The practice of members of water boards being paid monthly salaries whether they attended board meetings or not -- and especially after it had been agreed that such payments should stop – completely dominated the second half the meeting between the Portfolio Committee on Water and Sanitation and two entities from the Department of Water and Sanitation (DWS). These entities were the Trans Caledon Tunnel Authority (TCTA) and the Breede-Gouritz Catchment Management Agency (BGCMA).
The meeting was attended by the Deputy Minister, Ms Pam Tshwete, but she departed with an apology before the proposal was made by Members that the money that had been paid to Board members as salaries should be paid back. The DWS would be asked to explain its involvement at a meeting with the Committee next week.
The TCTA and BGCMA presented their annual performance and strategic plans. Both were admonished for the non-attendance of their Board members (only one from the TCTA was present), as this led to communication breakdowns.
The TCTA said its transformation strategy included the provision of economic opportunities to previously disadvantaged individuals through preferential procurement; the development of black businesses through enterprise development, particularly women, youth and people with disabilities; job creation and employment of local citizens; skills development; the provision of bursaries to deserving students from previously disadvantaged backgrounds; and poverty alleviation.
The BGCMA said it contributed 1% towards the country’s gross domestic product, and its
focus was on the equity and efficiency aspects of water associated with the availability and use of the water resources, and ensuring that these resources catalysed and supported social and economic development.
In the discussion, the issue of the raising of the Clanwilliam Dam’s wall was highlighted. The project had been halted soon after it started in 2015, and 53 workers from the Department’s construction unit had since been paid salaries amounting to around R2.5 million a month, without doing any work. The tender process had also been postponed for six months further, complicating the project from a seasonal point of view. The TCTA said that it had nothing to do with the dam, and that it was the Department’s responsibility.
Another dam with a long-term problem dating back to 1969, was the Mzimvubu Dam in the Eastern Cape, where there was still a struggle to raise money for its funding. The Deputy Minister said that she and the Minister had had meetings with traditional leaders in the Transkei the previous week, and these leaders felt they have been left behind in the process. She conceded that the project was taking time, but assured the Committee that something was going on now and that many jobs would be created.
A Member said that it was delays that were causing the costs of major projects to continue to rise, due to the effects of inflation. Entities should no longer be allowed to justify increased costs because of delays for which they were responsible.
Asked about the country’s recent downgrading by ratings agencies, the TCTA said it did not expect to be seriously affected. Although some foreign investors may no longer be allowed to buy South African debt, there were other investors who were willing to make such high risk investments.
The Chairperson thanked the Trans Caledon Tunnel Authority (TCTA) for coming to the meeting, even though there had been confusion over the date they should be there. The expected briefing by the Department of Water and Sanitation (DWS) had been rescheduled, as it was critical for them to have enough time to come before the Committee prepared. He welcomed the Deputy Minister of the DWS, Ms Pam Tshwete, and said an apology had been received from the Minister.
The date for the Committee’s Budget Vote had been set for later in May.
Ms T Baker (DA) said an ANC caucus was planned for later that week in the same venue as one of the Water and Sanitation Committee meetings, and she asked how that would affect the Committee. The Chairperson said he was working under the assumption that the Caucus would end before lunchtime, and asked Ms Baker if she knew anything about that Caucus that he did not. She joked and said that maybe she did!
Ms Tshwete said at this stage she was in and out of hospital, and asked to be excused for a physiotherapy appointment later that day.
Trans Caledon Tunnel Authority: Annual Performance Plan
The Chairperson said he wanted to outline the brief the DWS had received. In addition to what was constitutionally expected of the TCTA, they were to report on the areas of focus, the alignment of Annual Performance Plan (APP) and Strategy Plan (SP) to the National Development Plan (NDP), how the Department continued to improve the lives of South African individuals for the better, and how the Department would be contributing towards radical economic transformation.
Mr H Chauke (ANC) asked if the TCTA had a Board, and said it should be properly recorded if they did.
Mr Leonard Radzuma, Acting Chief Executive Officer, TCTA, replied that it did indeed have a Board, and that one of the Board members was present.
Deputy Minister Tshwete explained that board members were working in their own jobs full time, and that if they needed to be at a Committee meeting, that should be requested in time.
The Chairperson said that there were times when the entire full complement of the board was needed, but it had not been clarified who should have been present at this meeting. He suggested that the presentation should proceed and that the discussion could be continued later.
Mr Chauke agreed, and said he wanted it to be properly recorded.
The Chairperson added that the entities came to Parliament only twice a year and that it really did make sense to have the full complement of the Board present at such times.
Mr T Makondo (ANC) said that seeing that there was a Board member present, the CEO should actually take his cue from the Board member before he presented, because Board members were the executive authority of the entity.
The Chairperson thanked him for the guidance and said that generally the Chairperson of the Board gave an outline in a presentation, after which the CEO and Chief Financial Officer (CFO) came in.
Mr Muzi Chonco, TCTA Board Director, acknowledged and thanked the Committee for their comments, and said they were well taken. The TCTA had had a Board meeting the previous week where the presentation had been discussed. The Chairperson of the Board was supposed to be coming through, but he himself was in Cape Town and it had been decided that he would come to the meeting. He asked the CEO to continue with the presentation, and assured the Committee that everything in the report had been discussed.
TCTA’s strategic goals
Mr Radzuma said that the TCTA’s strategic goals were:
- To deliver on the ministerial directives relating to the planning, financing and implementation of bulk raw water infrastructure in accordance with specifications and within agreed timelines and budget.
- To ensure that all project activities facilitated social transformation and built sustainable communities by providing jobs and empowering women, youth and the disabled.
- To operate the business and its projects and processes in a cost-effective manner, conscious of the imperatives of the Public Finance Management Act (PFMA).
- To build the knowledge and capability of the organisation to support other water institutions in pursuit of greater efficiencies in overall water management and water services delivery.
- To ensure the continuous availability of high-calibre human capital for delivering on the organisational mission into the future.
The transformation strategy included the provision of economic opportunities to previously disadvantaged individuals through preferential procurement; the development of black businesses through enterprise development, particularly women, youth and people with disabilities; job creation and employment of local citizens; skills development; the provision of bursaries to deserving students from previously disadvantaged backgrounds; and poverty alleviation.
With the Acid Mine Drainage (AMD) project, the TCTA wanted to treat an average 30 to 33 million litres of water per day in the Western Basin in the current financial year.
Mr Nhlanhla Nkabinde, Executive Manager: Project Finance and Treasury, TCTA, said that the final funding strategy for the Mzimvubu Water Project in the Eastern Cape would be submitted for approval to the DWS in May 2017.He also said one of the Authority’s targets was to have debt managed within borrowing limits and to have all payment obligations met.
Mr Radzuma added that the TCTA was working towards having an unqualified audit with no findings, to comply with good governance.
Ms Halima Nazeer, Chief Financial Officer (CFO), presented the key budget strategies. These were:
- Partnering the stakeholders to address current water deficiencies.
- The establishment of intergovernmental partnerships and the strengthening of relationships with the DWS.
- The optimisation of resources in an enhanced work environment.
- Business process improvements.
- Exploring other business opportunities.
- Enhancement of the TCTA brand.
She also explained that there was an accounting adjustment in the snapshot of the TCTA budget that related to future tariffs due, and interest requirements.
In closing, Mr Chonco said that regarding transformation, the executive had also come up with key performance indicators regarding the involvement of black owned businesses, and in the next few months the TCTA would to come up with clear indicators as the current business model, that moved from project to project, was not sustainable. That would also cause the borrowing environment to improve.
The Chairperson said that the TCTA was an important organisation and that big numbers in terms of projects were being dealt with. Having heard about guarantees from National Treasury, he was trying to get a sense of the general trust of the entity’s financial modelling. Talks about an own construction agency and the timing of that, as well ratings and risks in the future, made questions around the financial modelling and the general trust around that necessary.
Mr Chauke thanked the TCTA for an exciting presentation. He asked the CEO for clarity with regard to the structure of the business. How long had the CEO been in an acting position, and what were the future plans? He asked about the vision of the Department of it merging with another entity in an attempt to secure its future.
Mr L Basson (DA) said he wanted to ask the same question. If the rumours of the TCTA being merged with the Water Trading Entity was true, what effect would that have on the entity’s ability to raise funds, as the Water Trading Entity was owing the Reserve Bank millions of rands?
How would the credit rating downgrading affect the raising of funds for the Lesotho Highlands scheme, and what was the effect on current loans?
Was the TCTA going to be involved in the raising of the Clanwilliam Dam’s wall? The project was estimated to cost just over R2.2 billion. What was the effect on the budget of the Department keeping 53 people there who were not working currently? Who was carrying the more than R2.5 million per month that had been paid in salaries since September 2016?
Ms T Baker (DA) asked the Chairperson if the entities had been briefed on the points they should report on. She was not sure what she should be looking at with regard to the mention of ‘radical economic transformation.’
The Chairperson replied that over and above what was constitutionally required for the entities to report on, they should include if they had programmes that potentially brought economic transformation, such as the promotion of black business. He said the issue was very specific, as the entity had programmes and within these programmes the distinction between developing businesses and developed businesses should be made. The narrative about black businesses and how one nurtured black businesses had been heard, and yet there were a number of black companies that were not being promoted to be serious players. For example, there were not any black chemical producing companies in South Africa (SA). At what point would this become a reality? Even though skills development was mentioned, talk about promotion of black industrialism was quiet.
The Chairperson said that when the Committee visited the eastern AMD basin recently, the point had been made that the TCTA was not managing the AMD basins. Expertise resided outside of the TCTA, and consultants had to be relied upon to make sure the basins were operationalised effectively. How would the Department have its own people operationalising those basins? How long would it take for the entity to have the plant for itself?
The Chairperson said that the Mzimvubu Dam project dated back to 1969 and still there was a struggle to raise money for its funding. “I can assure you that when we leave as a Committee, the issue of Mzimvubu will still be on the agenda ‘to be done’,” he said.
Mr Basson added that the Department and the entities were not assisting the Committee to create more black working companies, as the same companies worked in all the different provinces. He was worried about emerging companies not getting on their feet, because having only a few big black companies would create a major problem in the future. How was one going to deal with that? The Department and the entities should get serious about creating more black businesses by using bigger companies to get the smaller ones on their feet. He urged the Deputy Minister to take the issue up seriously with the Department.
Mr Dan Mashitisho, Director General (DG), DWS, said the Department was working with the TCTA.
Mr Chauke interrupted, and asked for the specifics of when interviews for the new CEO would be conducted, and when an appointment could be expected. He said that maybe the TCTA Board could answer that question.
Mr Matshitisho asked the Board if they wanted to respond immediately and upon agreement that he should continue, continued by replying that no merger of the TCTA and the Water Trading Entity was planned. He said the Committee would have known about that, and would not have had to read it in the papers. The Department had been surprised themselves, but that was part of the sensationalism of the newspapers and that there was no intention to merge TCTA with any structure, including Rand Water. There was a restructuring within the organisation, among others regarding the water resource infrastructure, to look at what the best way of managing would be. There were options there, as management could be done better, and at the right time this would be shared with the Committee. But there were no conclusions at present.
He replied that the Clanwilliam Dam had its own construction component within the organisation. When there was capacity within the construction component they would do the work, rather than hiring from outside. It was misinformation that the Clanwilliam Dam construction component would close down due to a lack of funds. There was no intention to do that.
Mzimvubu had been a long term project, but now was the right time for the project to move forward. Designs had been done and the Department had realised that more capacity was needed. Now was the time to fund mobilisation, and there was a potential commercial component. The “point of no return” had been reached. The project would now move forward, the sooner the better, because if it did not happen there would also be an escalation in costs.
Comment by Deputy Minister
Deputy Minister Tshwete referred to the Mzimvubu project, and said she and the Minister had been in the Transkei the previous week, where they had had meetings with traditional leaders. From the Department’s side, they were ready and what was needed now were negotiations with traditional leaders, who had previously felt left behind. Apologies had been tendered to these leaders, even though this situation had happened before the Minister and Deputy Minister’s time.
She referred to a similar situation in KwaZulu-Natal, where people had refused to move from land. What was needed at the present time, was to have a full time presence at the site of the project, because those who were outside the design of the dam were asking “why not them,” while those inside the design of the dam were asking “why them?”.
She wanted to agree with the Chairperson that the project was taking time, but assured him that “something was going on now”. It was a pity that Mr Basson was outside the room at that point in time (he was taking a phone call) because she had heard what he was saying and she wanted to assure him that a lot was going on, besides the building of the dam, such as the building of roads, for example, and there were many jobs going to be created around Mzimvubu.
Mr Chauke thanked the Deputy Minister, and said he appreciated her time with the Committee. He suggested to the Chairperson that perhaps the Mzimvubu issue should be given a specific time slot for a presentation.
The Chairperson said he would not imagine Members having any problem with that. At the heart of the Mzimvubu project, or maybe any dam, was the model that was adopted in reaching the surrounding communities. He referred to previous experience in forestry, and said that the Department owed the Committee a return on the promise that they would go back to the resettled communities. Saying to a community member “here is a piece of land, we will build you a house” was not fair and just. However, there should be no further labour on the Mzimvubu project, as that was a matter that could be responded on later.
Mr Chonco replied to the question on the appointment of a new CEO, and said that the month of December and January was inactive in this regard. It was important for the entity that the process was transparent, and he assured the Committee that the position would be advertised at the end of June and that an offer would be made the right candidate around September. A full time CEO should be appointed by October. He added that this was a worst case scenario, but that it was important to find the right candidate.
Regarding the impact of the downgrade, he replied that there was of course an increase in interest costs coming as a result. There was therefore the need for additional security on current debt. Each different project had its own specific conditions.
Mr Radzuma said that radical economic transformation was indeed a challenge. In 30 years of existence, not one company had been developed by the TCTA. However, there were two current projects where a new procurement policy could be implemented. There would also be discussions on how to ensure continuity in projects that were already in existence, such as the AMD project.
Resettlements were something that should be looked at again, and he agreed that just giving someone a house was not good enough. The same issues were coming up in the Lesotho 1 project, and that indicated the issue to be a problem that needed to be looked at.
Ms Nazeer expanded on the issue of black-owned companies not experiencing adequate economic transformation. Money was being spent on empowering black companies, but they were given only peripheral work to do and therefore they were not empowered. The strategy was being changed to have such companies become a part of the actual work. Projects were also being packaged into more parts to make them more accessible for black organisations.
She replied that the TCTA had no involvement in the Clanwilliam Dam.
The Chairperson asked who was responsible, and Ms Nazeer replied that it was the Department’s responsibility.
Mr Nkabinde said the problem with the funding model was a legacy issue. As the environment was changing, problems arose and the TCTA was challenged to find a funding model.
The Chairperson asked if there were not any room for Public Private Partnerships (PPPs) or concessions.
Mr Nkabinde replied that there was room, but that it depended on how projects were structured.
On the issue of the credit downgrade, he replied that the two obvious issues were access to funding and the fact that funding would be more costly. The TCTA did not have a separate credit rating. Foreign investors may no longer be allowed to buy South African debt, but there were investors who invest in what was now being called “junk”. He said that the TCTA’s investing universe was local institutions and unit trust managers, and that they were not hugely affected by the downgrade.
Mr Radzuma confirmed that so far the TCTA had not been affected by the downgrade, as nobody had told them “there has been a downgrade, now repay us” yet.
The Chairperson asked if the rates were fixed, or linked to inflation.
Mr Nkabinde answered that 70% was fixed, and 30% was floating, on each project.
Ms Baker said delays were the main drivers in the rising costs of projects due to inflationary pressures. How was that impacting on the current project? It was not acceptable to keep saying that the escalation in the cost of projects was due to inflationary costs, and that inflationary costs were reflected in the planning of a project. Why did entities come to the Committee time and time again with the same inflationary costs explanation?
She was not satisfied with the response that everything in the media was basically “fake news,” and said there was “no smoke without a fire.”
She wanted the DG to put on record that he had said that there were “no projects that would be delayed as result of a lack of funding.” If that was not the case, she wanted to know which projects would be delayed due to a lack of funding.
Mr Basson was troubled by the fact that the TCTA had said there were no financial difficulties.
He was surprised by the TCTA saying that they were not involved in the Clanwilliam Dam. That project would have started in 2015 and would have been completed in 2019, but it had stopped in January 2016 although there were still people costing the Department money there. The situation with the season meant that construction would now have to be done in summer time, resulting in a further delay which would cost a huge amount of money.
Mr Basson said that during the last meeting, the Department had said it owed R1.4 billion to contractors. Today, it was said that the Department owed water boards nearly R500 million, which took them to R2 billion. On 22 February, the Committee had heard that the Department got R1.1 billion with National Treasury, and that they had R800 million in the bank, and that March salaries of around R200 million and fees to contractors of around R400 million, as well as rent and the telephone account, could be paid. His calculations put them at R1.5 billion to be funded out of the new financial year. This was a “knock-on” effect, and it was not sensationalism when the media said that the Department owed, because the Department themselves had said that they owed the Reserve Bank R2.9 billion.
Mr Basson told the Chairperson that the Department’s statement that there was nothing wrong should be investigated. The country’s finances had been downgraded to junk status, and even though there were people who would take the risk to invest in South Africa, the cost would be much more. He was worried that the Department would look to the Public Investment Corporation (PIC) to fund projects, thus using the government’s pension money, and said nearly R300 million had been lost already. The Lesotho Highlands scheme would cost much more if new funding had to be found. He said that 40% of SA’s stock exchange companies received funding from outside the country, and asked those present at the meeting to imagine what would happen to infrastructure if those funds were to be withdrawn due to the downgrade. As it was, South Africa was under enough stress already to fund its infrastructure.
Inkosi R Cebekhulu (IFP) asked if the bursaries for deserving students were being advertised.
Mr Chauke wanted to follow that up, and asked what the impact of those bursaries had been so far. How much would be raised in this year, and for which project? He said that the Committee may want to reflect on the financial issues raised by Mr Basson.
Mr Makondo asked if the TCTA was in a position to indicate how far it would have gone in the next few years in terms of building capacity for radical economic transformation. He said that since 2014, it was known that the TCTA’s space was dominated by white companies.
The Chairperson asked if the TCTA was able to say how much of their total budget had gone out to black companies, and how much to white companies?
Mr Radzuma replied that the TCTA was able to provide that information. He knew for a fact that money went into developing businesses, but the problem was that the businesses did not operate at the core of projects.
The TCTA advertised bursaries, but it was not satisfied with the impact, mainly because other companies enticed their students away. It was an area where it could do more.
Ms Nazeer said that in the past, it had set targets for various projects and these had been exceeded. The TCTA had a lot of data that they could provide.
Mr Nkabinde said that the TCTA did not think that the cost of funding would be too extreme. There was no doubt that it would cost more, but it would not have a huge impact on water targets. He also said they would keep track on their colleagues in Lesotho.
Mr Chauke asked for clarification on the role of the National Treasury.
Mr Nkabinde answered that there was a representative of the Treasury on the TCTA board, and that Treasury was well aware of their position.
The Chairperson asked if the TCTA could say that it was well cushioned, and mentioned the 70% fixed interest rate.
Mr Nkabinde said that it was just one of the provisions they had taken.
Mr Chauke said part of the TCTA’s mandate was to deal with AMD, and asked them to elaborate. He referred to the Committee’s visit to Water Week in Durban and the impressive TCTA stand demonstrating their AMD project. What had been achieved so far?
The Chairperson agreed that that progress was important.
Mr Radzuma said plants at the central and western basin were now functional. At the eastern basin, water was being treated and released back into the system. The challenge put to the TCTA by their board was that a lot of money was being spent to clean water that was just being released, while Eskom and Sasol were being provided with expensive water from Lesotho. The TCTA was in discussions with Sasol regarding this.
Mr Nkabinde added that the funding for the long term solution of AMD was integrated.
Mr Matshitisho said that the Department owed the Committee another session to show the remedial action it had taken since the last meeting. The debt of R2.9 billion had been pushed back by R700 million. It was not only the TCTA owing the water boards, but that one of the water boards owed the TCTA R1.7 billion.
Regarding the Clanwilliam Dam, he said the Department used its construction unit when it was cost effective to do so.
He had not said that the Department did not have financial challenges. Last year there had to be a focus on interventions because of droughts. This had had a serious effect. There were financial challenges in the Department, and it was doing everything possible to address them. This would all be discussed at the next meeting.
The Chairperson suggested that the Department should be allowed to come before the Committee again, and indicated that the Auditor General’s office had expressed interest in such a meeting.
Mr Basson asked for clarity on the debt that had been pushed back, and said that he hoped that the Department had not used its budget of last year (which was R700 million) to reduce its loan, because that money had been earmarked for infrastructure. He also said it had never come before the Committee that the Department’s budget had been cut by R9 billion. The Department’s construction unit had been placed at Clanwilliam in December 2013 and they had been taken off the project, and the tender process been postponed for six months.
The Chairperson asked if Mr Basson agreed that this issue should be discussed when the Department next came before the Committee.
Mr Basson said the Department must come prepared.
The Chairperson said that he was saying the same thing.
Mr Chauke agreed, and asked if the Committee could have its own session before seeing the Department.
The Chairperson said that the Committee would have its own session before they recessed.
Breede-Gouritz Annual Performance Plan and Strategic Plan
The Chairperson said that the Breede-Gouritz Catchment Management Agency (BGCMA) had apologised for the chairperson of their Board not being present, and asked if there were any Board members present.
Mr Phakamani Buthelezi, Chief Executive Officer (CEO) said there were none present.
The Chairperson reiterated that it was important for the Board to be present, otherwise information got distorted. The Committee did not tamper with the entity’s internal communications, but it was very keen on there being only one expectation and not different expectations from different people. Only one message should go out.
Mr Buthelezi opened the presentation by saying that water needs to be looked at economically, and that the BGCMA contributed 1% towards SA’s gross domestic product (GDP).
- The strategic outcomes for the institution were:
- To have water resources shared for equity and development;
- To focus on the equity and efficiency aspects of water associated with the availability and use of the water resources, and to ensure that these resources catalysed and supported social and economic development;
- To protect water resources for the benefit of people and the environment;
- To focus on the management of the water resources and freshwater ecosystems and to ensure that these resources continued to provide the goods and services upon which society and the economy depended;
- To have stakeholders who were cooperating for legal compliance and resilience;
- To focus on the management of institutional aspects.
He closed by saying that since 2005, the entity had received unqualified audit reports, and told the Committee that similar institutions to themselves had come from Zambia, Namibia and South Sudan to learn from them.
The Chairperson thanked Mr Buthelezi for a short and precise submission. He told the DG that the submission reminded him about the Overberg Water Board which had not come through, and that there were serious implications. At some point, the Department and the Committee would get it right. He mentioned another water board, Mhlathuze Water, which had simply absconded -- “for the lack of a better word”. He said that there were those challenges to be dealt with, and that whatever those Boards were spending they were spending it illegally. That did not paint a good picture for the Department.
Mr Chauke said he appreciated the presentation, but was concerned about the absence of the Board members. When was the meeting with the Board held? He also wanted BGCMA to elaborate on Board-related costs. How often did this Board meet? Although these might seem like small questions, they were important because when the time for the debate came, the Committee needed to assure the public that it was fulfilling its oversight role.
Ms Baker wanted a clear picture on the state of resources at the Gouritz River in the light of the current water crisis, and whether the situation would have an impact on water tariffs.
Mr Makondo said that the entity’s salary bill was huge. Why was that, and what was the threshold? He supported Mr Chauke’s concern over Board salaries, and said there was an issue with another water board whose members got monthly salaries instead of getting paid only when they attended meetings.
The Chairperson said that Ms Baker’s question on the drought was pertinent. He criticised the entity’s document regarding its formatting, saying that the Committee was not mentioned and that there was no sense that the entity was owned by the DWS. Comments by the CEO and CFO were also lacking.
Mr Buthelezi replied that the Board was fully aware of the presentation, and had approved all parts of the Annual Performance Plan (APP) in November 2016. A draft had been signed in January 2017 and at the last meeting on 30 March, confidence in the plan had again been expressed by the Board. He said they communicated on a regular basis. The Board members were paid according to the directive coming from the Department. The Board met on a regular basis.
He replied to Ms Baker that the BGCMA was playing a very important role in the water crisis by engaging with municipalities and water users, among other things. It attended almost all the meetings brought to their attention by various water committees, where they did presentations and promoted water-wise projects. 25% of the water used in Cape Town was coming from its area. It religiously preached the drought challenge, but generally the rivers were ‘okay.’ There were water monitoring points throughout their rivers, whose results were collected on a monthly basis.
He replied to Ms Makondo, saying that the systems they used for their salaries were exactly the same as the salary structure of the Department. It did not formulate its own system. The BGCMA was a service orientated entity, and the work rendered to water users was being done by its own officials. The salaries were therefore justified.
He said that the entity could work on the formatting of its presentation to accommodate the Chairperson’s suggestions.
Ms Zanele Mngoma, Chief Financial Officer (CFO) said that their Board members were paid per month, the same as the Board of the Komati Basin Water Authority (KOBWA). In addition to that, they also received a travelling and subsistence allowance.
The Chairperson asked why they received that.
Mr Buthelezi said that it was an instruction from the Minister.
Mr Anil Singh, Deputy Director-General: Regulation and Compliance, DWS, said that the Board was a functioning Board appointed in 2007. The Chairperson had since retired, and now there was an acting Chairperson who was a black male, and this contributed to transformation. The cap on Board remuneration was around R1.2 million. The guideline was what public servants received. The Board was a highly specialized team whose functions could not be outsourced.
Mr Makondo said he wanted to understand the issue of Board attendance, because there could be situations where people were paid and did not attend meetings. That was a problem. There were serious challenges with a number of Boards, such as in Overberg and Bloemhof.
Mr Chauke asked what mechanisms were in place to monitor attendance. How much had each member been paid since 2007? This was important, because it was public money that was being spent.
He also said that the first page of the report must be corrected and the Committee must be mentioned because otherwise, years down the line, it would not be known where the report had been presented.
He said that mention was made of a new chairperson of the Board, and that he was black, but he wanted to know about the composition of the Board. Who were the people, and what were their qualifications? He reiterated that the Committee needed to show oversight of the Department and its entities.
The Chairperson said that question that was being asked was why Board members were remunerated on a monthly basis. If it was a policy, it was a wrong policy. It was supposed to be the other way around – Board members should be incentivised for coming to meetings. He said that Breede-Gouritz probably had a poor attendance register. This had been discussed last year, and the impression had been given that this would stop. He said that this practice did not exist anywhere else.
Mr Singh said the situation of paying Board members a stipend or advance had been corrected. A practice note had gone out to say that this should stop. He said that the Board was evaluated as a whole and individually, and that the Department was happy with the Board’s performance. The practice of paying people to sit at home was never encouraged, and the situation had since been corrected. A report came through about the attendance of members, and if more than three meetings were missed, the Minister could dismiss the Board member. The practice note and the report could be provided.
Mr Singh replied to Mr Chauke that the transformation of the water sector was a very important aspect. Because of continuity, the Board had been kept since 2007, but there would be a call for nominations for a new Board soon. Mr Buthelezi could elaborate on the issue of Board members not advancing the transformation agenda of the entity. That was a big challenge. Mr Singh said that there was always contestation between emerging farmers and “white” farmers. Emerging farmers should not be disadvantaged in terms of reform. He said that a written response on the remuneration and attendance of Board members would be provided.
The Chairperson said the question was what the current practice was.
Mr Makondo said that Mr Singh could not speak as if he had just arrived, and he was confusing the meeting. He asked when the policy was corrected, if it was corrected, and said that there could not be two answers for one question.
Mr Chauke proposed that if the practice of paying the Board members monthly still existed, the amount must be disclosed and the money must be paid back, because it was public money and that should be respected. He also said that timelines for the advertising of the new Board was needed. He wanted details of the composition of the Board and their qualifications.
Mr Singh said that there were nine members -- six males and three females -- who were knowledgeable in the field of water resource management, and the Department wanted to have a balance of skills. This was reflected in the advertisement for the new members.
He said that the Committee had made valuable comments, and monitoring and evaluation would have to be improved on. The Department was looking at renewing the remuneration policies of the water boards.
The Chairperson asked if this meant that the Board members were now being paid monthly.
Mr Buthelezi said that was correct.
The Chairperson asked if he was aware that that was wrong.
Mr Buthelezi said he was.
The Chairperson said that that needed to be corrected, and that there was a proposal from the Committee that the money should be paid back, because the members had been paid against the position of the Committee.
Ms Baker said that there were other water boards doing the same, and that the Minister should account to the Committee on that. She had already made the suggestion to the Department in a written request that Mhlathuze Water should pay the money back. In a court case, the court had ruled that that Board was not valid – but they were still there. Ms Baker said the Committee must look at all the Boards.
The Chairperson said he needed his Committee Members to be very clear so as not to confuse themselves or others. The issue was that Board members should not be remunerated monthly, and against the backdrop of the practice note and report, that practice had continued. That was what should be dealt with. Focus was needed.
Mr Chauke said that this was correct and clearly understood. He said that the money must be paid back by the Department within seven days, and that there must be a report on the status of all the boards and their remuneration and composition, as well as whether they were legal or not. If the money was not paid back, then a criminal case must be opened. Failing to do this would be failure of oversight.
The Chairperson said that the Department would come before the Committee in the following week, and that the entire day would available. He asked if it could be expected that the Boards who were continuing to pay their members on a monthly basis could be discussed. The rest of the issues, including the issue raised by Ms Baker, had been noted.
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.