National Department of Tourism on its Jan-Jun 2016 performance

Meeting report

Mr Victor Tharage Director General: NDT, leader of the delegation, said the aim of the briefings was to explain diversions from the NDT’s plans. At the outset he wished to speak to three issues that might not come out of the briefings. First, on the area of international tourism the National Department of Tourism (NDT) had a number of “soft” objectives that it pursued that did not necessarily feature in its plans submitted to Parliament. For example, Cabinet had given the NDT the go ahead to work with tourism companies to facilitate the application of visas for their clients. The NDT used existing Memorandums of Understanding (MOUs) with countries to access data. The NDT was able to access information on which companies in China were accredited companies to take people out of China. There were numerous examples of these types of work that the NDT did that did not feature in plans. Work was done in the regional context as well. Tourism instruments in the Southern African Development Community (SADC) had also been reformed. The NDT could present its efforts to the Committee.  The second issue related to the Expanded Public Works Programme (EPWP) where the NDT was going through a change in accounting policies. The Accountant General at National Treasury had called for the change. Previously accounting was for expenditure on the EPWP but now it was for expenditure and for assets. The NDT had done the accounting part. In order to obtain economic advice, the NDT partnered with a private firm to guide it along the correct path. In this way the NDT could go through EPWP projects and identify what was needed to complete projects and for them to be economically viable. There was a clear plan in place on EPWP projects. The NDT needed a session with the Committee on the EPWP. It would shed light on what the delays were. The third point was that the NDT had put together a good document on the National Tourism Sector Strategy (NTSS). It had initially been hoped to have the document ready by Quarter 1 of 2016. A review of the NTSS had been done and policy nuances had come up. Substantive issues had also come up. The current NTSS was still valid and there was no vacuum. On domestic tourism there was some positive movement. Lengthy consultation had taken place. There were documents on domestic tourism dating back to 2010 and even 2003 but they all looked the same. It was realised that the focus areas were all the same. The NDT decided to take a step back and to do some independent research. The NDT engaged with operators for instance to get an idea of why some things worked whilst others did not. This would be useful when the eventual domestic tourism document emerged. Things had to be done correctly.

National Department of Tourism (NDT) on its Quarter 4 2015/16 Performance Report

The delegation comprised of amongst others Mr Tharage as previously mentioned, Ms Morongoe Ramphele, Deputy Director General: Domestic Tourism Management; Ms Shamilla Chettiar, Deputy Director General: Policy and Knowledge Systems; Ms Aneme Malan, Deputy Director General: International Tourism Management; Ms Nomzamo Bhengu, Acting Chief Operating Officer; Mr Ralph Ackerman, Chief Financial Officer (CFO); and Ms Petra van Niekerk, Parliamentary Liaison Officer: Office of the Director General. The Deputy Director Generals were tasked with speaking to their respective portfolios with Mr Ackerman speaking to the financials of the NDT.

Mr Ackerman kicked off proceedings with insight into the financials of the NDT for the Quarter. The NDT had spent 99.1% of its budget. A breakdown was also provided of expenditure as per economic classification. The Committee was provided with an overall picture inter alia of targets achieved and targets not achieved for the Quarter. The NDT had achieved 48 of its 57 targets that had been set which gave an achievement rate of 84.21%.
Programme 1: Administration - the annual and quarterly targets were set at having a vacancy of 8%. The actual performance for the Quarter was 5.5%. Annual and quarterly targets had also been set to maintain a minimum of 50% women representation in Senior Management Service (SMS) and 5% r[presentation for people with disabilities. The actual performance for the Quarter was a minimum of 49% women representation in SMS and 4.9% representation for people with disabilities.

Programme 2: Policy and Knowledge Services - on the number of platforms facilitated to improve tourism sector stakeholder engagement and NTSS implementation an annual target was set to have two national tourism stakeholder meetings. The Quarterly target of having a national tourism stakeholder forum meeting hosted was achieved. The NTSS target was not achieved. On the number of policy documents developed on the implementation of the Tourism Act No 3 of 2014 the annual target was set to develop new regulations for tourist guides. The quarterly target of having final draft regulations approved and submitted for gazetting had been achieved.

Programme 3: International Tourism Management - with the annual target set at having tourism source market development plans implemented. Quarterly targets set were to have three international exhibitions attended and to have three engagements with outbound tourism trade. The actual achievements were that two international exhibitions in Russia and Turkey were attended and one engagement with outbound tourism trade was done with Chile in Quarter 2 of 2015 as well as with Egypt in March 2016. An annual target was set to have one tourism skills development opportunity facilitated. The quarterly target was to facilitate implementation of the Further Education and Training (FET) chefs’ trainers’ skilling workshop by French counterparts with Domestic Tourism Management. Actual performance was that the chefs’ trainers’ skilling workshop by French counterparts with Domestic Tourism Management was not conducted due to changes in logistics.

Programme 4: Domestic Tourism Management – on the number of programmes coordinated to inculcate a culture of travel amongst South Africans, the target set was to have a 2015 tourism month coordinated. The quarterly target was to have a 2016 tourism month project plan in place for September 2016. The actual performance was that a 2016 tourism month project plan was developed and in place.

With a view of creating a number of full time equivalent (FTE) jobs through the Social Responsibility Implementation (SRI) Programme annually, the annual target had been set at 3008. The quarterly target had been set at 1053 but the actual achievement was only 316. On the up side was that at the end of the year the annual target of 3008 had been exceeded. 

Discussion

Mr G Krumbock (DA) said that on page 41 the Quarter 4 target had not been met but had later on been met. On page 47 he noted that performance showed that there was a winding down of jobs created. He asked whether the two performances referred to were not a contradiction. On paper SRI projects looked okay but when one went on oversight many SRI projects were not doing what they were supposed to. An analysis was needed of SRI projects in terms of their cost and how many FTE jobs were created. The issue was whether funds were optimally spent on specific projects. A report on SRI projects was needed. When the Committee went on oversight it became apparent that many tourism projects were funded by the private sector and non-government organisations (NGOs) that had volunteers. Was enough being done to assist these types of NGOs who were doing good work in areas where the NDT did not have a footprint? He stressed the difficulty experienced when it came to integrating departments on the offering of tourism projects. Departments tended to work in silos. Many iconic sites were in disrepair as the responsible department was not taking care of them. The NDT was asked to provide the Committee with a report containing a list of the top 20 or 30 tourist attractions in SA. The list could even have the top 50 for that matter. The NDT was also asked whether there was progress with other Departments like Arts and Culture, Transport and Cooperative Governance and Traditional Affairs on issues like roads, maintenance of heritage and tourism sites. It went without saying that the NDT could not deliver tourism products on its own. The Committee needed to be provided with a progress report on cooperation between the NDT and other government departments.

Mr Tharage responded that the NDT reported as transparently as it could. The NDT had to adhere to prescripts on how it should report and sometimes it was difficult to provide Members with the information that they required. Much of the issues raised by Members were about strategic policy. He could not speak to issues where the NDT did not have a policy.

Ms Ramphele said SRI targets for the Quarter were not met but that the target had been exceeded annually. There had been skills development in nine provinces but as the year progressed it tapered off in Quarter 3 and Quarter 4. Overall targets had been exceeded annually. The SRI report requested would be provided to the Committee.

Mr T Rawula (EFF) asked what the actual types of skills were that the NDT was doing skills development on in Quarter 4. He would have liked to see the briefing document to have had an additional column showing the impact made regarding the meeting of targets set. Generally, the performance of the NDT was reported on but what was the performance in specific provinces. All provinces should be active on tourism. What was each province contributing to tourism activities?

Ms Bhengu, on the issue of skills, said supervisors in the NDT identified areas where skills were required. Some of the training areas included financial management, research and policy development. It depended on the needs. It was an internal skills issue for the NDT and did not relate to the sector.

Mr J Vos (DA) noted that in order to reach tourism goals other departments had to do their bit. What interventions did the NDT have with other departments in order for tourism to reach its potential?  The former Director General of the NDT, Mr Kingsley Makhubela, had spoken about the benefit of electronic tourism visas. Electronic visas could go a long way to alleviate the long queues that were at airports like OR Tambo International Airport where biometrics were done. The Committee should play a bigger role on the NTSS. On stakeholder engagements on the NTSS it could be taken one step further if the Committee could undertake to hold public hearings. The role of provinces, municipalities and the private sector was also important. The briefing had spoken about a review of visitor information centres at world heritage sites but he asked why was their not a review of all visitor information centres. Some municipalities were lacking when it came to having visitor information centres. The NDT was asked why it had only placed gateway centres at OR Tambo International Airport and King Shaka International Airport but not at Cape Town International Airport. Cape Town International Airport had introduced an airlift strategy which had introduced new routes. On the National Tourism Sector Plan, it was felt that municipalities and provinces had a role to play. He asked that the NDT provide the Committee with a progress report on SRI projects. It would give insight into functional and non-functional projects. A stock take of SRI projects was needed. SRI projects would deliver on tourism infrastructure. On domestic tourism it was a positive to hear that SANParks was offering discounts to South African citizens visiting their facilities. How far was the NDT‘s discussions with SANParks on the issue of discounts. The briefing had been silent on the issue of cruise tourism. Cruise tourism held economic benefits. The City of Cape Town was to get a dedicated cruise ship terminal. Cruise tourism generated annual product income of around R200m. Would cruise tourism feature in the plans of the NDT?

Mr Tharage, on cruise tourism, said that when the oceans economy was signed off the NDT would have direction on it. There were divergent views on the benefits of cruise tourism. The issue was that cruise ships which came to dock at South African ports picked up South Africans and sailed up and down the coastline. Just under R300m was lost to South African tourism revenue due to this. There were almost no South Africans working on these cruise ships. It was a concern. The matter had been discussed at Ministerial Members of Executive Committees (MinMEC). The decision was taken to first see how coastal provinces were dealing with the issue. The cruise ships were also not necessarily South African flagged. It was different if cruise ships came to SA’s ports loaded with passengers. This could be of benefit. There were many issues to consider and it was work in progress.

Ms Ramphele noted that conversations on accessibility and affordability had not only taken place with SANParks. The NDT had a Social Tourism Directory which spoke to providing discounted rates for South African citizens. The NDT would share the Directory with its stockvel groupings.

Ms Chettiar stated that there were 223 visitor information centres across SA. The NDT had a framework to manage visitor information centres. The framework addressed issues of quality of experience and looked at the training of staff. Unfortunately, the focus could not be on all visitor information centres hence those at world heritage sites had been prioritised. It was not deliberate that there was no information gateway at Cape Town International Airport. It was just that discussions with Cape Town had not been concluded as yet. Work was being done to have information gateways operational at all three major airports.

Ms E Masehela (ANC) asked for figures generated on the tourism guide capacitating programme. She also asked why food safety graduates had not been matched and placed. Even though there was an annual target of having nine service excellence awareness raising sessions conducted the actual performance only sat at two. What was the problem?

Ms Ramphele, on food safety initiatives not having the industry on board, said the Federated Hospitality Association of SA (FEDHASA) did manage the programme with three provinces. The intention was for the FEDHASA to open up to other service providers as well. This was where the delay came in. The process was nearing the end of getting a service provider. On service excellence two provinces were covered in the Quarter with the rest of the seven provinces being covered in other quarters. 
Ms P Adams (ANC) said on goods and services only 94.7% of the appropriated budget was spent whereas most of the other economic classification items had spent over 98% of its appropriated budget. She referred to tourism complaints received and asked what types of complaints they were and were they resolved. It was all good and well to have 100% expenditure on procurement from Broad Based Black Economic Empowerment (B-BBEE) enterprises was achieved. What was the impact on the Black Economic Empowerment company? The NDT was asked at what municipalities capacity building had taken place. The Committee needed specifics and also had to know what the impact was. On priority areas supported under the tourism incentive programme, she asked that the Committee be provided with numbers. If 5700 invitations had been sent out in this regard why only 206 applications were received. The variance was far too great for comfort. Were the 4500 invitees approached and asked why they had not applied. The NDT was encouraged to do follow ups. The NDT was asked whether it nurtured rural enterprises that it had supported. On the skills report that the NDT had, it was asked how it addressed challenges identified in the report. On programmes to enhance tourism offerings it was good that there was a programme of action for the N12 Treasure Route. What beneficiation of communities was taking place along the N12 Route, especially when it came to women and the youth?

Mr Ackerman, on the expenditure figure of 94.7% for goods and services, explained that the NDT could only pay for invoices that were up until the end of 31 March. In the Annual Report there was a note made on accruals in this regard. It did not include invoices received after 31 March. The percentage expenditure for goods and services would have been higher if all invoices had been included.

Ms Bhengu, on the manner in which indicators were formulated, explained that indicators were multi-year. Indicators had to thus be open-ended. On the types of complaints that were received, for the current year complaints were mainly around refunds. Tourists felt that in some instances they deserved to be refunded. Some complaints were resolved whilst others were not.

Ms Ramphele stated that assistance to rural enterprises was not a once-off. There was continuous handholding. There was further mentoring. There were still 100 enterprises assisted and they would exit the programme in the next financial year. On the skills report, a skills audit was done. It was not yet complete but should be done by the end of September 2016. By November 2016 there should be a strategy.  

Ms Chettiar said establishments were forced into grading for the 2010 FIFA Soccer World Cup as a requirement of FIFA. After the 2010 FIFA Soccer World Cup grading figures were tapering off. There were seven calls for proposals that were run. Many establishments had illegal grading plaques displayed at their establishments so there had to be some value in getting graded. A major reason why many establishments cancelled grading was the economic climate in SA. The NDT had put in place a process to address issues on grading.

Mr S Bekwa (ANC) noted that the Committee did not see the impact of projects that were spoken about in the performance report.

Ms L Makhubele-Mashele (ANC) noted that it seemed that the NDT planned things which it alone could not implement. The NDT had to rely on other departments for implementation assistance. Was it correct that the NDT planned things that it could not achieve? The Director General had earlier stated that the NTSS was still valid and that there was no vacuum. On oversight Members had found that provinces did not relate to the NTSS. Yet the statement was made that there was no vacuum. On grading the Committee had suggested that international benchmarking be done. Some European countries had made grading compulsory whereas in SA it was voluntary. Members as policy makers had to ensure when it came to delivery of a quality tourism product visitors had to know where they stood. The uncertainty around grading did not instil confidence around establishments in SA. Perhaps the Committee needed to work on some sort of policy direction. If training on domestic tourism had taken place and persons could not be placed, then the NDT was not working hand in hand with industry. She also pointed out that if the Domestic Tourism Growth Strategy could not be concluded due to terms of reference not being concluded then it would also seem as if the various departments within the NDT were not working as a team. This perhaps was a sign of governance issues being a problem in the NDT. How was the NDT not able to facilitate approvals from one department to another department within itself? 

Mr Tharage, on governance, there was no leadership vacuum in the NDT. In 2015 the Department on Policy Monitoring and Evaluation had ranked the NDT number one on management. The NDT was in the top 5. The NDT’s own score was even higher than what it was in 2015. The NDT had received a clean audit with no matters. It had robust systems in place. There was also transparency on project issues. On why certain things had not been approved, thorough processes had to be followed. Things could not be signed off unless one was satisfied otherwise things would come back to bite you. If the NDT was setting targets that were easily achievable then it would be performing at 100% across the board. Setting targets that were achievable was called sand-bagging. In the end the NDT was doing what was best for SA. Sometimes environmental factors did not allow one to obtain results that one had hoped for. On grading the discussion continued on whether it should be compulsory or voluntary. There was a voluntary grading system in place and it was robust. SA’s grading was envied by its neighbours on the African continent. Support was often requested by them. SA had a credible system in place and this was obvious when one looked at comments that were posted on TripAdvisor in relation to graded establishments.

Ms Chettiar said that the NTSS remained in effect. Regarding challenges of provinces aligning with the NTSS she stated that in 2011 when the NTSS had been published some provinces had come up with strategies that aligned with it. Some provinces took longer than others to develop a strategy. When the review of the NTSS had come up some of the provinces had still not come up with a strategy and hence there was some misalignment. With the revised NTSS there was a sharper focus. The NDT worked with provinces to prevent misalignment. The Draft revised NTSS was with provinces.

The Chairperson said that the economic impact of all the NDT’s efforts was important. There was a need for intergovernmental relations on various aspects of tourism. She asked how far the process was on the Sodwana Bay racism incident. The briefing had stated that the expenditure of the Administration Programme had been 98.7% whereas National Treasury had said that the figure sat at 96.2%. She asked what the reason for the discrepancy was. Members had asked overarching questions which applied to Quarter 1 2016/17 as well.

Mr Tharage, on intergovernmental relations, said the NDT’s Deputy Director Generals met with their counterparts on a regular basis. He himself also met with heads of departments. These were formally set meetings but meetings also took place on a one on one basis. A great deal of detail was covered in meetings. Matters were made difficult by the fact that tourism had a concurrent mandate. There was even concurrency on policy. When it came to implementation officials at local government said that tourism was an unfunded mandate. If municipalities prioritised tourism activities, then it would form part of their Integrated Development Plans (IDPs). Work was being done with the provinces. Everyone had a part to play. At national level the NDT worked well with its counterparts. The NDT had an Infrastructure Master Plan. The NDT was looking at infrastructure requirements at tourism places. There was also a Product Development Master Plan. Work was further being done on the Oceans Economy by looking at hidden gems.

Mr Ackerman, on the issue of the Administration Programme’s expenditure figure by National Treasury, was not sure what figure was being referred to. The NDT had used audited figures and it was published in the NDT’s Annual Report. From which National Treasury document had the figure been obtained?

Mr Tharage, on racism complaints, said the NDT had dealt with two matters. The first was in relation to an incident at a facility involving a black boy who had been adopted by a white family. The matter had been resolved. The operator at the facility had admitted that he had been wrong and had apologised. The facility would henceforth be open to diverse race groups and at certain times of the year entry would be free to people of colour. The Human Rights Commission had been involved on the issue. The Human Rights Commission had been involved in the Sodwana Bay and a matter in KwaZulu-Natal both still being under investigation. The NDT did not tolerate incidences of racism. The Constitution was upheld at all costs.

The Chairperson responded that the National Treasury figure on the spending of the Administration Programme had been obtained from the National Treasury website. The figure had also been submitted to the Portfolio Committee on Appropriation from where she had obtained it.

National Department of Tourism (NDT) on its Quarter 1 2016/17 Performance Report

The Deputy Director Generals were once again tasked with speaking to their respective portfolios with Mr Ackerman speaking to financials.

Mr Ackerman once again spoke to the financials of the NDT. As at 30 June 2016 the NDT had spent 37% of its budget. A breakdown was also provided of expenditure as per economic classification. The Committee was provided with an overall picture inter alia of targets achieved and targets not achieved for the Quarter. The NDT had had achieved 70 of its 91 targets that had been set which gave an achievement rate of 76.92%.

Programme 1: Administration - the annual and quarterly targets were set at having a vacancy of 8%. The actual performance for the Quarter was 5.6%. Annual and quarterly targets were also set to maintain a minimum of 50% women representation. The actual performance for the Quarter was a minimum of 49.3%% women representation in SMS. The figures showed a variance but corrective action had been taken. As at 1 July 2016 one male and one female had since been appointed at SMS level whilst one male was resigning. This had ensured a 50% SMS female representation.

Programme 2: Policy and Knowledge Services - on the number of policy documents developed on the implementation of the Tourism Act No 3 of 2014 the annual target had been set to develop new regulations on the National Tourism Information and Monitoring System (NTIMS). Quarterly targets were to have a framework to inform the NTIM draft regulations and to have an implementation plan in place for the drafting of the NTIMS regulations. The actual performance was that a framework to inform the NTIMS had been developed and that an implementation plan was in place.

Programme 3: International Tourism Management - on the number of skills development opportunities facilitated through bilateral cooperation the target was to recruit tourist guides and frontline staff for language training in the languages of Russian and Mandarin.  The quarterly target of having Phase 1 of the language training in Russian for tourist guides implemented was not met. The reason for the variance was that the NDT had taken a strategic decision to focus on the training in Mandarin rather than Russian for the Quarter. The interviews for candidates for training in Russian would be done in Quarter 2 with training envisaged to be conducted in September 2016.

Programme 4: Domestic Tourism Management - with a view to revising the Domestic Tourism Growth Strategy the quarterly target had been set to audit the 2010/11 Domestic Tourism Growth Strategy. The actual performance was that draft terms of reference were not developed. The reason for the variance was that the terms of reference were not yet approved to appoint a service provider. Corrective action taken was that work would commence in Quarter 2 upon approval of the terms of reference. With the aim of creating a number of full time equivalent (FTE) jobs through the Social Responsibility Implementation (SRI) Programme annually, the annual target had been set at 3488. The quarterly target had been set at 523 but the actual achievement was only 288. The reason for the variance was that the procurement of service providers for projects with high FTEs was not finalised in Quarter 1. The corrective action taken was to have procurement of service providers and recruitment of EPWP workers to be finalised in Quarter 2.  

Discussion

The Chairperson pointed out that Members had for the most part exhausted their questioning on the briefing on Quarter 4 2015/16 and that most of the issues already raised pertained to the Quarter 1 2016/17 Performance Report as well.

Ms Makhubele-Mashele said that if the Director General was saying that it was not problematic not to reach targets then she begged to differ as she felt it problematic if the NDT planned things and then did not deliver on them. Was the Committee expected to read between the lines? On domestic tourism for example twenty-one targets were set but actual achievement was only eleven. Surely the Committee could not be expected to commend mediocre work. The Committee unfortunately did not see much synergy between the NDT and other departments. If there were delays from one arm of the NDT to another arm, then it was a concern.

The Chairperson stated that she hoped that the variances in performance would be resolved in future quarterly reports.

Mr Tharage said if he had sounded not concerned then it was not his intention. When targets were not achieved then it was a concern. What he did say was that there were instances when the NDT did all it could but targets could still not be achieved due to external factors. For example, on the retro-fitment planned at Robben Island a site had been identified. However, the NDT was informed that an Environmental Impact Assessment (EIA) needed to be done. Thereafter a period needed to be opened up for appeals. There were thus these unforeseen delays. Only once the process was complete could he sign the deal with the service provider. Some of these caveats could be averted whilst others could not. Other types of factors hampering the NDT’s efforts could be land claims and demarcation issues etc. These were things that affected outcomes. This was what he had tried to explain earlier.

The Chairperson asked whether the NDT did oversight over SA Tourism.

Mr Tharage stated that the NDT did support the Minister of Tourism, Mr Derek Hanekom, to perform oversight over SA Tourism. The NDT did have scheduled bilaterals with SA Tourism regularly.

 The meeting was adjourned.