DPW Responsibilities at Robben Island; Property Sector Charter: briefing by Department of Public Works

Meeting report

Opening Remarks
The Chairperson apologised that the Minister would not be there that day. She announced that the Department of Public Works (DPW) would be finishing its presentation on Robben Island. Officials from DPW and the Council for the Built Environment (CBE) would be giving an update on the Property Sector Charter. However, the CBE Chairperson would be attending the meeting on behalf of DPW, not CBE.

Department of Public Works functions on Robben Island presentation
Mr Frederick Johnson, DPW Regional Manager: Western Cape, expanded his 15 May briefing by taking a look at stakeholders, the agreements with Department of Arts and Culture (DAC) / Robben Island Museum (RIM), functions, challenges, and issues previously raised by the Portfolio Committee.

He said that the various stakeholders were the DPW, the SA Heritage Resources Agency, Robben Island Museum, the Department of Arts and Culture, the Department of Environmental Affairs, and the World Heritage Committee. For specifics on their responsibilities on Robben Island, see document.

There were two agreements in place governing the function of the DPW on Robben Island. There was a Memorandum of Understanding (MOU) signed in 2006, between the DAC and DPW. A service level agreement between Robben Island and Department of Public Works was also established. Mr Johnson emphasized that this agreement was out-dated. One of the requirements of the Integrated Conservation Management Plan (ICMP) further required that this agreement must be updated and that it must include the roles of the Department of Arts and Culture as well as the South African Heritage Resources Agency (SAHRA).

Challenges experienced on the Island included the problem of safekeeping and supply of material and spares, the lack of necessary expertise for vacant posts; staff resided on the Island with no amenities; projects had to look at conservation significance and the possible use of each building had to first be determined by RIM before a project could be started; the ferry had a limited capacity to cart materials.

Mr Johnson then turned his attention to answering questions raised by the Committee on 15 May:

• What is the R8.6 million spent on fuel?
The funds were spent to purchase fuel for the generators. These generators must generate electricity 24/7 for the complete Island. The fuel is purchased from RIM at a rate determined by RIM.  For the last 12 months R7.771.412,39 was paid to RIM for diesel and R819.000,00 was spent on the operating and maintenance cost of the generating plant.

• Why are we only buying 40 L of fuel from petty cash and that for six vehicles

According to procurement procedure on petty cash, we cannot exceed R500,00 this allows only 40l of petrol for workshop vehicles only. Horticulture purchase their own petrol. The Department was informed by Robben Island to reduce the quantity of petrol it transports to the Island due to permit restrictions and also to replace the petrol vehicles with diesel ones. The process of procuring the diesel vehicles has commenced and the regional office is awaiting the date of delivery from the service provider.

• Why is the admin clerk waiting 3 weeks to a month for stationary

The processes followed to procure stationery can sometimes lead to periods of three weeks to a month delay in receiving such stationery, especially when the stationery is procured from outside service providers. The scheduling of the requisitioning of stationery will be improved to ensure the timeous delivery of stationary.

• Why are the geysers bursting, is it because of the saltiness of the water?

In the past (1996 -2003) when the geysers, toilets and fire hydrants were connected to the bore holes and the quality of the water was very brackish (very salty) the life cycle of the geysers was approximately 6 months. The kitchens were provided with fresh water from Cape Town. Since then a separate line was installed to all the houses providing good quality water to the entire house. There should at present not be any geysers bursting due to water quality or pressure problems, as all houses are fitted with pressure control units and the water quality is monitored daily. Geysers that are now bursting will be due to normal wear and tear.

• When was the island 3 weeks without water?

In June 2010 the water membrane at the desalination plant was damaged (contaminated) by a severe red tide. A new membrane was ordered from Germany and took some time before it could be delivered. During this period bottled water was provided to the residents of the island by the contractor. Two 2500 L water tanks were also provided by the contractor which was kept full.

• Why are two rubber ducts parked and at what intervals are they tested to ensure that the 60hp engines which cost R70 000 are operational. For what are the rubber ducts used?

Workshop is in possession of one rubber duct not two. The rubber duct has a petrol driven engine. It is not tested on regular basis because of the shortage of petrol on the Island. It is complying according to the local authority, meaning, it does have a sea worthy certificate which is due for renewal in 2012. Usage of the rubber duct is only for emergency purposes, e.g. if someone gets ill during the course of the night, if all the boats are full and there is an emergency.

• Are the sewage pipes blocked?

No sewage pipes are blocked. Several of the sewage and main water lines were replaced and/or upgraded the past two years. There are normal blockages occurring and are rectified immediately.

• Why is the horticultural section not cleaning the yards of the houses

The practice in the Department is that where official accommodation is used the tenant must attend to the garden themselves.

• Why is the staff not informed about the proposed FM contract

The staff have been informed on several occasions, the last occasion was on the 5th May 2011, where the workshop Superintendent together with Horticultural Supervisor, Director: Property Management, Principal Artisan Superintendent were given a full presentation on the proposed FM contract.

• What is happening to the school and the shop

The school falls under the Department of Education and it was closed due to the low number of children and the shop is managed by Robben Island.

• What portion of the R3.8 million for Day to Day is allocated to RI

The allocation is made to the Department of Arts and Culture (DAC) as a department with no separation of the budget for a specific building or institution receiving.

• Provide a breakdown of the 149K spend by horticulture

Fuel, for lawnmowers, vehicles: R70 000
Protective clothing: R24 000
Spares end repairs to equipment: R35 000
Horticultural items such as Fertilizer, plants, compost, etc: R20 000

The Chairperson asked about the operation of the rubber ducts regarding the dates of the testing. Mr Johnson apologized for not having that information available.

• Why is the vacant post not filled, how many times were the posts advertised and what is the requirements of the posts (see document for details).

• Why was the original report not submitted on the 16 March?

The original report was submitted by the regional office on 15 March 2012 but due to an oversight it was not submitted to the Portfolio Committee and for this the Department apologises.

• Why is the staff getting overtime for emergency work and after hours work performed when they stay on the island?

Overtime is paid in excess of normal working hours whether during the week or weekends. Prior approval from the supervisor is sought before it can be performed. Staff members who stay on the Island work normal working hours and if they are required to perform after hour duties it is regarded as overtime. Emergency work is performed in the event that an emergency occurs, for this a standby roster will be done by the manager. Staff members on standby will be paid standby allowance, this is not the same as overtime.
It is therefore possible for employees to get both standby and overtime at any given time due to the geographical location of RI as well as manpower/skills challenge

• When last was Robben Island painted?
The houses on the perimeter street were painted in 2010 and some off the other houses were done as requested. When a restoration project is done the relevant buildings are painted as part of the project. RIM will not allow for any painting to be done without their approval and they do not have the capacity to assess many areas at the same time.
 
The Chairperson clarified that by perimeter Mr Johnson meant houses along the tourist bus route, which he confirmed.

• Provide a breakdown of the projects both capital and planned and deal with the under and over expenditure. Why are young people not used on the job (see document for details).

Discussion
The Chairperson asked for clarification on the painting of buildings. She spoke to the standard practice of the DPW, and asked if Mr Johnson was contradicting this process.

Mr L Gaehler (UDM) asked if the Manpower Act made it difficult to hire people, as it was outdated.

Mr Johnson responded that the qualification levels of painters made it difficult to find staff, and asked that those requirements be lowered.

Ms A Dreyer (DA) made note of the long time periods between posting openings and closing, and asked why there was a long delay.

Mr Johnson said the delay was incurred because there were no funds to fill the posts.

The Chairperson wanted clarification on why the submission on the advertised Electrical Foreman post

was sent to Head Office more than six months after the closing date for applications.

Mr Johnson responded that at the time, the head office indicated there were sufficient funds, but by the time of filling, there were not. And the Department was not able to send the job submission until May 9.

Ms C Madlopha (ANC) said that she enjoyed hearing community reports. She proceeded to refer to page 10 of Mr Johnson’s presentation and the R8.6 million spent on fuel. There was an indication that DPW was getting 500 per day not per week. The indication was if the Department was not able to buy 250L total, they were able to buy twice at 40L. She mentioned the diesel that was bought for Robben Island at a discount. DPW was selling electricity and diesel and she asked where this money was going. Was it for profit to sell to residents?

The Chairperson said Robben Island residents were charged for using electricity in their houses.

Ms Madlopha thanked the chair for clarification. She asked if this petrol was used for the rubber duct, and why DPW used diesel and not petrol. She commented on the issue of vacant posts. She wanted to check that three painters were posted in 2011. She believed that this workshop was being set up for failure as it was outsourced. She wanted clarification about whether the painters were paid by the office and not the workshop. She brought up the issue of the painting contractor. During painting work, gutters were damaged, but the project manager acted as if it was business as usual. She asked why the contractor was not made to pay for the damage. She asked why only the houses next to the tourist roads were being painted, and not all of them. Finally, the painting of the museum roof — was it painted red and white, or just red. What paint was used, and what was the requirement?

Ms N November (ANC) thanked the presenter. She asked what DPW was fixing in the agreement. On page 10, it seemed it was a petrol issue that had already been raised. She noted that it seemed there were no policies, just guidelines that were being followed. On page 14 she spoke about fertilizer and compost, stating she was worried because she needed to know specifically what “etc’ meant.

A member touched on the new membrane from Germany, and asked if it was not available in South Africa, and at what cost it came. She addressed the issue of the job post and its specifics. If the school was closed due to the numbers attending, what was being done about those children’s education. Out of the seven job postings, one was for Robben Island. There needed to be a programme to accommodate the previously disadvantaged. The requirements might discourage those who had been trained but without the testing. She asked for an indication of the standby allowance. She asked about the project being delayed on the ICMP, who was supposed to do that and if that was supposed to be included, why was it not implemented. She closed by expressing concern about the over expenditures.

Mr Gaehler asked if any of the contracts were outsourced.

Mr M Swathe (DA) inquired about the rubber duct, and asked whether it was tested and whether the rubber duct was running, as it seemed to him it was tested on a regular basis. He asked what that meant in times per month, because it was perhaps consuming part of the budget. On painting the houses along the road, he asked what was done with the other houses. He expressed concern that the other houses were being neglected, and suggested that it might paint a poor picture of Robben Island for those who wandered in. Finally, addressing over expenditure, 4.1 billion to 5.6 billion Rand was due to additional work, and inquired what additional work was approved. He did not understand why additional work ended up being needed.

Ms Dreyer asked about the delay in sending things through. The President said all civil service posts needed to be filled within six months in his last State of the Nation Address. It did not make sense that there was no room in the budget for spaces to be filled. For the use of energy on the island, she asked about alternative sources of electricity like gas and solar water geysers.

Another member inquired about the commute and working hours of staff on the Island and for clarification of the work done.

A question was raised about the World Heritage Committee assessing the sites. Which reports were assessed by the World Heritage Council and were these reports sent to the DPW?

Mr K Sithole (IFP) referred to the Capital Projects on page 17 and asked if there was final agreement and if DPW had a plan for jobs since there was no plan shown about what was to be done on the issue.

Mr P Mnguni (COPE) asked what the delays were costing them, and what differences were still being sorted out. Secondly, he asked if the projects were outsourced. He wished the costs of the future projects were further broken down to better understand the costs.

The Chairperson repeated Mr Gaehler’s question on whether DPW used outside contractors.

A DPW delegate said the scrutiny was welcomed, but asked that things be put into context. DPW was in a turn-around process, and the Robben Island project was a symptom of what had happened. He hoped to give direction around contradictions coming through, but declined to offer explanations, though he said they had been noted. He said internal process failures were part of this problem, in terms of recruitment on Robben Island and in the department. He noted the disjunction of the post and that people had been disempowered to respond to problems adequately. In future he would like to receive a report on whether people had the power to deal with these problems effectively.

He continued that lacking or outdated government instruments were noted. On in-sourcing / outsourcing, DPW needed to finalize a process of re-establishing workshops. There was a June deadline about re-examining aspects of Public Works. He said they were trying “to fix a sailing ship, but change its direction at the same time”. He noted two future projects of the DPW: to resuscitate workshops, secondly, to re-engage clients in the operation of public works so it was more responsive to them. DPW wanted to in-source, but not everything would be readily available. In the short-term, the Department planned on in-sourcing through other companies to benefit from their work experience. He expressed the need for a transfer of skills through artisan programmes in DPW by providing workshops to train these people.

Mr Gaehler said this did not bode well for the Western Cape region, as they had all the technical skills in the region. Mr Johnson was misleading the Committee with these reports, for example, the over expenditure of R6 million. He expressed outrage as to why? DPW should be leading in renovations if the region was functioning properly. The main problem must lie with DPW Western Cape, because there certainly must be enough painters in the Western Cape. He did not understand a government using petty cash for petrol, again suggesting the main problem must lie with DPW Western Cape as they run Robben Island. He said the Members could not accept this as a Committee.

The Chairperson clarified that Mr Johnson was talking about standby allowance, but horticulture didn’t have an overtime budget, and there was no accommodation for those working overtime. In 2010, the workshop was taken from Customs and given to a project manager. She asked how that happened in terms of taking the structure from them. She asked if DPW had outsourced its functions. DPW had put R8.6million on fuel and vehicles, and not only on fuel alone.

Mr Johnson replied to the questions on painting, saying the delegation did not want to mess up the schedule set by DPW, but before buildings were painted, this had to be done in consultation with Robben Island. He accepted that DPW should interact more with RI on issues such as these, because if it was not on the ICMP, it would not be addressed. He would consult with them in the future on these issues.

The Chairperson asked to see a copy of this memorandum of understanding.

Mr Johnson assured the Committee that it would receive a copy of that. He said that the presenters would include it in the future.

Ms Madlopha asked if the Integrated Conservation Management Plan was approved.

Mr Johnson replied that he believed the latest one was approved.

The Chairperson referred to page 17, and said it contradicted what the DPW delegation had previously said.

A DPW representative said the Department would be putting it on that plan in the future.

Mr Johnson changed the direction of the conversation back towards the issue of petrol use by saying the 40L of petrol was per day, and purchased by petty cash with a maximum of R500 per day.

The Chairperson was confused about the validity of the report.

Ms Madlopha said she believed Mr Johnson was confirming whether DPW was receiving the petty cash weekly or daily and what their limitations were. The report was not honest, and she thought it was cooked to fit what the Committee wanted, not what was true.

Ms Dreyer suggested that the Committee visit Robben Island to see their processes and operations.

The Chairperson said the oversight visit in June would include Robben Island. She addressed the issue of fuel prices in the month of June. The Committee did not receive a breakdown as they had asked for on 15 May. It seemed there was a lot of money spent on these things and problems relating to its use.

Another member suggested that the Minister must be engaged in the discussion, and find out how the money was used in the Department. There were too many contradictions to understand the report and the presentation, and the Minister needed to take time and look at the matter thoroughly.

Mr Gaehler said if you outsource a project, the contractors were supposed to bring the material. The Department needed to conduct a proper investigation as to what was actually happening on the island.

One member said he believed Mr Johnson was unprepared for the meeting. Last week the budget was R4 million, but despite requesting a breakdown, the Committee had still not received one.

Ms November agreed about conducting an investigation and expressed some confusion.

Mr Mnguni said that the Committee could ask questions, but would not get the answers desired.

Ms Madlopha asked what the tanks that the diesel and petrol were kept in and used for.

Mr Johnson said DPW bought diesel from Robben Island. The DPW paid for the transportation of diesel and paid that rate to Robben Island. Previously DPW had asked for the construction of their own tank, but it was denied. For electricity on Robben Island, those employed paid a certain amount to the Island. The DPW staff paid a rental to Robben Island. As for the rubber duct, they were petrol engines, diesel was not used. Painters had been appointed within the workshops, but the one dedicated to Robben Island, did not accept the post. The conditions require them to live on the island, so it was a specific post you must apply to. He continued about the gutter issues and the contractors.

Ms Madlopha asked if there was anyone appointed in September 2011 for appointment but asked if there were any people currently employed.

Mr Johnson said those employed were appointed by Customs House, but they were unable to secure a person for Robben Island.

Ms Madlopha said the workshops were set for failure, believing DPW outsourced this job to certain people. She called for an investigation.

A DPW representative confirmed that the roof should be red, by instruction. The delegation was aware there had been a disagreement, but according to what it was in 1997, the instruction was for it to be red. On the issue of the contractor, she was not aware of that, and planned to follow up on that. Proper procedure required contractors to be responsible for that.

Ms Madlopha presented photo evidence of gutter damage, saying the project manager had approved everything.

The Chairperson said she had seen pictures this morning about gutters that were damaged. The damage was very noticeable. Why had the project manager paid the contractor? Was an inspection done?

Mr Johnson addressed the question about a timeline, saying at this point no time frames could be given, but he would follow up about renovations. That DPW monitored the weather, and tried to ensure work took place when it was good. Copies of statements would be provided. He did not have the cost of the membrane from Germany, but knew it was not available in South Africa.

The Chairperson asked why Robben Island would drive the mode of operation (MO) use.

A DPW delegate said that when UNESCO had visited Robben Island, UNESCO had raised the issue of the MO agreement. UNESCO asked for it to be a four-way agreement between Robben Island, the DPW, the DAC, and SAHRA so everyone was aware of their responsibilities.

Mr Johnson explained that the school children were taken over by boat to the harbour and then transported to schools. The Department was in the process of resuscitating workshops, and they were taking all of the factors into account in those decisions.

The DPW delegation then addressed over expenditure and specified that the material presented was regarding 2011/12. Several Members had commented that there was no breakdown. He explained that the delegation decided not to break expenditure down into project specific costs because those costs were related to the previous year. Planning projects and concluded projects were counted in different years and that allocation was not executed because of delays. The over expenditure was a result from a need to replace infrastructure that could no longer be fixed. The allocation for that financial year was an over expenditure, but might not, in the end, be that great. The project that started last year was for infrastructure replacement which took place at the beginning of the term. A full breakdown could be provided if necessary.

Mr Gaehler restated his position that the problem was related to the skills in the region. Project managers should not allow themselves to go over 20%, but it was 50% in this case. Going over 20%, in his mind, indicated a problem somewhere.

Mr Swathe was surprised. A roughly R2 million over-expenditure was too much for him. It was a matter of changing the plan from one area to another, costing millions and causing the over expenditure. He asked if items were being changed while work was in progress, or before work began.

Ms Madlopha wanted clarity on over expenditure and if the 50% additions were within regulations or any policy.

Mr Johnson said everything was line with trade regulations and the Public Finance Management Act (PFMA).

The Chairwomen said that Members agreed the Committee needed to speak with the Minister. The Regional Office was not hands on, and that despite given a week and an extension, the Committee was not getting proper answers. There was a problem in the office, and not responding questions was a continuing problem. To her, something was not “on” or committed in the department. As for Robben Island, DPW could not allow it to go down. The Committee could not allow officials to portray things as okay by painting houses along the road.

Property Sector Charter presentation
Ms Lydia Bici, DPW Deputy Director General: Policy, provided background information on the scope of the property sector, which was comprised of the residential property industry (houses, flats, clusters, informal housing etc) and commercial property (offices, retail, leisure, etc). The Property Charter applied to many segments including property owners, the Property Loan Stock Association, trust companies, property services (managers, agents), professionals (valuers), Regulators, Government, and Nedlac. The sector size was second biggest after mining. More background information regarding the Property Charter Council Members, its financial value, and the charter process were noted, as well as a short summary of goals for the present year.

Governance structures were described which involved Council members, Board members, and Exco members, who had high meeting attendance and participation. She reviewed the composition of the Council and outlined the appointment processes for each type of membership. Code of Good Practice were reviewed for companies, and the rating criteria on how they perform based upon sectors was covered. Generic Score Cards were Department of Trade and Industry (DTI) Codes used by sectors that did not have a Sector Transformation Charter, whereas sectors that had Sector Transformation Charters had to use that specific sector code. Companies were allowed to deviate to accommodate sector specific issues, but deviations had to be discussed and agreed on with DTI.

She spoke about deviations for economic development by means of investment and how that affected a company’s scorecard. The implications of the gazetting in terms of Section 9(1) of the BBBEE Act was that every operation must comply. Operations were obligated to use the Property Sector Code Scorecard effective immediately. The status needed to be analyzed by an organization such as the IRBA, the Independent Regulatory Board of Auditors, who then gave a true reflection of performance. The hope was to reduce fronting by undergoing this process. The verification process included receiving a level, but if a company was 51% black owned or above, it automatically received a rating above the level of evaluation.

The IRBA conducted a baseline study, which was designed to establish the status of the property sector in terms of transformation. The IRBA would then report on the status of transformation with one of the main objectives being to generate industry and sector reports with authentic trends and tracking its progress using tools such as DTI processes. Reporting was to be required annually, with the possibility of smaller reports being required.

The Department did advocacy work about the Property Charter Codes in Sec 9(1) of the BBBEE Act. In partnership with the Property Charter Council, DPW would rollout road-shows aimed at training on and promotion of the property charter codes. Advocacy was done to increase further broader formal organizations beyond current charters. Public Sector workshops and advocacy on the implementation and alignment of state programmes would be held with all spheres of Government and State Owned Enterprises (SOEs).

To support the transformation of the department, the Property Sector Charter and internal BBBEE provisions, DPW had developed and implemented a Property Management Strategy on BBBEE, Job Creation, and Poverty Alleviation which would support transformation, and the Property Incubator Programme (PIP) as an enterprise development programme.

DPW had launched CORP 17, which was a framework to develop a green economic programme throughout the industry. There was a small town strategy to ensure a property industry there and improve the economy as it identified opportunities for empowerment and job creation.

In summary, there would be a Property Sector Charter Council meeting in June to discuss the gazetting of the Charter and the implications for everyone would be discussed. The Council was adjusting the budget and devising a detailed programme to roll it out. There was a training manual for government departments and state entities, but the DPW would begin road shows and position itself to report on the performance of the public sector, and it would continue working within the Council.

Discussion
Mr Mnguni began by asking how long it would be until the gazetted Charter would be approved.

Mr Sithole thanked the presenter. He wanted to know more about the appointment of board members and about the appointment of the minister was made. Regarding organizing women, property, and the disabled, on page 20, he asked about the last bullet (having DTI approve any deviations in the Code of Good Practice, and asked if it would open things to corruption.

Ms Madlopha asked for clarity on page 20 about sectors that did not have a Sector Charter.

Ms P Ngwenya-Mabilia (ANC), asked why this charter now? If the main agenda was to transform the property sector, did one believe this charter would really change it? Moreover, if the Council was being funded by the Association, would the fees sustain its work?

Mr Swathe asked about the extent of the Property Charter. Regarding the development of a small town strategy noted on page 32, he asked if the Charter was trying to improve the lives of those people in rural areas. He thought it important for them to be active in the economy, and believed the rural population needed to be considered.

Another member asked why, if the charter was introduced in 2005, it had taken so long to be implemented. Secondly, who had been appointed as the CEO, and before the current person, who was there? On page five, she asked if the delegation had a percentage for women. On page seven she inquired about the percentage of the BBBEE. On page nine, on the stages the charter went through, she asked for the development between 2005 and 2012, and noted section 9(5) was only listed in 2010. She asked for an explanation on corporate governance and if they were still remunerated and how many were directed by the board members.

Ms November asked again about the advocacy work on page 30, and wondered if Members could be invited. For instance province and town meetings, would those be open to all who wished to attend?

Mr Gaehler asked what had been happening before and if there any transformation before. In page 30 the Charter outlined certain policies for all spheres of government, which he believed could not be left loose. He asked what areas were addressed by the Council, and if rural people were represented in those councils.

The Chairperson reminded Members about a previous briefing by black business property owners, which encouraged them to check up on the need for progress.

Ms Ngwenya-Mabilia also asked why it took so long to craft the Charter.

Ms Bici requested that the CEO of the Council speak, as she might be able to answer a few of the questions. The presentation might not be as detailed as it should be in terms of a strategy plan. She could address questions she could not adequately answer now, at a later time.

Ms Portia Tau-Sekati, CEO of the Property Sector Charter, gave a history of the Charter, prior to BBBEE being introduced to government. In February 2007, the Codes of Good Practice on Broad-Based Black Economic Empowerment were gazetted. The Council had to follow the process of BBBEE and she went through the process from 2007 up to 2012 found on page 10 of the PowerPoint presentation.

The Charter was gazetted on 15 May. She addressed the role of assisting the CEO and the appointment of Exco board members. She then addressed how Nedlac formed part of the composition. There was a trade section and a social section in terms of the economy, and Nedlac addressed more of the social issues. The Women Network had only one representative, the ones under trade and network would be under Nedlac.

On the sector transformation charter, the CEO clarified that everyone would use the Code of Good Practice, unless one had a sector charter. There were now currently ten, unless your sector belonged to one, you used the Code of Good Practice.

On why the Charter was being gazetted only now, she explained it had undergone much evolution, but it had followed a process set by DTI. The Charter body needed to follow it to ensure it meet all the requirements before the Charter could be approved, but DTI must satisfy itself and their own requirements. The Charter body was pleased to have finally received approval. In terms of the transformation sector and its affiliation funding, the private sector contributed 60% of the Council’s funding, the public sector contributed 40%. Currently they were looking at more funding mechanisms in terms of sustaining all Council sectors, but restated their main focus of getting the Charter gazetted and keeping it running. For sustainability, the Charter needed more programmes, but they were looking at other funding options.

On the appointment of the CEO, she apologized for the misrepresentation, saying that since 2007, she had been the CEO, with a gentleman acting before that.

On issues regarding women, she was not sure about the percentage of participation, but said the Charter body had begun a research study to understand the property sector in its totality. She was unsure what percentage was BBBEE, but suspected roughly 10%.

In terms of Charter strategies, public analysis would enable the public to participate before legislation was regulated. On issues pertaining to government structure, no member (Council, Board or Exco) was remunerated as a commitment to transform the sector. Transformation in the commercial sector had not been too visible because they did business with Public Works. In areas where there had not been transformation, it had been in residential areas, because of family owned businesses, which they were working continually to transform. That sector belonged to the DTI and Department of Human Settlements.

The process of Council and membership participation was then reviewed. The Council was formed by participating members, who were confirmed with the relevant ministers, from where the ministers endorsed these or more proposals were made. Finally, the DPW was a sector Charter; they accept invites, but do not usually attend meetings on their own accord. In the mean time, the Council gave regular updates, and DPW was updated on a monthly basis on Council’s work.

Mr Saul Gumede, Property Sector Council chairperson, thanked the chair for the opportunity to comment. He restated the previous statements on the difficulty of developing the Charter. On funding of the Charter, Exco presented a budget to the Council for approval. Once approved, a formula was applied to each association based upon their ability to pay and the size of their properties.

On reporting to the government, the Charter spent a lot of time convincing established business that these changes had to happen, and everyone must participate to improve. There were two deviations towards “why a charter now” questions. On their side, there was a fight on a deviation regarding the disposal and existing property companies. One such deviation was if someone sold to a BBBEE firm, the operation would get more points, so they would be encouraged to sell to a black firm. The other was the economic development scorecard, seeing those who managed to agree with a scorecard that black managers were seen as a positive factor. He touched on the idea that the Charter foresaw more development of shopping centres in rural areas, and companies could only get returns from the Charter if they developed in rural areas.

Ms Bici said it was a business imperative, and wanted the private sector to “want” to transform. The participation of government departments, all of them in terms of BBBEE Codes, were appointed by stake-holders who are appointees of the ministry. All sectors would appoint one person. Secondly, in the Council itself they had five public sector appointees, but it was rather the minister who sorted out the representation. In relation to raw development around small towns, all this work was billed in 2007, and was an independent process that she stated was not fast enough if Public Works could not contribute to it in terms of its own values.

Ms Ngcengwane brought up the point that property would be held by all spheres of government. She asked if property holdings would be done in collaboration with DTI or DPW. She stated that DPW showed no transformation on the issue of property holdings. All rental properties were controlled by “one white guy”, which worried her. Lastly, whenever the Black South African Association bought a property that was old and dilapidated and renovated it, how the situation would be handled if the transaction were perceived as corrupt?

Mr Gaehler said he welcomed shopping complexes in rural areas, but the involvement of people in rural areas was not there and he considered their involvement to be important.

Ms Tau-Sekati addressed the Code of Good Practice, stating that a Charter sector would be monitored by the Property Charter as stated in the gazette, in both quantitative and qualitative ways. As a property sector Charter, monitoring would be one of their core responsibilities. Regarding the transformation of government, she added that in December 2011, there was an amendment to the BBBEE Bill about groups developing their own charters, which gave them an opportunity to develop their own transformation policy. Speaking to the question of involvement of participation was that the Charter had been set up to accommodate rural participation, and participating in those structures.

Mr Gumede responded to the issue of rural development. Normally in those areas, the land belonged to the Department of Land Affairs and Rural Development who gave a lease of 49 years or more to the developer. There was a standard clause which states that the renter/developer must pay on an escalating rate over those 49 years and the rent would have to go through a community trust which would be established. How the money was used was between the developer and the trustees.

Ms Madlopha said she was worried about trusts because of the government policies, wondering if they ran ‘general dealers’? Why did the parties not come together? Why local businesses did not help these shares?

Mr Gumede agreed with Ms Madlopha, but stated the developers were guided by the rules of the state during the sale of land, giving ownership of 10%. If rented a trust was formed, which was a rule from the Department of Land Affairs and Rural Development.

Ms Bici said this was the example of Bloemfontein where there were few owners using the Charter to contribute to transformation. She apologized that she was not able to give a National Youth Service (NYS) presentation at the moment. On the issue of buying dilapidated buildings, this was an issue the Charter body was dealing with. She ended up by saying the Charter body was looking at dealing with high-level executives in the panel to assist them in dealing with these issues.

The Chairperson thanked everyone and adjourned the meeting.