Department of Public Works irregular, fruitless and wasteful expenditure; Prestige Portfolio report; with Minister and Deputy Minister

Public Accounts (SCOPA)

29 August 2018
Chairperson: Mr T Godi (APC)
Share this page:

Meeting Summary

The Department of Public Works (DPW) presented a report to SCOPA on contracts awarded to four companies where variation orders had been requested, and which the Committee wanted to interrogate.  KI Developers had been given a project at a government facility in Cape Town, and a variation had been done on an emergency basis. The matter was now being investigated, and no additional work had been given to KI since 2016. Meondo Trading had been given work in Johannesburg, a variation order had been approved, and the project was complete. Sebushi Somo did work for the Bloemfontein High Court, and there had been 11 variation orders, some of which were not approved. The completion of the project had been in January 2018. During investigation, it had been discovered that Sebushi Somo had nine other projects, so the DPW had to investigate further. For Varymix, the service provider had been fully paid, though there was some work which was not complete, and the DPW was liaising and following up. SCOPA was of the view that the variations were due to poor planning.

The DPW also reported that it was standard practice that after practical completion, the DPW allowed a defects liability period and retained 5 %, which would be paid if there was no defect. The Department’s compliance unit confirmed that it did not enforce the recovery of funds, but gave assurance to the bid committee, and also made recommendations that funds be recovered in cases of irregularities.

On prestige housing, the DPW confirmed that with the inclusion of the houses of the Chief Justice and Deputy Chief Justice, the total number of properties was 150. It included a schedule of maintenance costs and the value of the properties in the report given to SCOPA.

SCOPA noted that there were discrepancies in the Cape Town prestige report, especially in regard to municipal services. The DPW told the Committee that the financial model used for maintenance in Cape Town was similar to insurance. The company was contracted to provide scheduled maintenance at a fixed cost. This was unlike in Pretoria, where maintenance was unscheduled and the DPW “waited till things broke.” SCOPA asked for details on who had negotiated the contract, as it was irresponsible. SCOPA also wondered why the Portfolio Committee had not picked the issue of up when approving the budget.

The Minister reminded Members that the debate on splitting Cape Town and Pretoria was as old as 1995, and everything for ministers being double translated to huge costs. He added that a review of the ministerial handbook was necessary. He thanked SCOPA for laying bare the weaknesses of the DPW and assured it that for prestige housing, the Department would go deeply into the challenges.

Meeting report

The Chairperson welcomed everyone and registered strong dissatisfaction at having received the documents late in the afternoon. He said he would have preferred to have the information earlier to enable him to prepare.

Mr MHlengwa (IFP) sought an explanation from the Department of Public Works (DPW) as to why the documents had been submitted late.

Mr Sam Vukela, the DG responded that the work had been concluded the day before and had been under the impression that the documents were sent the previous day. He accepted the blame for having not verified whether the documents were sent. He apologised for the inconvenience and said that he would ensure his office does not repeat the error.

Mr E Kekana (ANC) commented that what the DPW had done was unacceptable, since Members had not been able to prepare for the meeting. If the meeting proceeded, it would be done under “malicious compliance.”

Mr Hlengwa enquired who was supposed to send the documents and whether any consequent management steps had been taken. The only reason he would stay for the meeting was if the Chairperson asked him to.

Mr D Ross (DA) said that the research team had assisted with the documents, and that Members should be able to grapple with them. He asked whether the Honey Cloud issue could be included in the agenda.

The Chairperson responded that this matter had been referred to the Public Service Commission (PSC) and would come back to SCOPA within two to three weeks. He had received a letter from the PSC saying that it had been able to work on one part, and that it would give a report to SCOPA once the other part had been concluded.

Mr Ross said that the matter was grave and that time was of the essence, and that Members would like to conclude the work.

The Chairperson agreed, and asked that a follow up be done with the PSC.

Ms N Khunou (ANC) added that when she was in the Transport Committee, when it received documents late, the Committee would send the Department back with the documents. She was glad both the Minister and Deputy Minister were present, and that something would be done.

Mr Kekana asked whether the directors of the four companies had been included in the report, since he could not see the names.

The Chairperson said he hoped the officials had a full appreciation of how Committee members felt, so that all times there was a level of focus. He asked the DG next time he signed the documents, he should explicitly direct that the information was passed on. He asked him to summarise to the issues on the four companies.

DPW contracts involving four companies

Mr Vukela said that the DPW had prepared an executive summary on the four companies, supported by the spreadsheets annexed to the report. The spreadsheets were more detailed.

KI Developers

KI Developers had been given a project at one of the facilities in Cape Town, where a variation had been done on an emergency basis. The variation had exceeded the 20% threshold. The variation order was not implemented, and no work had been done. Because no work had been done, it was subjected to investigations and referred to the governance and risk unit. No additional work had been given to KI after 2016.

Meondo Trading

Meondo Trading had been given work in Johannesburg, where there had been a variation order. The project had been completed, the variation order had been approved, and the amounts had been included in the report.

Sebushi Somo

Sebushi Somo had been given work for the Bloemfontein High Court, and there had been 11 variation orders. Some had not been approved, and there had been reasons why the approval was not given. The completion of the project was in January 2018. In the process of investigation, it was discovered that Sebushi Somo had nine other projects, and the DPW had to investigate further and confirm the standard of the work of the company.

Varymix

For Varymix, the service provider was fully paid, though there had been some work which was not complete, and the DPW was liaising and following up.

In the Mukhwase case, the DPW had undertaken an investigation which was almost complete.

Mr Vukela informed Members that the report provided to SCOPA also included details of the directorships of the four companies.

Discussion

Mr Brauteseth (DA) asked what an emergency delegation was, and if the DPW had a code of regulations that defined what an emergency delegation was. He asked how the DPW defined “emergency,” and what an emergency was in relation to the replacement of cabins, cupboards and paintings.

Mr Vukela responded that there was a regulation which provided for delegated authority and that an emergency was something that had to be performed immediately. The items mentioned did not meet the criteria for an emergency.

Mr Brauteseth asked who in the DPW had approved the variation.

Mr Vukela responded that it was a project manager who went by the name of Davis.

Mr Brauteseth asked whether the project manager who gave the approval had any relation to KI developers.

Mr Vukela answered that he was not able to tell.

Mr Brauteseth asked whether the DPW could provide a list of the expansions and deviations and variations that had been awarded on the basis of emergency delegation over the last two years.

Mr Vukela said that the DPW would be able to provide this.

Mr Brauteseth observed that for Sebushi Somo, there had been 14 variation orders, and asked why there had been so many.

Mr Wasnaar Hlabangwane, Construction Project Manager: DPW, responded that many of the variation orders were due to poor planning, and certain items were found necessary for the completion of projects.

Mr Brauteseth asked what price the DPW paid for poor planning.

Mr Vukela responded that the DPW had not worked that out specifically, and that he had not come across any variation order where the contractors had admitted it was due to poor planning.

Mr Hlabangwane clarified that the variation orders consisted of the cost of items that should have been added at the initial stage. The cost should reflect the same amount if it had been identified at the beginning.

Mr Brauteseth asked how the DPW had known that the list provided earlier was incomplete, and wanted to know who had assessed that.

Mr Hlabangwane responded that all variation orders were certified by professionals, including the principal agent, DPW project managers and the project accountant. The Quantity Surveyor (QS) on verification drew a sheet on all items completed on site.

Mr Brauteseth asked whether all the agents mentioned were present from the beginning.

Mr Hlabangwane confirmed that all of them were present from the beginning.

Mr Brauteseth noted that it was the people who planned at the beginning who later on decided that the list was incomplete. He asked how the DPW trusted the people who messed up the first time, and whether the DPW had independent engineers coming in to verify.

The Chairperson agreed that there was a gap.

Mr Vukela responded that the variation process did not involve another company. Only the variation committee, when investigating, could bring in another independent body.

Ms Khunou asked for a simple explanation on what a variation order was.

Mr Vukela responded that it referred to a change in the scope of work.

Ms Khunuo noted that if plans were made properly, there would not be variations. She asked who in the DPW agreed to the variations.

Mr Vukela responded that the project managers write to the variation committee, which accepts or rejects. The chairperson of the variation committee was the one who signed off on the approvals.

Mr Hlabangwane confirmed that he chaired the variation committee which was comprised of various persons -- a civil engineer, quantity surveyor, mechanical engineers, general administration, architects and the secretariat.

Ms Khunou said that the decisions made by the variation committee did not make sense, considering the qualifications of its members. The executive summary had acknowledged that the matter should have been forwarded to the National Treasury (NT), so why was the DPW not charging the person who had signed off on the variation order?

She also referred to the report which had stated that the ceiling of a particular project had to be repaired. She attributed the fault in the ceiling to a supplier providing timber that was not of good quality. She asked how much the DPW was paying to maintain the ceiling.

Mr Hlabangwane responded that the variation committee did not initiate variations, but considers what is before it. It critiques and looks at the need and makes a determination. The application for a 30 % variation had not been accepted by the variation committee. However, it had been approved at the regional level. He attributed the repair of the roof to the environment, and not to the poor quality of timber.

Ms Khunou wanted to know who the officials responsible for approving the variation order were, and what had been done in terms of consequence management.

Mr Hlabangwane responded that the compliance unit was still doing further investigations.

Ms Khunou asked if the DPW had a recovery plan -- for example, in instances where service providers exceeded their time.

Ms Chiloane (ANC) asked if there was anyone in the DPW who was related to Sebushi Somo Company, since it had had nine projects awarded to it. She also commented that the dates when the contracts had been awarded were very suspicious.

Mr Vukela responded that the DPW did not have information on anyone being related to Sebushi Somo. He agreed that the dates were suspicious, and that the DPW had gone to the extent of checking who had awarded the contracts. It had been discovered that the contracts were awarded at the regional level, although four had gone to head office. He confirmed that the contracts had gone through the public bidding office.

For Mukhwase, he said that the DPW had information that the construction company was being investigated by the Special Investigating Unit (SIU).

Ms Chiloane said she was not convinced that the DPW had seen these dates only when it was preparing for the meeting. She asked whether across the provinces, there was only one company meeting the requirements. She asked who had commissioned the SIU.

Mr Vukela requested that the DPW be allowed to provide feedback to the Dommittee on Mukhwase.

Ms Chiloane asked whether the people sitting on the tender committees were available.

Mr Vukela answered that the people were available, and that the chief procurement officer could elaborate.

The Chairperson interjected, and requested that the Committee wait for the SIU.

Mr Hlengwa asked whether the DG was satisfied with whom he had delegated the responsibility of signing the variation orders.

Mr Vukela responded that he was satisfied.

The Chairperson asked how the DG monitored the work of the variation committee.

Mr Vukela responded that he monitored through regular reports from the executive committees. He also followed up on the reports to the governance unit.

Mr Hlengwa observed that certain Sebushi Somo projects were complete and payments were still pending. He asked why payments had not been made ,yet payments were required to be made within 30 days.

Mr Vukela responded that it was not the whole amount which had not been paid, only a certain portion remained unpaid.

Mr Hlabangwane added that it was standard practice that after practical completion, the DPW allowed a defects liability period and retained 5 %, which would be paid if there was no defect. When the team had gone to Clarkson, some defects had been discovered and, a letter had been issued to the contractor for him to complete the work.

Mr Hlengwa asked whether there had been any defects at Ermelo prison.

Mr Hlabangwane responded, not to his knowledge, and the company had complied and had received payment.

Mr Hlengwa asked who paid for the cost of the defects identified.

Mr Hlabangwane responded that the contractors met the cost.

Mr Hlengwa asked what the anticipated day to complete the Clarkson project was, and how severe the defects were.

Mr Hlabangwane responded that as per the recovery plan, the expected date of completion was 31 August 2018.

Mr Hlengwa asked what the value of the identified defects was.

Mr Hlanangwane responded that the general practice was to not cost the defects -- the DPW only issued the list of defects.

Mr Hlengwa asked who bore the cost when the defects cost more than 5 %.

Mr Hlabangwane responded that it was the service provider who met the cost.

The Chairperson asked the DPW to send to SCOPA the findings on the defects, and the communication from DPW to the contractor, including the schedule of payments for that prison.

Ms Chiloane proposed that the DPW sends to SCOPA the list of all contractors not paid.

The Chairperson asked that the matter be not taken that far. It could use Clarkson to identify the kind of defects the DPW had seen.

Mr Hlengwa asked where Sebushi Somo Company was based, and who the bidders had been who it had been up against. He asked how the matter of the replacement of a cabin and cupboards had arisen, and what the motivation had been.

Mr Vukela responded that it had been done at the regional level, and that he did not have the facts.

Mr Hlengwa asked what the circumstances were, and why the cabinets and carpets were being replaced.

Mr Vukela responded that the first work was to repair the roof, and after the roof was repaired, it was seen fit for the cupboards to be replaced.

Mr Hlengwa asked whether the damage had arisen because of repair, or if it was already there. He assumed that someone could deliberately create an emergency, which went to the notion of poor planning. He asked whether the employee was still there.

Mr Vukela responded that the employee was no longer there.

Mr Hlengwa advised that if emergencies were done haphazardly, the DPW compromised its own protocols.

Mr Ross said that the DPW had confirmed there were various parties involved -- a principal agent, an implementation agent, the verification committee, and the governance and risk and compliance unit. He asked if the compliance unit was independent in instances where it needed to recover money from consultants, officials and contractors in default. In a specific year, how many projects did the compliance unit come in to recover money from contractors? He asked how effective the compliance unit was, and whether it had an intervention role.

An official from the DPW compliance unit responded that the unit did not enforce recovery of funds. It gave assurance to the bid committee, and it also made recommendations that funds be recovered in cases of irregularities.

The Chairperson asked if the compliance unit looked at tender processes only.

The official responded that the unit reviewed the tendering process and also did investigations in suspected cases of fraud and maladministration.

Mr Ross asked if he could be given a report on who was responsible for the recovery. He also asked for clarification of the difference between the governance and compliance units.

An official from the DPW governance unit responded that the unit conducted investigations and recommended the legal department to institute the recovery process, whereas the compliance unit was more concerned with the tendering process.

Mr Ross noted that the implementation agent and the building contractors were the problem, and he wanted to know who was responsible for recovery and implementation, or if the matters were simply referred to the legal department.

Mr Vukela responded that the project managers followed up with the contractor, and if the contractor did not comply, the project managers referred the matter to legal.

Mr Ross observed that the costs for the prisons differed, and asked whether the projects were new or were renovations, and what the cost was per unit.

Mr Hlabangwane responded that he did not have the statistics at the time.

Mr Ross wanted to know whether there was an architect in the delegation who could confirm the current cost per unit.

Mr Vukela said that there was no architect at the meeting.

Mr Ross commented that the DPW should know what the current cost per unit was. In terms of regional efficiency, he asked if there was somebody in a position of seniority who engaged with the project managers.

Mr Vukela responded that the DPW had regional offices, and project managers reported to regional managers who reported to head office -- specifically to the DDG in charge of construction.

Mr Ross asked who facilitated the actual payments to contractors.

Mr Vukela responded that the regional offices had finance units which facilitated payment.

Mr Kekana said that he had done a company search on the four companies, and he could not get details of two companies. He asked for details of when the contacts had been advertised, when the adjudication was done, the dates of final completion of the projects and the names of the people who sat in the bid evaluation committee (BEC) and the bid specification committee (BSC).

Mr Hlabangwane said he had the names of the people who sat on the BSC of the three tenders that had come to the head office. He read out the names, and confirmed that he would provide the details of the people who had sat on the tender committees at the regional level.

Mr Kekana asked that when the DPW gave the details, it should also give the specifications.

Ms Khunou asked for clarification on the variation order for KI, and why other variations had been paid in full and others had not.

The Chairperson also asked whether the work had been done or not.

Mr Vukela responded that the variation committee had not approved, but the principal agent supervising the project had allowed it to go ahead.

The Chairperson asked what the monitoring mechanism was to check on the regions, since there may be many other transactions where the variation committee said no and the work still continued, because payment was done at the regional level.

Ms Khunou asked if the DPW had a report on money recovery.

Mr Vukela said that the DPW had not recovered any money as yet, but it had put processes in place.

The Chairperson commented that Sebushi was behind schedule on three projects, and wanted to know what the problem was.

Mr Hlabangwane responded that the detailed reports of the projects were not with him, and that it was the principal agent who administered the contract on behalf of the DPW.

The Chairperson said that the DPW should have mechanisms to monitor principal agents. He asked whether there was a process of monitoring projects and keeping tabs on them. He would have imagined since there had been a project delay, the DPW would have followed up with the principal agents.

Ms Khunou asked how often the DPW met as management, since it appeared the DG was not well informed.

Mr Ross wanted to know if the DPW had experts who did mechanical and electrical installation, and whether it was getting value for money in order to protect the state in respect of escalating costs.

The Chairperson said that the question had been asked earlier, and the DPW had answered that it did not have many experts.

He asked the DPW to report back to SCOPA on the following items:

  • Variations in terms of emergencies done in the last two years;
  • The defects in the Clarkson project, the communication with the contractor and payment schedules;
  • Adverts, adjudication, and the number of people sitting in the various committees.

Mr Kekana added that from the company search done, KI Developers was not a South African company. He asked the DPW to do a search on the directors of KI, and to compare it with SCOPA.

Ms Khunou added that at the Bloemfontein High Court, all the things said in the report to have been done, had not been done, and that there was a reason why these documents had been given to SCOPA late, so that Members would not have time to verify the information.

Prestige Portfolio Report

Mr Vukela said that the DPW had confirmed the previous week that it had 148 houses, and with the inclusion of those of the Chief Justice and Deputy Chief Justices, the number was 150, of which 67 were in Cape Town. The DPW had provided the costs of maintenance and the value of the properties in the report given to SCOPA. It had separated the costs for Cape Town and Pretoria, and had also indicated the maintenance plans per year.

Mr Brauteseth reminded the DPW that Sec 217 of constitution referred to fair, equitable and transparent processes. He asked the DG whether he was aware of any unique feature of any of those properties, particularly 74 and 76 Graskop. He asked whether the purchase of ministerial houses came to the DG’s desk. He had looked at all the similar properties in the same area as 74 and 76 Graskop, and the last recorded sale for the two properties had been R3 million. He asked if the DG applied his mind when the purchases came through his desk, and if he was aware that the properties were sectional title properties'

Mr Vukela responded that he applied his mind, though he was not aware that the properties were sectional title properties.

Mr Brauteseth asked who the DPW consults to purchase the properties, and what assurance it has that a cost effective process is followed.

Mr Vukela answered that the DPW relied on the estate agents to ensure the properties were within the price range.

Mr Brauteseth remarked that the DPW could not rely on an estate agent to give it a price. His concern was that a process was not being followed to ensure market value.

The Chairperson added that generally in government, there was no value for money. The DPW could not vouch for juniors who brought reports to it. He noted that the average rent was R10/11 per square meter, and as the biggest purchasers, the DPW should be getting the biggest discounts.

Mr Hlengwa said that he was seeing a discrepancy in the Cape Town prestige report, especially with regard to municipal services,

Mr Mzwandile Sazona, Chief Director: Prestige, DPW, responded that the Department had not got into the details of those figures.

The Chairperson asked what value the figures were to SCOPA if the DPW could not explain them.

Mr Hlengwa referred to a Cape Town prestige property (No 48-16170), where the municipal services cost R17.4 million, and asked for an explanation for that amount.

Mr Sazona replied that the figures were for municipal services.

Mr Hlengwa noted that there was a house where the DPW paid R400 000 for municipal services for one year, and asked whether the DPW had been overbilled, or if it included a backlog, since it seemed to involve the management of the accounts.

The Chairperson asked whether, if one went to the actual houses, the DPW would be able to give meaning to the figures.

Mr Vukela responded that the figures referred to maintenance costs.

The Chairperson asked if the money had been put aside as a budget, or as money spent.

Mr Vukela responded that it was money spent.

The Chairperson asked what the maintenance was, as he was interested to find out what kind of repairs cost the amounts given.

Mr Hlengwa noted that the DPW had a house where maintenance was R400 000 every year.

Mr Sazona responded that it had contracts for maintenance, and the financial model used was like insurance. There was a fixed rate, which consisted of hard services and soft services -- all the maintenance at the house cost that amount. In Pretoria, the DPW had unscheduled maintenance, where it waited until things broke. He clarified that the contract with the service provider, Broll Company, provided for routine checkups and scheduled maintenance, and also includes soft services such as cleaning services.

Mr Hlengwa asked whether the model was being phased out.

Mr Sazona responded that the idea was to do maintenance internally. The DPW had started training artisans, and it wanted to incorporate them.

Mr Hlengwa wanted to know when the contract with the facilities management service provider, Broll, would expire.

Mr Sazona said that the contract would expire in August 2019.

Mr Hlengwa asked whether maintenance in Pretoria was done in-house.

Mr Sazona replied that it was not done in-house -- it was done through day to day unscheduled maintenance.

Mr Hlengwa said that he did not see any integrity in the contract. There was no rationale, and something was fundamentally wrong.

The Chairperson wanted to know for how long the contract had been in place.

Mr Sazona responded that the contract had started in 2014. Pretoria had had a similar contract which had been terminated in 2011 because of issues of corruption, and the DPW was attempting to put a contract in place at the Union Buildings. The DPW properties had deteriorated, and it had to look at other models of maintenance.

Mr Hlengwa asked for details on who had negotiated the contract with Broll, since the contract was irresponsible. He also asked for a breakdown of costs of rates, since the figure given did not make sense.

Mr Ross wanted to know whether the Portfolio Committee had picked the issue up when looking at the budget. In terms of financing, he had never heard of such a model, and said that the consequences were going to be serious. Maintenance was something that did not occur on a day to day basis, and he suspected corruption. He proposed an investigation and intervention on the matter of the facilities management service provider contracts.

Mr Kekana wanted to know whether security was being provided for the vacant houses.

Mr Sazona responded that security was provided, but that he did not have the figures at that time. In order to deal with the issue of security, one house had been rented out to a staff member. The number of vacant houses in Pretoria was 11. Most had structural defects.

Ms Khunou wanted to know why there were properties with electricity backlogs.

Mr Sazona said that the electricity backlogs referred to the compliance certificates which had to be procured, and someone was required to do the wiring.

Ms Khunou asked whether Mr Sazona was the maintenance manager.

Mr Sazona replied that he was the one responsible for prestige housing.

Ms Khunou stated that she would want to see the maintenance plans. She invited the DPW to visit the parks, and see how maintenance of the houses was done. People came, did nothing and were reimbursed. She said that there was a vacant house in Rondebosch, where the scheduled maintenance cost was R348 000 and the municipal services rate approximately R100 000, yet it was a vacant house.

Mr Sazona requested that he be given time to investigate, since the house had been vacant for a long time.

The Chairperson suggested that the matter be put in abeyance until SCOPA had another engagement with the DPW. He needed time to be convinced. It was unbelievingly wrong to speak of scheduled maintenance and unscheduled maintenance in the same house, and the DPW was being totally insensitive to the social realities. He did not believe in poor planning -- poor planning was a deliberate act.

Mr Kekana supported the Chairperson’s ruling to defer the meeting. He added that SCOPA needed to interrogate and deal with the issues that had emerged, and he requested that the directors of Broll Company be present at the next engagement.

Ms Khunou suggested that SCOPA go for an oversight in Pretoria together with the Hawks, and check on the issue of maintenance properly. She urged that SCOPA should not wait for oversight week.

Mr Hlengwa asked for details of how long the vacant houses had been vacant. He could not find the house that had been leased to a member of staff in the categorisation. How much was being paid for the house, and who was the person? He agreed that he would want to inspect the houses, and he would want the management of Broll and the Western Cape manager present at the next meeting.

Mr Ross said that he would want the management of Honey Cloud to appear before SCOPA, because Honey Cloud was central to the contracts.

Ms Chiloane added that corruption in the DPW was heart-breaking, and she echoed that SCOPA should make an unannounced visit.

Ms Khunou said that the reason for the purchase of four new houses had been because there were no vacant houses, but now the DPW was confirming that there were vacant houses.

The Chairperson commented that this discussion on prestige accommodation had not been presenting a good picture. In the previous week, it had been discovered that there was no cap for the purchase of the houses, and now maintenance was a problem. He requested the DPW to go look at the numbers again, and said that the matter would be revisited.

DPW’s response

Mr Jeremy Cronin, Deputy Minister: DPW, said that the DPW was notorious for corruption and it would help if one of the recommendations be that the ministerial handbook be amended to provide limits. He agreed that the size of the Cabinet was excessively high, and that the new President had been talking about addressing its size. He welcomed the suggestion by SCOPA, including the possibility of involving the Hawks. He commented that the officials had explained the maintenance issue poorly, and said that unless one did scheduled maintenance, one would end up spending more. His understanding was that the companies charged a fixed rate in order to provide scheduled maintenance, and at their own cost did the repairs. In the case of Cape Town, where there was service contract, there was sustained planned maintenance. This was in contrast with Pretoria, where the score card was 8.2% -- far above international standards. He asked SCOPA to exercise its minds critically on the matter, since the cost in Cape Town, as high as it appeared, had proven to be better performing. He concurred with SCOPA that the DPW had a responsibility to maintain unoccupied buildings.

Mr Thulas Nxesi, Minister: DPW, apologised for the poor preparation and the late submission of documents. It was appropriate that SCOPA had raised the issues, and he reminded Members that the debate on splitting Cape Town and Pretoria was as old as 1995. Everything for Ministers was double, and this translated to huge costs. He added that the issues must be clear from the ministerial handbook, and that a review of the handbook was necessary. The DPW should engage projects in the line of sight to ensure that things were done on time and within the specifications, and should not leave it to agents.

He thanked SCOPA for laying bare the weaknesses of the DPW, which consisted of poor coordination, poor leadership, inadequate data and systems. He said that external auditors had raised the same issues. He assured SCOPA that for prestige housing, the DPW would go deep.

He agreed that there was a problem, and that the lack of progress in the billing system was linked to information communication technology (ICT). The facilities management contracts had been identified as corrupt, and the President had recommended investigation by the Special Investigating Unit (SIU) into facilities management in the DPW.

 

If the DPW was serious about construction, then it needed to have top project managers and technologies. The DPW’s leases were chaotic, and at some point the DPW had been paying more than 45 % of the market value, which was why it had come up with the Property Management Trading Entity (PMTE).

On the cost of maintenance, contracting out was favoured. He reminded Members that the apartheid government used to use the government workshops, but the skills had left the state and the DPW had not been able to maintain the workshops.

On the lack of coordination, the DPW had to institute checks and balances, quality control, proper data and clear lines of accountability, consequence management and recovery. He had requested the Department of Public Service and Administration (DPSA) to challenge 600 appointments in the human resources (HR) dept.

Lastly, he welcomed the visit by SCOPA, even if it was not announced.

The Chairperson said that SCOPA would get back to the DPW by 31 August.  A different mindset was needed. He advised the Minister not to allow officials to misuse funds in his name.

The meeting was adjourned.

Share this page: