Public Works Budget: Committee Report

Public Works and Infrastructure

08 May 2018
Chairperson: Mr H Mmemezi (ANC)
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Meeting Summary

The Portfolio Committee on Public Works, meeting for the second time to consider its report on the DPW Budget Vote, officially adopted the report with amendments. The DA withdrew its earlier decision to second the adoption. In its observations and recommendations, the Committee highlighted several matters of great concern, including its feelings of “alarm and disgust” at the state of mismanagement at some of the DPW entities, especially the Independent Development Trust (IDT), and called on the Department to take urgent steps to resolve the crisis.

Members also called for consequence management regarding still unresolved challenges around the Property Management and Trading Entity’s (PMTE) Asset Register; the Expanded Public Works Programme (EPWP) and the general culture of unaccountability at the DPW. The dominant mood of the Committee was that the era of “business as usual” was over and that Parliament would no longer play rubber stamp to the dictates of an uncaring Executive.

Meeting report

The Chairperson welcomed Members and said the expectation was that the meeting would produce an adoption of the Committee’s official observations and recommendations on the Department of Public Works’ (DPW) Budget Vote. He asked Members to check for omissions, misrepresentations and to communicate any concerns they might still have. He thanked the Committee Content Advisor and the Researcher for work on the various versions of the document. He felt confident that the process had been able to capture all the key relevant issues and these would be communicated to the National Assembly in the Budget Vote debates to follow. Apologies were received from members Mr K Sithole (IFP), Mr M Filtane (UDM) and Ms Q Madlopha (ANC) for not being able to attend – the two men were in other meetings while the latter was on a trip to China.

Mr F Adams (ANC) proposed that the focus be on changes made during the last Committee meeting on the report.

Mr Shuaib Denyssen, Content Advisor, said the first important changes were around the Property Management and Trading Entity (PMTE) and its relationship to the DPW - in response to several queries and requests for clarity on this issue. The report now contained more background information and explanations to address those concerns. Another improvement was around inconsistencies (reported last time by Dr M Figg (DA)) between figures quoted by the DPW which appeared to contradict those from National Treasury. A particularly worrying instance of such, but not raised before, was in connection with figures of the PMTE’s staff complement. According to the PMTE, out of a total of 6 861 funded posts, 2 938 were vacant. Yet 763 posts were quoted as “additional” to the total. This could be interpreted as saying that ‘on top of 2 938 vacant posts, a further 763 were required’. Was this a euphemism for “consultants”? The suspicion was that by 763 “additional” the PMTE was trying to avoid the actual filling of existing vacancies. He therefore argued that the report should have an observation or recommendation to highlight this concern - the wording of which he then proposed to the Committee. He also observed that the use of consultants was not only a PMTE challenge but also cut across DPW and some of its entities such as the Independent Development Trust (IDT) and the Construction Industry Development Board (CIDB).

Ms I Stephney, Committee Researcher, also challenged the figures relating to the number of “critical positions” at the PMTE. The numbers simply did not add up. She undertook to refer back to the PMTE for clarification but also noted that for the Committee supporting staff, this was a recurring problem when dealing with the DPW. The agenda keeps changing but the same issues keep popping up every year.

Ms L Mathys (EFF) said it was time to take a hard line against the DPW and demand accountability for repeated maladministration. Instead of merely expressing concern, the report should spell out that the Committee is “alarmed” by the state of affairs at PMTE (the incomplete Asset Register) and the IDT (the financial chaos; no one knowing what is actually going on). She urged that the days of Parliament being used as a rubber stamp must come to an end and action should be taken against those responsible for mismanagement and underperformance.

Ms M Masehela ANC) felt strongly that something should be done - maybe an internship programme for graduates who still cannot get jobs in the property and construction industry. Why are the DPW and PMTE “dragging their feet” on this matter? Was the advertising of posts/work opportunities done so that those in rural and internet-deprived areas are also reached? On the status of the PMTE, she said she was still not satisfied with the wording on the document. It must be made clear that the PMTE is not an entity. She agreed that the Asset Register may not be fully operational yet, but at least now there was “something”, compared to earlier when there was nothing.

Mr D Ryder (DA) commented on the statement in the document that the DPW budget represents 0.1% of the national appropriation by vote.  If this figure was correct, it was no wonder that much of the State’s property was in the poor condition it currently was. There was not enough money available to achieve what was expected of the DPW and this should be come out strongly in the report. The report should also clarify the R518.3 million increase in compensation of employees - was that for DPW only or did it include the entities as well? An all inclusive salary bill would be interesting.  All in all he agreed with Ms Mathys in saying that the report was “more of the same”. He wanted to see a tangible, working Asset Register, broken down into property segments according to type, condition, and other specific nuts and bolts. What DPW projects are currently running? What has been achieved in those projects so far and what still remains to be done and by when? What is the DPW actually doing? He suggested that instead of complaining all the time about the EPWP), the Committee should summon the actual beneficiaries and the people running it on the ground. Mr Ryder said although he appreciated the work gone into the report, if it were up to him, he would rewrite it from scratch.

Echoing the previous speakers and their frustration with the lack of urgency with which the DPW approaches things, Mr F Adams said being alarmed was no longer enough. “Disgust” was the more correct word to describe the Committee’s attitude to the situation. This was in accordance with the totally different reality the Committee had several times encountered on the ground during its oversight visits around the country. There might not be enough time to further refine the report before the budget debate, but he urged Members to use the podium in Parliament to communicate the true state of the DPW and hold the political principals accountable for all the failures they had personally observed in its work.

The Chairperson agreed and instructed that “alarm” and “disgust” be included in the wording. He also felt that Ms Masehela’s partly positive comments on the Asset Register should be included in the report, as the Register had uncovered properties hitherto unknown to the State itself. 

In reply, Mr Denyssen said Mr Ryder’s and other Members’ queries and suggestions around the figures would be looked into and accommodated in the final wording of the report. He also reassured Ms Masehela that the remaining uncertainty about the status of the PMTE vis-à-vis the DPW would be removed.

The Chairperson agreed with previous speakers on the oversight role of parliamentarians in the work of government, saying the time for diplomatic language was over.  A clear message needed to be sent not only to the DPW but to those whose lives needed to be changed for the better, and for whom the Committee should be fighting. The people should not be allowed to lose hope, lest they start burning and destroying the little that had already been delivered.

Mr Denyssen also replied to Ms Mathys’s comments on the crisis at IDT by adding that the entity was now surviving through bailouts because of its failure to collect revenue through charging management fees from its clients. He agreed that more strong language was called for in the case of the IDT since its role had crucial implications for service delivery.

Ms Masehela said another factor in the IDT fiasco was that the organisation had a serious lack of appropriate skills for the carrying out of its mandate. The situation had got so bad that government bodies were increasingly refusing to entrust projects to the IDT.  

The Chairperson also proposed that the report note the negative effects of constant top leadership changes at the DPW and its entities. One of these was the creation of opportunities for fraud and corruption to exploit the gaps between the departure of the old and the coming of the new leadership. This applied not only to the political principals but to boards, DG’s and CFO’s as well. The report should make it clear that this practice was not assisting in ensuring good governance at state institutions.

Mr Denyssen said the above could also go together with a call that the DPW’s Governance, Risk and Compliance unit come before the Committee to report on the outcomes of its work.

 As part of the Committee’s recommendations in the report, the Chairperson moved that mention should be made of the Committee’s strong view that the DPW and its entities should ensure sub-contractors, especially in the construction sector, are protected from unscrupulous principal contractors. It had been found that the Department always declined to involve itself in monetary disputes between principal contractors and sub-contractors, thus failing to defend vulnerable and upcoming entrepreneurs.

Mr Adams suggested that the best way to give practical expression to this recommendation was to make it one of the policy proposals in the ongoing review of the DPW White Papers.

The Chairperson added that in the meantime, as the review process continued, the Committee should urge that the recommendation be implemented in the form of a regulation.

Mr Adams, again with support from the Chairperson, urged Committee Members that sentiments expressed in the meeting should also be reflected in the speeches be made during the upcoming debates in the National Assembly, and there should be no contradiction between the two.

Ms Mathys revisited her comments on the IDT and recommended that the entity produce a comprehensive turnaround strategy as a matter of urgency. Her position was that IDT had two choices: either justify its continued existence or simply “close shop”.

Ms P Adams (ANC) raised concern at the ongoing woes still plaguing the EPWP and requested that the report reflect the concerns of the Committee on the matter, especially the reality that the EPWP was the hope of millions of poor South Africans. The report should include a strong statement on the PMTE and the irregularities and other challenges regarding the leasing of State property.

Returning to the Expropriation Bill of which he had spoken at the last meeting, the Chairperson told the Committee that the management of Parliament had declared the speedy finalisation of this legislation a matter of the utmost urgency. Meanwhile Parliament had passed a resolution to look into expropriation without compensation, thus raising the political temperature around the Bill.  As it fell under the responsibility of the Public Works Committee, this meant that a plan of action on how to achieve this objective was sorely needed. The upshot of all this was that during the upcoming constituency period, Members would have to remain in Parliament, hard at work on bringing the Bill in line with recent parliamentary developments, and preparing it for tabling and eventual enactment.

The Chairperson then called for the adoption of the report.

 Mr Adams moved for adoption.

Dr Figg, who had seconded the adoption, withdrew his secondment on the advice of his party colleague.

Ms Masehela then seconded the adoption.

The report was adopted with amendments.

Adoption of Minutes

Minutes dated 8 May 2018 was adopted with minor amendments,

The meeting was adjourned.  



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