Transport & Public Works and Government Motor Transport 2017/18 audit: Auditor-General & Audit Committee briefing

Public Accounts (SCOPA) (WCPP)

19 October 2018
Chairperson: Mr F Christians (ACDP)
Share this page:

Meeting Summary

Members of the Committee showed an overall approval and appreciation for the detailed report.

The issue of CIDB Grade-9 contractors in the construction sector was one of the issues debated as it was identified to be a consistently problem within the Department and also one of the challenges that prevented small and local business to be afforded the opportunity to do business with the Department. The Department notes the challenge and says it has been working closely to ensure that coalition between big companies did not prevent small companies from receiving business. However, the Department pointed out it was difficult to do business with the informal sector as the regulatory laws only permitted them to hire contractors that are registered with them.

The issue of corruption within the department was discussed. One aspect that was persistent was the strategies implemented to ensure that corruption was rooted out and reported. In efforts to ensure that corruption is curbed, the Department has been working closely with law enforcement entities by reporting any identified criminal activities. The Department noted that the strategies are not necessarily perfect, however the Department did

Transport and Public Works MEC, Donald Grant, said on violence on public roads and generally in the transport industry, that together in partnership with the City of Cape Town, PRASA National and the Department, there was a signed agreement and a task team was formed to address the issues causing the violence and ensure that all the conditions set out by the Road Safety Regulator are met. The MEC said he chaired the committee assigned to address the issue and the committee has been given an amount of about R48 million. To date about 84 out of 100 officers how have received training. After receiving training, the officer will undergo induction upon the completion of the process and will be ready to work. A deployment plan is currently being drafting by the committee created to address the issue. About 60% of the officers will be deployed inside the trains and the remaining will be deployed in key areas identified and acknowledge by the committee. This was important because an estimated R1 billion has been lost since October 2015 due to violence. On taxi violence, he said there was a scheduled process which included meeting the taxi bosses and addressing taxi violence and decisions on how the routes will be divided.

The Committee raised concerns regarding the number of cases launched against the Department and the costs associated with it. The Committee raised their concern about the under spending of the GMT and suggested that the entity looked into detailing expenditure so that it provided clarity on under spending.

Meeting report

The Chairperson welcomed delegates from the Department of Transport and Public Works (DTPW), as well as from Government Motor Transport (GMT). He said that just under an hour ago he and the Public Accounts Committee had a private briefing with the Auditor-General South African (AGSA) and the Auditor-General Committee on the performance of the Department. The Committee has picked up discussion points that departments could provide clarify on.

The Committee proceeded to discuss the Annual Report.  

Discussion

Mr A Simmers (DA) commended the departments for producing a well detailed report that highlighted all the work. He noted the accountability section on page 152 and says he appreciated that the departments took the notion of accountability seriously. He asked for clarity on the cases outlined on page 157 and asked if these cases were resolved and reported to SAPS. He asked about the performance information of EPWP on page 169 and if this issue was dealt with in the morning session.

Ms C Beerwinkel (ANC) was also impressed with the report; however she raised her concern about the cost implications associated with producing the report. She referred to page 164 and asked about the information and progress of a hospital that was previously discussed by the Committee with the Department.

Mr S Tyatyam (ANC) referred to page 155 that discussed the 10-point issues outlined in the report regarding the CIDB grade-9 companies in construction. He asked what process was put in place to protect small companies against the CIDB grade-9 companies. He asked about public safety in relation to taxi violence and what process/procedures are put in place to address the issue.

Mr F Philander (DA) referred to page 157 and asked about receiving any information regarding corruption within the Department. He wanted to know if the Department has taken action to protect whistle blowers within the Department that reported corruption. He asked if the Department ensured that there is no collusion between department official and outside citizens. He also wanted to know, given the nature of the cases reported in the Annual Report and all the strategies presented to tackle corruption, if any money has been recovered.

Ms M Maseko (DA) referred to pages 154 and 157 where it talked to corruption and the strategies proposed and implemented. She asked if the Department has identified and amended any risks with the strategies used to tackle corruption within the Department and its jurisdiction.

On fraud cases identified, a delegate from DTPW said the nature of the cases ranged from construction tender to licensing and all these cases are detailed in the Annual Report. Most cases of fraud and corruption are reported through the anti-corruption hotline and others are reported through the Western Cape Government hotline. Some cases are picked up in the Department by members and addressed. With regards on the progress of the cases, some have already been reported to SAPS for further investigation which is closely watched and some are being investigated internally and closely monitored.

The performance of EPWP was well detailed on page 129. This was the first time that the Department was able to produce a well-planned report with all the dividers and illustration and this was partly to make everyone see a visual representation of what was done within the Department. The costs around the report were not as hefty as imagined because some parts of the report were printed within the Department and some parts elsewhere. Once collusion is picked up, it was immediately reported to the CFS for further investigation.

The Department was extremely cautious when monitoring the strategies implemented to tackle corruption within the Department and between the Department and big companies and these strategies are continuously being worked on.

Mr Tyatyam asked a question about the mandate of the Department to create and promote local businesses and how this is used to only promote well-known business which was corruption.

A delegate from DTPW replied that the Department only used registered contractors that are within the database of the Department. This did not mean that the Department ignored the informal sector or local businesses. The Department needed to recognised services providers and hence it has been hard for informal businesses.

Mr Tyatyam asked on a legislature response or guideline that ordered contractors to include local businesses.

The delegate replied and said there was no sure guideline within the Department or a provincial response to enforce such. Again, the Department did not have the powers to enforce such a rule. In cases where the Department has contracted service providers for big projects like building a school, a hospital etc.; contractors are requested to submit a response plan for the number of job opportunities for the area where construction will take place.

On the CIDB grade-9 issue, the delegate stated that on 20 June 2018, there was a presentation to the Committee about the actual risks identified in the grade-9 contractors and the most important aspects was to address the issue of coalition between grade-9 that was identified through 2010 World Cup. One of the proposed methods was that when such incidents are identified and reported, the Competition Commission and the CIDB will take the matter further. In cases that the contractors in question are found guilty, they will be removed from the Departments’ registry or requested to pay a penalty. However, some of the contractors were found guilty and no process of removing them from the registry was done. Hence, the Department along with other government departments are still conducting business with these contractors. With regards to the protection of low grade contractors, the register design only allowed contractors to bid for tenders in the grade they are in, and unfortunately, high grade contractors can bid for low grade tenders, hence for low grade contractors need to apply to the CIDB for upgrade. Until then, there was nothing the Department can do.

Transport and Public Works MEC, Donald Grant, replied to the question of violence in public roads and generally in the transport industry within the province. He said that together in partnership with the City of Cape Town, PRASA National and the Department, there was a signed agreement and a task team was formed to address the issues causing the violence and ensure that all the conditions set out by the Road Safety Regulator are met. The MEC said he chaired the committee assigned to address the issue and the committee has been given an amount of about R48 million. To date about 84 out of 100 officers how have received training. After receiving training, the officer will undergo induction upon the completion of the process and will be ready to work. A deployment plan is currently being drafting by the committee created to address the issue. About 60% of the officers will be deployed inside the trains and the remaining will be deployed in key areas identified and acknowledge by the committee. This was important because an estimated R1 billion has been lost since October 2015 due to violence. On taxi violence, he said there was a scheduled process which included meeting the taxi bosses and addressing taxi violence and decisions on how the routes will be divided.

Ms Beerwinkel referred to pages 174 and 175 and asked if the Committee can be provided with a comprehensive document that outlined laws which the Department was subjected to as stated in the Annual Report. She referred to page 176 and asked about the number of cases and if they were against the Department. If not, who are they against? She also wanted to know the progress on these cases. .

Mr Tyatyam referred to page 185 and asked about the review of the material adjustment resulting from the internal audit committee of the Department; what adjustments these were and what was adjusted.

A delegate from DTPW replied and said the documents which outlined the regulatory laws the Department was subjected can be made available upon request by the Committee. Most cases against the Department are small in nature and included, but were not limited to claims on street poles, holes, stones on the roads, etc. Like all cases, these complaints will be investigated. The reason adjustments resulting from the internal audit were stated in the outcomes in the report was because the Department felt it was at financial risks and therefore conducted an internal audit to ensure that the Department function smoothly. The audit was not a process that will act as an advisory for the Department or unit but was conducted for the purpose of understanding the businesses side of the Department.

Ms Beerwinkel raises a concern regarding the audit review and said it was the first time an audit report noted quite a few risks, even on the cases claims emerging from pothole issues which are not stated in the risks listed in the Report. She said the Department should be cautious with such things.

A delegate from DTPW said claims from potholes was not noted as an emerging risk is because these cases have been there longest and are not listed among the issues the audit committee felt are a risk for the Department.

Mr Simmers asked if the R17 million increase in liabilities included contingent liabilities occurred through claims made from the potholes matter.

Ms Beerwinkel asked about the usage of consultants in approving designs for projects ran by the Department and how much it cost. She wanted clarity on why the names of consultants used are not listed in the report and why there was no date and company these consultants are registered under. She referred to page 84 and asked what losses were suffered due to poor contractor performance on some of the Department’s projects and what was done to address the issue. She referred to page 240 said the Department highlighted information from 2016 to present but did not detail what was done and when.

A delegate from DTPW referred to the increased contingent liability the Department incurred and said most of the cases, especially ones that included pothole incidents, were about medical reasons and death and some included damages citizens incurred. Out of the more serious cases which were part of the 124 cases presented, 10 amounted to R63 million. One case launched by Nature Reserve costed about R35 million which was about a fire that was alleged to have started from the road. Four designs were approved because of limited funding and those designs were done by consultants. In terms of costing for the designs, consultants and the work that needed to be done, the municipality in question will pay 20% of the costs, and the Department will subsidise the rest. The Department was not told to or had been required to name contractors for projects they implement thus the names of those contractors are not listed in the report.

Mr Tyatyam said the Department needed to have listed the names of the contractors because if the same contractors are the ones being used year in year out and there seems to be no progress.

A delegate from DTPW replied and said the names of the contractors would be made available upon request.

Mr Tyatyam asked what has been done in terms of skills development and transfer upon the completion of projects.

A delegate from DTPW replied by saying that it depended on the project as not all are created to transfer skills especially with very delicate projects that need to be done as soon as possible. However in instances where the Department hired staff that does not know how to perform their designated duties, a service provider would then be required to come in and do some work while at the same time transfer skills.

Mr Tyatyam referenced the last meeting they held with the Department and the discussion about cutting down on the number of consultants the Department outsourced work to that could be done by an in-house employee. He asked what procedures are put in place to ensure that skills transfer occurred in cases where the Department hired service providers to do just that.

A delegate from DTPW replied and said that the report did not allow for the Department to detail all the projects done and how skills transfer occurred for some projects. However, a meeting could be arranged to discuss projects that have already being used to transfer skills. It must be noted that some services will always be outsourced as some projects of the Department are not in a business of transferring skills rather than get the job done. Poor performing contractors may have faced issues of liquidation, lack of man power and poor management and thus there were unable to complete projects on stipulated times. In addition, the Department faced a situation of finding new contractors late than usual because they now face a problem of trying to get other contractors to finish off work started by someone else and this has been difficult because most of the service providers are hesitant of doing so.

Ms Maseko referred to page 244 and asked clarify on what types of bursaries were offered to staff and what skills were retained and whether skills were being addressed in terms of scare skills.

Mr Tyatyam (referred to page 314 and asked what seems to be the issue in reliably measuring the long term service of contractors.

A delegate from DTPW replied and said measuring long-term service of contractors was difficult mainly because no one can assume that contractors would still be around 10 to 15 years. That was why it was important that for current service, the judgment is based on the evidence present of the work done by the contractor.

The Department followed the standard provincial policies with regards to bursaries and how they are awarded. Staff members are allowed to enrol for any degree that was departmentally aligned. And upon the conclusion of their studies, should they decide to leave the organisation before a year; they will be liable for the cost of study. The Department only awarded bursaries from level one to level 8.

Mr Tyatyam asked about the under spending with regards to the Government Motor Transport (GMT) and aske if it could be clarified.  

A delegate from GMT said the operation allocated budget was around R624 million and the entity was only able to use R600 million for the financial year.

Mr S Tyatyam suggested that if maybe GMT have detailed the timing of all operations under the entity it would provide clarity on why there is such an under spending. However he noted that some parts of the report did not allow for it.

The meeting was adjourned.

Share this page: