Department of Public Works Strategic and Annual Performance Plans 2013

Meeting report

Chairperson’s opening remarks
The Chairperson said that the Committee had had some problems with the Department of Public Works (DPW or the Department) in the past. The Department had not been properly represented, and many senior members had not attended, and he hoped to see a difference in the presentation today.

Department of Public Works Presentation 2013/14 Annual Performance Plan: Briefing
Mr Mziwonke Dlabantu, Director-General, Department of Public Works, introduced his team and gave a brief outline of the outcomes, programmes and projects for the year. The medium-term priorities of the Department included the building of schools across the country, in accordance with the Strategic Infrastructure Projects. He admitted that the challenges in the Department in the past had included a lack of control in Supply Chain Management (SCM) practices, poor lease management, and an inadequate Immovable Asset Register. A turnaround strategy had been developed to improve the Department's performance.

Mr Dlabantu identified four public entities that reported to the DPW. He then went through the DPW's budgetary allocations in detail, examining, amongst other things, compensation of employees, goods and services and capital assets (see attached presentation for full details). Over the Medium Term Expenditure Framework (MTEF), R1 billion was reprioritised from infrastructure towards other higher priority areas. The DPW budget for this year had been reduced by R8.4 billion. The DPW requested that the National Treasury (NT) should earmark certain funds to the provinces for the payment of municipal rates and taxes only, because the DPW had no legislative power over the provinces and NT had acceded to this request. Slide 24 set out the earmarked funds, and these included the allocations for Village Management Boards, the Turnaround Programme and Expanded Public Works Programme (EPWP) grants.

Ms Mandisa Fatyela-Lindie, Chief Director: Strategic Management, Department of Public Works, presented the remainder of the document. She outlined  the main strategic objectives and linked these to the work of each of the programmes of the Department (see attached document for details). In respect of the Administration Programme, she referred to issues including internal audits, fraud awareness and risk management. Finance and Supply Chain Management (SCM), and corporate and legal services were also addressed.

She noted that in respect of the Immovable Asset Investment Management, the DPW expected to achieve  “Sustainable human settlements and an improved quality of household life” (see slide 58). In this context she also mentioned DPW's Inner City Regeneration Programme. 54 647 properties were to be verified for DPW's Immovable Asset Register by 31 March 2014.

She also noted that 40 000 work opportunities were to be created by DPW by 31 March 2014. 140 000 work opportunities were expected to be created under the EPWP by 31 March 2014. EPWP grant allocations were broken down by province.

She also mentioned the DPW's prestige clients. Finally, she noted that the DPW still had some challenges with regard to vacancies.

Discussion
Immovable Asset Register
Ms L Mabija (ANC, Limpopo) referred to slide 64. In Polokwane, 1 295 properties were expected to be verified and updated in terms of the Immovable Asset Register by 30 June 2013. She noted that she would be doing constituency work and asked for the name of the person whom she could approach to check on the state of assets there. There had been many public works buildings. Allegations had been made that some of these buildings had been sold at very low prices or had been looted. She had seen this personally. She asked for precise information as to where the relevant buildings were, according to the Asset Register. Proper oversight in her constituency was difficult because this information was not available. She asked for assistance, in general, for public representatives, to allow them to establish the position and help the DPW to strengthen and correct its implementation.

Ms M Themba (ANC, Mpumalanga) agreed with Ms Mabija that this kind of information should be provided, for all the provinces. She complained that when the Department spoke about Nelspruit, it only discussed the City of Nelspruit, but she would like to see a broader area being discussed. Every time the Department made a presentation to this Committee, Committee Members asked for information on the Asset Register. Public Works buildings in the Western Cape had problems with communication, illegal occupation and damage to the buildings. She asked exactly how the DPW was monitoring its assets.

Mr Z Mlenzana (COPE, Eastern Cape) said that the presentation looked like old information being presented by new officials.

Mr Mlenzana also wanted information on the Asset Register. He had been intending to ask questions about  DPW's relations with provinces, and the coherence of the Asset Register, but the presentation had shown that the Asset Register was still not available. He asked for realistic timeframes for the completion of the Register, and pointed out that an intention to develop it over the Medium Term Expenditure Framework was not sufficient. He wanted a specific day, month and year. The Committee had been waiting for an answer on this for four years, and he wanted to know exactly what was holding the Department back?

Mr Groenewald (DA, North West) suggested that the Asset Register was not yet completed because Premiers, MECs and Councillors were renting out some DPW houses in the communities and municipalities, for their own benefit.

The Chairperson also asked for more information in regard to the Asset Register and properties.

Mr Jacobs (ANC, Free State) said that the Asset Register was supposed to have been finished some time ago, and asked if the DPW could at least produce a draft. It was taking too long to get it. Representatives from the various provinces knew which land and buildings belonged to the government, where they were situated and the status of the buildings. All that the DPW  needed to do was to correlate and check this information against what it had on the register. He pointed out that this information had been sought since inception of the Committee, and in about eight months this Committee would no longer be active in Parliament, so the information must be made available.

Mr Dlabantu replied to Ms Mabija and Ms Themba that the presentation summarised information from regional offices. Where the report mentioned Mthatha or Polokwane, it did not exclude surrounding towns. More detailed reports on specific cities and towns would be presented to the Committee in future.

Mr Peter Chiapasco, Deputy Director General: Asset Management, DPW confirmed, in reply to Ms Mabija and Ms Themba, that when the Department spoke of Nelspruit or Polokwane, it was talking about its regional offices. A discussion of the “Polokwane Regional Office” spoke to the Department's assets or its holdings in the Limpopo Province. In 2014, the Department would find a way of indicating more clearly its breadth of meaning when it referred to a representative town or city.

Mr Chiapasco answered the questions on the Asset Register in general. He noted that asset registers for immovable assets had always existed with national custodians, be they DPW, or Departments of Agriculture or Human Settlements in the provinces. For various reasons, over time, the information on these registers had become unreliable. It no longer met the requirements of the Auditor-General (AG) or international accounting standards, and so DPW had appointed a Project Management Office (PMO) at the end of 2011 to deal with the need to get a proper and compliant Asset Register. The DPW had also appointed officials to perform physical verifications of its assets on-site. Thus all the assets would be located, confirmed and photographed.

Mr Chiapasco said that there were varieties of categories of assets. The DPW had both surveyed and unsurveyed assets. The surveyed assets had been reconciled with the asset register, and the DPW had a figure of 90% accuracy, on what it would be disclosing in March 2014. Unsurveyed assets were still with the Department of Rural Development and Land Reform, which was busy with a survey of these properties. From this research, the DPW would be able to determine which custodians had ownership over which properties belonged. In 2013, the national and provincial custodians had been reconciling their asset registers of surveyed properties. Some figures were still to be reconciled between the national Department and the provinces, but by the end of May 2013 the DPW would be completing, and submitting for audit purposes, the surveyed properties asset register. 179 000 properties had been surveyed and were documented in the Deeds Office as registered properties for all custodians. The reconciliation process had made it possible to break this figure down per custodian.

Mr Chiapasco said that all of the provinces’ assets collectively added up to 122 000 of the 179 000 properties, and that the DPW  had the evidence to support its accountants' assertions on ownership. Nationally, the Department would be disclosing 33 560 assets for itself. These figures were available in the National DPW Asset Register, which was to be submitted to the auditors by the end of the month.

With regards to the overall Asset Register programme, Mr Chiapasco referred to the DPW Minister's budget speech, which had said that the Asset Register for the National DPW would be completed by the end of March 2015. An extra year was being allowed for, till 2016, as that was when the Register would start to work as a springboard for investment decisions. At this point, assets could be evaluated and prioritised, to determine the building programme. However, the deadline for compiling concrete evidence, knowledge and information about DPW assets was March 2015.

In summary, he noted that by March 2014, custodians would disclose assets reconciled against the deeds. This would result in a complete asset register for these registered properties. Thereafter, the DPW and its custodians would be looking at unregistered and unsurveyed properties, and deciding on a valuation approach. National Treasury would finalise whether the valuations should be based on municipal or market value. By the end of March 2015, the Department would be able to disclose the complete, accurate Immovable Assets Register with fair values. 

Prestige programmes
Ms Themba wanted to speak to the parliamentary villages and asked if the DPW employed anyone to check on the quality of houses where Members of Parliament stayed. She noted the age and poor quality of construction of the houses. Taps and toilets needed constant repair. She also asked if the DPW had investigated how domestic workers who helped Members were living, and suggested that senior officials from the DPW should conduct a site visit to check on the living conditions of the domestic workers.

Mr R Tau (ANC, North West) also commented on the Prestige programmes. He said some of Parliament's lifts had not been working since January 2013. Malfunctioning lifts had caused injuries. One lift carrying workers had dropped during construction. Some members were disabled or elderly, and many were inconvenienced by the malfunctioning lifts.  

DPW buildings
Ms Themba spoke about a labour centre in Ermelo, Mpumalanga, that had had a tree fall on top of the building and asked when buildings where the infrastructure was collapsing would be revamped.

Mr Chiapasco replied that he did not have information on this building.

Ms Themba clarified that this building was actually in Carolina, Mpumalanga.

Mr Chiapasco said that he would refer the question to the Deputy Director General on Regional Coordination.

EPWP Projects
Ms Themba wanted more information on the EPWP projects, to inform debates with the public. In Hazyview, Mpumalanga, the EPWP had assisted many young people and women. She asked for an indication of which projects were actually sustainable.

Mr Jacobs said that the DPW should be creating jobs and giving skills to artisans, but that that was not happening. He wondered if the objectives of the EPWP were being met. In the municipalities, the allocation for this was used to give people short-term jobs, rather than contributing towards the EPWP, so he wanted to know how the DPW monitored and managed the money set aside for this purpose. He hastened to add that he was not talking about whether the DPW was receiving reports, because of the experience that those could easily contain false information, but wanted to know if the DPW actually visited the provinces and municipalities, to ensure that the money was being used correctly.

Mr Jacobs also wanted to know more about construction company tenders, and wondered if the artisans and people who had gained skills through the EPWP were linked with construction companies, and were also linked to the incubation programme.

Mr Jacobs also noted that in Cape Town and other centres there were centres that offered sheltered employment for disabled and elderly people, and he believed that these people often had skills that the DPW could use, and urged it to look into this.

The Chairperson referred to the DPW's programmes and projects linked to youth, such as the EPWP. The DPW was supposed to be creating jobs, but he wanted to know what programmes for youth development were available.

Mr Mfezeko Gwazube, Deputy Director General: Projects, DPW, responded to the questions about sustainability of projects. It was important that Members understand the definition of “a project”. Many projects had a defined lifespan, and the sustainability was therefore linked to the lifespan. A project's durability could range from six months to five years, depending on the nature of the work involved. He raised the issue of maintenance programmes. These kinds of programmes did not readily attract funding, because they were not directed at innovation, but at sustaining existing infrastructure. It was important that Parliament helped the DPW bring back the National Infrastructure Maintenance Strategies (NIMS) projects, which were . the only way to establish sustainability. He urged that these kinds of programmes should be made a priority.

Mr Gwazube assured Mr Jacobs that the DPW was in future trying to link the EPWP to later or ongoing programmes. It had been difficult in the past, as the contractors would run and conclude the programmes without establishing links. The founding purpose of the EPWP was to create short-term job opportunities to provide work experience in various sectors, including infrastructure. The DPW offered a contractor incubator programme that aimed to develop enterprises. This constituted a linkage with a more long-term objective. Mr Gwazube said the Department would work towards these linkages internally and with other state departments.

Mr Gwazube replied to Mr Sibande that the EPWP offered technical skills and experience to professionals and artisans. A number of projects were in the pipeline, including Human Capital Investment. Within the context of the built environment, this project aimed to provide some level of structure to the candidacy phase once an individual had graduated with a qualification. These individuals required practical experience to be registered before being permitted to practise. Mr Gwazube admitted that the programme was not adequate, but the Department was providing professionals within the DPW to help graduates get the experience they needed. However, the programme was not yet on a large enough scale to address the challenge of a lack of skilled professionals in the area of infrastructure development, and it was recognised that wider interventions were required. There was an approved framework for the skills pipeline, but it required funding. The pipeline had four components: the pre-tertiary stage, the tertiary stage, the candidacy stage and the post-registration phase. Due to the limited scope of the DPW's budget, the Department was only focusing on one of these components.

Appointment of DPW Director General
Mr Mlenzana commented on the length and detail of the slides, and asked when the current Director General had been appointed.

The Chairperson pointed out that this question illustrated that in the past, the Director General of DPW and other senior officials had not always attended Committee briefings. He was pleased to see the full team present today.

Mr Dlabantu replied that he was appointed and started working with the Department on 15 January 2013.

Mr Dlabantu added that the DPW had made its presentation having had much more interaction with the Portfolio Committee than with the Select Committee. Thus the presentation might have been less effective than desired.

Mount Frere taxi rank
Mr Mlenzana spoke about land for a taxi rank in Mount Frere that had been waiting for a signature to become operative, for ten years. He asked to be taken through the process towards the actual transfer in this matter.

Mr Chiapasco replied that the requisite letters between the local authority and Department of Rural Development had been facilitated through the DPW. It was at the final stages of approval, so he assured Mr Mlenzana that it was virtually a “done deal”. As soon as the relevant Minister agreed to make the land available, the project would commence.

Earmarked funds
Mr Mlenzana asked about funds earmarked for provinces, referred to on slide 15, and asked if this  guaranteed the Department's firm control over the provinces. The DPW did not have legislative authority over provinces, as stated on slide 23, so he wanted more detail on how the grants were earmarked, whether the action was friendly or harsh, and, generally, for more clarification on this matter.

Internal cohesion
Mr Mlenzana said that the presenters had not talked about rationalising the Department, but rather about reorganising it. The three DPW offices in Eastern Cape were in Mthatha, Port Elizabeth and a location between the two, but the employees did not know each other. The Department had been refusing to connect these offices more effectively.

Mr Jacobs also said that programmes were undertaken in isolation and that there was no coordination between departments.

Mr Chiapasco replied that the national office of DPW had a very robust interaction with provincial Departments of Public Works and Human Settlements. Through the Asset Register Management Unit at the National DPW, custodians could agree in whose books an asset would be disclosed. This Management Unit work also had to be submitted for audit purposes by the end of May 2013.

Housing sustainability
Mr Groenewald said that the Turnaround Strategy looked hopeful. Outcome 8 spoke to sustainable human settlements and an improved quality of household life. He asked what  control measures were in place from the DPW side to ensure that this happened in the future. He pointed out that many houses built across South Africa were falling apart, and about 500 had had to be demolished in one area of KwaZulu Natal. Ministers had promised to get to that area immediately, but he enquired how far that project had gone.

The Chairperson pointed out that the question should be directed to the Department of Human Settlements, not DPW.

Mr Groenewald replied that in fact DPW had been involved in the KwaZulu Natal project.

Piet Retief water-bottling project
Mr Groenewald spoke about a DPW-assisted water-bottling project in Piet Retief. The building for the project was half-completed, with a couple of millions of rands outstanding, and had since been seriously damaged. He enquired about the current status of this project.

Budget allocation decrease
Mr Groenewald referred to slide 14, which showed a decrease in budget allocation for DPW programmes from R7.7 billion in 2012/13 to R6.17 billion in 2013/14. Usually there would be an increase year after year, so he wanted to know the reasons for such a substantial decrease.

Historic residences
Mr Groenewald asked what would happen to Ministers' historic residences in terms of Programme 1. A media article on 14 May 2013 had mentioned that one such residence would not be renovated by the DPW, and he wanted more information on these renovations. In some cases, it seemed that DPW preferred to build new buildings, because they were easier to maintain. If the historic buildings were going to be sold, he wanted to know who would sell them, and what would be done with the buildings.

Legal personnel
Mr Groenewald asked how many legally- trained personnel worked in the DPW.

New Parliament
Mr Groenewald asked what was happening with the new Parliament, and what was the current situation with the plans for demolition of old buildings and construction of new ones.

Nkandla
Mr Groenewald pointed to Programme 5 on page 122 and asked whether this could shed some light on the expenditure surrounding Nkandla. He asked how DPW was involved in this matter.

Mr Tau said he had cautioned Mr Groenewald not to mention Nkandla, but that Mr Groenewald had managed to mention it anyway.

University construction
Mr Tau asked about the DPW's budget for constructing property for government. The Minster of Higher Education had said that two universities were going to be built, in Mpumalanga and the Northern Cape respectively, in the 2013/14 financial year. He asked if the budget for this would be found with the Department of Higher Education and Training (DHET) or with DPW, and who was responsible for the construction.

Mr Gwazube replied that the DHET was not a traditional client of the DPW. The question of who would construct the universities would be the client's decision, in this case. The Minister of Higher Education would have to decide on the implementing agent. The DPW was involved in making land available and in clearing land, dealing with town-planning and professional services. Task teams had been set up to address this matter. The universities' construction was part of the Presidential Infrastructure Coordinating Commission (PICC) programme. There were about eight strategic infrastructural projects under PICC, including this.

Resource distribution
Mr Tau spoke about the DPW's Programme 2, in connection with projects and professional services. Mr Tau said that his poor province usually received the least resource in allocation. However, he commended it in this year for showing a more equitable distribution of resources, including implementation of the incubation project, to provinces.

NCOP public hearings
Mr Tau referred to a report of the Select Committee on Appropriations with regards to public hearings in the fourth quarter. The DPW had spoken about challenges raised in terms of legal instruments not yet passed into law. Mr Tau said that the NCOP had the capacity, through its committees, to call on provinces, Directors General and MECs to come and account for the expenditure of funds allocated to them. This was an important instrument.  The DPW was not powerless if it did not yet have the requisite legislation in place to hold provinces accountable, or to intervene where necessary. The public hearings were strategic and effective, involving political and administrative heads from provinces as well as the National Treasury, and they focused on overseeing grants transferred to provinces. DPW could therefore call upon the NCOP for help in holding provinces accountable, via public hearings, whilst preparing the enabling legislation.

Mr Dlabantu agreed that the Select Committee could help provide monitoring assistance for the DPW via public hearings, particularly as regards money granted and spent in the provinces. He said that the Department would welcome this assistance, and that it would help to keep the Department honest on all of its functions.

Village boards
Mr Tau spoke about baseline allocations to village boards for 2013/14. He asked whether and how the village boards were capacitated to manage this money, and which agency might assist them in managing the money properly. He also wanted details of what the allocations were intended to cover, and whether it included meetings of the parliamentary village boards.

Money available for Parliament
Mr Tau said that for the past three years, Members of Parliament had been speaking to the DPW about high levels of unfitness amongst members. Mr Tau was interested in using state or private funds, for example treadmills supplied by Virgin Active, to create a space where members could exercise, to help to keep them healthy. This would help to keep members healthy.

Construction of schools
Mr Tau said that the DPW had committed to the construction of 200 schools nationally. However, the Department of Basic Education (DBE) had committed to building 30 schools for the Eastern Cape. He wondered how many schools would be built in the other provinces in the 2013/14 financial year, and whether the intention was only to construct schools in the Eastern Cape during this financial year?

Mr Gwazube said that he could not speak on behalf of the DBE and explained the model of working between the two departments. The schools-building project was part of a particular infrastructure project, SIP 13. The secretariat of the PICC had approached the DPW, to work with the DBE on this particular project. The DBE had different streams of school construction work. One stream dealt with the construction of schools in totality. The other dealt with beautifying schools and providing them with all the necessary amenities to facilitate the highest standard of education possible. The DPW and the DBE had discussed a conceptual framework agreement, under which the DPW would provide professional services to the SIP 13 programme, including quantity surveying, town-planning and engineering. The DPW itself was going through a rebuilding phase, and it did not have the capacity to pick up a new portfolio.

Mr Gwazube added that the construction was not only taking place in the Eastern Cape. Originally, the initiatives were piloted in Limpopo and the Eastern Cape, to judge the extent to which the DPW could actually deliver on the programme. However, the programme would take place across the country wherever there were challenges. Currently, it was agreed that the DPW should be looking at the Eastern Cape as a first priority.

Achievability of key medium priorities
Mr Tau wondered if the key medium priorities, as outlined in the APP, were achievable and practical, or whether the DPW was perhaps being too ambitious.

Monitoring mechanisms of public entities
Mr Tau asked about for more information about the public entities over which the DPW had oversight. At the departmental level, he asked if there were systems or a unit in place to monitor the entities. More than R22 million had been given to foreign governments and international organisations under the transfers and subsidies, as set out in slide 15. He quipped that he wanted to know whether the allegations that Al Qaeda had been given some space to operate in South Africa were true.

Reduction of infrastructure budget
Mr Tau said that infrastructure was key to job creation, skills development, youth employment and the improvement of quality of life in the context of government priorities and the DPW's programmes. For that reason he wanted to know why the infrastructure programme budget was being reduced.

The Chairperson also wanted more information on slide 20, setting out the baseline reduction. If schools and universities were being built, but there was a reduction of R8.4 billion in infrastructure funding, there was a contradiction and he wanted to know exactly how the plans for building would be funded.

Independent Development Trust (IDT)
Mr Jacobs said that it was known that the IDT had problems, but the DPW was still using it to build schools. He wanted to know how the DPW was monitoring the IDT and trusting it to do the work expected of it. He also mentioned that during a presentation by the IDT, there were several problems identified.

Mr Gwazube replied that the IDT had in fact proven to be a better implementing agent than many other infrastructure departments of state. The IDT indeed had challenges, but in terms of expenditure, time and quality, the IDT was implementing the programme better than other parts of the state had done previously. This was the reason for the use of IDT in this context, and the IDT had agreed to this arrangement. However, the DPW was still waiting for agreement, between the DPW and the DBE, on the further building and construction of the schools.

Inner City Regeneration Programme
Mr Jacobs asked which cities were being regenerated. It was not sufficient to identify only Pretoria and Johannesburg for this programme. Other provinces should benefit also.

Regional offices
Mr Jacobs said that the last time he had been in Durban, there had been a conflict between the national and regional offices over the issue of tenders. He asked if this had since been resolved.

Management of funds
Mr Jacobs said that the Department generated money on its own account. The Property Management and Training Entity was intended to manage these funds, but was not in place yet. He asked for a follow-up on this issue.

Intervention in Limpopo
Mr Jacobs asked to know more about the progress of this intervention.

The Chairperson asked about the DPW's task team that was active in Limpopo, handling the provincial interventions in terms of the Constitution and asked for a report on the latest developments.

Vacancies
The Chairperson noted that the 2011/12 annual report had raised concerns about the vacancies. The Committee needed to know how far the DPW had come on filling the vacancies, since the previous year.

Auditor-General’s findings
The Chairperson asked for a report on the current status of the Auditor-General's investigations into matters at the DPW, and whether any DPW staff had been found guilty of corruption. He also enquired if any money had been lost, and, if so, what steps would be taken to recover it.

Actions of the DPW to address identified challenges
The Chairperson referred to the challenges raised on slide 10. He asked for further elaboration on the issues raised. Challenges such as difficulty with timeframes and the lack of controls in Supply Chains had been highlighted, but a report was needed on what the Department was actually doing. He asked for an example of poor lease management, and suggested mismanagement of the lease in Limpopo under section 100(1)(b) might be one issue for investigation and action.

Long leases
Ms Mabija asked about the alleged granting of long leases of 99 years at R1 per annum. She asked what steps the Department had taken to resolve this problem, and what the progress was on the lease investigations. She noted that this problem had been uncovered when she and her colleagues had been doing oversight at Westenberg, Western Cape, but it was probably a challenge in other provinces also.

General statements regarding infrastructure development
Mr Tau said that the DPW infrastructure plan lists were clear as to replacements, upgrades and additions. Some statements were, however, too general and provided too broadly for composite amounts for repair, maintenance and, for example, the installing of elevators. He warned the Chief Financial Officer to exercise stricter controls, because money could get spent on less important projects if the specifications were too broad. 

PMUs
The Chairperson wanted to know more about the Project Management Units (PMUs).

At this point, the Chairperson noted that unfortunately the Committee had run out of time and asked that the DPW respond to the questions not yet responded to, in writing.

Ms Themba, supported by Mr Groenewald, asked for these responses to be given in writing before the budget vote.

Mr Sibande thanked the Department, and reiterated that he hoped that the unsatisfactory performance of some DPW members in the past would not be seen again. He noted that public participation was a vital part of Parliament, and called upon the DPW officials to participate fully and answer all the questions, in writing, as they had promised, within the agreed timeframe, to inform the debate on the budget.

The meeting was adjourned.