The Department of Tourism met with the Committee in order to brief Members on Quarter One and Two of its performance for the 2017/18 financial year. The Department presented its performance in the different programmes including targets, areas of achievement, non-achievement and the reasons therefore - 89% of the targets were met. Under-achievement was recorded in the Tourism Incentive Programme (TIP) which was caused by the discovery of protected species on the construction site leading to unspent funds of R25 million. Under achievement in the Expanded Public Works Programme (EPWP) led to the loss of R53 million in incentive funding. Another under achievement was recorded in the Accreditation of Travel Companies (ATC) - the Department said there was a deliberate end to the planned ATC because further deliberation revealed the ATC would not achieve its purpose but the accredited companies would use it to their advantages.
The Committee then engaged the Department on the presentation – questions probed why there was under spending of R88 million, what the Department was doing to avoid a repeat of underachievement leading to a loss of incentive, the impact of curtailment of expenditure over service delivery and why six learners dropped out of training. Members also wanted to know what the Department was doing to assist beaches in maintaining their blue flag status, assisting those beaches who had lost their blue flag status and why there was no signage on the N3 indicating the Nelson Mandela Capture Site.
The Chairperson, after welcoming the Department of Tourism, accepted the apology from Ms L Makhubele-Mashele (ANC) who had to leave the meeting because of news that her husband was involved in a car accident.
National Department of Tourism Quarter 1 & 4 performance
The Chairperson requested the Department to explain reasons behind the R88 million under spending. She noted that the performance of Programme Three had improved compared to previous years.
Mr Victor Tharage, Director-General, Department of Tourism, tendered the apologies of the Minister and Deputy Minister due to clash with another meeting. He noted the delegation was accompanied by two interns – they were accompanied in order to understand accountability, experience Executive planning sessions and ensure they were fully equipped by the end of the internships.
The R88 million was comprised of two parts - R53 million under the Tourism Incentive Programme (TIP) and R25 million under the Expanded Public Works Programme (EPWP). The EPWP target was not met which prevented the Department earning additional appropriation (incentive appropriation). The R53 million would have been earned i.e. it was not already with the Department. The TIP fund was for a project in the Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority (CATHSSETA) but there was a delay in the project because some protected plant species were found at the site which necessitated a change in the design and needed technical people to intervene. A roll over was requested by the Department from National Treasury. Although third parties were involved in areas of non achievement, the Department took responsibility for non-achievement.
The Department tabled its annual report yesterday and the entire portfolio of the National Department and South Africa Tourism received a clean record. Overall, about 89 percent of planned targets were achieved and the Department received a god rating for monitoring and evaluation although the Department was short of 85% in its rating for Performance Assessment Tools. The Executive Development Programme for women began to fruit as four participants progressed to General Manager’s Status. There was good progress for Quarter Four in comparison with Quarter Three.
Programme 2 (Policy and Knowledge Service)
Ms Shamilla Chettiar, DDG, Tourism Product and Infrastructure Development, Department of Tourism, said out of the 18 targets in Programme Two, 15 Targets were met. One of the targets not met was the completion of the National Tourism information Management System. The Department consolidated input from the industry and looked at the tools but the regulation was not promulgated to avoid immature delivery - the regulation had since been finalised. The second target not achieved was the baseline study on the amended tourism Broad-Based Black Economic Empowerment
(B-BBEE) sector code - the Department delayed the process to re-visit the methodology and governance. Although the construction of Shangoni Gate had not commenced, the flood line studies were completed and service provider appointed. Construction had recently commenced in one of the sites and the Environmental Impact Assessment was completed and a public participation meeting had also been held.
Programme 3 (International Tourism Management)
Ms Anemé Malan, DDG, International Relations, Department of Tourism, said there were 10 targets under Programme Three out of which nine targets were achieved. The Accreditation of Travel Companies (ATC) was implemented successfully in China. The visa waiver for Russia eliminated the need for ATC in Russia. Close examination of the situation in India and some other African countries showed facilitation will not improve visa processes in these countries but lead to exploitation by accredited companies.
Programme 4 (Domestic Tourism Management)
Ms Morongoe Ramphele, DDG, Domestic Tourism, Department of Tourism, said there were 20 targets under Programme Four which were achieved. A reasonable amount of work was done on three targets while one target, the EPWP, was not achieved as explained by the DG. The three targets not achieved at the end of the Fourth Quarter were achieved by the end of the financial year. There was a target around the Tourism Human Development Strategy - the Department was supposed to have engaged the public on the Strategy but this was moved to the next financial year.
Programme 1 (Administration)
Ms Lulama Duma, DDG, Corporate Management, Department of Tourism, said there was improvement in performance in Quarter Three. The issue was around the Tourism Amendment Bill - the amendment was not submitted to Cabinet and not published for public comment because the Department wanted to do a comprehensive review of the legislative framework.
The Chairperson asked the delegates to provide information on the financial performance of the Department.
Mr Tharage said Programmes One to Four had financial performance of 96, 96, 98 and 95 percent respectively – this gave an average of 96 percent financial performance for the Fourth Quarter of the 2016/17 Financial Year. There were issues of grievances which were reported in Programme One (Administration). Out of about 500 people in the organisation, only about two grievances were related to post placement during the restructuring were reported. Other grievances were related to small scale financial misconducts. The National Tourism Strategy (NTSS) went to Cabinet and was consulted – the Department was in the process of finalising the Strategy and this should be done by October 2017. There were some sensitive issues under consideration delaying the legislation but it was expected the legislation would come before Parliament at the beginning of the 2018/19 Financial Year. The ATC was not carried out because, on examination, unintended consequences will inflate the cost of travel packages and this will outweigh the benefit of easy visa facilitation.
The Chairperson asked the Department to update the Committee on the Ocean Economy.
Mr Tharage responded that the Department received final approval on the Ocean Economy on 16 August 2017 – the Department could brief the Committee on the full plan in relation to the Ocean Economy. The NDT was ready to for implementation. There were certain successes already recorded and an investment proposal of R150 million from the private sector.
Ms P Adam (ANC) was passionate about the EPWP but did not understand the explanation of the DG - she asked if the Department got another allocation when it reached its target. She also asked if the Department had a plan for when, or if, it reached its target - there was a need to make such plans. R88.4 million of the Department was under-spent - what measure was the Department putting in place to avoid this? Under-spending was a serious risk for the Department. She asked how curtailment on software costs and other tangible assets, as stated in the report, impacted service delivery. She was unaware that the Department needed to report to the Department of Public Works because she was a Member of the Portfolio Committee on Public Works and can take the Department up on why it did not approve the Department of Tourism’s request. She asked how the companies for ACT were identified, assessed and selected. She noted there was no training in some of the Programmes and wanted to know how the Department determined training for each province because there was an imbalance in the training between provinces.
Mr G Krumbock (DA) found the Report of the Department to be a bit summarised which made engagement difficult. Nevertheless, he asked how the Department responded to micro-economic growth trends - Africa was in the top six for global economic growth but had sine been overtaken by Europe. Angola was currently the third biggest economy in Africa – did the Department evaluate a change in strategy bearing in mind that Africa was slowing down in expenditure? He asked for clarification on the signage mentioned in the Report and asked what the Department was doing to put signage on the N3 that would advertise the Nelson Mandela Capture Site. What was the Department doing to help blue flag beaches maintain its status and what interactions were in place to help those beaches restore blue flag status after it had been lost?
Ms E Masehela (ANC) hoped the improvement would continue in the new financial year. She asked why six learners dropped out of training and what the Department was doing to address learners’ drop-out. Of what help would the Tourism Investment Master Plan be?
The Chairperson asked if incomplete projects in Quarter Four of the 2016/17 financial year spilled over to Quarter One of the 2017/18 financial year. Tourism was responsible for job creation - the Nelson Mandela Capture Site was very important even for domestic tourism. She suggested the issue of the signage should be taken to the Deputy President. What was the Department doing to ensure that projects in the Transition Master Plan were ready for investors? More detail was needed on vacancies in the Department.
Ms Malan said the registration of visa facilitation companies in China was very thorough and, having examined criteria for registration with the Northern Cape Tourism Authority (NCTA), the Department agreed to register any company that had been registered with the NCTA.
Ms Chettiar said the Investment Master Plan (IMP) was developed last year in consultation with provinces and local authorities. It would assist local authorities and provinces to package tourism related projects so that it can be sold to public and private partners. The beaches blue flag achievement and maintenance was project of the EPWP. The Department was working on raising the standard of the blue flag. The Department was also working on the green coast project which helped beaches that had the potential to reach blue flag status. The Department started with 50 of such beaches and now had 75. When the target was met, there was an incentive allocation that can be utilised - the reason it was not approved by the Department of Public Works was that the targets were not met.
Ms Ramphele said the criteria for determining the number of people to be trained in each province were based on the number of organisations that were ready to take up learners - the training was 70% practical and 30% theoretical. There were fewer companies in some provinces which meant fewer learners being trained. KZN, Gauteng and the Western Cape had more companies who were willing to take up the learners, The Minister planned to meet with businesses in this regard and it was hoped the intervention would lead to more learners being accepted.
Some learners dropped out of the training programmes due to falling pregnant and finding permanent employment while others were absconded. Out of 570 candidates, 518 graduated. 90% of the candidates passed and 66% graduated with distinctions and merits. 19 hotels participated in the programme - nine hotels retained all their learners and achieved a 100% pass rate.
The signage in the Report was an interpretation signage i.e. the signage within the attraction (within the park). The South African National Road Agency (SANRAL) did not allow signage on national roads.
Ms Duma said the vacancy rate in the Department stood at 6.6% as of the end of the financial year -this was below the targeted rate but was due to restructuring. The vacancy rate stood at 14% as of the beginning of the 2017/18 financial year. Restructuring in the Department brought about more positions and 56 additional employees were recruited. An advertisement for 38 positions would put the vacancy rate at between 9% and 10% for the current financial year.
The Department decided to shutdown provincial offices and change management processes were being applied to see how the employees from the provincial offices could be absorbed or relocated. No employee could be retrenched because there were vacancies to be filled.
The Chairperson asked if the Department was comfortable with what was happening in the municipalities. How did the Department maintain communication and coordination in terms of the work municipalities were doing? The Department gave a large chunk of funds to South African Tourism (SAT) – did the Department have good oversight over the organisation?
Mr Tharage explained that interaction with the different municipalities differed. The Department sent letter to the municipalities informing them of new projects, its implications and opportunities for the municipalities. There were proper organisational engagements between the Department and municipalities.
With SAT, the Department looked at governance and strategies. Although the Department did not dictate to SAT on the strategy to apply, it had oversight in ensuring the strategies met certain standards, for example, if it took the broader guiding objectives in response to the national strategy. Oversight over SAT was to ensure rationalisation and good governance. People to people relationship helped the Department - there were a few agreements in the pipeline to strengthen such relationships. In terms of feedback from other African countries, it was said that SA also needed to visit other African countries. It was also observed that more African Americans were becoming interested in the African continent. These strategies were not dictated to SAT. The Department was working in a fiscal constraint environment and must prioritise objectives. The Department was ultimately contributing to the South African economy.
Ms Ramphele added that there was formal and informal capacity building in local government. Informal aspects were reported to the Committee quarterly. The main purpose of capacity building was to provide an integrated approach for the public sector community sector and create a platform where stakeholders can engage. The Department realised the best entry point was at district level. Formal training was done through the University of Pretoria. 103 officials and 35 municipalities had gone through the programme. There was a unit that looked into the Intergovernmental Relation policy and legislation issues for local government and provinces to ensure planning and implementation synchronised. The Department had engaged the Department of Cooperative Governance and Traditional Affairs (COGTA) and the SA Local Government Association (SALGA) on the new units and was in the process of identifying priority areas so that resources were utilised effectively.
Mr Krombock said one of the good things about the Committee was that party politics was not allowed and this enabled several achievements. There was a brown sign on the N3 advertising a golf club (which he showed to the Committee and Department on his phone) – if this could be done why was the Nelson Mandela Capture Site not advertised? The site was of monumental value to the nation. He could not accept the response from the Department that it was engaging with SANRAL as it was not the first time such engagement was being reported. Why were double standards being applied? Nelson Mandela is a national hero.
The Chairperson agreed with Mr Krombock - there was a need to take the issue to the powers that be in the nation. She asked if the DG had been to Treasury to ask for funding. What would the Department do if the European Union (EU) wanted a taste of rural South Africa?
Mr Tharage said the Department did not want to make excuses and said matters raised in the Committee were taken seriously but the Department had its arms tied in this instance of the road signage as it was outside the mandate of the Department. He suggested the Committee call the party that was mandated to deal with the matter for discussion. The Department would like to avoid being in loggerheads with other departments because there was always a need for interdepartmental relationships. The Department would also not want to mislead Parliament by giving false hope that the signage would be installed on the N3.
Mr Krombock said the proposition of the DG was acceptable. If signage presently on N3 was legitimately installed there, there should be no reason why the signage for the Nelson Mandela Capture Site should not be installed. He asked if the DG was aware of any latitude that allowed a golf course to be advertised on a national road but there were restrains in erecting signage for the Nelson Mandela Capture Site.
Mr Tharage was not aware of such latitude. For the sake of clarity he said the 2015 budget vote referenced the interpretive signage done at different heritage sites. Although the Department would not turn away from requesting such signage as it brought attraction to such sites, the signage referenced in the Report was to interpretative signage. There was awareness the Department was working in a fiscally constrained environment and so it would be appreciated if funds were not cut. The Department was doing a lot in the rural areas even in the enterprise development space.
The Chairperson said the next engagement between the Department and the Committee would be on the Department’s Annual Report. The Budget Review and Recommendation Report (BRRR) process would take place on 13 October 2017.
The meeting was adjourned.
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