Free State Department of Roads & Transport Extended Public Works Programme employment creation

Meeting report

Free State Provincial Department of Transport: Extended Public Works Programme (EPWP) briefing
The Provincial Department of Police, Roads and Transport in Free State (the Department), as well as a representative from National Department of Transport (NDOT), briefed the Committee on the Extended Public Works Programme (EPWP) in the Free State, with specific reference to job creation.

Mr Leonard Malapane, Deputy Director: National Department of Transport, Ms Grace Mentz, Acting Chief Director: Free State Provincial Department of Police, Roads and Transport, and Ms Sibongile Mazibuko, Head of Department, Free State Provincial Department of Police, Roads and Transport, introduced themselves.

Ms Mazibuko said the MEC in the Free State had sent a letter of apology. Mr Malapane tendered apologies for the Deputy Director General of the National Department of Transport.

Ms Mentz briefed the Committee on the three areas of job creation in the Free State, by way of the Expanded Public Works Programme (EPWP) and the Contractor Development Programme (CDP).

She noted that the budget for the CDP for 2011/2012 was R80 million. The Department would employ 149 contractors, of whom 87 would start training in September 2011. 54 were in the restoration pool as the Department was not able to give them additional work due to financial constraints, and eight were to start in September 2011.

The contract value of the Qwa Qwa Route 4 project was R40 million. The contract period was 12 months, but might have to be extended due to a number of snowfalls in the area, where construction had to be halted for a number of days. The total length of road to be completed during this financial year was 9.6 km. Expenditure to date was R5 149 992. The Project was divided into four phases, each representing a different section of a circular route. Phases 2, 3 and 4 would happen in the outer years. The project was spread over a number of years because of the limited amount of money available. The total project value was estimated at R180 million.

The objectives of the project were to create as many job opportunities for the local people as was economically feasible, to create empowerment opportunities for local small subcontractors, to enable Construction Industry Development Board (CIDB) registered contractors the opportunity to participate in large projects, and to develop, and the training of local labour in social as well as labour intensive construction skills.

There were 377 job opportunities created in the previous financial year, and 876 in this financial year. The target for the first phase was 1 300 job opportunities. No disabled people were employed on the contract.

The contract value of the Monontsha Pass project was R20 million, and the contract period was ten months. There were delays due to heavy snowfalls. Due to financial constraints the total length of the road to be completed during the current financial year was only 0.8km (800m). Expenditure to date was R4 500 932.
The project was for the upgrading of the Monontsha Border Road in the Eastern Free State (Thabo Mofutsanyane District Qwa Qwa). The project was divided into two phases, which were described. It was a very challenging project in the mountains of Lesotho with a lot of gradient work, and necessitated a lot of blasting.

The objectives of the project were to implement EPWP principles and policy, with a focus on the labour intensive construction methods, to improve road safety, to create job opportunities for as many local people as economically feasible, and to create and train small contractors for future projects and skill transfer to local labourers.

623 job opportunities were created in the previous financial year, and 472 in the current financial year; a total of 1095 job opportunities. The target was 1 100. This project would, however, have to be put on hold pending allocation of a new budget in the next financial year.

Ms Mazibuko added that there were also 23 roads under construction in the province. In the past, this had not been calculated into the EPWP work, although labour-intensive methods were used. The Department had now reached agreement with both the NDOT and the Department of Public Works (DPW) that these jobs could be included as part of the EPWP work. This presentation showed only the EPWP figures. The numbers would be greater in the next term.

The MEC was apparently emphatic that the numbers of people with disabilities who were to be employed on the projects would be increased, and even in that very bad terrain, suitable work would be identified.

Discussion
The Chairperson reminded Members that during a recent People’s Parliament, a number of issues were raised, and when this Committee received no feedback, it planned an oversight visit to Free State. It was expected that the National Department of Public Works would join the Committee, but that department had apologised, and did not participate because it felt that the issues were outside its jurisdiction. However, the Provincial Department of Roads, who was definitely expected to be present, was not. This was why it had now been called to Parliament.

Ms Mazibuko apologised for the confusion. The invitation received by the Office of the MEC indicated that the Committee would be in Qwa Qwa on Tuesday at 2pm, and the Department attended at 13:30, only to be told that the programme had been changed without informing the Department. There was no attempt by this Department to undermine the Committee’s work.

Ms M Themba (ANC, Mpumalanga) had expected to hear an apology from the Department. She noted that only a very short presentation was given, and stressed that this should have been given in Free State. Parliament had to be taken seriously. The presentation consisted largely of pictures, with very little real information.

Ms Mazibuko apologised if the presentation did not meet the Committee’s expectations, and noted that all responses to today’s questions would be forwarded to the Committee. The communication to the Department from the Committee had indicated that it must respond on the numbers of jobs and programmes in the EPWP.

Mr D Feldman (COPE, Gauteng) asked for clarity. He noted discrepancies in information, saying that on one page it was noted that the value of the Qwa Qwa Route 4 contract was R180 million, and it would be done in four phases, totalling 27 kms. However, the previous page noted a contract value of R40 million and 9.7 kms.

Ms Mazibuko explained that the R40 million was budgeted for this financial year, and she stressed that this was a multi-year project, divided into four phases.

Mr Feldman then noted the statement that the contract value of the Monontsha Pass was R20 million, but it was stated that “due to financial constraints” only 800m of road would be completed, with expenditure of R4.5 million. He enquired why there was a reference to “financial constraints” since there appeared to be R15.5 million still available.

Mr H Groenewald (DA, North West) supported the Chairperson’s concerns about the way in which the Members were treated on their visit to Free State, stressing that the MEC had not attended the meeting. Once again, the MEC was not preset at this meeting, although he had been given two weeks notice, and that was unacceptable. A clear message was needed as to exactly what was happening. He was concerned at the numerous references to “estimates”, because there were budgets, and there should be clear figures. Parliament expected exact figures.

Ms Mazibuko responded that the MEC had written a letter of apology. He had a Cabinet meeting that clashed with this one, and he had assigned Ms Mazibuko to attend this meeting. She assured the Committee that, wherever possible, both would appear in future. They clearly understood the importance of the Committee’s work.

Mr Groenewald had also done the calculations for Route 4. An amount of R40 million for 9.6 kms was approximately R4 million per kilometre. However, the total figures referred to another figure of R180 million for approximately 26 kms, which was about R7 million per kilometre, another estimated amount. He asked the reason for the huge difference.

Ms Mazibuko clarified that the spike in cost per kilometre was due to the terrain in the remaining part of the project, which was very mountainous and rocky. The need to blast affected the square kilometre rate of the project. R40 million was budgeted for the current financial year, and R5.1 million had been spent to date. The remaining work was on level terrain and a lot of material bought would be delivered and used on site. The EPWP could not account for stock, but only for work done. In future the Department would also indicate material procured, to give a clearer indication of the work done and the material procured for current work.

Mr M Jacobs (ANC, Free State) also expressed concerns that the MEC should have been present to respond to questions and to take decisions. He thought that the figures quoted in the presentation were not realistic. The contract value of Qwa Qwa Route 4 was R40 million, and the contract period was twelve months ending September 2011. Expenditure was R5 million, which meant R35 million was not used. There were two budgets, totalling R80 million, with one ending September 2011 and the other in 2012. Clearly if only R5 million was used, the target would not be met. He also mentioned that although four phases had been named, there were no specific time frames for those phases.

Ms Mazibuko explained that the R180 million was an estimate, because of the acute rock conditions in mountainous areas. The figure could change in the final stages of the project over very mountainous terrain.

Mr Jacobs asked whether the programme addressed the concerns raised by the people when the Committee took Parliament to the People. He noted that the contract value for the Monontsha Pass was R20 million, with an end date for July 2011. That date had passed, yet expenditure was only R4.5 million. He asked when the other R16 million, which should already have been spent, in fact would be spent. Snowfall was cited as the reason for delay. However, those only took place after July. He wondered what hindered the completion prior to that date.

Ms Mazibuko accepted the criticism about the snow, but noted that where people, rather than machines, were used to work on the projects, they would not work in adverse weather conditions.

Mr Jacobs asked whether phase 1, from the Monontsha Border Post to the Caledon River, took place on the South African side of the border.

Ms Mazibuko replied that the projects were done on the South African side of the border.

Mr Jacobs asked if EPWP was only focused on Qwa Qwa or ran across the whole Free State, as he thought that every municipality in the Free State should benefit.

Ms Mazibuko responded that the Department accounted for money budgeted and received for the EPWP allocation. However, there were 23 other roads that also had an EPWP component. In the past, this was not included in the statistics. In future, after discussions with DPW and NDOT, they would be, and this was in respect of roads that cut through areas of Bethlehem, Welkom and Harrismith. This would give a better indication across the whole province.

Mr Jacobs also asked whether the project was being monitored, in which case time frames were required.

Ms Mazibuko said there was room for improvement, but dedicated staff members supervised the projects because all the certificates had to be signed off.

The Chairperson agreed with what was said about the short presentation, noting that this amounted to only five pages, excluding the photographs, and two of those pages merely outlined statistics. He noted that in Free State people raised many issues during the oversight visits. The Department apparently had created projects for brick roads, but they were then not pursued because the Department decided to build tar roads. The Committee expected an explanation of that decision. The proper procedures to abandon that project were apparently not followed. There was a problem in intergovernmental communications. He claimed that instead of being paid for the contract, some people had ended up having to pay government.

Ms Mentz explained that the brick project was changed to black top surfacing, to try to achieve cost saving. The length of the road would have made the brick construction and laying far more expensive. Although four small contractors had been appointed to make bricks, the quality was not correct, and it was decided to use those bricks instead for the sidewalks on the part of the route that went through the township. The contractors were thus still included as part of the bigger project, and were involved in other on-site activities.

Ms Mazibuko said she would need to go back and investigate why some contractors were fined. She had understood that no penalties had been enforced, although the contractors were asked to hold back on producing any more bricks because of the change of plans, and they would be used to pave, once the main roads were built. The complaints had more to do with the fact that they were currently not earning, so the correct version, to the best of her knowledge, was that they were not fined, as alleged, that none paid anything to the Department, and their contracts were on hold. She asked that any payments made should be reported so they could be investigated. The Department was also prepared to include them in other projects so they would not suffer any eventual loss.

The Chairperson asked how people were being empowered. Despite requests that those living in the areas be given priority when employing, the Committee had been told that projects were awarded to those from other parts rather than to locals. He also asked whether any advertisements were published, and what selection criteria were used.

Ms Mazibuko explained that the employment of EPWP workers was driven by local structures. The Department worked with the Parliamentary office in the area, and Members of Parliament from those areas actually recruited people. The Department did not advertise, as newspapers did not circulate in some areas, but instead would place notices in municipal and public buildings, and it tried to absorb as many people as it could afford. The situation was not perfect. Contractors would employ their own people first, but that could be improved.

She admitted that financial constraints in the previous year had limited the empowerment. The Department had 54 people listed in the restoration pool. These were contractors who may have worked in the first phases on EPWP, but whose CIDB registrations had lapsed during gap periods in which they had no work. While they were on the restoration pool, they were used for small jobs, to enable them to re-register, after which they could return to larger projects. The restoration programme included training and work on larger contracts.

She added that by the end of the current financial year the Department should have 149 contractors who had either been directly trained or contracted with, and people were employed in the EPWP programme. She added that there was further empowerment was achieved through transporting workers up and down the mountain. In its next report, the Department would provide statistics on how much of the budget went to empowerment.

The Chairperson enquired how many of the jobs were permanent, and how many were temporary. There were concerns about the figures that did not seem to tally. He informed the Department that Members were well informed about provincial issues.

Ms Mazibuko referred to the involvement of municipalities in the Department’s EPWP, and stressed that the Department worked through municipalities, particularly in the Roads and Transport sector. The Department could provide a list of what the contribution was from each municipality. In this presentation, only the jobs that the Department created and paid for from its own budget were listed.

Mr R Tau (ANC, Northern Cape) expressed his disappointment that MEC Komphela had not attended. In this year of Job Creation, there were very important issues of rural development and re-design of programmes to address the need to create jobs. The presentation had not covered any challenges in road construction, how the calls for rural development were addressed, how the roads connected with the formal or informal markets, what the benefits of the roads were for the poor and unemployed, how the roads would transform and connect the second and first economies, and how the roads would assist communities in getting access to schools.

Mr Tau also asked how much, from the millions of rands invested in this infrastructure development programme, was directed towards capital expenditure, as opposed to service delivery. Contractors were supposed to benchmark their fees, yet he suspected that some were taking as much as 80% and only investing 20% in the physical construction. He asked what the contract terms imposed on them.

Ms Mazibuko responded that there was 80% capitalisation in the EPWP project because there was no machinery, and people were performing the labour. There was division between material and staff. The work done was capitalised.

Mr Tau referred to the conditional grant, and said that the NDOT had indicated that a specific amount of money was allocated to provinces, although the NDOT itself, after transferring the money, had no control over how it was spent. He asked how much was received by way of transfer, how much came from the Provincial Equitable Share, and how much from the Provinces’ own revenue, to contribute to overall infrastructure development in the province.

Ms Mazibuko responded that the Department received R447 million for EPWP projects in the mid-term budget. A report could be provided as to how every part of that money was used. The Department was developing 23 roads for provinces, partly with provincial money. A report could be provided on how much the Province itself had invested. The Provincial Equitable Share amounted to R447 million.

Mr Tau asked specific questions on the Putodechaba development, which the Committee had visited, and where issues around EPWP were raised. The Committee now needed to report on progress and he asked the Department to study the inputs made by that community, and respond to them. The Premier had, at that stage, given a presentation that indicated that money was to be put into infrastructure. He asked how much, if any, of the Department’s delivery was linked to these operations.

Ms Mazibuko asked for further details to be provided so that this could be investigated and responded to.

Mr Tau stressed that the matter of cross border transportation was very important and urgent, and asked that the Department must intervene and provide reports.

Ms Mazibuko responded that the Department would appear before the Committee on 6 September, and would give a reply on that date on the cross border issue. It would assist the Department if the Committee could supply a list of the issues raised by communities during the People’s Parliament visit.

Mr Groenewald commented that he thought that the number of 149 contractors on one project was large and asked who was accountable for quality and control.

Ms Mazibuko responded that the 149 contractors were not employed on one project, but this represented the total number who would be employed in the financial year.

Mr Jacobs asked again if the projects addressed the issues raised by the community. He asked how much budget was provided by NDOT and how it was divided. He questioned again the value of the projects and how this would be allocated over the five years. He asked whether the EPWP projects were taking place on provincial or local roads, and whether the Department was responsible.

Ms Mazibuko responded that, as HOD, she was responsible. The MEC was strict on the issue of accountability, and the Department must account both for positive and negative actions. If anything went wrong, the Department would act swiftly to discipline the staff member.

Mr Jacobs was concerned about scholar transport. He himself was from Bethlehem, but he noted that schoolchildren there were using transport from Qwa Qua, as taxi drivers from Bethlehem were not being awarded tenders. The children had to leave home for school at 5am and only reached home after 9pm. This could be solved if local transport was used.

Ms Mazibuko responded that the contract was awarded by the Department of Education, and she would try to find out the reasons why the tenders were not awarded to local contractors.

The Chairperson was aware that written responses would be sent, but wanted to raise certain issues for a response now. There were concerns about interdepartmental communication, and the issue of the invitation, which was worrying, and he recommended that steps must be taken to follow up with the responsible individual in the Office of the Premier. He explained that the initial invitation had been for a meeting on Tuesday, but when the Premier’s Office responded that the leaders would be participating in a Provincial Lekgotla, the meeting was shifted to Wednesday, and so clearly something was wrong with the lines of communication, as the very people who claimed to be present on the Tuesday were, according to that Office, supposed to be in a Lekgotla.

The Chairperson reiterated concerns about the change of project without the proper procedures being followed. He asked whether there was any guarantee that the contractors would in fact get the paving jobs. He wondered what had happened to the money for the intended project. He reiterated that the purpose of EPWP was to employ locals.

The Chairperson also reminded the Department that the Committee was still waiting for the report dated 18 November 2010.

Ms Mazibuko responded that her Department, when called to Parliament, was told that the presentation should cover the EPWP, and so the Department was not aware that Parliament wanted it to respond to all the issues that Members had now raised. She asked for a list of the issues on which a response was required. She further pointed out that as she had only been appointed this year, she could not answer for issues that were raised in 2010.

The Chairperson indicated that another worry linked to intergovernmental communication was that the Committee had found that people were still living on sports fields, as they had been during a previous visit, and so he wanted the Department to indicate, in its report, whether there were intergovernmental lines of functions and communication. Such matters had a negative effect on oversight.

Ms Mazibuko said there was room for improvement in this respect, and said that her Department was meeting with colleagues at national, provincial and municipal levels in other departments.

Ms Themba asked why Mr Malapane had attended but had not clarified issues.

Ms Mazibuko again asked the Committee to provide a list of all the issues that were raised when the Committee took Parliament to the People, and apologised again for any miscommunication.

The Chairperson emphasised that the Committee took the issue of transport very seriously.

Mr Jacobs repeated his unanswered question as to where the Department drew the line between provincial and local roads.

Ms Mazibuko said the roads were classified according to who took responsibilities in the three spheres – and pointed out that there were municipal roads, provincial roads and national roads. However, some roads, such as rural roads, were uncertain. National Roads were all those routes with an N number – such as N1, N2. The Department was maintaining 23 provincial roads. There were challenges with provincial and municipal roads. The Department was requested by Cabinet to give a clear and detailed maintenance programme, and there were huge challenges with potholes in the provincial roads.

Mr Groenewald questioned if the financial constraints in regard to the paved roads were not budgeted for in the first place. He enquired what happened to this budget.

Ms Mazibuko explained that initially the whole of the Route 4 project was to be paved. However, because of cost, it was decided to convert it from a paved to a tarred road. Those originally contracted for the paving would now be use to pave on the shoulder of the road, and would also be used in other projects for paving, so that they would not receive any less, finally, than they would have received had the paved road gone ahead. The budget was now being used for a different surface. Contractors would be moved across to other projects.

Mr Groenewald pointed out that the details raised by communities could be accessed from the report in the Premier’s Office and Office of the Chairperson of the NCOP.

Mr Tau asked whether the R449 million formed part of the Provincial Equitable Share from National Treasury, or was a conditional grant specific to road construction.

Ms Mazibuko said that this was not the Equitable Share, which was a larger figure, and it was a conditional grant for specific projects, for which the Department accounted to NDOT.

Mr Tau was surprised to hear that the HOD would consult with the DOE on the issue of scholar transport, because he had understood that the Department of Transport was taking over that responsibility from the Department of Education. There were inconsistencies, and rural and poor children suffered.

Ms Mazibuko said the issue was still under discussion.

The Chairperson thanked the presenters for what they had tried to present, but warned the Department that in future a full team must attend. He was concerned about inter-governmental challenges and he said that the line function issues must be addressed. If certain issues were already integrated, then the Department would have been in a position to explained how money was spent. He again requested that the poor communication on the invitation must be followed up and the correct person brought to account. He concluded that transport issues would be discussed at the next meeting. The Committee was very serious about protecting lives that could be affected by operations across the South African/Lesotho border. The MEC must attend that meeting, and the report from 18 November 2010 was expected.

Committee minutes
The Committee tabled the Minutes of Committee meetings held on 7 June 2011, 14 June 2011, and 28 June 2011. All were sent back for correction and were not adopted.

The meeting was adjourned.