Budget and Programmes 2002/3: briefing

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Cooperative Governance and Traditional Affairs

22 April 2002
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
23 April 2002
BUDGET AND PROGRAMMES 2002/3: BRIEFING

Chairperson:
Mr Y I Carrim (ANC)

Documents handed out
Political Framework of the Budget [document awaited]
Overview of Budget and Department's Programme
Restructuring of the Department and the Strategic Planning Process
Intergovernmental Relations
Provincial and Local Government: Vote 5 [available on Treasury website]
Report on the Financial Year 2001/2 [document awaited]
Strategic Plan of the Department: 2002-2005 [document awaited]
These documents are available, please email
info@pmg.org.za for a copy:
ISRDP/URP documents
CD: Development and planning paper
Traditional Leadership

SUMMARY
The following matters arose in the discussion on the Political Framework of the Budget presentation made by the Minister:
- the percentage of municipalities actually providing basic services to their communities;
- the effective operation of district municipalities;
- the importance of volunteerism;
- municipal CEOs that are paid "exorbitant" salaries;
- the need to appoint permanent staff; and
- the importance of capacity building, interspheral mobility and infrastructural development.

The Acting Director General gave an overview of the Department's budget and programmes and the following matters arose for discussion:
- measures taken by the Department to address the problem with personnel posts;
- whether new personnel are familiar with the policies and plans of the ruling political party; and
- measures introduced by the Department to ensure personnel are not "poached";

The presentation on the Restructuring of the Department and the Strategic Planning Process highlighted the following matters:
- the value of the performance management system in disciplinary matters;
- the need for a comprehensive business plan from the Department;
- improvements to the business plan to assist the Committee in its oversight function;
- incentives provided by the Department to ensure personnel are poached;
- developments on the appointment of the new Director General; and
- the problem of underspending.

During the afternoon session the Committee was briefed on budgetary oversight dealt with governance and development issues. Three briefings were heard, from the Integrated Sustainable Rural Development Programme (ISRDP) and Urban Renewal Programme (URP), the Local Economic Development and Consolidated Municipal Infrastructure Programme (LED CMIP), and Traditional Leadership.

MINUTES
Political Framework of the Budget
Minister Mufamadi focussed on the following issues:
- a general overview of the factors that inform the policies of the Department of Provincial and Local Government (the Department);
- the President's call for: "volunteerism" of the population to be observed, the need to ensure development and growth and eradicating poverty;
- the problem with ensuring and maintaining universal access to basic services;
- the consequent problem with service delivery; and
- means to improve the efficiency of local and district councils.

Discussion
Ms G Borman (DP) requested clarity on the precise percentage of municipalities that are currently providing basic services to their communities, as far as delivery of services is concerned.

The Minister replied that it is clear that many municipalities are indeed struggling, largely due to the new local government system that has been introduced. But is has to be borne in mind that no municipality, even those with sufficient resources to meet their mandates, currently possess the necessary knowledge and skills to operate the municipal system. This explains the need for the implementation of training programmes for municipal councilors and managers, and these skills will continue to be upgraded by making this programme available to all levels of municipalities. Indeed, there are councilors who have been in the system for some time, and are therefore of the opinion that "they know what to do", with the result that they do not attend these programmes. In fact, the Mayor recently just delivered his keynote address and left immediately thereafter, also of the opinion that the programme does not apply to him.

All municipalities are required to complete a questionnaire in which they assess their own performance, apart from the assessments done by the Provincial and National Governments, which allows for a better appreciation of exactly which municipalities are struggling, and the precise areas in which they are struggling. This allows for the specific problems of particular municipalities to be identified.

When ascertaining those struggling municipalities the "usual suspects" are those communities that have never before had municipal councils and those that have been historically marginalised, especially the rural communities and those falling on the urban periphery. This does not mean, however, that the rest of the municipalities are not struggling (as seems to be the case in Gauteng), but that municipalities in general are struggling to various degrees.

Ms Borman requested clarity on whether it remains feasible to continue financing district municipalities, when it appears that the local municipalities are better placed to meet the needs of their communities.

The Minister responded that capacity building is important here, as government cannot afford to finance municipal entities that are "so miniscule" that they do not provide a sufficient base from which to plan sustainable development. For this reason the Municipal Demarcation Board suggested the introduction of District Municipalities to solve this shortcoming, and the lawmakers agreed. The question is not, therefore, whether district municipalities are needed, but rather how they can be made to operate effectively and productively so that no particular community may be marginalised, and produce the sort of inequalities South Africa is currently experiencing.

The Department is currently conducting a study to ascertain the specific functions currently being carried out by each municipal body, to provide "a rigorous appreciation" of what each municipality is able and not able to do. This would help identify the potential of each municipality.

The Chair appreciated the fact that three tasks identified by the President during his State of the Nation Address have been recognised by the Department. The call for "volunteerism" is "up the street" of the Department, and also it is not the sole duty of the government alone to deliver, but the public has to play its part by taking responsibility in this regard. Furthermore, the magnitude of the Department's transformation is the "most ambitious and far-reaching in the world", and such drastic changes were not expected overnight.

As far as the concerns with the district municipalities is concerned, it is generally agreed that the new system will be implemented over the next 15-16 months, and the question regarding the feasibility of such municipalities is premature. Furthermore, this 2-tier system is enshrined in the Constitution. The Minister correctly stated that the appropriate question to ask here is how the system may be implemented, and there is insufficient consensus on the programme and strategy to be employed in implementing these objectives.

Ms R Southgate (ACDP) requested clarity from the Minister on the recently reported cases of certain municipal CEOs receiving "exorbitant salaries greater than the budget of their municipality".

Minister Mafumadi answered that local government has been recognised as a very important sphere of government, and as the "delivery arm of the entire system of government". It is thus important that the proper people with the appropriate strategic, political and administrative skills are appointed "to make the system work". The national economy is characterised by inequality and non-symmetry, and it is this that determines the rates and income base of municipalities. Should it be decided that every municipality is to fend for itself (effectively freezing financial support), then this could not be considered a developmental approach, whereas the adoption of a developmental approach necessitates identifying the (financial) assistance needed by the particular municipality to attract sufficiently skilled persons, so that their current status may be improved.

It was decided that contributions from the National Fiscal Fund
be used to meet the salary requirements of political office bearers in an attempt to assist the struggling municipalities. This was not, however, extended to CEOs. Some would argue that if these officials are truly willing to serve the interests of their community they would not be averse to certain (financial) sacrifices, but even the missionaries demand a "materialistic base" for their services. Others cannot therefore be expected to sacrifice what we are not ourselves prepared to forego.

Rev A Goosen (ANC) stated that district councils are indeed needed and necessary to ensure development and progress in rural and semi-rural areas, and the progress they have made thus far is greatly appreciated by those who have benefited from it, especially the five municipalities in the Eastern Cape in his constituency, which have since been amalgamated into a single district municipality. The only problem facing these municipalities is that they are "afflicted with a lack of resources", as is apparent from the daily functioning of these municipalities. This problem has to be addressed, and special attention has to be given to the important matter of appointing permanent staff, rather than the present cycles of temporary employment. This is particularly pertinent in the community clinics, thus ensuring that adequate primary health care is provided to the community.

The Minister replied that the Department is currently engaged in a joint effort with the Department of Public Service and Administration to investigate the possibility of bringing all public servants across all three spheres of government under the Public Service Act, to arrive at a framework for interspheral mobility. This would address the current problem whereby the staff in one sphere are lacking the necessary skills, while these skills are possessed by the staff in a separate sphere. There is thus a need to rationalise the current system to allow for movement between the spheres so that the states goals of government may be met. Furthermore, the rigid separation of local government from the other spheres, as far as human resource management is concerned, must be done away with as it is counterproductive.

The Chair welcomed the budget for 2002/3 as greater finances are allocated to the Department, but noted that "this is not the answer alone". What is also important is ensuring that the money is used productively.

As far as capacity building is concerned, the SETA results should also be made available to members. This is a "key" concern. It is also suggested that all these projects be brought to one meeting after the June recess, as this committee also has to assist "in any way [it] can". Indeed, it can be learnt from the Growth and Development Summit that concerted links between the Department, this committee, the Department of Finance and other governmental departments have to be established to assist the Department in executing its mandate.

Interspheral mobility is especially important, as well as infrastructural development as far as job creation is concerned. The Chair assured the Department that this committee is not merely an "armchair critic" that only criticises the Department, but it is also assessing its own performance over the last five weeks of the constituency period. Indeed, there is nothing preventing the Department itself from asking this committee to explain what it has done to facilitate the achievement of its stated objectives, despite the fact that this would be somewhat unconventional.

Overview of Budget and Department's Programme
Mr Craig Clerihew, the Acting Director General, noted that his overview would not delve into detail as this would be done by the other presentations. He focused on the following issues:
- the primary programmes contained in the Department's Budget Vote: governance and development, institutional reform and support, the provision of administrative services and the auxiliary services provided by the Department (such as the Municipal Demarcation Board);
- the primary mandates of the Department for 2002/3;
- the growth in the Budget;
- number of personnel employed by the Department, and the cost of their employment;
- the current and capital transfers;
- the vision of the Department; and
- the clean bill of health pronounced by the 2000/1 audit report.

Discussion
Ms Borman requested the Acting DG to explain whether the Department will again be restructured, as appears to be suggested by the presentation.

Secondly, the presentation indicates that the savings in personnel costs are continually on the increase, and there is a need to increase the personnel in those struggling municipalities, as well as those positions that have not been filled. Indeed, it seems that the reason for the current delays in service delivery lies in the fact that the municipalities are not properly staffed, and once this is resolved the standard of service delivery will improve.

Mr Clerihew replied that the Department is not restructuring again but is rather engaging in a process of reprioritising within the current structure, because it has identified "gaps" in the personnel quota that need to be filled. This is done via seconding people or contracting the services of consultants, so that urgent matters may be fast-tracked. The Department's goal is ultimately to replace these with permanent staff. Personnel from other directorates may even be employed to complete certain tasks.

The Chair reminded members that during 2001 the Department was requested to provide a gender breakdown as well as representivity ratio of its personnel quota.

Mr B Solo (ANC) stated that the current problems with personnel turnover and permanent staff complement is "a serious concern", and requested the Acting DG to explain any plans devised by the Department to address this matter.

Mr Clerihew responded that the Department has recognised the dilemma posed by the urgent need to fill vacant posts, and in this regard the Department aims to employ thirty to forty personnel over a three year period. The problem here is the fact that several personnel are being "poached" by the private sector especially females in top management positions, such as the current CEO of the Umgeni Water Board. This is the harsh reality of "the real world out there".

Mr J Ngubeni (ANC) referred to the "277" personnel on Slide 10 of the presentation, which the Acting DG said has not yet been approved. The suspicion here is that the Department could use these personnel as "cushions for resources it is not going to use". It is thus not clear why the Department has budgeted for this number without attaining the prior approval of the Minister of Finance.

Mr Clerihew assured Mr Ngubeni that this is not the case, and that the personnel area "is one place where you cannot do that". Furthermore, it would not be possible to increase the personnel complement without prior approval of the National Treasury, and a management programme has been devised to address this issue.

He continued that every time a post is vacated, the Department has to and does go through the entire evaluation study in terms of competence, salary structure, performance value, placing of advertisements etc. Apart from this process it takes at least three to four months for the post to be filled, if lucky. This procedure is currently being executed by the Department in its search for the new Director General, and clearly illustrates "bureaucracy in the extreme". It is a matter that the Department is addressing.

In addition, the Department cannot say with certainty what its needs will be in three years time, or even in one year's time for that matter. It therefore tries, as far as possible, to predict its future needs because if this is not done it would not be assured of receiving those resources should it request them at a later date, or as they arise.

The Chair inquired as to the training of these personnel, especially those young people who, despite having the necessary knowledge and acumen in their field, do not seem to be "grounded" in the politics of the ruling party of the day. This is the problem currently being experienced with civil servants. The point being made here is that these members of the Department have to understand what it is that the majority party calls for. The public servants have to understand the policies and plans of the ruling party.

Mr Clerihew replied that the Department is committed to improving the skills and expertise of all its personnel. It has completed a full independent skills audit of al staff, and is presently engaged in an independent evaluation of these. He assured the Chair that the members of the Department's Human Resources directorate present at this meeting will be noting the concern about understanding the policies of the government of the day, and this will be included in these training programmes.

Ms Borman asked the Acting DG to explain whether staff are required to sign into a Performance Management Programme agreement, thus reducing the chances of them being lured away.

Mr Clerihew replied that all managers, directors and the director general is required to sign this agreement, and this will also be done by the deputy and assistant directors at middle management level during this year.

Restructuring of the Department and the Strategic Planning Process
Ms Tumi Mketi, Chief Director of Human Resources and Legal Services, discussed the following issues:
- the process and objectives of the restructuring process;
- the progress made to date;
- the representivity and gender profiles of the Department staff;
- background to the strategic planning process: legislative requirements and new Public Service Regulations;
- the process of strategic planning: development of the 2002-5 plan; strategic planning workshops; and consultation with the Ministry;
- the implementation of the strategic plan; and
- the monitoring and evaluation of the strategic plan.

Discussion
Ms Borman asked if the performance management system already employed by the Department has ever been called into action in a disciplinary matter. This becomes relevant if one considers that it "would make no sense" if this system and measures are in place yet they do not achieve the desired result, because they are not punitive.

Ms Mketi replied that these are referred to as matters of "incapacitation", but she cannot recall a single case where disciplinary measures were required in cases of poor performance. Furthermore, it is only the current plan of performance standards that sets out such steps. This plan not only provides for disciplinary steps, but also corrective measures such as training and consultations etc.

Mr B Nobunga (ANC) requested that the committee be provided with the a comprehensive version of the Department's business plan, so that it may be better abled to address the problems facing the Department and properly exercise its oversight function in effectively evaluating the work done by the Department.

Ms Mketi responded that key performance indicators are used to assess the work done by the Department, and it is presently looking at a business plan for all the projects undertaken by the entire Department for 2002/3.

The Acting DG added that the Department's indicators are over a three year period, and the business plan actually forms part of the performance agreement mentioned during the discussion of an earlier presentation. The Department's business plan is far more detailed, so that all members in the Department may be held accountable for their individual performances. It is requested that this committee stage special hearings so that the Department can fully brief it on its overall plan, as was recently done by the Environmental Affairs Portfolio Committee and its Director General over a two day period.

Mr Nobunga stated that, as far as service delivery is concerned, the presentation does not mention training and capacity building. This is expected to be one of the important issues on which the Department should focus.

Ms Mketi replied that the Department is focussing on delivering service efficiently to clients. It has to be borne in mind that the presentation did not deal with capacity building within the Department structures generally, but rather with regard to the employees.

The Acting DG responded that the plan to phase this in over a three year period has been fast-tracked.

Ms R Southgate (ACDP) referred to Slide 3 of the presentation dealing with the "absorption process" and "internal promotions", and requested Ms Mketi to explain which incentives, if any, have been put in place to ensure (senior) personnel remain with the Department.

Ms Mketi answered that the employer in this case is the public service in general, with the result that employees are able to move from one office to another. But it is difficult to ascertain and prescribe benefits to individual employees because these are centrally determined, and must be common throughout the public service. These incentives have in the past been used to abuse the system, and it is thus suggested that that approach be done away with.

Secondly, is the Department able to give the committee a time-frame for the appointment of the new Director General and any other information regarding the appointment process, such as the number of applications received etc.

The Acting DG replied that the advertisement phase has just expired, a shortlist of candidates has been compiled and was recently submitted to the Minister. A panel has been established, via Cabinet protocol, on the appointment of the new Director General. The final shortlisting will take place this week, and the interviewing process will commence next week, it is hoped.

The Chair suggested that the first fifteen minutes of the meeting scheduled for tomorrow be set aside for an overview by the Department on the contents of its strategic plan, as well as other key aspects. As Mr Nobunga stated, it is difficult to ascertain exactly what the Department has planned or has done according to the Report on the Financial Year 2001/2 submitted to members, despite the fact that the present Report is much better than those submitted over the last five years. Yet "it is still not good enough" as it does not grant this committee sufficient insight to enable it to properly exercise its oversight function, and other requirements under the Public Finance Management Act. It is requested that shorter documents be presented to this committee, as these would prove more effective.

The gender representivity within the Department has improved, but it still has not reached the desired target.

The problem caused by the high personnel turnover rate mentioned earlier effectively means that members would probably be seeing new faces at next year's budget briefing. This clearly illustrates the fact that the current turnover is far too high, probably because the new brand of public servants seem to move to positions were the salaries are higher. While it cannot be denied that "this is natural the world over" it is nevertheless disappointing because there is no longer any "public spiritedness" as called for in the Moral Regeneration Conference held last week.

The challenges posed by the issues regarding capacity building are also important and will be taken up further with the new Director General, once appointed, during next year, as it does not seem fair to involve the Acting DG is this process.

Under- and overspending by the Department remains a problem, and here it would be useful to compare the Department's performance with other governmental departments. The statutory bodies are "nowhere near" doing what is required of them to remedy this problem. He gave the example of the Demarcation Board.

Mr Nobunga added that the problem with underspending lies with the person actually spending the finances, and in this regard the Department is encouraged to be proactive.

Intergovernmental Relations: Overview
Mr Derek Powell, Chief Director:
Inter-Governmental Relations in the Department, conducted his presentation on Intergovernmental Relations: Overview of 2002/3 Outputs, and dealt with the following issues:
- the context of intergovernmental relations with regard to: integrated government and the Department's mandate; the Department's crosscutting programmes; and the establishment of a Chief Directorate.
- the budget provision for years 1998/9-2004/5;
- the progress made in 2001: the assignment and supervision framework under Budget Vote 5;
establishment of the Special President's Co-ordinating Council on local government; the Integrated Sustainable Rural Development Programme initiative; provincial and local government guidelines reference book; World Summit on Sustainable Development position paper relating to local governance; and
- expected outputs during 2002/3.

Afternoon session
The Chairperson opened the meeting and handed the floor over to the Unit Managers of the ISRDP and the URP.

Integrated Sustainable Rural Development Programme (ISRDP) And Urban Renewal Programme (URP)
Ms Mogane-Ramahotswa explained that they had been given a mandate by the newly democratic government of tackling the legacy of apartheid, colonialism, poverty and underdevelopment. Her next point involved describing the motivations of the ISRDP and the URP.

Programme objectives
The spirit of 'doing things differently' informed the broad programme objectives. [After dealing with the elements of the programmes, the rural nodes throughout South Africa were cartographically illustrated to the Committee.] She pointed out that the vision of the ISRDP was "to attain socially cohesive and stable rural communities with viable institutions, sustainable economies, and universal access to social amenities and retain skilled and knowledgeable people who are equipped to contribute to growth and development". A description of the programme was given, after which she outlined the ISDRP trajectory. After referring to the numerous achievements made by the programme, she gave an example of a node project by dealing with the Kgalagadi Dipudi Enterprise. She emphasised the fact that the project did indeed exist, and commented that they would be seeing many great things come out of the project.

Programme Challenges
Although there are numerous challenges in carrying out the programmes, these challenges are of political and developmental significance. Upon mentioning the key outputs and activities of the programme, she noted that this was a critical time for all concerned to become involved. All rural projects are currently in the process of drawing up project business plans.

Mr Marion showed the Committee a map of the urban nodes. After describing the URP programme, he outlined the progress that had been made to date, and the challenges that had been faced. They were in the process of engaging national and provincial government as to what resources they would be directing towards the nodes. He reflected upon an overhead representation indicating the funds going to the urban renewal nodes and the municipalities, and pointed out that R400 million had been allocated to the Department in terms of the programme. Of this amount, 30% would be directed towards the renewal projects. He referred the Committee to links to equitable allocation per urban renewal node, and stated that these would assist in implementation.

Mr Marion stated that the aim is to promote co-ordination between the various ministries, and went on to state the progress made, and the challenges faced in this regard. He gave an example of the three spheres of government working together. He noted that they were also engaging with local authorities as an effort in co-operative government. Project examples were given, and he emphasised the fact that they were all directed at promoting integration, and sustainable human settlement development. He referred to the Galeshewe Urban Agricultural and Food Security project as a direct example of national, local and provincial government working together.

Mr Marion moved on to the expected outcomes for the year 2002 to 2003, and explained that KPI referred to the Key Performance Indicator. As he moved towards his conclusion, he stated that it would be important to note that they had experienced some delays, and that there had been tension between the importance of "doing things correctly and fast-tracking delivery".

Discussion
Ms Borman (DP) commented that the plans of the respective managers were great. Nevertheless, her real concern lay with the implementation of the plans. Approximately 62% of the anchor pilots relating to urban renewal were underway. However, she was concerned about whether there were projects implementing the plans.

Ms Mogane-Ramahotswa stated that the programmes were completely new. As a result, structures had to be put in place, and in this regard, they were still grappling to develop key performance indicators. Nevertheless, the projects were ongoing, and she pointed out that she would be able to take the Committee through the nodes.

Ms Borman (DC) referred to the link between the IDP and the poverty alleviation project. She was concerned with the fact that local government would not be able to fully fund such programmes. Thus she sought clarification as to whether this was indeed the point that had been raised.

Mr Solo (ANC) expressed great concern with the fact that the Dipudi Project had been mentioned in the newspapers over several occasions. However, he wanted to know, with absolute clarity, whether or not the project really existed. He went on to ask whether the Department was aware of the comments that had been made by the papers, and noted that the issue tied up with the Beaufort West and Karoo Projects. He emphasised that the Committee would have to be fully briefed in order to be able to respond to any challenges that the public could make, otherwise the whole situation created a bad perception of what the Committee was doing.

Ms Mogane-Ramahotswa responded that the project did exist, and added that they had picture proof of this. The media representations were another thing because they had selected to criticise Dipudi, while failing to mention the progress that had been made in other areas.

Ms Mogane-Ramahotswa added that they were clearly facing problems with their municipalities in Beaufort West and it is because funds were being withheld. Nevertheless, project implementation was set to be 'kick started' in May 2002 because funds were now available. This means that they would begin to see implementation beyond May, and she added that she was confident that their ground structures would function. She emphasised that they could definitely expect to see progress by the 2003.

The Chairman stated that although it all sounded very good, he could not understand why the impact could not be felt on the ground. He realised that it was a ten year programme. However, he said that it would be crucial to know exactly where the programme stood as far as progress was concerned. He pointed out that although there was not anyone to blame, as the Chairman of the Committee, he had a duty to know a more accurate reflection. He added that for the 2003/2004 budgetary meeting, the Committee would be expecting more concrete results.

Mr Nobunga (ANC) said that the Committee was not saying that they did not trust the fact that the Department was saying that it was doing something. However, the problem lay in the manner with which they put forward their progress. He pointed out that "underway" could mean anything, and he asked that the Committee be placed in the exact stage within which the process was, in order to allow the Committee to support the Department. He noted that the Committee did not want to 'walk with ghosts'.

Mr Goosen (ANC) stated that there was no allocation for the urban renewal programme (URP). He asked whether this was included in the rural programme (ISRDP).

Mr Goosen (ANC) pointed out that there must have been many challenges to both the URP and the RDP. He wanted to know how the challenges compared with one another, with particular reference to the actual challenges made against the RDP.

The Chairman interjected at this point and asked whether there were Members of Parliament present from either the urban or rural nodes. The floor was silent.

Mr Africa (RDP/URP) began by pointing out that the major difference with last year was the fact that they were currently able to refer to actual experiences. Reflecting on the dilemma put before the Cabinet during the previous week, he stated that they were quite unapologetic. While he understood the desire for quick delivery, a counter imperative existed, and this involved building government by ensuring that the technical relationships would be in sync. The approach they had taken during 2001 was deliberately aimed at putting the necessary enabling conditions in place. They did this by undertaking anchor projects, involving all three spheres of government. The result is that by the end of 2001 they were confident that the conditions were in place. Key projects were identified, with some already being in place. Thus he hoped that the Committee could understand that during 2001, they had consciously decided to deal with enabling conditions, and commented that the hope was that this would pay off during 2002.

The Chairperson emphasised that there was not a person in the cCmmittee that was ignorant to the fact that the challenges faced were considerable. Nor was there anyone who was unaware of the need for the Committee, as public representatives, to become involved. He suggested that the Members of Parliament in the respective areas become increasingly involved, and stated that this would be in the aim of them all playing a more active role.

The Chairman stated that the Committee required clearer outcomes to be anticipated during the year in order to have a progress measure when meeting in 2003. Thus he asked what they were hoping to achieve before meeting with the Portfolio Committee in 2003.

Mr Solo (ANC) stated that it was first necessary to see something from the inputs, before visualising the outcomes. In this regard, they were dealing with unsophisticated communities. As a result, it would become a political problem in cases where individuals would be moved out of the townships. He referred to the situation in Alex, and questioned why this was not reflected in the inputs. Thi`s he explained to the Chairperson by stating that the starting point would be with the inputs.

Mr Marion assured the Committee that delivery was taking place on the ground, and he used Alex as an example. He apologised for not bringing before and after pictures. Nevertheless, development was happening, albeit at a municipal level, and this meant that their task was to sustain the projects.

In terms of funding, Mr Marion stated that they were currently in the process of seeking grants. This meant that the municipality alone would not fund the Business Plans. He readily welcomed the members to tour the ground, and noted that they were very encouraged by the progress that had been made.

Mr Nobunga (ANC) assumed that the intersectoral co-ordination did not only include the public sector. He wanted to know whether the private sector had a role to play. If so, what co-ordination existed, and if not, were there any plans to involve them?

Mr Marion explained that the private sector was indeed a critical component. The Department of Social Development was presently looking to assist them, and he noted that this was encouraging.

Ms Borman (DC) wanted to know who could be held accountable for the money injected into the projects.

Ms Mogane-Ramahotswa responded by saying that the funds would eventually move via the municipality. She pointed out that they were currently proposing to work together with the municipalities in the rural nodes, in which case procurement would be by both. Nevertheless, as the position stood, most of the Departments had contracted consultants. She added that there were projects not of nodal municipal competence at the provincial level, and in this case they would be accountable to the treasury.

Mr Marion added that flows from National Government had criteria to be met. In this case, the process would be regulated specifically by the existing fiscal and legislative requirements.

Ms Borman (DP) repeated her question because it had not been answered directly. She wanted to know whether they could confirm actual results in the projects where money had been injected, accountability in that sense.

Mr Marion responded that this definitely was the case for the URP in Alex. He added that he would be able to make the report available.

Ms Mogane-Ramahotswa added that there had yet been any funding to the rural nodes. Nevertheless, the financial controller would assist the municipality in order to ensure that the money would reach the projects.

Mr Africa felt that he had to explain the complexity of what they were dealing with. He stated that the programmes were trying to macro-manage distinct and emanating projects. This was in stark contradiction to collapsing all the programmes into a single project. As a result, serious monitoring problems were faced. This is because they presently did not have a single over-arching monitoring system, and as a result thereof, they were currently negotiating such a consensual macro-level monitoring mechanism. This turned on the complex nature of the programme, and that this is what they were in the process of setting up.

The Chairperson stated that he was not implying that they had to have CMIP statistics. However, the Committee needed something more than what had been heard at the meeting. He pointed out that they did understand the great challenge faced. However, they would have to understand that in a spirit of "comradeship", bearing ideological connotations. They would have to appreciate the fact that as Department officials, the Portfolio Committee would probably give them 'flack' once a year. However, Portfolio Committee Chairpersons are particularly volatile for reasons such as individuals being unable to reach the Minister, and respect for seniority. This meant that they were all under pressure. He noted that this was another way of saying that they were desperate that the process work, and that delivery occurs.

The Chairperson ended the discussion by outlining the steps that the Committee would be willing to take from its side:
-Put a report to the effect that members of parliament must be notified of the problem.
-Report back on what they as a Committee are doing.
-The fact that the Committee wishes to become more involved. He suggested that this could be in the form of closed workshops. Nevertheless, there would still be time to work on the detail.

Local Economic Development (LED) and Consolidated Municipal Infrastructure Programme (CMIP)
Ms Gumbi-Masilela, Chief Director of Development and Planning explained that they had taken a different approach, in terms of which the RDP was seen as the centre of development.

Ms Gumbi-Masilela gave a description of the project. This was followed by a list of the objectives of the programme. She dealt with the programme budget, and highlighted the fact that this would increase significantly over time. After dealing with the specific outputs and "political" outcomes, she referred to two project examples. The Lambert's Bay Birds Sanctuary illustrated the significance of the role of private partners. She emphasised that the project was well managed, and that this therefore indicated that projects would be sustainable in the event that the private sector and other sectors are mobilised. The Khulani Xhosa Village was the second example. She explained that the key challenge faced was the need for skills for project management because the potential for success was there.

Ms Gumbi-Masilela outlined the challenges faced by the programme as a whole. This was followed by an indication of further outputs to the programme. She gave a sense of targeted projects from the CMIP point of view, and pointed out that she was in no way underplaying the needs in other areas. She stated the challenge in so far as infrastructure was concerned using a rural/urban break down, and this showed the fact that rural areas were in greater need. The need to strengthen the support to municipalities in order to implement the projects was dealt with by reference to the resources for implementation. She concluded her presentation by explaining the monitoring and evaluation of the programme, and she proudly pointed out the fact that they have a sophisticated monitoring programme, in addition to current negotiations to embark on external evaluation facilities.

Discussion
Mr Solo (ANC) questioned whether the Department feared the Committee. He wanted to know why they did not keep coming back to the Committee because CMIP programmes needed clarification.

Ms Gumbi-Masilela referred to the two programmes and explained that they by and large provided infrastructure. As a result, it would not make sense to run them separately. She emphasised the need for supportive infrastructure, hence the attempt to balance the two. She also pointed out that the result of a separation would be the loss of maintenance.

Mr Kruger, Director: Municipal Infrastructure, added that they decisively indicated CMIP projects on signboards.

Mr Solo (ANC) wanted to know how the municipalities went about actually assessing the said factors.

Ms Gumbi-Masilela explained that all the municipalities received an allocation. This made it necessary to ensure the viability of RDPs. She referred to a process within the RDP, known as Community Based Planning, which built some of those factors into its strategy, thereby showing that the municipalities had the task of marketing. Nevertheless, they would also assist.

Mr Solo (ANC) referred to the success stories in the Western Cape, and explained that he would be happy to rely on them. He asked to one day be taken to the projects. Nevertheless, he cautioned that the chosen names could become controversial.

Ms Gumbi-Masilela pointed out that referring to Western Cape success stories was a bad example. However, she noted that there were others, and in this regard referred to the Far Limpopo and Mpumalanga projects where the communities were generating income.

Mr Nobunga (ANC) expressed concern with the marked increase in the CMIP expenditure.

Ms Gumbi-Masilela responded that under-spending was their largest challenge. She pointed out that they were worried, and as a result had introduced mechanisms to cushion the effects. She referred to R94 million worth of business plans that had already been approved, and explained that they were awaiting the commencement of operations. She added that the MTEF allows municipalities to plan, whilst they had the task of monitoring. Nevertheless, she pointed out that they were working with the treasury in an attempt to develop monitoring mechanisms.

Mr Kruger added that there had been a rollover of R31.9 million in 2001. He used this point to illustrate the fact that although the projects were there, progress was not being made fast enough.

Ms Borman (DP) asked whether in the event of such a marked increase in expenditure, they had the capacity to facilitate it, both as the Department and as Municipalities.

Ms Gumbi-Masilela felt that they did have the capacity. She referred back to the comments made by her colleague and emphasised the fact that the focus would rest on the areas where the need was greater.

The Chairperson wanted to be informed of the expected aims for 2003.

Ms Borman (DP) asked for and indication of the maintenance arrangements that would be made when adopting infrastructural programmes. She referred to "managing" the arrangements, and wanted to know whether they would take care of it themselves.

Ms Gumbi-Masilela stated that they were basically not leaving this to the municipalities. However, they needed the capacity to carry out these functions. During the course of the day's proceedings, reference had been made to conscious Portfolio Committee efforts to assist the Department, and this had been a concern of theirs.

Mr Kruger explained that they required business plans for CMIP, including operation and maintenance plans. He added that they would assist where necessary, but only on the phasing out level. He gave the example of the Eastern Cape Municipal Mentorship Programme. Nevertheless, they would conduct regular site inspections, irrespective of the status of the project.

Mr Solo (ANC) wanted to know who would approve the projects.

Ms Gumbi-Masilela responded that the process would move between the council, provincial government and national government, in a two-way manner. This ensured that there would be many stopovers.

Mr Goosen (ANC) spoke in light of the fact that RDPs were now being submitted to provinces. He wanted to know whether they foresaw the situation where much of the money would go to the provision of priorities in the RDPs.

Ms Gumbi-Masilela explained that the process of RDPs was legislated. Nevertheless, she did not think that this would impact on the approval of the projects because the projects were running parallel.

Mr Goosen (ANC) rephrased his question and stated that he was asking whether in light of the increase in CMIP, the funds would cater for the needs in the RDPs.

Ms Gumbi-Masilela responded affirmatively. She added that additional allocations had been made to the nodes.

Traditional Leadership
Mr Thabo Seboko stated that he would be taking the Committee through the policy programme progress made by the Department. He explained that he would give background information, state where they are, and end by showing where they want to go.

Mr Seboko referred to the relevant Constitutional provisions, and pointed out that in his State of the Nation Address 2002, President Thabo Mbeki had committed the government to finalising the status of traditional leadership. He moved on to deal with the White Paper Process on Traditional Leadership, and emphasised that it would be ready by the end of 2002. He explained the three phases of the process, and pointed out that phase three coincided with the holding of municipal election in December 2000, and traditional leaders raised which many concerns. He emphasised the need to amend the Constitution in order to make it more in tune with the cries of traditional leaders, and that this led to the new Bill.

Mr Seboka explained that even with the resolution to introduce a new Bill, the process went on in order to produce a satisfactory Bill. The Interim Bill was withdrawn in light of the President's commitment to have the new Act by the end of 2002. He noted that this was in order to expedite the completion of the process.

Mr Seboko moved on to the time frames set for the Department, and he added that these were at the latest. The legislation would assist provincial governments to formulate their own provincial legislation.

Mr Seboko went on to explain to the Committee where the process currently stood. He stated that they had almost completed research on the White Paper, and pointed out that it contained many issues. He highlighted the role in governance and development, and explained that his would be critical. This is because it is on this very issue that traditional leaders wanted local government elections to be stopped in 2000. He referred to the institutional issues faced by the process, and explained that these would be crucial in the process.

Mr Seboko concluded his presentation by referring to the National House of Traditional Leadership. He pointed out, like the Chairperson had, that the House would be presenting to the Committee on Friday. Nevertheless, from the Department's point of view, he felt that it was very important to show the Committee that they, as the Department, continued to support the traditional leaders. He gave the examples of human resource assistance, administrative empowering, and the capacitating of the leaders. He ended by reminding the Committee that the term of office of the National House would be ending in April 2002. Thus they were currently in the process of assisting the House in the institution of the new House.

The meeting was adjourned.

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