding related to were given in the report. She asked for clarification whether the joint decision between South Africa and Mozambique was taken in a meeting, or at a workshop. She said that the costs generally were not clearly set out.

The Chairperson was not happy with the overall quality of the report, which lacked clarity and specific information. She asked the delegates to compile a proper report that addressed all the issues raised by the committee, and that set out specific details and costs.

Ms Bici apologised to the Committee, and promised that the Department would try to answer all the questions that were raised by the Members during the next meeting.


2011 State of the Nation Address: the Public Works perspective
Ms Inez Stephney, Researcher, Parliamentary Research Unit, stated that the 2011 State of the Nation Address (SONA) had repeated many of the issues raised in previous Addresses, reinforcing the priorities. The emphasis, as far as public works was concerned, remained in the areas of infrastructure development, investment in skills development, job creation and poverty alleviation through the Expanded Public Works Programme (EPWP) Phase 2. She noted that certain priorities had been identified. These included the alleviation of poverty, the need to ensure greater labour intensive projects through the EPWP, the need to invest R846 billion in capital works over three years, and the creation of jobs for the youth. Also mentioned were expansion of public employment programmes, creating decent work, developing skills and producing additional engineers and technicians, improving health by building and upgrading hospitals and clinics, improving provision of housing, water, sanitation, electricity, waste management and roads by municipalities. Emphasis was also placed on eradication of corruption in procurement and tender processes.

The implications of the SONA for the Department of Public Works thus remained as an emphasis on poverty alleviation, job creation and skills development. In addition, a number of avenues had been proposed to ensure the implementation of these priorities. These included infrastructure development, the refurbishment of hospitals and clinics, the provision of decent work opportunities through youth development, and promoting youth enterprises and cooperatives.

The impact of infrastructure development would boost the economy of South Africa. Government had announced plans to invest R784 billion in 2009, increasing to R846 billion for 2010. The infrastructure development initiative did provide both a shield as well a job creation potential in different sectors, including construction. However, Statistics South Africa had reported that comparisons between the fourth quarters of 2009 and 2010 had revealed a net loss of 181 00 jobs in the year-on-year employment rate in the formal sector.

The effective and efficient utilisation of the R846 billion investment in public infrastructure development, which was aimed at job creation and stemming job losses, had not materialised after the intensive construction period leading up to the World Cup in 2010. The explanation for the slow delivery was that government processes had held up progress in key areas. The energy sector was given as an example, where the development of the Integrated Resource Plan and government’s Twenty Year Electricity Programme took more than a year. According to Consulting Engineers South Africa (CESA), a strong contributory factor could be that the number of technical professionals dealing with the implementation of public works projects in government had shrunk from 5 500 to less than 1 800 over the last ten years.

The 2009/10 Annual Report of the Department of Public Works provided a list of vacancies in critical permanent positions. These included architects, civil engineers, engineers, quantity surveyors and senior managers. The Department had 646 critical positions available, of which 467 had been filled, leaving 170 critical position vacancies.

In February 2011 the Social Protection and Community Development Cluster reported on rural infrastructure development programmes that were undertaken by DPW in collaboration with the Department of Defence and Military Veterans. The two departments had completed community bridges in the Eastern Cape, and planned to build an additional 30 community bridges in rural areas, especially in flood-prone areas.

In order to finance job-creation initiatives, the budget announced that an amount of R9 billion had been allocated for the creation of a Job Fund over the next three years. These funds would be made available to assist the country in improving and increasing its skills base, to meet the demands of a growing economy. The need for skilled people in all areas and for creating platforms to ensure that skills were filtered down had been of concern since 1994. State-owned enterprises, such as Eskom, had been tasked with undertaking youth development programmes to support 5 000 young people in finding employment.

Ms Stephney reported that Phase 2 of the EPWP had created 750 000 job opportunities since its launch in April 2009. The aim of the programme was to create 4.5 million work opportunities by 2014, in response to the requirement of halving unemployment and poverty by that date. The two phases of EPWP had created approximately 2.4 million job opportunities since starting in 2004, the majority being created in infrastructure. A study released by the South African Institute of Race Relations reported that the job opportunities provided under the programmes lasted an average of 46 days, instead of the projected 100 days. That number also decreased from 50 days in the first year of Phase 2, to 34 days in the first quarter of 2010/11.

The Department also announced the rollout of a R150 million programme to address the potholes that were affecting roads in all provinces. The use of alternative technologies to close potholes and assist with road maintenance would be explored. Road engineers and superintendents were expected to inspect the conditions of the road networks on a daily basis. It was necessary to assess the cost of such an exercise, including what money and labour would be required, to ensure that it would be viable. 

The infrastructure programmes went further, since 300 labour intensive building projects were to be undertaken to build new schools and replace unsafe structures or mud schools. A further additional amount of R615 million was allocated for exclusive use on maintenance projects.

Ms Stephney then turned to the response on youth development. The creation of work opportunities for young people, especially in rural areas, was a response to the concerns about the large numbers of youth who were not employed and were also unable to access productive work. Government had proposed the introduction of the Youth Corps and the Waste for Food programmes under the EPWP. These initiatives aimed to create further job opportunities in a variety of skills, to support the entry of youths into the formal job market, as well as to foster opportunities for prospective rural entrepreneurs. In addition, 7 000 rural youth were recruited under the National Rural Youth Services Corps. The completion of the Green Building pilot project launched in Pretoria had focused on the installation of energy saving lights. That programme would now be extended nationally, hopefully creating more job opportunities for the young people.

Ms Stephney then dealt with the need to address corruption and maladministration in government institutions and municipalities. In July 2010 the Special Investigating Unit was tasked with the investigation of corruption and maladministration in various government departments, which included Provincial Departments of Health (Gauteng), Human Settlements, Arts and Culture, and Education (Eastern Cape), as well as the Department Public Works, the South African Security Agency (SASSA) and the South African Police Service (SAPS). In particular, it was mandated to investigate allegations about losses suffered by the DPW, and whether they could be recovered. The report on that investigation must still be provided, but this was likely to take some time, given the scope of the investigation, covering October 2003 to July 2010. The investigations were expected to focus on officials and employees of the Department, and on alleged irregular transactions or practices in acquiring State property, as well as loss of public money.

The DPW had, in 2009, launched Operation Re Ya Patala, which was aimed at clearing the backlog of payments to service providers that had been waiting for settlement of their invoices for more than 30 days. Visible invoices were to be resolved within seven days. In September 2010, DPW reported that 80% of invoices had been paid.

Ms Stephney then discussed the review of the procurement system. The 2011 SONA noted that a properly constituted procurement system was of importance, as it would assist in reducing and eradicating instances of corruption. There was a need to review the entire government procurement system to ensure effective and efficient spending. The DPW managed tenders valued at millions, sometimes billions of rands. The Auditor-General also paid high attention to proper systems for procurement, and controls. The DPW had received a qualified audit for 2009/10, due to irregular expenditure arising from that Department’s failure to follow proper procurement processes for all procurements. DPW had also lacked systems and processeses for identifying and recording irregular expenditure.

Ms Stephney noted that the Department of Performance Monitoring and Evaluation would, within six months, need to report on the progress made in filling all government-funded vacant posts. In the 2009/10 financial year DPW had 6 159 available posts, of which 5 026 were filled, and 1 133 were vacant. The DPW ran four programs, but reported on three as the fourth programme consisted mainly of transfers and therefore did not require staff. In its Administration programme 141 posts were vacant, in the Provision of Land and Accommodation programme there were 855 posts to be filled, and the National Public Works Programme had 37 vacancies.

Ms Stephney then went on to describe the implications of the 2011 SONA for this Committee. Parliament should receive a report on the implementation of the infrastructure development programme, and a progress report from the Department on the implementation of the Re Ya Patala programme. The Committee would need to monitor the Department’s progress towards improving its procurement systems and enquire to what extent proper procurement procedures were followed. A report would need to be given on the progress of the DPW in filling all its funded vacant posts. The Committee would need to monitor the effective implementation of programmes aimed at youth development, looking both to entrepreneurship development and proper coordination of programmes for youth in rural areas. The Committee should also receive progress reports from DPW on the outcomes of Phase 2 of the EPWP, including its impact in improving the lives of women, youth and those disabilities, particularly those in rural areas.

In addition, the Committee would need to continue to receive progress reports on issues that were raised in the 2010 SONA, including the development of skills and promoting additional engineers and technicians, the capital works investment, and the eradication of corruption in procurement and tender processes.

Ms Stephney concluded that the 2010 SONA had mostly tried to ensure that government programmes shielded South Africa from the worst effects of the global economic crisis. The 2011 SONA highlighted many of the same issues, but extended the priorities, with inclusion of greater monitoring and evaluation by Parliament, and responsible use of government resources. The priorities were job creation, skills development and broadening the opportunities for people to enter the formal job market, and targets and funding were assigned to those priorities. Both the effective implementation of programmes, and their quality, would need to be monitored to ensure timely delivery of the requisite infrastructure and skilled personnel.

The meeting was adjourned.