Department of Public Works on lease portfolio and performance of Property Management Trading Entity

Meeting report

Briefing on Property Management Trading Entity (PMTE) and Lease Portfolio

Mr Dhaya Govender, Head, Property Management and Trading Entity (PMTE), Department of Public Works, tendered the apologies of the Director General, who was unable to attend. This presentation would outline the PMTE and focus in particular on the lease portfolio. The PMTE had been in the news lately for a variety of reasons and the briefing would be related to the endeavours on issues relating to that portfolio.

 

PMTE’s mandate was to be the custodian and manager of government’s immoveable assets and this directly impact on the efficiency and effectiveness of all client departments and their ability to deliver government services to the people. He noted that corruption, mismanagement and poor management had greatly impacted on the Department of Public Works’ (DPW’s) ability to deliver on its mandate, however.

When the Minister had assumed office in late October, 2011, he had initiated a process of review. This had culminated in the launch of the seven-year turnaround strategy for the Department in January of 2012. The ownership of that turnaround was located within the DPW itself and in particular, the office of the Director General. Prior attempts to implement this turnaround had failed due to leadership instability and an ineffective change of management strategy. The core of management’s strategy was anchored in zero tolerance towards fraud and corruption and improving the business of the DPW, and in particular the PMTE.

He traced the history of the PMTE from 1999, when Cabinet had approved the establishment of a State Property Agency, till 2014, when it had approved the operationalisation of the PMTE and ultimately the phased implementation plan to establish PMTE as a government component (See document).

Mr Govender gave details of the portfolio size of the Department. There existed a minimum 32 000 registered and unregistered land parcels, with 108 000 structures on them. About 8 000 properties had been discovered by the Registrar of Deeds, and he was constantly updating the Ministry. The status of construction projects currently going on was given and the requirements for effective service delivery were highlighted (See Document).

The turnaround implementation plan had focused on the PMTE.  The first stage had started with stabilisation, which commenced in 2014 and focused on the immediate challenges and stabilising areas to create the potential for fundamental change. The second stage dealt with efficiency enhancement, which had started this financial year and was expected to end in 2019. It was centred on systematic improvements, redesign processes, systems and structural elements. The focus areas were on key strategic areas to improve efficiencies and effectiveness. He noted that the success recorded so far would drive the third stage after 2019, which was the sustainability and growth stage.

During the current cfficiency enhancement stage, the Department had focused on seven areas identified as priorities for the PTME and DPW. The priority areas of the DPW included meeting the needs of their prestigious clients through applying proper norms and standards, expediting infrastructure delivery on special projects such as buildings, schools and bridges, building the policy and regulatory function, and taking the Expanded Public Works Programme to a higher level. These focus areas would be assisted through a service delivery improvement management framework fighting corruption and creating an effective chain management distribution.

According to Mr Govender, the key to achieving the focus of PMTE’s turnaround in phase two was to improve service delivery in the context of the government’s priorities, and to save costs for the Department and the fiscus. This would be achieved by maintaining the value of the government’s assets, improving access to and quality of the immovable assets, ensuring optimal use of state stock, a conscious decision to move away from leasing-in, and using the state’s vacant properties productively to create a funding stream for capital maintenance and improvements, to extend the life-cycle of existing state properties.

Furthermore, to reclaim its mandate, the DPW would develop small proclaimed and unproclaimed harbours, develop government precincts in small towns and rural areas, safeguard the state’s assets from vandalism, theft and invasion, reclaim all misappropriated state land and preserve government assets, structures, building, and land parcels. The intended outcomes were expected to include leveraging the state’s property portfolio to contribute towards skills development -- such as artisans working to do basic maintenance -- to create employment through their workshops, to empower emerging black businesses through real estate facilities management, where small companies would maintain their buildings, and small scale developers who would build, operate and transfer.

From an organisational point of view, an acting head of the PMTE had been appointed to drive the full operationalisation of the PMTE. Key property management specialists had also been appointed to the transitional management structures of the PMTE Account. Targets on energy and water had been rolled out in five regions, which would significantly improve its achievement targets in terms of kilowatt hours saved.

Mr Dhaya Govender informed the Committee that the DPW had set itself a target of creating 20 000 work opportunities per annum over the next five years. These had been split into 75 000 work opportunities for those in construction projects and 25 000 job opportunities in the facilities maintenance programmes. However, not all of the Department’s properties were optimally utilised.

The PMTE had set some targets in the areas of property management and the establishment of a government component (not privatization). This was geared towards the better utilization of the state’s vacant properties productively and to extend the life-cycle of existing state properties.

On the progress made so far, in terms of a lease review initiative, Mr Govender said that in 2012, with 2 162 leases from private sector, 112 properties had been vacant, 29 properties had been occupied by non DPW clients, 578 leases had no lease agreements, and 1 176 backlog leases had been identified. In 2013/14, an application for special procurement conditions had been made to National Treasury (NT) to be given a special dispensation for lease renewals. This had been approved on 5 September 2013 and it applied to leases that had expired before and by 31 December 2013. It had been further extended to include leases expiring in the financial year ending on 31 March 2014. This had brought the total number of expired leases to 1 566.

On the status of the 112 unoccupied properties and the 29 occupied by others, Mr Govender said that the work was divided into three phases. In phase one, letters were written to the landlord requesting proof of active leases. In phase two, there was physical verification of 82 buildings, while the Department had no access to ten buildings. In phase three, there was a consolidation of information and a handover to the Special Investigating Unit (SIU). All the other cases had been handed over to the SIU for further investigation.

A significant enterprise of the Lease Review Initiative was the establishment of the Lease Review Accountability Management Committee, chaired by the Director General. Furthermore, a real estate management business process was established. This would ensure streamlining the procurement process, because the entire business of leasing had to do with the procurement process. A significant area of change was in Identifying and allocating tasks, responsibilities and delegations.

Mr Govender reiterated that the process of capturing lease agreements, and the approval and automated payment system, would be done only at the head office, and no longer in the regions. This provided an element of control over an environment that was once under no control. The execution and processing would occur in the regions, while managing and controlling the leases would take place at the head office. This was a significant departure from the past. This translated to the fact that at the head office, the Department could account for every single lease from the year 2015 going forward.

The expenditure and performance review of government leases was a project in partnership with the NT and the Department of Performance Monitoring and Evaluation (DPME). The project focused on identifying key areas for the DPW and other organs within the government. It also determined expenditure trends and, more importantly, recommended better service delivery. The work had begun, but no progress report was available for presentation. The project had taught the Department a lot of things about how to run the properties.

The Chairperson thanked Mr Govender for a very frank report and asked Committee Members for questions and comments.

Discussion

Mr K Sithole (IFP) raised concerns about the turnaround strategy. He was optimistic that things would indeed change, but from the report, it was a case of one step forward and two steps backwards.

He gave the following reasons:

- The department had promised to have a proper report about the Government Immovable Asset Management Act (GIAMA). There had been nothing of that sort in the presentation, and nothing had been said in that regard.

- He reminded the Department of the need to deal with the skills needed in the Department. However, there had been no report on specialisation in regard to the skills needed in the PMTE.

- The lack of professionalism in the management of leases. It seemed the Department did not have a management in place. There seemed to be no clear target for operating the PMTE.

- What was happening around the area of supply chain management?

- There had been no concrete discussion on inner-city regeneration. There should have been a target and time frame concerning this.

Dr C Madlopha (ANC) commended the Department for a detailed report. She had been of the opinion that after the turnaround, something was bound to happen. However, looking at the previous performance on the PMTE, there was evidence to show that there had been a remarkable improvement from the previous financial year. This was an indication that the turnaround was bearing fruit.

She wanted to know if the Department was now confident that after this turnaround programme and the appointment of property turnaround specialists, things would go better. Were the issues of corruption, poor management and inefficiency truly a thing of the past? She also asked if there were any challenges concerning the people employed.

She asked about the reason for the R443 million overdraft, exceeding the current assets. What would the Department do with the overdraft? She referred to the Auditor General’s report, and noted the AG’s concerns. The key challenge was keeping the correct records.

She queried an indication that a Treasury directive had not been fully complied with. Even though the NT directive was before the Committee on the turnaround strategy, the Department could share with the Committee the reasons for failure to obey the directive. She also raised concerns about the vacant properties, vandalism and illegal occupation -- why were the security men being paid? What were the consequences for those people responsible for such vandalism? She was furious that security men were being paid, yet there had been no improvement on the issue of illegal occupancy.

Dr Madlopha sought clarification on the claim of the Department that there existed 32 000 registered and unregistered land parcels. Did that number refer to each of the land parcels or was it a combination of both registered and unregistered land parcels. She observed that 176 projects at the tender stage had not progressed. This implied that those projects were not supposed to be there in the first place. On the 112 vacant properties indicated on slide 20, she wanted to know how much expense the Department had incurred on those properties before the turnaround scheme came in, and in which provinces the properties were located. This would assist the Committee’s oversight function, as they would know where to locate the properties.

Mr M Filtane (UDM) went through the Department’s presentation slide after slide while showing his concerns. He was furious at the state of affairs in the Department, calling it depressing. What was even more depressing to him was the fact that the state property management portfolio was underutilised and neglected. This indicated that the problem still persisted, despite the turnaround in place. He wondered whether the turnaround was actually having any effect on the Department.

He was pleased that the presentation had been being frank and honest. However, its effect on him was quite depressing. He was aware of a number of properties under the Department which were underutilised -- in the Mthatha region, in particular. People kept asking whether they could just move in and use a property until the landlord showed up to claim the land.

Mr Filtane expressed dissatisfaction at the fact that some properties were derelict. He advised the Department to prioritise properties which were of strategic importance. He cited a personal experience he had at the Mthatha High Court, for instance. His discussion with the advocates at the court had shown that it was possible for a sitting judge to find someone approaching him from behind, while the court was in session. Besides, when there was a shower of rain, water came in through the ceiling and the court was unusable. On the other hand, when the same advocates went to Port Elizabeth, which was mainly serviced by white advocates, there was tight security and good buildings which were well maintained. The consequences of this were that the judges’ lives were put at risk in the Mthatha region. He queried the assertion that there were no proper systems to maintain facilities.

With regard to spending, Mr Filtane said that reconstruction of the structures was going to lead to improvements. There was a big need for efficient servicing of government property. Thus there was no need to talk of underspending in the new system. He asked what would be done effectively and differently as regard improving real estate management services.

He was of the opinion that if the Department was dealing with the same persons, there would be no progress unless it brought in new people who would infuse fresh ideas and work differently. He wanted to know what happened to the 60% of construction projects allocated towards BBBEE contractors. Concerning the value proposition (autonomous ring-fencing), he wondered how it was possible for the structure to operate as proposed, as accountability to Department was none. The Department received funding from the government through the National Assembly, so how was it possible for the new structure in place not to be accountable to the Department? He asked what measures would be in place to ensure there was efficient accountability to the Department.

On the proposed new structure, Mr Filtane emphasised that there was nothing that would bring the expected turnaround or service needed. Like his Mthatha experience, he said that there had been no water for months, so toilets were not functioning. He found it difficult to be pleased by the change-around personnel.

Mr S Masango (DA) expressed concern about having to see that the Department worked efficiently and that properties around the country were well managed. The Committee kept getting complaints that one building or another was unoccupied, and this inevitably caused crime. If the Department would attend to this, the work of the Committee would be lessened.

He was emphatic that the PMTE was one of the problems in the Department. He disagreed with the idea that the PMTE should not be made a government component. Corruption was everywhere. Everyone had to comply with audit report.

He referred the Department to the 528 projects in the planning stage, and he wanted to know how long they had been in the planning stage. The same went for the 176 Projects in the tender stage and the 136 projects in the contract closing stage. How long had all these projects been in the planning stages and what was their current status?

Ms P Adams (ANC) queried the projected annual saving of over R33 million (R99 million over three years) and wanted to know if this would be a saving, or an underspending. She asked the Department to give the Committee time frames around the phases. She wanted clarification on the report that in 2012, there had been a review of 2 162 leases from private sector.

She about the relationship between the office of the Chief Procurement Officer, which that had been established in the NT, and the DPW. She expressed fears that where it was indicated that there would be a direct oversight by the Executive Authority, this might erode the oversight responsibilities of the Portfolio Committee.

On the position that some key property management specialists had been appointed to the transitional management structures, she wanted to know if this included consultants. She demanded an assurance that if there was a need for consultants, there would be a proper transfer of skills to officers or employees of the Department.

Ms Adams asked about the total amount of misappropriated state land indicated in the presentation. She questioned the claim that there was an infrastructure backlog and under spending of capital. She wanted to know if this was as the result of a lack of capacity. She advised the Department to make an analysis of the type of capacity they were lacking. They should also come up with plans to improve the type of capacity the Department may need.

Ms D Mathebe (ANC) sought clarification on the location of the properties -- whether they were only in South Africa, or abroad.

She refuted the claim by the Department that there was a shortage of professional capacity and skills in South Africa, insisting that there were a lot of engineers in South Africa. Some were not even working. Government should reach out to them.

Department’s response

Three members of the delegation from the Department responded to the questions asked and comments raised. They were Mr Govender, Mr Cox Mokgoro, the Chief Financial Officer, and Mr Jeremy Cronin, the Deputy Minister of the Department.

Mr Govender tendered his apology for the Department’s inability to table the GIAMA report.

On their programme of activities and turnaround changes envisaged, he responded that his intention was not to go into detail. The Department’s intention was just to table the first ever strategic report of the annual performance plan (APP) on the PMTE. They would then set, identify and indicate the various areas they had focused on as part of addressing the problems of the past, with the aim of going forward.

On construction, he asserted that there was an analysis of all the construction projects on record. In respect of those 176 at the tender stage, he informed the Committee that planning in Public Works could take as long as three to four weeks. There were various steps involved. He did not dispute the fact that this process may be too long. As part of the review process, time frames had been put in place. The aim of this was so that the Department could speed up the planning process. This was inevitably not going to be a simple process. It involved site clearance issues, the installation of services, water, sanitation or energy. Notwithstanding, he agreed that the current processes were too long and needed to be time bound and more efficient. Some of these projects could be as much as five or six years old.

Of the 528 projects in the planning stage, he said that some of them would not have progressed beyond phase 1 if not for the Department’s intervention. The essence of their intervention was to put a project management team together, solicit the services of the former head of the Gauteng Infrastructure Development Department to turn around the construction delivery. They had also gone to the South African Council for Project and Construction Management Professions (SACPCMP) to get them to do a mentorship programme. The Department’s resources were efficiently utilised and the Council had provided the much needed support, guidance and mentorship.

He said that the tender process stage had to be managed properly. Some of the projects were in the contract closing stage. The contract stage took an unnecessarily long time -- it should not take more than two to three weeks. He agreed that the current tender process was deficient. It started with poor specification and good offices were not provided. Hence, the deficiency of specification was what the Departments lived with.

In the re-engineering process with NT, the Department had determined that the biggest area of concentration was going to be on the specification process. Whether this was for construction or leasing properties, this would be keyed into the intervention programme.

In the 2014/15 financial year, the turnaround could not be guaranteed in the short term. There were some committed projects which needed to be seen through. The Department had to create a good and proper service point.

In the area of operationalising the PMTE and using the same people to achieve something different, Mr Govender said that the reality was that at the head office level, the Department had not developed the full capability to run the property management business. There was no proper property and facility management branch, so any new personnel might not understand the workings of the area. The commitment of the Department was to seek the right person with the professional skills required to head those areas. When the Department sourced a new person to head up, that person must come as an investment manager. Even the construction project did not have a permanent head. Currently, the Department was looking for individuals to come and supplement the existing complement. At the leadership level, the Department would not be making use of the same people. New people with the right skills would be brought in.

He asserted that there was, in fact, a shortage of technical and professional skills. It was the culture that emerged in the organisation that did not attract those people to work for the Department. There was a time when Public Works was a home for the profession. People would come into the Department and cut their teeth before going into private sector. There must be a new way of bringing in those professionals. The Department would also focus on the development of technical and professional skills in the property and construction skills industry. Initially, the Department had specifically identified artisans at the technical level, but through the work at the construction level, the Department had had to employ mechanical, electrical and civil engineers.

In the Mthatha region, the Department did not have professional skills. Professionally skilled workers confined themselves to the suburbs and cities like Durban, Cape Town, Pretoria and Johannesburg. The Department was extremely lucky to have a set of professionals in Bloemfontein. There was a continuous struggle to get professionals in other regions. The present system was to get a group of professionals who worked with the Department nationally, but who were willing to be assigned to a project in the regions. This would not be a permanent position, but the skill could be deployed to that area.

He agreed there was a serious problem in the field of construction management. The intervention programme in place may not be fast enough.

On property management, he said the Department was custodian of over 32 000 land parcels. The law was clear -- if a land parcel was not registered in anybody’s name, it defaulted to the DPW. There were about 28 000 registered in a variety of names. There had been a discovery of 8 000 more parcels of land, and the Department would inquire how many of those 8 000 were registered or not registered. Furthermore, the Department was sitting on a large number of properties. Where there was a user on a property, it prevented the Department from paying for additional security. The problem of providing maintenance for buildings that were in use, still persisted. There had never been a dedicated means of funding for maintenance.

The Department would prioritise the water treatment plant. There must be dedicated funding for maintenance and money found for upgrades where upgrades were required. There were certain national strategic buildings that needed to be maintained. The cost of maintenance was not cheap, so the Department had to share the responsibility with the user.

Another area was to focus on a service centre which people could access. There were parts of the country where one could not lease a building because there were none. The Department would start up with park homes and put in some infrastructure.

In respect of the SIU, of the 112 vacant properties, the approximate cost was R5 million per annum; of the 29 leased to non-DPW clients, it was R900 000. Of the R5 million, 75% was in the Pretoria region and of the R900 000, R750 000 was in the Pretoria region. Looking at the 112 and 29, the highest value and risk related to that was in the Pretoria region. There were no statistics as to the exact number per province of the 112 and the 29. All matters had been referred to the SIU so that they could decide on the ones to pursue and those which could not be pursued.

He informed the Committee that the Department did not pay on the properties that had been terminated on the system. The Committee must bear in mind that in the group of 112 was the accommodation for the Statistician General of South Africa. He was a seasonal client who did not need offices forever. When his duty called, he required an office for a period of time.

The target set by the Department was that by March 2015, there would be a fully compliant asset register. The compliance would be verified, value would be added and it would be compliant. The 2% that were presently not compliant were properties that were built on trust or tribal land, and trying to identify or verify them was not easy. Some did not have a street address. That was the area of difficulty the Department was facing. He claimed that physically visiting and verifying properties was an important step that the Department had made.

On the issue of employing the same personnel, Mr Govender affirmed that there was a large number of employees in the PMTE, but not necessarily in the areas of facilities or the construction industry. They were support staff.

The Department’s savings were in the area of savings and not underexpenditure. Expenditure was when the Department was not spending money. When it came to leasing in, there should be no concept of under expenditure -- it should be an area of cost saving. In terms of leasing in, the DPW was confident that the R33 million was in terms of the effect of escalation rates. The more the DPW saved, the more money it could put into facilities maintenance.

There was a direct relationship between the DPW and the Chief Procurement Officer, as a pilot department. The Department was an active participant in the work that went on between the CPO and the NT. Their development of measures for the DPW had been based on the Department’s participation and their understanding of our needs. The first understanding they had arrived at was that the DPW could not procure property or construction companies with the same procurement methodology as for goods and services. A different regime was required. They had developed a different methodology for property within the national framework and they would start work on the procurement construction methodology.

On PMTE operationalisation and the government component, the PMTE had been established by the Treasury and DPW in 2006. It was supposed to have had a fair share of operations to support their accounts. The Department, for whatever reason -- maybe a change of leadership that had occurred at that time -- had not taken forward the decisions reached at that time, so no structure had been created around the PMTE. Hence there had been no operations to support it. It had just run as an account. The business occurred separately.

The Department’s first target and job was to operationalise the PMTE. This had started on 1 April 2013. The DPW had transferred the asset and some of the functions to the PMTE. It had worked through slowly with the staff for around 18 months and it was now on a firm footing to operationalise PMTE formally in April, 2015. The DPW had also worked with NT and developed a new budget structure. The government component had been approved by Cabinet last year. In 18 to 36 months, it would begin operations. The government component would not be established now. The DPW was cautious in the sense that it first wanted the PMTE to operate before it initiated the process of establishing it as a government component.

In respect of misappropriated state land and “Operation Bring Back,” the DPW was not in a position to identify the properties stolen from it. However, the Department did get suggestions from the public that some properties were once government properties. The Department would first have to investigate this thoroughly before pronouncing on it otherwise it may act on a claim and find it not to be true.

When the physical verification was done, it may be that a farmer was on the land and had been given the land by a government, with no agreement. The DPW refers these cases to the SIU to authenticate the genuineness of such occupation. The Department was certain that there were so-called government properties out there that warranted an investigation.

Mr Cox Mokgoro answered questions that dealt with financial concerns. He confirmed that the R443 million overdraft for the Department in 2012/2013 was a trading account. The overdraft of the PMTE was on a much more normal basis throughout the year. The Department sits on an overdraft of over R1 billion in a year and from that amount, the Department conducts its operations by paying and enlisting providers upfront, on an average of about R700 million over a 90-day cycle. The balance was about R300 million of old debt that the Department had carried over and was still trying to resolve.

The Department was currently working with the NT to deal with the recovery of these amounts. In cases where no recovery was in sight, a decision could then be taken. The overdraft was a result of the operation module. He confirmed that the R33 million was not underspending, but real savings.

On the gaps in the numbers, he explained that it was not the summation of all the indicated numbers that led to the total. Some of them were duplicates, so they did not just add up to the actual amounts therein. The backlog leases were those that had expired and those that would be expiring soon.

The assets which were abroad were reported on by the Department of International Relations and Cooperation (DIRCO). However, there was a condition that DIRCO could not dispose of these properties without the knowledge of the DPW.

By virtue of ring-fencing, the PMTE would optimise the assets of the state. The Department was embarking on a drive for revenue generation for the state.

Ms Pinkie Modisane, the Chief Director, Facilities and Property Management, DPW stated that the APP had been undertaken to introduce a building management system. This was important, because practice taught the Department that those systems would enable it to know the status of its buildings. With these systems, it would be easier for it to identify areas which need attention. The DPW had, in particular, identified high courts and magistrates courts to put in place facilities management contracts to make sure they were running well, because that was where it provided services for the people.

The Department sends out people to repair vandalised buildings. Though it has security there, its properties are just too many and the maintenance budget can not sustain it. This was why the Department wants to go to the market through the office of the CPO, to identify real estate development contractors who could take over these buildings

Mr Govender reported that the inner city regeneration programme had been an embarrassing issue for the Department for ten years now, with little progress. The decision the DPW had made was to pay for the installation of the bulk services, but that was still a just developed plan, and it would take a maximum three years to get that done.

The focus of the Department had shifted away from inner city regeneration. The Department had widened its programme to focus on development of precincts, with a preference for small towns and rural areas, looking at provincial precincts and then national.

He said that when a government component was established, the head of the component reported to a Minister. It was the Minister’s prerogative on how he wanted to manage that relationship. The concept was not used to mean that this Portfolio Committee lost its oversight responsibility. The oversight function of this Committee remained intact and was not in any way undermined.

The issue of professionalisation was an area which required the ability to attract the right skills with the right pay to come and work. A lot of time was spent debating on the format required for this entity. The government component, which was not far from the Department, was the best vehicle to created and managed.

It would be a dangerous thing to talk of going back after the turnaround. This could happen if the government component was not established. To avoid this, the government component becomes ring fenced, giving it protection so that the tendency to slide back is avoided. It is a component of government so it is not independent. That was the balance the DPW thought of in establishing the government component.

Deputy Minister’s comments

Mr Jeremy Cronin spoke on the government component issue, which indicated the direction of the PMTE. There was an erroneous belief that government should basically be doing policy and regulating entities. He gave his experience when he was at the Department of Transport. There, virtually all of its key operational elements had been turned into agencies of one kind or another. Then the professional expertise in these agencies that were reporting to the Department had disappeared into the private sector.

He reminded the Committee that the Department was under a public mandate to fulfil public duties. In 2006, the NT and the DPW had come together to forge the PMTE. There had been no such thing as a government component -- this was a recent development developed by Treasury. This was partly due to entities that had started to run away from administration. The government component was an interesting concept because it did not have a board, but it did allow people to do what the Department desperately needed to do, which was to develop a serious professional capacity.

The government component enabled the Department to build up the professional skills needed. It was the implementing arm of government, and needed to be guided by regulations. It also needed to have an implementing capacity. Because it was a government agency, it could run a service. It was running with an overdraft because of the business module -- the Department paid upfront when there was a lease out. The PMTE, as a government component, enabled the Department to make money for the government by using its property intelligently and strategically.

Mr Cronin commended Mr Filtane for his insight into the Mthatha experience. Such information, where Committee Members talk about their constituency and draw attention to it, helped the work of the Department

Discussion

The Chairperson wanted to know why the Department could not gain access to the properties indicated in the presentation, and where the properties were located. He wanted to know if the utilisation of the expertise of retired engineers was still on track, and whether the Department had obtained the services of those engineers. Besides this, what programmes did the Department have for the youth?

Ms N Sonti (EFF) asked whether the job opportunities in the Department were permanent positions. She also sought clarification on the issue of professional skills in the construction industry and how corruption had been prevented in the Department.

Ms Mathebe sought further clarification on the verification of the assets mentioned in the presentation. What was the exact number of properties? She asked the Portfolio Committee to seek a list of DPW properties, because it was so broad. She stated that in Limpopo, there was a property lying around with nobody taking care of it. She also wanted to know the relationship between the national and provincial departments.

Mr Masango wanted further information on the Department’s explanation that they were going to pay extra remuneration for skilled workers.

Mr Filtane asked what the Department was doing to make sure that a pool of engineers was being developed. Were there scholarships or incentives to make sure there were technical professionals such as engineers and architects? He asked whether there was a pool of people who could actually do the job. He wondered why the Department had to bring those who were due to retire to do the job, because there was every tendency for those people to take the job for financial reasons unless they were forced by the government to retire.

Mr Govender responded that the Department had permanent employees. It also had fixed term contract employees, especially those who were helping with the PMTE on a performance-based approach. There had to be funding to make jobs permanent,.

On the issue of assets abroad, he said that the DPW was once a custodian of properties abroad, but there had been a devolution that placed the properties into DIRCO’s hands, which they could not dispose of. He promised to provide the list to the Committee.

The relationship with the provinces was mutual. The bulk of the work of the Department ensured that they worked with the provinces to clarify who the properties belonged to. This vesting process had been initiated after 1994, and was still proceeding.

The issue of lack of skills and capacity had required the Department to call for retired individuals to assist. The Department had also sought funding. Experience showed that retired people were willing to work flexibly with lesser remuneration than those who were full time in practice. Mr Govender noted that the Department identifies matriculants who want to study engineering and they are given bursaries. In 2015, 20 of such matriculants had been given bursaries, and they were spread across the Universities of Cape Town, Stellenbosch, Pretoria and Kwazulu-Natal. There was also a competition in this regard with Transnet and other agencies or companies who have active bursary schemes.

Mr Govender said that in the intervention programmes, there were positions for interns on the construction programme. The DPW hoped that from those interns, it could get those who were employable.

Mr Mokgoro stated that the overdraft was indeed the amount being owed to the bank. However, it was a Paymaster General Account, which was a Treasury account. Hence, it was not a public bank and therefore no interest was charged on it.

Mr Govender repeated that there had to be verification of their properties. The Department had also referred to the SIU from the third phase of the programme. For instance, if they got to a particular property and they met locked gates, they could not break in. They would have to get a court order to be able to enter the property. Sometimes the DPW deferred to the SIU because they have wider powers.

Mr Cronin stated that the need for work opportunities persisted. They may not be full time jobs, but opportunities should be offered for enterprise and cooperative development. This afforded young people the opportunity to acquire some skills and they could be employed. The Department was short of engineers at times because when some of these young engineers come into the Department’s programmes, they become frustrated. This was due to the fact that those in charge of them were core administrators who did not have professional skills. Administrators were important, but the people needed were core professionals. Emphasis should be placed on senior people with property management skills so that the Department could become an employer of choice in a more professionalised Department.

The meeting was adjourned.