Government Printing Works: briefing on role, mandate and challenges

Meeting report

Opening remarks
The Chairperson pointed out that the attendance by Members for the current meeting was not good, and this seemed to imply that Members did not take the Government Printing Works seriously. He noted that all entities of the Department of Home Affairs (DHA) had to be overseen in the same way.

Ms S Nkomo (IFP) agreed that there were many Members not present, but urged the Government Printing Works (GPW) not to take this as a sign of disrespect. It was more an issue of Members having a great work load and having to prioritise. The Committee did indeed have respect for the GPW. She asked the Chairperson to take the matter of Members’ attendance up at the relevant channels.

Government Printing Works (GPW) role, mandate and challenges: Briefing
Prof Anthony Mbewu, Chief Executive Officer, Government Printing Works, noted that the GPW derived its legal mandate from the Public Service Act of 1994, as amended in 2007. Before 2009, the GPW had been a sub department of the Department of Home Affairs (DHA). On 9 October 2009 the Ministers of Finance, Home Affairs and Public Service and Administration approved the business case for the GPW to become a government component. This was always intended as a transitional phase on the way for it to become a state owned company (SOC).

Prof Mbewu explained that the GPW provided specialised security printing services to the DHA in the production of passports, ID books, smart ID cards, birth certificates, visas and licences. The GPW also provided general printing services to government. The GPW had now become a profitable state-owned business, compared to its bad financial state in 2008. The GPW had doubled its turnover, reaching R781 million in 2013/14, since being established as a government component in 2009. It was a good model of an efficient state owned company.

Most of the briefing entailed highlighting the key challenges that the GPW experienced. One of them was related to the transformation of the GPW from a government component to a state owned company. In 2009, the feeling by the relevant departments was that the GPW was not ready to be a state owned company. A considerable amount of time had passed since 2009, and the GPW had shown that it had transformed. It was ready to make out its case to be a state owned company. The Draft State Printers Bill had been prepared.

The renovation of the GPW’s Visagie Street premises and the purchase of its administration building was another challenge. The total cost was R1bn. The process of relocation from Bosman Street to Visagie Street had been slow. Renovations to the Visagie Street premises had also been delayed.
 
GPW noted that it really needed to have a special salary dispensation in order to improve its staff retention. The problem was that after staff had been trained and skilled, they were often poached by other sectors or entities.

The asset recapitalisation programme of the GPW was at a midway stage, and the cost was R600m from 2012 to 2017. The printing industry had to keep up with technology, and in the last 15 years labour intensive methods had been used. The GPW was moving towards using less labour-intensive methods. The GPW had taken a decision not to retrench staff but rather to try to retrain and reskill them.

Another key challenge identified was the Smart ID card rollout. It was officially launched on 15 October 2013. Thus far 500 000 smart cards had been produced. Over the next six years, all 38 million ID books would be replaced by the Smart ID card. The challenge was not in the printing of the card but rather the rollout of the live capture.

An additional challenge related to the new dispatch centre for passports and Smart ID cards. It was a R1bn facility and would be operational by 2015.
The Committee was also provided with insight into the strategic outcome orientated goals of the GPW for 2013 to 2018. Members were furthermore provided with figures on the budget of the DPW (see attached presentation for full details). Production statistics for the years 2011 to 2014 were also provided.

Key projects identified were the installation and commissioning of a new security printing division, the Smart ID card, the implementation of the E-Gazette, to create capacity to print passport visa pages in-house, the implementation of the new ERP system, the development of the new facility at Visagie Street and lastly the project that would allow the GPW to have its own polycarbonate card manufacturing plant.

Discussion
The Chairperson pointed out that there were no timeframes cited for the key projects of the GPW.

Mr A Figlan (DA) asked how far the GPW’s engagement with the Department of Public Service and Administration was, in relation to the process for the GPW to become a state owned entity. He also asked what the success of the E-Gazette was since its inception. He noted that the GPW website stated that government gazettes were also obtainable from the Government Communication Information Services (GCIS). He asked how many Thusong Service Centres there were, and where they were located.

Prof Mbewu responded that the GPW’s legislative mandate was derived from the Public Service Act. A State Printers Draft Bill was currently with the office of the Minister of Home Affairs. How quickly that Bill would be processed was dependent on Parliament and the Minister of Home Affairs. He imagined the process could be completed in a few years time.

Prof Mbewu confirmed that the E-Gazette was very successful. It was being monitored, but the figures were increasing exponentially month by month.

Ms Bonakele Mbhele Chief Director: Marketing and Stakeholder Management, GPW, stated that the GPW had a partnership with GCIS. The GCIS recently launched Thusong Centres. It was possible to obtain government gazettes at GCIS offices. More details on the numbers and locations of the Thusong Centres would be provided to the Committee.

Ms S Nkomo (IFP) referred to the renovations that were being done at the GPW’s Visagie Street premises, to Pavilion 1, 2 and 3, and the challenges that arose from delays caused by the Department of Public Works (DPW). These delays had financial implication, and she was concerned about that point. She also noted that timeframes that had been set had to be abided to.

Prof Mbewu noted that building costs increased by 5% to 10% annually. The more delays there were, the more the costs increased. The GPW had moved ahead with the renovation of Pavilion 3 at the Visagie Street premises because National Treasury had said that if these funds was not used they would be taken away from the GPW. He noted that the DPW was preparing a Site Master Plan. He said that building was expected to start early next year. The GPW had obtained a legal opinion that a government component did not have to work with the DPW when building. The Minister of Home Affairs and the Minister of Public Works was discussing the matter. He added that the state of the art machines that GPW had acquired were still sitting in boxes because the facilities that were supposed to house them were not yet completed.

Ms Nkomo noted that salary dispensation and staff retention was important, so the poaching of re-trained and re-skilled staff from GPW was a concern.  

Prof Mbewu conceded that several staff from GPW had already been poached. The GPW was engaging with the DPSA on the issue of a special signed dispensation. There was a report on that, which was to be considered by the Minister of Home Affairs and the Minister of Public Service and Administration. 
 
Ms Nkomo referred to the GPW’s recapitalisation programme, specifically relating to the replacement of outdated machines, and asked how long it would be before the GPW would have state of the art machines.

Prof Mbewu answered that the replacement of machinery programme had started in 2011/12 and would be completed in 2017. However, the delays in renovations also had to be taken into consideration.

Ms Nkomo was pleased to note that the Smart ID cards could at present not be forged. She appreciated the efficiency of this process, saying that she had experienced no problems. With regard to the new dispatch centre of the GPW, she said that that there was no place for corrupt officials.

Prof Mbewu agreed that the Smart ID card had not been hacked as yet. The issue of cyber security was a major issue that constantly needed attention and the GPW ensured that cyber security was maintained. Crime syndicates were always on the lookout for ways to breach systems. He noted that the public perception was that state owned entities were inefficient and ineffective, but the GPW and the DHA were examples of how transformation could be positive.

Ms D Raphuti (ANC) said she also had experienced no problems when she obtained her Smart ID card. She asked from where the state of the art machines had been purchased and how many GPW staff they had replaced. She asked if there was a backup service if problems were experienced with machines.

Prof Mbewu explained that passport booklets machines had been purchased from Japan. Polycarbonate card machines had been purchased from a French company based in Finland. Personalised ID card machines had been purchased from the United States of America. He said that when a machine was purchased, 10% of the purchase value was for maintenance costs annually. The sellers normally had partners in South Africa to attend to the maintenance, and problems were fixed promptly.

Ms Raphuti asked how reliable the courier services were that the GPW used, and whether it would be possible for them to sabotage services, pointing out that in the past courier companies had leaked exam papers.

Prof Mbewu answered that GPW also had a disaster recovery site for manufacturing and production. It was a backup site if anything happened to the GPW premises. The courier services could not sabotage services. Couriers could not interfere with the material in any way. If they stole the Smart IDs they would not be able to use them. The same could be said about passports.

Ms Raphuti asked about the cost, and how assistance could be provided to anyone who could not afford to pay for the Smart ID card fee. As a state owned company, she questioned whether the GPW would be able to show a profit.

Prof Mbewu said that the cost of the Smart ID was the same as the cost of the green identity book, at R140. The cost of the Smart ID was deliberately kept down, and this represented about one fifth of what it cost overseas.  For 16 year old first time applicants, and for those over 60, the Smart ID card was free. Unfortunately it could not be provided for free to the unemployed, as the cost for this would simply be too high. The Minister of Finance was discussing the issue with the Minister of Home Affairs. He stated that the GPW had not been subsidised for quite a few years and its products covered its costs. The profit margin of the GPW was small and the Minister of Finance urged other governments also to use the GPW’s services.

The Chairperson asked when it could be expected that the DPW could become a fully fledged state owned company. He pointed out that when this happened, it would of course be faced with additional costs.

Prof Mbewu stated that the timeframe for the transition of the GPW to a state owned company was in the hands of the Committee and the Minister of Home Affairs. The DPW was also unblocking some of the blockages and he repeated that it was likely that GPW, as a government component, may not actually be obliged to work with the DPW when building. He was aware that when it became a state owned company, the GPW’s costs would increase. The GPW was considering new applications to ensure sustainability. E-passports were also being considered. e conceded that factory and office space costs were high but the investment of R1bn on the Visagie Street premises was worth the money paid, and at the end of the day, it must be remembered that this was a valuable state asset.

The Chairperson pointed out that on performance targets the GPW had not yet reached a 50% mark, and questioned what it was doing to try to improve on this.

Prof Mbewu agreed that in the past, the GPW had not met targets, but they had not been set properly and there was reliance on others. One factor that affected targets was the DPW delays. However things were improving. In the GPW’s last quarter it had met 87% of its targets.

The Chairperson noted the GPW’s move towards non labour-intensive machines. The GPW had vacant posts at present, and so he asked if there was an intention to fill posts, or whether these posts would be scrapped. He also enquired whether the GPW was training staff to be able to use the new machines. He wondered if the GPW was reviewing its organogram.

Prof Mbewu noted that the vacancy rate of the GPW was also improving. There had been a delay in the implementation of the GPW’s Human Resource Organisation.  There were also delays in the progress of new facilities.

Ms Raphuti asked how the GPW could assist government departments like housing and health regarding the abuse of resources. She also asked how the use of the Smart ID card would assist in the security of the country.

Prof Mbewu stated that the health sector was a sector worth R250bn. With the Smart ID card, a person’s health details could be captured on the card. The health professional would be able to read the Smart card with a card reader. The patient’s health records could be accessed as well and could be updated. There would be less duplication, resulting in huge savings being made. In the case of the housing sector, the Smart Card could be used to verify that the recipient was a South African. Details could also be verified against the property register. It could stop identity abuse.

The Chairperson asked why the old green identity document book was still being produced. It should only be replaced where it had been lost or damaged. He asked how the GPW could generate meaningful income if the profit margins were small.  In the end the green identity books would not be produced any longer, so it meant that the income derived there from would stop, and he asked how the GPW would ensure that this lacuna was covered.

Prof Mbewu responded that at some stage the Minister of Home Affairs would declare that the old green identity book would no longer be produced. The old identity book did not generate much income for the GPW as it was produced by the South African State Information Technology Agency (SITA). The Smart ID card was produced by the GPW, even though the profit margin was small.

The Chairperson said that the Committee applauded the efforts of the GPW on the Smart ID card. It was more efficient and secure. The GPW’s consciousness over the security of SA was also admirable and appreciated Members also appreciated the GPW’s contribution to the National Development Plan and the efforts it made to retain its employees, even though it was using less labour intensive methods and processes. When the Committee next met with the GPW, it hoped to see a revised organogram.

The meeting was adjourned.