Support provided to Mpumalanga by Department of Public Works – in preparation for Mpumalanga oversight visit

Public Works and Infrastructure

13 September 2016
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Committee received a briefing from the Department of Public Works (DPW) in the preparation for the oversight visit to Mpumalanga with a particular focus on DPW support that had been provided to the province. The Department had identified a number of projects that could be visited in Mpumalanga and these included Mpumalanga High Court, Barberton Prison Security Fencing, Emakhazeni Boarding School and Swartfontein Treatment Centre. There were additional projects to be completed in Mpumalanga with a main focus on infrastructural development and maintenance in Jeppes Reef Border Post, Bushbuckridge Traffic College and Tekwane North School between Nelspruit and Kanyamazane.

On 20 September, the Committee could be briefed on the Barberton Prison project which is being implemented by the Independent Development Trust (IDT) in the Umjindi Local Municipality in the Ehlanzeni District. It will also receive a briefing on the Rob Ferreira Hospital Revitalisation Project implemented by Mpumalanga Department of Public Works, Roads and Transport (DPWRT) in the Mbombela Local Municipality in Ehlanzeni District Municipality. The project had been completed in October 2014 with a total expenditure to date of R5.8 million. The project had created a total of 25 jobs, 15 for the youth but with no jobs created for women or disabled people. The challenge was that some aspects of the design for the plant was not according to DPWRT standards and this caused delays in the handover of the facility as modifications to the design and the plant had to be done to conform to standards.

On 21 September, the Committee could be be briefed on the Jeppes Reef Port of Entry project and Mananga Port of Entry.

On 22 September, the Committee could be briefed on the Traffic Training Project, Phaphamani HBC project and Mpumalanga High Court Project. The client of the Traffic Training Project is Bushbuckridge Local Municipality and the implementer is the Mpumalanga DPWRT. The project is currently 93% completed and the Department is still unclear as to when the project would be completed. There are a number of challenges in this project such as non-performance of some of the consultants, lack of capacity in bulk electricity and storm water on the boundary of the court. The Department has terminated the contract of non-performing consultants and there was an addition of bulk services to the original scope.

Members commented that the programme should be structured to give Members a full picture of the projects including that challenges and remedial action taken. The Committee should be briefed on what was being done by the Department to the Piet Retief provincial hospital as the infrastructure in the place was debilitated. Had the Department been asked to do maintenance on the Ekwandeni Primary School and Malanga Primary School as the infrastructure was debilitated and too dangerous for the children who attend those schools? Members expressed concern that some DPW projects were supposed to have been completed in 2013 but were still incomplete and this once again pointed to poor planning. What are the reasons for the projects not being completed on time? The Committee should be provided with information about the financial impact of these projects not been completed on time.

Members complained about inconsistence in the breakdown of number of jobs created for young people, people with disabilities and women. It was concerning that the Ehlanzeni project employed only four women out of the total of 40 job opportunities as the target of government was to reach 50/50 gender representation. They requested a list of those that would be present during the oversight visit to Mpumalanga. Some Members felt like it would be ideal for the contractors and beneficiaries to be part of the oversight. It would be interesting to hear about the number of jobs created through these projects in Mpumalanga from the previous financial year. Members expressed concern about the problem of fruitless and wasteful expenditure in these projects executed by the Department. The inflated amount for the projects seemed also the “order of the day” within the Department. It was still confusing what assessment was used by the Department in choosing contractors for the projects.

Meeting report

Support provided to Mpumalanga by Department of Public Works
Mr Samuel Thobakgale, Deputy Director-General: Projects, National Department of Public Works, said that the Department had identified a number of projects to visit in Mpumalanga and these included in Mpumalanga High Court, Barberton Prison Security Fencing, Emakhazeni Boarding School and Swartfontein Treatment Centre. There were additional projects with a main focus on infrastructural development and maintenance in places like Jeppes Reef Border Post, Bushbuckridge Traffic College and Tekwane North School between Nelspruit and Kanyamazane. The Committee will visit the Barberton Prison project on 20 September 2016. It is implemented by the Independent Development Trust (IDT) in the Umjindi Local Municipality in Ehlanzeni District and the client is the Department of Justice and Correctional Services. Total expenditure on the project to date is R99.45 million and it is 97.5% completed. The revised completion date for the project is 1 December 2016.

Members would also be briefed on the Rob Ferreira Hospital Revitalisation Project implemented by Mpumalanga Department of Public Works, Roads and Transport (DPWRT) in the Mbombela Local Municipality in Ehlanzeni District municipality. The client is the Provincial Department of Health. The project had been completed in October 2014 with a total expenditure to date of R5.8 million. The project had created a total of 25 jobs, 15 for youth but with none created for women or disabled people. The project had improved power supply capacity to the hospital. The Department was concerned that some aspects of the design for the plant was not was not according to DPWRT standards and this caused delays in the handover of the facility as modifications to the design and the plant had to be done to conform to the standards.

Mr Thobakgale said the Committee would visit and be briefed on the Ludziwo Project implemented by the Expanded Public Works Programme (EPWP). The client is the Department of Arts and Culture and this is to be under Mbombela Local Municipality. The site handover date was 21 July 2011 and total expenditure to date is R210 000. The project was aimed at assisting school going children by addressing their educational, family support and socio-economic needs to reduce school drop-out rates. The project had created 21 job opportunities, 21 women were employed, 6 being youth and 1 person with disability. There was a challenge with the project due to lack of funds. The Department had been lobbying for additional funds from different stakeholders.

Members are to be briefed on a number of projects on 21 September and these included Jeppes Reef Port of Entry project and Mananga Port of Entry. These projects involved 36 months of maintenance and servicing of buildings, civil, mechanical and electrical infrastructure installations. The implementer of these projects is the National Department of Public Works. The client of the Jeppes Reef Port of Entry project is Border Control Coordination Committee (BCOCC) and the project is to be undertaken in the Inkomazi Municipality. The project had been completed and the site handover was done on 10 February 2012 at a cost of R7.6 million. A total of 32 job opportunities were created for the project with 8 women employed and 6 young people. The Department was experiencing challenges in terms of the non-performance of the contractor due to low tendered rates and the contractor’s price was 30% below the estimate. Certain work was not done due to low rates from the contractor and lack of qualified resources.

The Committee would later visit the Swartfontein Treatment Project implemented by the Mpumalanga DPWRT under the Mbombela Local Municipality who is the client. The project was 100% completed and the site handover was done on 16 October 2015. The cost of the project was R35.49 million. The project involved maintenance of the Swartfontein Treatment Centre and construction of housing units. The Department experienced a challenge in that the Municipal Fire Department withheld the certificate of compliance. DPWRT was engaging the Municipality to finalise this.

Mr Thobakgale said that Members would visit a number of projects on 22 September and these included the Traffic Training Project, Phaphamani HBC project and Mpumalanga High Court Project. The client of the Traffic Training Project is located under Bushbuckridge Local Municipality and the implementer is the Mpumalanga DPWRT. The project is currently 93% completed and the Department was still unclear as to when the project would be completed. A total of R76 million had already been spent on the project. The impact of the project is on job creation, increased access to road safety services to the public. The project has created 77 job opportunities with 7 women employed and 51 young people.

The Mpumalanga High Court Project is focused on construction of accommodation for all justice system users. The project is located under Mbombela Local Municipality and the client is the Department of Justice. The site handover date was 9 September 2013. The project is currently 95% completed and the revised completion date is 14 December 2016. The expenditure on the project to date is R99.45 million. The project has created 1 108 job opportunities, 830 for women and 567 for young people. The project has played an important role in skills development, job creation, integrated criminal justice and increased access to the community. There are a number of challenges experienced by the Department in this project and these included non-performance of some of the consultants, lack of capacity in bulk electricity and storm water on the boundary of the court. The Department has terminated the contract of non-performing consultants and there was an addition of bulk services to the original scope.

Discussion
The Chairperson indicated that the responsibility of the Committee is to conduct oversight over the Department and the Ministry and the proposed oversight programme should cover an array of Department responsibilities. The Committee was expecting not only to be shown projects that the Department was do well in but also those that are not doing well so that Members could offer constructive criticism. The nature of the programme should be structured in a way as to give Members a full picture of projects including challenges experienced and remedial action taken.

Ms D Kohler-Barnard (DA) said it was the first time she had served on a Committee where the oversight programme was determined by the very people this Committee would be doing oversight on. The Committee should be briefed on what was being done by the Department about the Piet Retief provincial hospital as the infrastructure was debilitated. She asked if the Department had been asked to do maintenance work on the Ekwandeni Primary School and Malanga Primary School as the infrastructure was debilitated and too dangerous for the children who attend those schools.

The Chairperson corrected Ms Kohler-Barnard, saying that the Department is responsible for DPWRT in Mpumalanga and what was being presented to the Committee was merely a proposed programme. The responsibility of the Department was to provide the Committee with an overview of the projects that had been undertaken. It was the responsibility of Members to ultimately decide which projects needed to be visited. It was incorrect to assume that the Department was the one to determine the oversight programme of the Committee as Members would be given an opportunity to include certain aspects that had been missing in the presentation.

Mr K Sithole (IFP) added that he too was initially perplexed as to how it was possible for the Department to formulate an oversight programme. It was concerning to see that there are projects that were supposed to have been completed in 2013 but are still incomplete and this pointed to poor planning. What are the reasons some of the projects are yet to be completed? The Committee should also be provided with information about the financial impact of these projects not being completed on time. It seemed like there was a lot of inconsistencies in the breakdown of the number of jobs created for young people, people with disabilities and women. The challenges identified in the Rob Ferreira 4D project including unforeseen defects of the buildings which were not taken into consideration during planning showed that there was a lot of poor planning in the execution of these projects.

The Chairperson reiterated that Members were still allowed to make suggestions to the proposed oversight programme presented by the Department. It would be incorrect for Members to assume that the Department had already decided on the projects that Members were to see during the oversight visit in Mpumalanga.
 
Ms E Masehela (ANC) commented that the presentation delivered by the Department would be helpful to Members in the process of conducting oversight in Mpumalanga as everyone would have an overview of the projects in place. It was concerning that the Ehlanzeni project only employed 4 women out of the total of 40 job opportunities as the target of government was to reach 50/50 gender representation. There are a number of women who are ready to benefit from some of the projects still being undertaken. It would be important for the Department to explain to the Committee whether National Treasury had accepted the cost escalation of the Barberton Prison project from the original contract amount of R32 938 230 to the revised contract amount of R99 796 124.

Ms Masehela asked if the Department had already appointed a new contractor for the Barberton Magistrate Office project as the previous contract was terminated for non-performance. The Department should also provide an explanation for the significant cost escalation for the Mananga Port of Entry project from R6 897 733 to the approved variation order amount of R202 833.26. She asked why the Department was involved in the construction of housing units and how this was assisting the Department in revenue generation. It looked like it would be unnecessary for Members to conduct oversight on Mbombela Maintenance of Parks and Cemeteries project as the expenditure on the project to date was zero.

Mr M Filtane (UDM) requested a list of co-audiences that would be present during the oversight visit to Mpumalanga. It would be ideal for the contractors and beneficiaries of these projects to be part and parcel of the oversight. It would be interesting to hear about the number of jobs created through these projects in Mpumalanga from the previous financial year. There are media reports that large contractors are reported to be leaving South Africa for greener pastures and this is because of a lack of big contracts from government. What had been the impact on the Department of these large contractors reported to be leaving South Africa? He asked this in the context of whether DPW had had to downgrade or upgrade some of the contractors. The Committee should also be briefed on the transformation that had taken place in these projects.

Mr Filtane wanted to know the number of people initially planned to benefit from the Ehlanzeni Project especially when one took into consideration of the challenge of insufficient funds to sustain the project and retain staff. The aim of undertaking the Barberton Magistrate Court Project was commendable in that it aimed at installation of facilities for people with disabilities. It was concerning that one of the challenges in the Rob Ferreira 4D project was a lot of unforeseen defects in the building which were not taken into consideration during planning as this pointed to poor assessment and planning. The Department would need to work together with local government to address the challenge of lack of funding for some of the projects. It would be important for the Committee to know the name of the contractor that had its contract terminated because of non-performance due to low tendered rates. It was absurd that the Department was able to appoint a contractor that charged 30% below the estimated price of the project. How was the Department involved in the HIV/AIDS related health project?

Ms P Adams (ANC) asked why DPW was not able to deal with the challenge of lack of adequate capacity of bulk electricity and storm water on the boundary of the Mpumalanga High Court. The Committee should also be provided with an explanation on the cost escalation of the Mpumalanga High Court project. What had caused this cost escalation? It was understandable that it was impossible to properly budget for the exact amount for a particular project. However, the discrepancy between the original contract amount and the total cost of the project should not be this significant.

Mr F Adams (ANC) expressed concern about the problem of fruitless and wasteful expenditure within these projects executed by the Department. The inflated amount for the projects was the “order of the day” for the Department. It was still confusing what assessment was used by DPW in choosing contractors for the projects.

Mr Mziwonke Dlabantu, DPW Director-General, welcomed the comments and questions as these would be taken into consideration going forward. It must be stated clearly that the pre-planning activities were unfortunately not done in the Mpumalanga High Court project and this once again pointed to the problem of lack of expertise in the implementer of the project (IDT). The challenges of the Mpumalanga High Court project clearly pointed to this lack of pre-planning activities. DPW aimed to change the whole contracting arrangement in order to make appropriate use of professional services. DPW was working very closely with National Treasury to focus on procurement law requirements and this was to deal with challenges in the procurement process. There is a need to have people with adequate skills in the procurement process.

Mr Thobakgale responded that DPW would ensure that the contractors and the beneficiaries of the projects are present during the oversight visit including those involved in the implementation of these projects. The information provided in the presentation was a summary of the detailed information on the projects undertaken and those that were still in progress. It must be clarified that some of the projects that are EPWP are actually implemented by non government organisations (NGOs) like the HIV/AIDS related health project. The Department of Health and the local municipality were involved in this and this is not a project that is infrastructure-based. DPW is responsible for providing necessary funding for the programmes that are based on the EPWP and the other departments that are involved also provide funding for their related projects.

Mr Thobakgale replied that the project manager for Rob Ferreira 4D project would have to respond to the challenges picked up and this included the problem of unforeseen defects on the buildings which were not taken into consideration during planning. DPW is compelled to interact with municipalities in order to get a site clearance to continue with a particular project and this sometimes take a lot of time in terms of compliance to the norms and standards implemented by municipalities. DPW had to commission a traffic assessment before DPW could be given a permission to proceed in resolving the traffic route issue in the Mpumalanga High Court project. DPW was asked to even furnish the cost of that traffic assessment. There is a concerted effort by DPW to enhance its interaction with municipalities.

Mr Thobakgale added that DPW had to consider the low tendered rate that was being charged by the contractor for the Jeppes Reef Port of Entry project. The decision was that the contract should be terminated after certain work was not done due to lack of qualified resources. It must be noted that some of the projects are implemented by the IDT and more information would be available when Members and DPW would be interacting with the implementers and contractors involved in these projects.

The Chairperson requested that the Committee should be provided with a list of projects and the implementers of those projects.

Mr Thobekgale replied that IDT was the implementer of the Mpumalanga High Court project, Rob Ferreira 4D project and the Barberton Prison project.

Mr Morake Morolo, Mpumalanga Department of Public Works, Roads and Transport Senior General Manager: Public Infrastructure, responded that the DPWRT was the implementing agency at the provincial level with a particular focus on infrastructure including clinics, hospitals, schools and social development projects. The building and maintenance of community halls and Technical and Vocational Education Training (TVET) colleges did not fall under the jurisdiction of DPWRT. The manner in which these projects are implemented is that DPWRT is given a request or instruction by a client department to be involved in the project. DPW was working based on the assessment that had been completed on the project to be undertaken. There are engineers, architects and quantity surveyors within these government departments that are responsible for conducting an assessment from the conceptualisation to the completion of a project. DPW was merely an implementing agent of government, meaning any renovation or upgrading of an infrastructure would be based on the assessment and instruction of the client department.

Mr Morolo explained that that participation of disabled people in these various projects was extremely low and this was particularly the case for low skilled and semi-skilled jobs. The absence of disabled people could be rationalised by the fact that these are the people receiving monthly disability grant from government. It is not lucrative for disabled people to forfeit the grant in order to get short-term employment in a project. It was still difficult to come across a government department or agency that had met the target of 2% for the employment of disabled people. It is always a challenge for practitioners to meet this target. There is room for improvement in the employment of women in these projects and there should be a conscious decision from DPW to ensure that the employment of women in these projects is increased. DPW would perhaps need a policy prescription on how to deal with the low uptake of women in these projects.

Mr Morolo replied that some of the unforeseen defects in the buildings of the Rob Ferreira project were related to sewerage and plumbing and the electrical cabling that was very old. The Rob Ferreira project was done in 2009 for the FIFA 2010 World Cup and therefore the project had to be fast-tracked. It was difficult for DPW to get sufficient cooperation from some of the municipalities in making site plans immediately available. About the construction of housing units in the Swartfontein Treatment Centre project, DPW was constructing the houses on behalf of the Department of Social Development (DSD) and these housing units would accommodate a total of 10 residents. The scope of work includes building an administration block, laundry and television room. The treatment centre is for people with drug addiction and this is more like a rehabilitation centre. It is the Department of Social Development that could provide an appropriate response to whether those individuals housed at this treatment centre pay rent. The centre is also being used to to attract relevant skills, particularly rare skills like doctors and nurses.

Mr Morolo said there may be a number of factors leading to the exodus of big companies from South Africa and these included the problem of collusion and the transformation agenda that had been implemented in the Built Environment. There is also an issue of political risk in the country and this might also lead to big companies opting to leave South African for greener pastures elsewhere. The project pipeline for infrastructure in the country was one of the biggest on the continent. DPW would perhaps need to do an assessment as to why these big companies are leaving the country. DPW would review the projects undertaken and review the challenges encountered in order to avoid them in the future.

Mr Dlabantu clarified that there was nothing wrong or inconsistent about the figures presented.

Ms Jabulile Mabaso, DDG: Projects; indicated that the NGOs and the implementing agencies doing work on behalf of DPW are hiring new people on an annual basis and not everyone who had been hired in a particular project would start simultaneously and this is particularly the case for EPWP. The second quarter of the financial year is when more people are involved in these projects. The poorest performing sector in representation of women was the environment and culture sector as it was sitting at 67%. The target of DPW should be 65% for women, 65% for young people and 2% for people with disabilities. The highest performing sector was the social sector at 81%. DPW was still looking at quarterly performance of these projects and this was likely to change broadly in the third and fourth quarter.

Ms Mabaso added that the main challenge in the Ehlanzeni project was funding and this impacted on the work opportunities created. The intention of DPW is to ensure that the projects are able to contribute to the delivery of public goods in the form of services and assets. DPW needed to strengthen the mechanism to ensure that these principles are adhered to especially in the EPWP.

Mr Thobekgale responded that DPW had decided to terminate the contract of the contractor at the Barberton Magistrate Court due to non-performance. DPW would verify the figures again from IDT for the total expenditure to date relative to the original contract amount for the Mpumalanga High Court project.

Ms Kohler-Barnard asked if the Department of Basic Education (DBE) had ever requested the Department to do repair and maintenance work on some of the schools like the Ekwezi Primary School in Mpumalanga. The Committee should be provided with a progress report about the four reservoirs built that are still not working.

Mr Sithole sought clarity on the status of the Mananga Port of Entry project particularly the cost escalation of the project. It would also be interesting to hear about the progress in the application for additional funding for the Phaphamani HBC project.

Ms Masehela requested that the Committee be provided with a list of projects requested by other departments for DPW to implement on their behalf. It would be important to hear if the Department was in a position to spend the entire allocated budget for the projects. It was hard to accept the excuse that the failure to achieve the target of 2% for the employment of people with disabilities was because it was not lucrative for disabled people to forfeit the grant in order to get short-term employment in a particular project. There are other government departments that are able to reach that target of 2% and the Department of Tourism (DoT) had even gone as far as 4% for employing people with disabilities. The majority of people who are disabled are young people who are supposed to go to school and work in order to feed their families and the grant they are getting is not adequate or sustainable.

Mr Filtane mentioned that the Committee would give DPW enough time to work on employment figures for these projects.

Mr Thobakgale responded that there was an adjustment to the contract on the Mpumalanga High Court project. This is a maintenance contract over 36 months and DPW was looking at the economic situation every six months so as to assess how that impacted on the contract. The Committee could be provided with the calculation on the adjustments that had been made on the contracts.

Ms Mabaso replied that DPW had to still verify with the regional programme manager for the EPWP programme for Mpumalanga to ascertain what exactly is going on with Maintenance of Parks and Cemeteries. It looked like there was a delay in the take-off of the project but the Committee would be provided with detailed information on the matter.

Mr Morolo responded that DPW usually did a planning process on the projects with client departments. The client departments would provide DPW with a list of projects they wanted to be implemented including maintenance projects and these projects are usually linked to their budgets. The budget for each and every project lies with the client department. DPW was the one who comes up with an implementation plan and there is always an exchange of communication between DPW and the client department to provide an update on the particular project. DPW had not been given a mandate on what to do in the case of the Piet Retief Hospital but this issue would be raised with the client department.

Mr Morolo stated that DPW was doing wonderful work in the maintenance and repair of schools in Mpumalanga. DPW had eradicated all mud schools in the province and there are no children learning under trees. DPW had also constructed five state of the art boarding schools in Mpumalanga and this was done to take care of the needs of children who stay on farm. The province used to have a lot of children who were dependent on farm schools and there was no education taking place in these farm schools. DPW was now in the process of completely eradicating all farm schools in the province. The eradication is part of the process of doing away with intergenerational poverty. DPW was currently dealing with a backlog in basic services including sanitation projects and the provision of water. There are about 250 projects for the DBE that would be implemented and the budget set aside for these projects is R896 million.

Mr Morolo said that Members would be provided with information about whether any maintenance work was being done on the Ekwandeni and Malanga Primary Schools. There are projects focused on tourism that are able to accommodate disabled people and this was mainly long-term employment. The construction projects are usually short-term and this was a huge dilemma faced by people with disabilities in terms of employment.

Ms Kohler-Barnard wanted to know if DPW had been asked to upgrade the National Rural Youth Service Corps (NARYSEC).

Mr Thobakgale responded that he would check woth the Department of Rural Development and Land Reform (DRDLR) about NARYSEC.

Mr Morolo replied that the construction of reservoirs falls under infrastructure that is managed by DPW. There is a water treatment unit in place that had been established to address the infrastructure for water treatment. DPW would appreciate if Members could provide the name of those reservoirs with problems so it could attend to them.

The Chairperson requested Members to forward any suggestions that could be added to the proposed oversight programme.

The meeting was adjourned.

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