Documents handed out: Auditor-General letter; Organogram [not available for public]
The Portfolio Committee met with the Department of Water and Sanitation (DWS) to be updated on a wide range of outstanding items from the Department.
The Chairperson requested that the Department’s organogram be explained before starting the presentation, in order to get a sense of how it was structured and populated, particularly at the senior management level. He wanted to know whether there were other Deputy Directors General (DDGs) who were not included in the organogram. A Member of the Committee said that he did not agree with the organogram’s structure, and that it looked misleading. Another Member asked when the Department was planning to fill the vacant positions, pointing out that five senior managers were in acting positions. The Department responded that the organogram showed the current structure of the Department which was approved in 2014, and the Committee was made aware in 2017 that the DWS was in the process of reviewing its structure in line with the National Macro Organisation of the State (NMOS), integrating the sanitation function, amongst others, into the Department as well as other structural changes to align it to the strategy of the Department. There was also discussion on the number of posts attached to the Minister and Deputy Minister, and the reasons for the suspensions of three DDGs.
Other issues covered included:
- The construction of the Umzimvubu Dam, and China’s role in providing infrastructure support through grant funding, low interest rates and procurement of materials.
- An update on Sedibeng Regional Sewer Scheme dispute, which involved a community uprising due mainly to community members demanding to be employed on the projects. In some instances, work stoppages were totally unrelated to the projects.
- The outcome of the intervention by the Department through its implementation agency, the Magalies Water Board, on water issues in the Kgetlengrivier Local Municipality
- The suspension of officials, and in particular the knock-on effect of moving people to acting positions across the Department.
- Progress on the findings of the Motau report on finding sustainable solutions to procurement issues.
- Responses to the findings of the Auditor-General on the 2016/17 financial and non-financial performance of the Department and its entities.
- Key achievements from July 2017 to January 2018 were listed.
The Chairperson said there was only one item on the agenda which covered outstanding items from the Department. There was an one apology from the Minister of Water and Sanitation, who was booked off due to ill health. The budget review recommendation reports had been distributed for the purpose of following up and implementation of those recommendations. The Speaker of the National Assembly had written to the Minister about the recommendations, asking for her to respond on them. This was the procedure which the Committee would follow, and it would forward its response to the Speaker via the National Assembly.
Ms Pam Tshwete, Deputy-Minister of Water and Sanitation, had a list of the issues which the Chairperson wanted answered. These would be raised or addressed in the presentation, including an organogram of the Department, as requested by the Committee.
The Chairperson requested the presentation to begin by looking at the organogram to get a sense of how the Department was structured and populated at the senior management level, particularly at the level of Deputy Director General (DDG).
Mr Sifiso Mkhize, Acting Director General: Department of Water and Sanitation (DWS), presented the organogram and said that they had also included the acting positions and the filled positions, as well as the unfilled positions and vacancies from the level of Chief Directors (CDs), DDGs and upwards. At the top was the Ministry, then the DG, then a unit called Risk and Internal Audit, and the top structures that were at a DDG level.
The Chairperson wanted to know if the DDGs that were shown in the organogram included everyone at the DDG level, and which other DDGs were not included on the organogram.
Mr H Chauke (ANC) said that he did not agree with the organogram’s structure. He did not agree with someone being represented by someone else at meetings, as well as some of the delegation members who were there in the capacity as representatives of other people.
Ms D Manana (ANC) said that she was new to the Committee, but it was dealing with a Department of constant acting positions. She wanted to know when the Department was planning to fill the vacant positions and not keep dealing with acting positions. More than five positions were acting positions.
Mr Conrad Greve, Chief Director: Human Resource Management: DWS, said that the organogram showed the approved current structure of the Department. It had been approved in 2014. The Committee had been made aware that in 2017, the DWS was in the process of reviewing their structure in line with the National Macro Organisation of the State (NMOS), integrating the sanitation function, amongst others, into the Department as well as other structural changes to align it to the strategy of the Department. That was a process which they were busy concluding, and had been working on it for about 18 months – the Minister had commissioned it in 2016, and finalisations were about to take place.
In the meantime, the organisational structure had been in place since 2014. The operational integration was the unit that linked the nine provinces under one DDG. However, due to the evolution of the Department, that position was not currently functionally filled, and the regional managers all reported directly to the Director-General, but the Department was currently addressing that in their new proposed structure which would be briefed to the Committee in due course.
The Chairperson said that this was understandable, and the Committee could move on. It could be accepted that one person could be in charge of something but was doing work in another section as well.
Mr Chauke, wanted to know when the review had started and when it was expected to be completed. What had been the involvement of the Department of Public Service and Administration (DPSA) in the review?
Mr Greve said that the review of the structure had started in the middle of 2016, when a service provider had been appointed to assist in reviewing the structure in line with the mandate and the strategy of the sanitation function, which had been added. It had started off with a diagnostic analysis, which was an exercise which had been undertaken during which all the regions had had the need for the structure review explained. It had also included a climate survey. There had been consultations at the executive management level, from the DDG level moving down to Chief Director. Within the next few weeks the Department would be able to table the final structure to the Ministry of Public Service and Administration (MPSA), and once the Minister and Treasury had agreed and sufficient funds were made available to fund the structure, the Minister would be able to sign off and implement it.
Mr Chauke wanted to know for what purpose the review was being done, and what informed it.
Mr Greve said that what informed the review was that structure followed strategy, and the idea was to align the organisational structure to the Departmental strategy.
The Chairperson said the explanation given was sufficient, but he wanted to know what went into the Ministry’s structure.
Mr Greve replied that the Ministry’s structure was purely personally support for the Minister and Deputy-Minister. There were specific positions that were provided for in the Ministerial handbook, which served as a guideline.
Mr Chauke wanted to know how posts were attached to the Minister and Deputy-Minister.
Mr Greve replied that there were primarily 10 posts for the Minister, and six for the Deputy-Minister. However, there were provisions for additional support.
The Deputy-Minister acknowledged that there were six in her Ministry, excluding the two administrators.
The Chairperson asked how many DDGs there were in the Department.
The Deputy-Minister suggested that the Committee should refer to the organogram to see how many DDGs there were, in order to answer that question.
Mr Chauke said to the Deputy Minister that the DG seemed to be sleeping, and she should not come to his aid.
The Chairperson said that the question was very simple and required a simple answer. How many DDGs were there in the Department? He wanted to know the position of Mr Aviva, who was supposedly a DDG in the Department.
Mr Greve replied that he was unaware of Mr Aviva’s salary level, but he did not occupy a DDG position in the Ministry, because there was no such position.
The Chairperson asked for a response from the DG as to whether Mr Aviva was a DDG.
The DG replied that Mr Aviva was not a DDG, and as far as he knew, there was no level for him as a DDG.
The Chairperson said that when Mr Aviva had gone out and introduced himself, he had introduced himself as a DDG.
Mr Chauke stressed that the sitting was taking place in Parliament and the Committee was expecting accountability, and there was no way that people could go to Parliament and present misinformation. When asked a question about how many people were in the Department, then the information should have been known. He pointed out that the Minister of Public Service and Administration, Ms Faith Muthambi, was in hot water because she had bloated her office with people who were not meant to be there -- she had over 40 people in her office, and the matter was before a Committee of Parliament. All Committees were made to look at the structures of the Departments, starting with the office of the Minister, and working down.
Ms Manana said that the question was a very simple one: How many DDGs did the Department have? The organogram showed nine, but already a misleading error indicated that one DDG was not mentioned in the organogram, and that brought it up to 10. The other extras that were not mentioned were unknown, and that made the Committee believe that the organogram was not a true reflection of what was going on in the structure of the Department.
Mr Chauke said that delegation members should be prepared to answer questions when they attended meetings, and not say it would be answered next time because the issues could not keep going back and forth. Even if delegation members had to leave the room to make calls to find out the information, then that was what they would have to do.
Umzimvubu Dam, and the role of China
Mr Mkhize addressed the Committee on progress in the construction of the Umzimvubu Dam, and the role of China in the project.
The Mzimvubu Water Project (MWP) was categorised as a social development project, with the key goal being to address the water needs of the underserved, poor rural communities and to facilitate regional economic development by using the water resources of the Mzimvubu River as a catalyst for change.
The DWS did not have an agreement with the Chinese Government on the construction of the Mzimvubu Dam. However, on 29 July 2016, a letter of intent between the DWS and the Eximbank of China was signed, in support of engagements and processes led by the Presidency and the Department of International Relations and Cooperation (DIRCO). The economic viability of the project was questioned. During the Johannesburg summit of the Forum on Chine-Africa Cooperation (FOCAC), held in December 2015, Chinese President Xi JinPing had announced that China would invest a fund of US$60 billion to support the development of China-Africa Cooperation for a limited period of three years (ending December 2018). The two Presidents oversaw the signing of the state-owned entity (SOE) cooperation framework agreement between the Trans-Caledon Tunnel Authority (TCTA), from the South African side, and the China Communication Construction Company Ltd (CCCC), during a state visit. Subsequently, on 29 July 2016, the Minister of the DIRCO, Ms Maite Nkoana Mashabane, and the Director-General of the Presidency, Dr Lubisi, had led a team to Beijing to further strengthen the bi-national agreement between the Republic of China and the Republic of South Africa.
Role of China: Funding Infrastructure Development
The Mzimvubu Water Project was one of the FOCAC flagship projects considered for funding by the Chinese Government. It was identified as one of the priority projects under the FOCAC targeted for Chinese assistance as an initiative to alleviate rural poverty in South Africa, as part of the 10 initiatives announced by Chinese President Xi JingPin during his visit to South Africa on 2 December 2015. The Chinese President announced a US$60 billion financing package for Africa under the 10 cooperation plans, which included:
- US$5 billion in grants and zero-interest loans;
- US$35 billion in concessional loans;
- Export credits, and US$5 billion equity funding from the China Africa Development Fund;
Based on the social nature of the project, the above three-layered funding envelopes fitted well with the projects under the DWS, Mzimvubu being a FOCAC focus flagship project to be supported through the Chinese infrastructure development initiative.
The advantages of the Chinese infrastructure support were:
- Grant funding: During bi-laterals with the Chinese government, it was envisaged that a grant of US$5 billion would be used for reticulation from the dam to the villages of the poor communities in Eastern Cape.
- Lower interest rate: The infrastructure development support from China would be accessible to the South African government at an interest rate of 2%, with the possibility of negotiating it to 1.5%.
- During the bi-laterals, it was indicated that 70% of the materials would be procured in South Africa, and 30% would be procured in the Republic of China.
Social Implications and Public Interest
The Mzimvubu catchment in the Eastern Cape is one of the poorest and least economically developed areas in South Africa. It is situated within three of the Eastern Cape’s district municipalities -- the Joe Gqabi DM in the north-west, the OR Tambo DM in the south, and the Alfred Nzo DM in the east and north-east. The population is largely poor and rural, lacks adequate access to safe and reliable water supply and the quality of life of the community is further limited by a lack of opportunities to participate in the economy. Good infrastructure development such as the provision of potable water by means of a reliable distribution network is necessary to attract investments and foster economic development.
The Mzimvubu River is the only river in South Africa which is still largely unutilized. The current water supply infrastructure does not meet the current needs of the area and is totally inadequate to enable sustainable future economic growth. It is for this reason, therefore, that the government had identified the development of a water supply scheme within the Mzimvubu River catchment area as a key priority.
The DWS commissioned the preliminary and feasibility studies for the Mzimvubu Water Project within the overarching aim of developing a multi-purpose dam scheme to provide benefits to the surrounding communities and to provide a stimulus for the regional economy in terms of irrigation, forestry, domestic water supply and the potential for hydropower generation, amongst others. There were also opportunities for tourism development in the area.
The feasibility studies commenced in January 2012, with the report handed over to the DWS for detailed design and implementation in October 2014. The feasibility studies recommended a scheme comprising the following key components:
- A new dam on the Tsitsa River, namely the Ntabelanga Dam;
- A new water treatment works (WTW) at the Ntabelanga Dam, with the capacity to supply potable water to approximately 725 000 people in the region (projected for 2050, as per feasibility studies);
- A bulk water distribution system (BWDS) comprising of a primary, secondary and tertiary system;
- A bulk raw water distribution system to supply irrigation water to approximately 2 800 ha of land;
- A small hydropower plant at Ntabelanga Dam to generate up to 5 MW of power.
Update on Sedibeng Regional Sewer Scheme Dispute
The Sedibeng Regional Sewer Scheme includes the upgrade of Meyerton WWTW by 15 MI/day and the Sebokeng WWTW by 100MI/day, the extension of the Leeukuil and Rietspruit WWTW, and the expansion of the Rothdene pump station and rising main. The disputes/challenges experienced on both the Sebokeng and Meyerton WWTWs involved a community uprising due to, amongst others, community members demanding to be employed on the projects. In some instances, work stoppages were totally unrelated to the projects.
Suspension of officials
There were responses to the suspension of officials, and in particular the knock-on effect of moving people to acting positions across the Department:
- Mr D Mashitisho: Director- General. Suspension date was 20 July 2017. Suspension status is “Suspension listed”. Mr Mashitisho was transferred to the Department of Cooperative Governance with effect from 1 December 2017.
- Mr A Singh: Deputy Director-General. Suspension date was 15 June 2017. Suspension was listed on 20 November 2017. Mr Singh is currently on unauthorised leave and appropriate steps are being taken. A disciplinary hearing has commenced.
- Mr M Mofokeng: Chief Financial Officer: Water Trading Entity (WTE). Suspension date was 17 April 2017, and the suspension was lifted on 28 July 2017. Mr Mofokeng resigned from the Department on 31 December 2017. The Department accepted his resignation.
- Ms Z Mathe: Deputy Director-General: National Water Research Institute (NWRI). Suspension date was 25 April 2017 and the suspension was lifted on 28 July 2017. Ms Mathe had submitted written representations and the Department was currently considering the representations.
- Mr A van der Walt: Chief-Director: Sanitation. Suspension date was 25 April 2017, and the suspension was lifted on 28 July 2017. Charges had been served and the hearing was currently in process.
Water issues in Kgetlengrivier Local Municipality
Progress was reported on the outcome of the intervention by the Department through its implementation agency, the Magalies Water Board, on water issues in the Kgetlengrivier Local Municipality
A master plan was compiled by Magalies Water to guide the capital expansion programme. The plan was developed to address the unavailability of sufficient bulk water infrastructure supply demand; to define capital funding requirements so that the budget could be sourced on time; to assess development needs; and to consider new development scenarios affecting current demand projections.
The primary source of water for the Pilanesberg bulk water supply scheme (BWSS) is the Vaalkop Dam. The project was divided into three phases.
Phase 1 has been completed and is comprised of the following:
- Pilanesberg North: Transfer of water from the Vaalkop water treatment plant to the La Patrie reservoir complex and beyond;
- Pilanesberg South: Draws water from the evergreen junction and transfers water to the new reservoir system at Mafenya. Water is then distributed to consumers downstream -- mines, Moses Kotane LM and Rustenburg LM, including the RBA;
Phase 2 of the project is partly under construction, and comprises the following projects:
- Tuschenkomst to Ruighoek pipeline and pump station. This project is currently in the construction phase.
- Projects at a detailed design stage consist of a bulk distribution pipeline, pump stations and the construction of three reservoirs -- 100 ML at Phokeng, 20 ML at Thlabane and 20ML at Bakubung.
- Areas in the Moses Kotane local municipality will also benefit from this phase through bulk distribution pipeline capacity improvement options in La Patrie to Sandfontein, La Patrito Moruleng and Padda Junction to Swartklip.
Pilanesberg BWSS phase 3 will, once completed, transfer additional water to Kgetlengrivier LM from the Pilanesberg South system. It is envisaged that phase 3 will reach the following areas: Derby, Koster, Mazista and Swartuggens. This is the final phase for the expansion of the Vaalkop scheme that is intended to convey bulk water towards the south-west regions of Bojanala Platinum District Municipality (BPDM). In line with the discussions undertaken between Magalies Water and the Department, funding of the feasibility study under the Regional Bulk Infrastructure Grant (RBIG) would be prioritised for the 2018/19 budget process. The project has been submitted to the National Treasury for inclusion in the 2018/19 bids for infrastructure strategic projects.
Motau Report on procurement issues
A progress report on the findings of the Motau Report on finding sustainable solutions to procurement issues indicated that Advocate Motau had submitted a preliminary report on the investigation, where he recommended that a forensic investigation would need to be instituted for him to come to a conclusion. The Department was currently in discussions with National Treasury on the procurement of an investigator.
DWS Response to AGSA findings
The Department had responded to the findings of the Office of the Auditor General of South Africa (AGSA) on the 2016/17 financial and non-financial performance of the DWS and its entities.
It had compiled an action plan monitoring tool to respond to the AG’s findings, with responsible officials appointed to address the audit finding as well as set deadlines to address the findings. as The progress is reported to top management on a quarterly basis. The final date to address all audit findings is March 2018.
Following the issuance of the audit report by the AG on 31 July 2017, the leadership of the Department felt that the report had many inaccuracies upon which their findings had been based, and wrote letters of objection to the AG. In response, the AG addressed two letters to the Department in December 2017, where the findings were upheld and the appeal procedure was outlined and availed to the Department.
The Department was still dissatisfied with the outcome from the AG, and has since lodged another appeal against the outcome to the Deputy Auditor General (DAG) for consideration.
Key Achievements from July 2017 to January 2018
- Finalisation of 2015/16 annual financial statement (AFS) and audit;
- Completion of 2015/16 annual report;
- Policies and governance systems approval, including the supply chain management (SCM) policy;
- Beefing up capacity, including additional resources from DWS for accrual;
- Movable asset tender;
- Completion of first 2016/17 draft AFS report;
- Engagement with the AG for the 2016/17 AFS and audit for completion in March/April 2018
- Office accommodation
- Promun financial system evaluation, to ensure 2017/18 AFS and audit are on time
- 2017/18 tariff determination was timeously concluded, including consultation with relevant stakeholders such as the South African Local Government Association (SALGA) and concerned municipalities;
- Improving internal controls;
- Conclusion of the chief financial officer (CFO) disciplinary process;
- Engagements with the Department of Public Works to run some wastewater treatment works with an intention to cover the whole Western Cape province;
- Quality drinking water is continuously supplied to customers;
Mr L Basson (DA) wanted to know if Mr Singh was back at work, because if his suspension had been lifted then he was meant to be back at work.
The Chairperson said that the report indicated that the suspension had been lifted but the hearing was ongoing. He asked that meant with regard to a return to office.
Mr H Chauke wanted to know if it could be submitted what the charges were, despite the suspension being lifted. If the Department could not do that, then he would source that information himself and bring it to the Committee. He he would make his reasons known to the Committee and to the Chairperson at their next meeting as to why he wanted the information on the charges. The allegations made were very serious. He wanted to know why Mr Singh was not put back into his position
Mr Greve replied that upon the upliftment of the suspension, Mr Singh was told that when he returned to work, he would return to a different role due to the nature of the charges that were against him, and therefore he needed to temporarily report to a different department until the disciplinary process was completed. Mr Singh had declared a dispute and had filed an application to the Labour Court on the matter. The hearing continues, and Mr Singh had not yet reported for duty, but the Department was in communication with Mr Singh’s legal representatives on getting him back to the office.
Mr Chauke wanted to know why three DDGs had been suspended, and while all three of them were back in their positions, Mr Singh was not. He wanted to know specifically why Mr Singh was not put back into his position.
The DG replied that it depended on the nature of the case. The Department felt that his going back to the same position would allow him to interfere with witnesses. Therefore he was still put back into the position as DDG, but not performing the functions which he was performing before the suspension, therefore not allowing him to interfere with the witnesses. The matter was currently before the Labour Court, as Mr Singh had declared a dispute.
The Chairperson said that the Committee could not move forward productively with the matter as it was before the courts. The main issues which were not being looked at were the nature of the charges.
The Chairperson said that the number of Members present had fallen below the required number to continue the meeting, so it would be adjourned until the meeting next week, when the rest of the issues would be dealt with.
The meeting was adjourned.