Expanded Public Works Programme: progress report

Standing Committee on Appropriations

28 June 2011
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Standing Committee on Appropriations and Portfolio Committee on Public Works received briefings from the Department of Public Works (DPW) and various provincial and municipal entities on the challenges that were experienced on the implementation of the Expanded Public Works Programme (EPWP). The EPWP Incentive grant was introduced in phase 2, to encourage entities not only to make more use of labour-intensive methods, but also to create longer or more permanent work opportunities, and would be paid out quarterly, provided that quarterly reports were received. The DPW set up the policy, determined the thresholds and provided technical support to various public bodies. The public bodies had to prepare and implement the project plans, and update project information. Provincial public bodies received funds via provincial treasuries, whilst payments for municipalities were made directly from DPW to the municipal public account, although National Treasury monitored the compliance of the incentive and supported DPW. In the last financial year, R185 out of the R330 million allocation was paid out to provinces, and R273 million was paid to municipalities, of the R622 million made available. In total, EPWP expenditure was R458 million out of the R952 million allocation. 91 out of 126 eligible municipalities accessed their incentive, an increase on the previous year. However, public bodies were under-reporting and using low-labour intensive projects, and were therefore not accessing their full incentives. An exception was KwaZulu Natal, which received 80% of its allocation, and Limpopo, who drew down 234%, part of which was transferred to it from other non-performing provinces. City of Johannesburg had performed well in the category for municipalities, and North West municipalities outperformed that province’s department. Six out of nine provinces accessed the incentive for the current year, and 80 out of 126 municipalities. The measures put in place to accelerate expenditure were outlined, including strengthening of capacity both in the National Department and at public bodies, training through the Siyenza Manje project, technical support, and ring-fencing of funds.

The KwaZulu Natal (KZN) Provincial Department of Transport, which was driving EPWP in that province, outlined the various construction and maintenance programmes, noting the targets for beneficiaries, how the contracts were divided, training of learners and spending. This Department was targeting youth, and aimed to provide employment and training for at least three years, over and above the permanent work opportunities already created in this programme. The North West Province noted that although its public works programmes were performing well, the roads programmes were not, and the main problem was the lack of capacity to design, specify and manage projects, as well as lack of commitment to implementation, with some projects being treated as optional. North West was due to replicate the KZN programme, had inserted targets into contracts of employment, and had injected resources in and improved supply chain processes. Nelson Mandela Bay Municipality had had some challenges but had still been shortlisted for awards. It was working with non-government organisations and had achieved its targets for 993 full-time employment opportunities, and had been awarded a R2.6 million incentive. It could have some problems in reaching the increased targets but had developed a new policy. It was implementing four projects. Mangaung Municipality outlined that it had put in substantial effort, although it had not reached all targets. Most capital projects were funded through the Municipal
Infrastructure Grant. There had been delays in procurement and on site, but these challenges had been identified and were being addressed. Solutions were also sought for lack of reporting and lack of awareness. Most of the projects were environmental. The City of Johannesburg said that it was unique in that all EPWP projects were seen as an integral part of the City’s programmes, and were a mayoral priority. Targets had been set by the City, which was managing the programme for 15 companies and 11 departments. A number of officials attended planning sessions, and 400 learnerships were intended, with a specific target of the youth, and all projects had to be reported. The City still needed to create more opportunities for those with disabilities. The South African Local Government Association (SALGA) commented that it was concerned about the differentiated approach on reporting and a lack of capacity. It urged that rural municipalities not reporting needed to be bolstered by provincial departments, and said that there had been loss of institutional memory following the recent municipal elections. It recommended training for incoming councillors, including the EPWP as a part of the provincial commissions, and short and long term solutions to increase labour-intensive projects.

Several Members expressed concern about the way in which the EPWP was currently funded, commenting that an implementing body, in order to access the grant, needed baseline funding. Whilst the larger metros were able to supplement from own income, the smaller and rural municipalities could not do so, and could never implement at all, resulting in their potential grants being removed and given to other bodies who could perform. Members felt that DPW, SALGA and National Treasury were not currently doing enough to capacitate, assist and monitor the rural municipalities. The Committee therefore urged National Treasury to undertake a comprehensive review of the EPWP funding model, and do more to assist rural municipalities, drawing on the models of City of Johannesburg and KZN province. Members further commented that consultants and contractors must take proper instructions from the bodies providing the work, and that control systems must be introduced, targets should be set better, and DPW should be assisting also with budget planning and capacity assistance, as also improvements in data capturing. They also emphasised the need for training. In future, they suggested that the poorer municipalities should be asked to give presentations. National Treasury clarified what the Committee was asking and said that this would be discussed fully with DPW.

Meeting report

Expanded Public Works Programme: Expenditure briefing: National Department of Public Works
Mr Stanley Henderson, Deputy Director-General: Expanded Public Works Programme, Department of Public Works, noted that the presentations by the National Department of Public Works (DPW or the Department) would explain the existing model used for the Expanded Public Works Programme (EPWP), and he would also highlight the challenges faced with this programme.

Mr Ignatius Ariyo, Chief Director: EPWP Infrastructure Sector, Department of Public Works, said that the EPWP Incentive Grant was introduced in Phase 2 of the EPWP project, and was intended to ensure intensive implementation of EPWP by public bodies. Public bodies also had to use the grant for projects with longer duration, so as to create more permanent work opportunities. The grant was paid out on a quarterly basis, depending on the submission of reports, which was also supposed to be done quarterly. DPW determined the allocations to public bodies based on how they had performed during the previous financial years, and in order to ensure that the payments of the incentives were made correctly, it also called for continuous submission of reports. The results from the assessment of the reports were added to the management verification system. The role of DPW was to set up the policy, determine the thresholds and to provide technical support to various public bodies. The responsibilities of the public bodies were to prepare EPWP project plans, implement the EPWP projects and update project information. 

Mr Ariyo also explained that the provincial public bodies received funds via provincial treasuries, who also bore the responsibility of withholding or withdrawing funds if they did not perform. Payments were made to municipalities directly from the DPW to the municipal public account. National Treasury (NT) monitored the compliance with the incentive and supported DPW.  The current model obliged public bodies to report quickly. They signed an agreement, which was valid for one financial year, and had to submit reports on all the projects they were implementing.

During the 2010/11 financial year, R185 million was paid out from the R330 million provincial funding that was available. The Northern Cape (NC) and the North-West provinces did not access their incentive. Of the R622 million made available for municipalities, R273 million was paid out to municipalities. The total expenditure on EPWP as therefore R458 million out of the R952 million allocated. 

Mr Ariyo reported further that 91 out of the 126 eligible municipalities accessed their incentive in 2010/11. This showed an increase from the previous financial year, in which 47 municipalities accessed their incentive. The number of eligible municipalities was growing continuously. The challenge was that public bodies were not drawing down their full incentive allocations, due to under reporting and low labour-intensity of projects implemented. KwaZulu Natal (KZN) received 80% of the allocation, and Limpopo drew down 234%. The reason for this overdrawing was that because this was an incentive grant, those provinces not performing could have their funds taken away and given to those that were performing. Northern Cape, North-West and Gauteng continued to be a concern as their draw-down was low. The City of Johannesburg had performed well in the category for municipalities by drawing down 79% of its incentive. Eastern Cape municipalities had drawn down 38%. The North-West municipalities had used 52% of their incentive and outperformed the provincial departments. For the current financial year 6 provincial departments had accessed the incentive. 80 out of the 126 municipalities would be paid a total amount of R55 million. 

The challenges being faced by the public bodies in drawing down the incentive included the poor quality of data reported, under reporting, lack of capacity and the fact that projects were not being implemented intensively due to poor designs or lack of technical capacity and a poor understanding of the EPWP incentive by public body officials. 

DPW had put some measures in place to accelerate expenditure. The capacity of the Municipal Technical Support Directorate had been strengthened; EPWP Unit officials hade been assigned to municipalities to assist in reporting, and public bodies were being provided with support to report on EPWP. There had been a partnership with the Development Bank of Southern Africa (DBSA) through the Siyenza Manje programme, training officials in municipalities in labour intensive methods of construction. Technical support was also being provided to public bodies to implement their projects on a more labour intensive basis. DPW had now decided that allocations would be ring-fenced across the spheres of government, to align implementing plans, and implementing bodies would be allowed to use EPWP incentive to ensure that there was enough capacity to implement and report on clearly identified projects.

Co-Chairperson Mr Sogoni requested the KwaZulu Natal (KZN) delegation to give a separate presentation on its model, which was working successfully. He explained that the officials were from the KZN Department of Transport, which was the department driving the EPWP incentive, and that this was unique to KZN.

Co-Chairperson Ms Mabuza said that she had understood that DPW would explain to the Standing Committee on Appropriations why EPWP was not making an impact on the ground, and why the rural municipalities were not accessing the incentive. The explanation given to the Chairperson, on the previous evening, during an informal discussion, was that after DPW had given its presentation, there would be engagement with the two Committees. It was not expected that the provinces would present.

Mr Sogoni responded that the discussion to which Ms Mabuza referred was one at leadership level, not one for the current forum. He suggested that the discussions remain at appropriate level. However, the purpose of this meeting was to try to gauge, from the models being presented, what was the best practice, and to assess what was going wrong at municipal level.

KwaZulu Natal provincial presentation on Incentive Grant
Ms Lulu Mdletshe, Manager: EPWP, KwaZulu Natal Provincial Department of Transport, said that she would, in her presentation, focus on the construction and maintenance programmes. The main target projects were the Zibambele project, Block Paving Construction, Ultra Thin Labour Intensive Construction, and Labour Construction Programme. As an expansion to Zibambele, the provincial department was targeting the youth who had graduated from the programme itself, in order to increase capacity. This was to improve the quality of reporting for the EPWP at regional level. The projects were implemented from the baseline budget and the incentive grant was used as additional funding.

Currently, the Zibambele road maintenance programme was targeting 40 000 beneficiaries, and this was the pillar of EPWP in KZN within the infrastructural sector, as it provided permanent work opportunities. The incentive grant was targeted at Labour Intensive Construction, which contributed to achieving an equitable and well maintained provincial road network, as well as enhancing emerging contractor development and employment opportunities for local labour. Emerging contractors in the Construction Industry Development Board (CIDB) Grade 1 and 2 were the main focus for delivering on labour based projects. Contracts were divided into smaller parts in order to enhance the development of emerging contractors, which provided employment for local labour. 140 learners were targeted for capacity building learnerships, which were aimed at developing young future contractors within the construction industry. R143 million had been spent on the Labour Intensive Construction and Maintenance Projects and R10 million on the Labour Intensive Construction learnerships. R113 million was projected to be allocated as the incentive grant for the 2011/12 financial year. R10 million would be spent on the Capacitation Programme, R2.1 million on the Zibambele Youth Development Workers Programme, R3 million on the Pilot Plant Operator Learnership, R97 million on Road Infrastructure Projects and R2 million on Road Safety Crossing Guards. The targeting of the youth by the provincial department would provide employment and training for at least three years, over and above the permanent work opportunities already created in this programme.

North-West EPWP Incentive Grant briefing
Mr Mbulelo Tundzi, Coordinator: EPWP, North West Province, said that the problem areas of North West’s programmes would be highlighted in the presentation. The North West’s Provincial Department of Public Works had two programmes, which were the public works programmes, and roads programme. These programmes contributed to the provincial EPWP. The general public works programme was doing well, but the roads programme was not doing well and this resulted in the underperformance of the EPWP incentive grant. The North-West had a budget of R482 million and spent R238 million. It had created 1 819 work opportunities. However, there was a lack of capacity in the provincial department to design, specify and manage projects. There was a lack of commitment amongst some officials to implementing EPWP, and there was a gap in that policies which were supposed to be obligatory were being treated by officials as optional.

In order to improve this situation the provincial department undertook a study tour to KZN in 2007, when it was recommended that the North-West should adopt and replicate the KZN programme. The Executive Committee (ExCo) adopted the recommendations. After the 2009 elections, the Provincial Department of Public Works, Roads and Transport was constituted. Another trip was undertaken to KZN. In the previous year, this department then launched a replica of the KZN programme, but the provincial department was still trying to catch up and compete against those who had been dealing in this sphere for a long time. Unfortunately, the allocation of resources was also not sufficient to bring this up to the level of KZN. There was a target of 10 000 work opportunities in the first year of the launch of the programme, but not even 3 000 work opportunities were achieved.

During the current year, the programme was up scaled to 14 000 work opportunities. EPWP targets had to be inserted into the contracts of senior managers and Heads of Departments (HOD), so as to reward or sanction staff, based on their performance. This had been discussed at ExCo meetings and was minuted. Officials in the provincial public works office were being trained, workshops were being held and resources were being mobilised to address the issue of underperformance for the EPWP incentive grant in the North-West.

A further challenge was that once the funds were appropriated, the consultants used did not meet EPWP guidelines, and were not competent. The programme had to be improved both by injecting resources and human capacity. Supply chain processes had to be reviewed to ensure that EPWP was enforced and appropriately applied. It had to be noted that this was a national programme.

Nelson Mandela Bay Municipality presentation
Mr Mandayi Rala, EPWP Metro-Wide Coordinator, Nelson Mandela Bay Municipality, said that this municipality (NMBM) had some challenges in promoting the EPWP programme, but it was still shortlisted for an award at the EPWP Awards during the past financial year. One of the achievements of the NMBM was that in a joint undertaking, two Non-Governmental Organisations (NGOs) were awarded funding by DPW for purposes of the EPWP programme. This resulted in 1500 beneficiaries. NMBM was working with the NGOs as well as other private industry role-players. In 2009/10, NMBM set, and achieved, its target for the creation of 994 full time employment opportunities. As a result of this, it was awarded R2.6 million as an incentive.

Mr Rala started to give a comparison with other district municipalities.

Co-Chairperson Sogoni interrupted to point out that NMBM could not compare itself with district municipalities, as it was a metro.

Mr Rala concurred and said he would then move on to other points.

Mr Rala said that some problems started with the increase in the target for job creation opportunities, which was now 2761. The allocation for this was R12.4 million. NMBM would have to work very hard to achieve this target, and would have to achieve figures of no less than 650 per quarter. Currently, however, it had managed to achieve between 400 or 500 opportunities per quarter. NMBM had also needed to develop an EPWP policy, as some providers did not want to change their mindset, and this new policy would be enforced at all costs.

Included in its achievements, NMBM had received an award for best corporative in the environment and cultural sector, and was short listed for the social sector award. Training had been conducted for 30 officials on the Labour Intensive model in March 2011. There were currently four projects that were being implemented in the environmental and cultural sector and all targets in each programme were being achieved. The projects were driving EPWP. They included the Infrastructure Development and Maintenance Programme, the Peer Educator Programme, the Environmental Programme and the War on Hunger programme, and
Beautification Programme (mainly run in cemeteries).

Mangaung Municipality: Implementation of EPWP briefing 
Mr Gert Van Rooyen, Project Manager: Project Management Unit, Mangaung Municipality, said that there had been a statement that Mangaung Municipality was experiencing challenges with regard to the implementation of the EPWP. Although the target set by National Government had not been reached, Mangaung had put substantial effort into the creation of work opportunities and reporting on them. The minimum threshold for the creation of job opportunities was 1725. He outlined the achievements as being 509 opportunities in Water & Sanitation, and 363 in Roads and Stormwater, with an average of 449 for the Municipal Infrastructure Grant (MIG). If the aaverage non-MIG projects were included, then the figure was 1066. This was still below target. Most capital projects in Mangaung were funded by MIG, as this municipality was unable to fund much from its own pocket. The challenges were that the procurement process was still causing unnecessary delays. Projects were advertised only after budget approval, postponements of bid meetings caused delays and there was referral-back of items due to minor queries. All these delays led to late starting dates, which meant that contractors experienced problems in completing on time, and would tend to use less manual-labour and more mechanisation.

In order to address some of the challenges, Mangaung had decided that Council approval had to be obtained for certain projects before budget approval, that advertisements had to be done sooner, that
no Bid meeting should be postponed and that minor queries on bid items must be rectified without having to refer the item back to the next meeting. 

Challenges on site were that
Mangaung had rocky areas, meaning that excavations had to be deep. For the building of major roads, the contractors, instead of using labour-intensive methods, tended to rather use machinery, which was expensive. In some cases, labourers did not turn up for work, and ccontractors were careful not to employ excess workers because the MIG unit cost could be exceeded. Possible solutions were that more workers could be appointed, documents could be improved to force the contractors to appoint a specific number of workers for each project, and workers in the various wards must be selected more carefully to make sure that they were willing to perform their duties.

Further challenges were the lack of reporting on existing projects, the fact that not all officials were aware of EPWP and all its implications, and operational budget constraints. Possible solutions were
the expansion of the existing structure and the recommendation of a special operational budget item for EPWP activities. Identified environmental sector projects were listed as: Food for Waste, Road & Water, Road & Maintenance Projects, Parks Projects, Waste Collection and Cleaning Project as well as Waste Recycling.

City of Johannesburg EPWP briefing
Mr Jason Ngobeni, Executive Director: Department of Economic Development, City of Johannesburg, said that the EPWP fitted in with the rest of the programmes for the City of Johannesburg, rather than being seen as a stand-alone project, and they fell under economic development. The set objectives were job creation, enterprise development and skills development. The target that had been set by the City of Johannesburg was 150 000 jobs, and this was an internal target, not one agreed upon with DPW. Currently 44 000 jobs had been achieved. The City of Johannesburg was currently managing the programme for 15 companies and 11 departments, and all entities submitted plans and targets that were set jointly with the metro. Quarterly reports were submitted to the mayoral and portfolio committees. Reports were submitted monthly to the municipal manager. EPWP had been turned into a “cultural practice” at the City of Johannesburg. However, what was unique to the City of Johannesburg was the fact that there was no specific budget allocation; instead, every capital budget that was approved by Council was treated as an EPWP project. 

Mr Ngobeni noted that about 26 officials had attended planning sessions on the implementation of EPWP. There was strong political will, at mayoral level, for the implementation of EPWP. An internal target of about 400 learnerships has been set. The Jozi Ihlomile Project was an annual project, which did not get an appropriation or allocation from the City budget, but instead was funded through the EPWP programme. This project targeted the youth and had been running for the past four years. This programme was also treated as a mayoral priority. The Tourism Ambassador programme was inspired by the 2010 FIFA World Cup, when persons trained to speak foreign languages were recruited and placed at major tourist attraction areas. The Zakheni and Kageng Environmental Project had resulted in 250 jobs, and concentrated on eliminating urban decay. R22 million had been spent on a project for the commemoration of June 16, and this was to be an annual project. All projects under the EPWP incentive grant had to be registered, as well as the beneficiaries. This made for easier reporting. The only challenge that could be mentioned was that it was difficult to create opportunities for people with disabilities. 

South African Local Government Association (SALGA) comment
Mr Tim Hadingham, Project Manager: Economic Development, South African Local Government Association (Western Cape), noted that he was representing all of the municipalities in SALGA, said that he had been requested to represent SALGA as a whole at the meeting. SALGA was concerned about the differentiated approach to reporting. Even in the metros, capacity was also a major issue, as had been demonstrated, which meant that the smaller rural municipalities had even more difficulties, which meant that fewer projects could be initiated, as there was insufficient management capacity to oversee them. SALGA was of the opinion that when rural municipalities were not reporting, then there should be a closer relationship with the provinces, to bolster their capacity. The inclusion of EPWP was a longer-term municipal process. SALGA would be proposing, to its internal structures, that a two-pronged approach should be adopted to encourage municipalities, in both the short and long term, to improve on their labour intensive projects. EPWP was a standing issue at provincial and national working groups, and meetings were held quarterly, to encourage municipalities to report. Because of the recent municipal elections, where about half the councillors were not re-elected, much institutional memory was now lost, and SALGA also proposed that there should be training for incoming councillors, especially those on portfolio committees. It was also proposed that EPWP should be part of the provincial commissions.

Discussion
Co-Chairperson Mabuza said that there were certain problems common to municipalities. These included the lack of control systems. She suggested that EPWP should have its own model, so that municipalities should be able to access the grants. Rural municipalities should be capacitated before receiving grants, and there should be a skills transfer policy for the municipalities so that there could be implementation.  If these problems were not attended to, and National Treasury was not challenged to change this model, then EPWP would never be a success. She commented in particular that the target for job creation in Johannesburg was low, at 150 000 jobs over a five year period, whereas it should be around 250 000 to 30 000 opportunities.

Ms C Madlopha (ANC) said that SALGA was responsible for assisting municipalities with capacity, and asked what SALGA had done, in conjunction with the Department of Cooperative Governance and Traditional Affairs (COGTA) to address this problem. She also enquired about National Treasury’s view on the EPWP and its suggestions to address any failings. She pointed out that the rural municipalities were the worst affected as they did not have a revenue base. Municipalities were accessing little of the MIG grant, and this created a gap in terms of service delivery. DPW also had to play a wider role and assist the municipalities, especially in budget planning.

Ms Madlopha further noted that, throughout all presentations, challenges in data capturing were highlighted, and she asked about the role of the data capturers employed by DPW, and how they were assisting municipalities. She thought that the problems in North West were indicative of a lack of drive from the officials in that province, despite the President’s call for 2011 to be the year of job creation.

Mr J Gelderblom (ANC) commented that it was unfortunate that there were too few rural municipalities making presentations, as this was where the main problems lay. He agreed that job creation was the main challenge, but there was also an urgent need for technical capacity, especially at the rural municipalities. There had been no improvement in the training conducted by SALGA, which was also of concern, and there seemed to be too little coordination between DPW, the provinces and municipalities. The model presented by the City of Johannesburg was ideal, and should be shared with the rural municipalities, and whether their own models were working needed to be addressed. There had to be uniformity across the programmes. There was also a lack of good communication. National Treasury could not keep paying money where there was no accountability or if there was underspending. Training was also of tremendous importance and he suggested that officials should attend all courses for their entire duration.

Ms P Ngwenya-Mabila (ANC) asked how DPW would assist the municipalities with technical skills if they did not have capacity. She did not think it was good practice to take funds from underperforming public bodies and allocate them to those that were performing. It was necessary to ask why provincial departments were not adhering to the guidelines and standards of the EPWP, and what steps were being taken to address this. In the municipalities, she asked what plans had been put in place to cater for the change in leadership after the elections. She suggested that DPW at national and provincial level, and SALGA, must intervene in the North West, where there was a major challenge. In addition, National Treasury had a responsibility to address underspending on EPWP, and she asked what interventions had been made.

Mr L Gaehler (UDM) said that the KZN and City of Johannesburg models were ideal. He also expressed concern about the North West, saying that it was not satisfactory to hear that consultants were unwilling to adhere to EPWP guidelines, as they should be taking instructions from the public body by whom they were being paid. The main problem with the rural municipalities was the number of residents, but the very small tax base, and he asked what the Treasuries were doing to address this. He also urged that SALGA must assist in boosting the capacity of the municipalities.

Ms N Ngcengwane (ANC) commended the City of Johannesburg on its new culture of supporting EPWP. She thought that all role players should attend an “EPWP Legotla”. She also urged that National Treasury must re-consider the current EPWP incentive model, and help struggling rural municipalities. In addition, the Sector Education and Training Authorities (SETAs) should be called upon to assist with training.

Ms R Mashigo (ANC) stressed that the main issue was poor reporting, and this needed to be monitored and should have received more emphasis in the presentations. There was also a need for a properly designed and maintained infrastructure.

Ms Madlala said that there were several poor municipalities in the Gauteng region that had not given presentations and suggested that in future the poor and underperforming municipalities should present their problems. She also noted that there were 238 municipalities, but only 202 had signed the Memorandum of Understanding with the DPW, and enquired what had been done about the rest.

Co-Chairperson Sogoni corrected Ms Madlala, saying there were 278 municipalities in South Africa.

Mr Gaehler noted that North West, unlike Mangaung, did not mention its own rocky areas as a particular challenge for construction projects.

Mr Chris Hlobisa, HOD, KZN Provincial Department of Transport, said his province appreciated that others were coming to learn from these programmes, and noted that KZN could also learn lessons from the City of Johannesburg. KZN also had a Food for Waste programme. The call for a change in the EPWP model was welcomed by KZN. There was constant work in KZN to ensure that its municipalities were reporting in the appropriate manner.

Mr Sam Vukela, Acting Director-General, National Department of Public Works, said that all input from this meeting would be taken forward for the review of the EPWP.

Mr Henderson said that the targets for public entities had been set relatively low. MIG was the basis for target setting, but it was also necessary to set targets that were achievable. It was also important that there be good political buy-in, so that the targets could to be achieved.

Mr Ariyo said that the target set for Mangaung was based on the MIG, and this was the minimum. The same applied to all the public bodies. There were provincial steering committees set up for the purpose of coordination from the DPW. The City of Johannesburg had its own coordinating committee, and this set the City apart from the other bodies. He told Members that the DPW was capable of disbursing the funds, over time. National and provincial summits were being planned in order to coordinate and follow up on all issues raised.

The Chairperson told the Mangaung representative that he had expected better targets from Mangaung. 

Mr Van Rooyen said that Mangaung was now employing better labourers. The fact that there were rocky areas meant that much excavation had to be with machinery. Mangaung operated by first approving a project, then identifying where the work had to be done. Mangaung was reporting on MIG and non-MIG projects.

Mr Ngobeni said that about three years ago the City of Johannesburg could not provide more than 10 000 jobs a year, but this had improved, and the expectations of the City also kept rising. The City’s focus was now on providing long term employment.

Ms Julia de Bruyn, Chief Director: Public Finance, National Treasury, said that in Phase 1 of the EPWP programme, grants were given that were not based on performance. However, the infrastructure grant was then introduced in response to DPW’s request to encourage implementing bodies to perform in a labour-intensive environment. If the Committee was not in favour of the policy of incentives, then it was possible to revise it and turn the Incentive Grant into a normal grant.

Co-Chairperson Mr Sogoni said that Members were concerned with the fact that the larger metros could use their own funds, whilst smaller municipalities were unable to do so, and could not access the grant because they did not even have a baseline from the outset. There was a need to give assistance to those smaller municipalities.

Ms de Bruyn asked if the Members were saying that rural municipalities should be treated differently, or if the incentive model aspect of the grant should be removed.

Ms Madlopha said that the Members had reached the conclusion that only the stronger municipalities could access that grant, and pointed out that Mr Hlobisa had said that the grant could not be accessed unless a municipality had an implementing budget. The metros had capacity, as they had a revenue base. The rural municipalities did not have such a base, and therefore could not possibly compete. Members wanted to see all municipalities benefit.

Ms De Bruyn thanked the Members for clarifying the issues, and said that the communication lines with DPW as to what the Committee wanted would be clearer and the municipal funding would have to be reviewed.

Ms Gillian Wilson, Chief Director: Public Works Budget, National Treasury said that the Department would look at the issues that had been raised. The rollout of Phases 1 and 2 was intended to build capacity within DPW, but National Treasury, although it did not enforce the programme, must review the basis of the funding.

The meeting was adjourned.

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