Matters related to security-fencing projects: input by Independent Development Trust, Deputy Minister of Public Works & Department of Correctional Services

Meeting report

Mr L Max (DA) asked where the National Commissioner of the Department of Correctional Services (DCS) was. Why was he not present in the meeting?

The Chairperson responded that the National Commissioner’s employment was being terminated. The Committee would request to be briefed on the matter. The DCS and the Department of Public Works was present but more so to observe, but would be called upon to comment if the need arose. In the main the Independent Development Trust would undertake the briefing.

Independent Development Trust (IDT)
The Independent Development Trust briefed the Committee on the IDT-implemented security-fencing projects. The briefing was undertaken by Ms Thembi Nwedamutswu Chief Executive Officer IDT, Mr Vedanth Jugath Programme Manager: Social Infrastructure Development IDT and Mr Stephen Ntsandeni Executive Operations IDT.

Ms Nwedamutswu firstly provided the Committee with insight into the purpose and background of the IDT. Thereafter, he gave a breakdown of its programme management and its programme budgets. The IDT was a government development agency that implemented projects which were commissioned by government departments. The total programme budget for 2012-2013 was R5.6bn.

Mr Jugath continued with a briefing on the actual correctional centres fencing programme i.e. Programme DCSSF02. The DCS and the IDT had entered into a Memorandum of Agreement (MOA) in October 2011 whereby the IDT would serve as an implementation agent. The IDT would then appoint contractors to do the actual work. Amongst the MOA governance requirements was site meetings held fortnightly as well as programme progress meetings held on a monthly basis. There were also programme steering committees and client meetings on a monthly basis. The scope of work covered high security fences, closed circuit televisions, gates, external lighting along fences etc. A second part of the scope of work dealt with access control points which included metal detectors and x-ray machines. In addition there was also a software systems for prison management systems and integrated security management systems. General security like prison doors and cell phone detection was also included.

An open tender process was undertaken to procure a professional service provider and contractor. A professional consultant and contractor was appointed by February 2012 to install high security at 27 correctional centres on 13 facilities as well as associated integrated security systems and sallyports that goes with the fencing for a total tender value of R476m. The contractor was advised to begin procurement immediately to accelerate delivery. The fence manufacturer had to manufacture the customised fencing for DCSSF02. At the beginning of the programme an assessment was conducted to confirm the scope of works met with operational requirements. This process was called the Projection Execution Plan (PrEP). This led to a mitigation of scope variance at a very early stage. The PrEP reports, which considered the operational needs of each facility, had resulted in quantity fluctuations as opposed to rate fluctuations. Only the original tender rates were used. The operational requirements showed that more fencing would be used which meant higher costs per facility. A prioritisation exercise was embarked upon in which 15 correctional centres on 8 facilities were prioritised within the existing tender amount of R476m. There was thus a balance of 12 correctional centres on 5 facilities which was put on hold until further funds were allocated from DCS. Progress as at 15 July 2013 was that progress was at 85% whilst 81% of the total budget had been paid. Members were also provided with projected completion dates at various correctional centres. For example at Goodwood prison the projected construction and installation was expected to be complete by December 2013.

Some challenges identified was that excessive rainfall hampered the implementation process, on existing services no records existed, poor soil conditions also hampered the progress on most of the sites, there was also inconvenience to staff due to the new security measures and finally that construction had to take place in a “live” facility which meant that the facility had to be secure at all times.
 
Discussion
Mr J Selfe (DA) pointed out that in 2006 there had been a DCSSF01 Contract, prior to the DCSSF02. Why was the first contract discontinued? What were the related costs? He also asked for what work funds were used for and where.

Mr Ntsandeni responded that when the IDT had first engaged with DCS there had been agreement that it follow a closed tender route. The IDT would get a list of contractors from DCS that had done previous work for them. However problems emerged in that some contractors had grievances that the specifications were in favour of some contractors and not in favour of others. As a result it was agreed to go with an open tender process.

Mr Ntsandeni reported that there had been no fruitless expenditure. The same designs used for the first tender process had been used in the second tender process. The scope of work was quite comprehensive. Work had amongst other places been done at Pollsmoor and Umtata prisons.

Mr Selfe noted that on the 18 September 2006 he had questioned who tenders had been awarded to. The tenders had been awarded to Phezulu Fencing and Sondolo IT which had provided a comprehensive access control system. Many of the centres where work was to be done now had already had work done in 2006. Why was work at the same centres being done? Should work not have been completed already in 2006?

Ms Nwedamutswu said that an analysis had been done by DCS, and the IDT had a report that showed whether there was different or a duplication of work done.

Deputy Minister Jeremy Cronin, Deputy Minister of Public Works, assumed that the work done in 2006 had not been managed by the IDT but by the DCS themselves.

The Chairperson asked the DCS to elaborate.

Ms Nontsikelelo Jolingana, Acting National Commissioner, DCS, responded that the IDT did have the information and could present it to the Committee.

Mr Jugath stated that the systems previously fitted at correctional centres had not been maintained. In 2006 there were things that did not need to be done as yet but was now required to be done. For example on fencing done by Phezulu at Pollsmoor Prison, it was now needed whereas back in 2006 it had not been needed. New things that were not identified in 2006 were also now being addressed. He did however concede that there was some level of duplication. There was perhaps 14% overlap.

The Chairperson asked whether at all the correctional centres where work was being done there had been no high security fences for all this time. He added that due to a lack of maintenance many of the correctional centres needed upgrading. The point was made that certain correctional centres like Durban Westville did have access control so why was there a need to replace it. What was the rationale for the upgrades?

Mr Selfe was concerned that in 2006 R683.3m had been spent to put up fences at correctional centres and now almost R500m was being spent on security fences. He considered this as wasteful expenditure.

Mr Jugath responded that some correctional centres already had existing fencing. It had not been replaced in 2006 as they still had life expectancy. Those same fences were now considered outdated. Some of the existing lighting also did not meet specifications.  

Mr Gcinumzi Ntlakana, Chief Security Officer, DCS, pointed out that in certain areas there were access control points. Even in Parliament there were different levels of security access. At prisons there were outer perimeter fencing and there was inner access control. The outer perimeter fencing was to keep persons as far away as possible from the core of the prison. The upgrading of systems might in the context look like fruitless expenditure. As was previously stated there was overlaps. At places lighting needed to be changed as internal and external perimeters had different lighting requirements. Existing regular fencing had not been taken out.

Ms W Ngwenya (ANC) was concerned about the challenges highlighted during the briefing. How were the challenges going to be addressed? She pointed out that at Goodwood prison the security was not very good. Smuggling was also taking place at the cells. The question was whether correctional centres were secure prior to the fencing being done by Phezulu. Who was going to do maintenance now if it had been a problem previously? Systems put in previously did not work and now new systems were being put in place. The DCS blamed DPW and DPW blamed DCS. “The blaming game should stop”.

Mr Jugath said that at Goodwood prison screen fencing had been installed to prevent smuggling. Thermal cameras were being installed to pick up on smuggling. The IDT was dealing with securing the outer part of facilities. Internal control would be dealt with by another programme.

The Chairperson asked why work at Harrismith prison had not been completed. What challenges were there? He noted that the steering committee on the programme had experts like engineers sitting on it. What was the reason behind challenges then? Members had become sceptical about challenges. The work at Kimberley prison had been delayed for two years. The cost had gone up from R200 0000 to R800 000. At Brandvlei prison there was also a two year delay. What planning was being done by engineers if delays were the norm? He addressed Deputy Minister Cronin and said that over the last four years all DCS projects had been delayed and had gone over budget. What was the reason for the delay at Harrismith prison?

Mr Jugath noted that he was aware that the Committee had visited Harrismith prison on 31 July 2013. A portion of the fence and a road had been completed. The use of more than one contractor on a site was problematic. The Harrismith prison was nearing completion and was expected to be completed by the latter part of September 2013.

The Chairperson asked what the general policy on the missing of deadlines was. Who was punished? How could business be done with persons who miss deadlines?      

Mr Ntsandeni said that there were penalty clauses that applied to contractors. There were performance guarantees and it was 5% of the contract value which came to R23m. Where delays were not the fault of a contractor, such contractor could apply for extensions.  If delays were the fault of the contractor and deadlines were missed then the performance guarantee came into play.

The Chairperson asked who was to blame when soil was an issue. Surveyors should know better before construction even started.

Mr Ntsandeni responded that the issue related to planning processes and timeframes. There were instances where targets were set with timeframes where provision was made for a buffer. The IDT would in the future request that enough time be set aside for planning with the DCS. The problem was that enough planning was not being done before construction started. There were not only delays in the DCS programme, the IDT was also involved in school building projects which also had delays. A cost element also needed to be taken into consideration. There was a combination of issues but planning played a key role.

Deputy Minister Cronin noted that the presentation did not show the original targets. The figures given in the briefing looked good. Some of the IDT issues raised were pertinent. Where were targets completion figures?

Mr Jugath pointed out that the initial completion date for the contract was 30 April 2013. It had been extended to June 2013. The end of October 2013 was the deadline for sallyports. The IDT was actually ahead of schedule. Most of the contracts tended to start and end at the same time. The deadline for Harrismith prison was September 2013. The IDT was ahead of schedule. The bulk of the work to be done was electrical engineering. Many building environment elements needed to come together. Many factors however affected the progress of work. At Umtata prison wind and heavy rains affected the fence. There would also be times when in planning there would be oversight over certain things.

The Chairperson emphasised that overcrowding in prisons was a major problem for DCS. When work was done prisoners were shifted to and fro. Hence if deadlines were not met then it had a huge impact on correctional services. It was for this reason that the Committee was so vocal about deadlines. It was not just a theoretical exercise for the Committee because overcrowding had human rights implications.

Ms Ngwenya referred to Leeukop prison in the Gauteng Province and said that it also had building related problems. There were problems since 2005. How far had progress been made to deal with the issue?

Mr Max said that his earlier query about the National Commissioner had been a serious one. On 7 August 2013, the Committee had conducted an oversight visit to the Goodwood prison. The Regional Commissioner raised a concern that a fence could be erected on either side of the prison but not at the back of it as the land at the back of it belonged to the City of Cape Town. Were the IDT and the DCS aware of it? What was being done about the issue?

Mr Ntlakana said that the DCS was aware of challenges. The DCS was dealing with the concern and having discussions with the Regional Commissioner. Talks with the City of Cape Town were also taking place.

Mr Max responded that the DPW had been present when the Regional Commissioner had informed the Committee. The issue needed to be taken up by the affected departments. He referred to the actual agreement between the IDT and the DCS and said that paragraph 3 stated that all programmes would be implemented after conditions were met in clause 7. Were conditions met before contractors were appointed to projects? He recalled that on 16 May 2012, the previous Minister of Correctional Services, Hon Nosiviwe Mapisa-Nqakula had in her budget speech said that 27 correctional centres would be fenced. Now the IDT was saying that only 15 correctional centres would be fenced. Clause 8.5 of the agreement also stated that DCS should appoint two senior personnel to the specifications committee. Were they appointed and who were they?

Mr Ntsandeni responded that the IDT had appointed contractors after conditions had been met. He noted that there had been a reduction in the number of centres to be fenced after a detailed assessment had been made. The aim was to provide comprehensive security. Based on the model chosen for comprehensive security, it meant that more fencing was needed and hence the costs increased. As a result the numbers of correctional centres to be fenced decreased. The scope of work to be done had to be rationalised.

The Chairperson asked how the 15 correctional centres were chosen. How were they prioritised? Departments had a tendency to “cherry pick”.

Mr Ntlakana said that the point of departure was looking at security risks. There were budgetary constraints. There was a need to prioritise Harrismith prison over Barberton prison. A conscious security assessment needed to be done. The decision to prioritise was not made “willy nilly”.

Ms Jolingana said that senior personnel had been appointed to sit on steering committees.

Mr Abram stated that under normal circumstances when one wished to build something one looked at one’s needs. The needs were costed and a budget was worked out. The agreement between the DCS and the IDT would be 2 years old in October.  The decision had initially been taken to fence 27 correctional centres with the budgeted R472m. However at implementation stage the number of centres to be fenced was reduced to 15. What processes had been put in place to get to the R472m budgeted figure. Within which timeframe had the IDT realised that it could only fence 15 correctional centres. In 2006 a total of R682m had been spent. How many correctional centres were covered then? The IDT stated that the security requirements now were different than what it had been in 2006.  

Mr Jugath noted that when the design issue was considered it was done from a technical perspective. It was agreed to fix up problems that might crop up later on. The idea was to deal with issues upfront.

The Chairperson said that a certain number of correctional centres were identified and the tender on a certain specification went out. The initial number of correctional centres was 27 but along the way the number was reduced to 15. The budget however remained unchanged. He felt that poor planning was done in that the number of correctional centres to be fenced was almost halved. Problems cropped up when things were changed halfway.

Mr Ntsandeni pointed out that the change in number was part of planning and did not change the rest of the tender. The length of fencing to be used was more hence fewer centres could be done.

Ms Nwedamutswu said that the budget of DCS remained at R400m plus. When the IDT was appointed, it did an assessment to look at the functionality of the facilities. The DCS had a limited budget and National Treasury refused to increase it. Hence within the same budget it was decided to fence fewer facilities, the number was reduced from 27 to 15. The remainder of the facilities had not been dropped, a prioritisation was merely done. She added that the decision to fence 27 facilities had been taken years ago.

The Chairperson responded that if the decision to fence 27 facilities had been taken years back and was old history why then had the then Minister of Correctional Services, Hon Nosiviwe Mapisa-Nqakula, mentioned the 27 facilities in her budget speech.

Mr Abram said that when a Minister made a statement in a budget speech it was taken to be a factual statement. The Minister had depended on the figures that had been provided to her. It would be now construed that the Minister had lied. The explanation given was unacceptable.
 
Mr Abram asked what the IDT was charging the DCS. Government departments and its entities needed to be more prudent on how they spent state funds. What was the need to use consultants? Did the IDT not have the required capacity to do the work? When was government going to reach the stage where it was on the ball? He asked again what the rate was that the IDT charged the DCS. He believed that a great deal had been left to chance and the IDT was not delivering what it was supposed to. There was almost a 100% escalation. Why was it necessary for a Cape Town supplier to supply steel to Gauteng? It did not make sense. Gauteng surely had steel suppliers. The IDT needed to up its game and the continuous use of consultants should end.

Deputy Minister Cronin felt that sounding off did not help much. Constructive lessons needed to be learnt. Parliament did have an important role to play. The issue was about the prudent use of state funds. The IDT was saying that it would have fenced 27 correctional facilities if it was a facility with a single entrance and a single fence. The model however called for facilities with many entrances and hence more fencing was needed. Because the budget remained unchanged, it had to prioritise 15 correctional facilities. There was therefore an increase in quality but there was a change in the scope of the work done. It had been a policy decision that had been taken by the IDT and the DCS. To blast the IDT for reducing the number from 27 to 15 would be okay if something questionable was happening, but if it was done properly they should be congratulated for taking the best quality option.

The Chairperson asked what the need for an 80% advance payment was. What was the payment for? Of the total R493m how much had been paid to date.  The agreement had stipulated that initially a payment of 10% would be made and thereafter payments would be made quarterly. The Committee had received information that the IDT had made upfront payments in lieu of material prices going up. He noted that the bondstore presented to the Committee had showed that blanket plates and sockets were bought upfront. Why? Had the provisions of the agreement been abided to?

Ms Nwedamutswu pointed out that the advance payment was made to the IDT and not to contractors. The IDT was an implementer and needed funds to perform technical issues.

The Chairperson asked how much of the funds had been paid to contractors and how much work had been done by them.

Ms Nwedamutswu responded that 81% had been paid and 85% of work had been done.

The Chairperson asked whose bondstore was it that was presented to the Committee.

Mr Jugath answered that it was the bondstore of contractors of materials to be used at sites. The IDT did visit sites on a quarterly basis to check on the progress of work done.

The Chairperson asked Ms Jolingana if the budget was still at R493m to be used for 15 correctional facilities. He said that the Committee would not approve a request for an increase in budget.

Mr Selfe was concerned that six years from now the conclusion would be reached that the work done at present was also not satisfactorily done.

Ms Nwedamutswu noted that the IDT had already allowed for a 3.5% escalation to be worked into the R493m. The issue of maintenance however still needed to be taken into account. A provision for maintenance would be made. There had been no escalations on the project since implementation.
The IDT’s management fee was 4%. The expenditure on consultants was the gazetted figure. It was built into the implementation costs of the targets.

Ms Nwedamutswu stated that it was an expensive exercise to build the capacity that was being referred to into the IDT. It was beyond he IDT’s control. The IDT had technical capacity but had to bring in market consultants. There was a database of consultants that had been used and eventually the process went out on open tender. National Treasury’s Compliance Unit was monitoring the project on a quarterly basis.

The Chairperson pointed out that the IDT was being paid R20m. The IDT listened to the needs of the DCS and found someone else to do the actual work. So what was it that the IDT was doing? The DPW had done the work themselves at Kimberley and Ceres prisons.  Why was the IDT being paid the R20m? The issue was whether the DCS should continue to use the IDT going forward. What was the IDT’s role in DCS? There were three levels of people to do the same thing. There was the IDT, the DCS and the DPW.

Deputy Minister Cronin said that the Chairperson made an interesting point. He noted that the DPW was busy with a policy perspective and business case for the IDT. A similar question to what the Chairperson was raising was being asked. The IDT was an Apartheid initiative and did not receive a budget from government. It survived by charging management fees. The problem with using DPW on projects was that it also did not have much capacity. The IDT has been relatively effective in social infrastructure projects. The huge problem was government’s inability to programme and project manage infrastructure. The private sector took government for a ride. The taxpayer was hugely compromised. The idea was to develop the IDT into the supposed South African National Roads Agency Limited (SANRAL) of social infrastructure. It was a complicated job that the IDT had to do. Many government departments were frustrated by the work done by DPW. Perhaps there was a need for a mini DPW in DCS. The policy on where to go with the IDT was being developed. South Africa lacked programme and project management.

Ms Jolingana noted that the DCS lacked capacity. It still had vacant posts. The DCS lacked capacity to project and programme manage. She said that Leeukop prison was not part of the IDT project. The DCS and the DPW was driving the project.

Mr Selfe requested that DCS brief the Committee sometime in the future on the Mangaung Maximum Security Prison. Media reports said that riots were taking place at the prison.

The Chairperson agreed and informed the DCS that they would be invited to brief the Committee over the issue.

Mr Abram noted that the Committee was still awaiting information from DCS on inmates who were able to apply for parole. These included sickly or old inmates.

The Chairperson stated that the Committee would schedule a state of the department meeting with DCS.
 
The meeting was adjourned.