Department of Public Works and Infrastructure & PMTE Quarter 4 performance; with Deputy Minister

Public Works and Infrastructure

20 August 2019
Chairperson: Ms N Ntobongwana (ANC)
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Meeting Summary

The Committee was briefed on the 2018/19 fourth quarter performance of the Department of Public Works and Infrastructure (DPWI). It was provided with details of the Department’s mandates, strategic objectives and programmes for its two separate structures – the Department of Public Works (DPW) and the Property Management Trading Entity (PMTE) -- and key issues were highlighted. These included the under-expenditure of the DPW and the PMTE’s approach to handling its debt issues.

Members wanted to know what progress the Department was making in implementing lifestyle audits. Was there a distinction between the skills imparted to learners by the Expanded Public Works Programme (EPWP) and those covered by the Sector Education and Training Authority (SETA)?  There was criticism about the state of the Department’s buildings, including the Parliamentary Village.

Staff vacancies and the lack of female representation in the Department came under the spotlight, with the Deputy Minister promising to take action as both she and the Minister were women. The Department was also taken to task for failing to meet its EPWP job opportunity target by over 400 000. More details were sought about the contractor incubator programme, progress on the proposed Public Works Academy, and the disciplinary processes for the fraud cases.

Disappointment was expressed over the poor performance of the EPWP programme and the Department’s failure to draft amendment bills. It was also suggested it should to adopt a comprehensive asset register to monitor buildings owned by the Department, and Members asked if it was aware of its buildings that were currently occupied by foreigners. Other issues discussed included fraud and corruption cases, the poor performance in meeting tender advertisement deadlines, and the below market rates that government employees paid to rent government buildings.

Meeting report

Mr Imtiaz Fazel, Deputy Director-General: Department of Public Works and Infrastructure, briefed the Committee on the non-financial information of the 2018/19 fourth quarter performance of the Department.

He explained the constitutional, legislative and policy mandates of the Department, and described its programme structure. There were two separate structures: the main vote and the Property Management Trading Entity (PMTE). The programmes under the Department of Public Works were administration, inter-governmental coordination, the expanded public works programme (EPWP), property and construction industry policy and research, and the prestige policy. The programmes under PMTE were administration, real estate and investment services, construction project management, real estate management services, real estate information and registry services, and facilities management. He explained the shared services between the main vote and the PMTE.

DPW performance

Dealing with the audited DPW programme performance, Mr Fazel outlined the strategic objectives for each programme and evaluated the Department’s performance.

In Programme One, the Management Performance Assessment Tool (MPAT) score had moved up from 1.5 the previous year to 2.9 in the current year. However, it still fell short of the target of 4.0. The settling of compliant invoices within 30 days was an area that needed to be improved. The moratorium in filling vacancies had had an impact.

In Programme 2: Inter-Governmental Coordination, the proposed public works academy was still under discussion.

In Programme 3, Mr Fazel stressed the important work done by the EPWP and its impact on creating work opportunities. 997 286 work opportunities had been created, though this fell short of the 1.456 million target. This programme also targeted certain designated groups such as women, people with disabilities and youth. Work created in this sector mainly involved labour-intensive industries.

Under Programme 4, the Department’s aim was to regulate and transform the construction and property industries through the development of the Comprehensive Public Works White Papers Review Report, and proposed amendments to the Construction Industry Development Board (CIDB) Act of 2000.

The strategic objective of Programme 5 was to improve service delivery to prestige clients. Mr Fazel reported that 30% of movable assets had been provided within 60 days after approval, and the eight planned state events had been supported with movable infrastructure.

An overview of the DPW audit outcomes for the 2016/17, 2017/18 and 2018/19 financial years showed that the performance of Programmes 3 and 4 had remain unchanged, while Programme 5 had improved.

PMTE performance

Mr Fazel said the audit for the PMTE was still in progress and the presented data might still change.

Programme 1 aimed to provide compliant internal controls and financial services, as well as compliant supply chain management (SCM) services.

Programme 2 ensured user asset management plans were produced in compliance with relevant prescripts. It also aimed to direct precinct planning and development for national government in urban and rural areas, as well as to inform asset management decisions through optimal investment solutions.

Programme 3 was to develop detailed construction plans that directed the execution of construction projects and ensured that construction programmes were implemented in accordance with approved criteria.

Programme 4, real estate management services, aimed to provide functional leased accommodation for client departments, to increase revenue through the rental of state-owned property, and to manage and administer contractual obligations for all accommodation solutions.

Programme 5 was for maintaining a compliant immovable asset register (IAR), and to provide guidance and support to other custodians in the compilation of compliant IARs.

Programme 6, facilities management, aimed to manage maintenance programmes in accordance with an approved plan, to reduce unscheduled repairs on state-owned buildings, and to ensure resource efficiency in state-owned buildings.

Mr Aaron Mazibuko, Chief Director: EPWP, told the Committee that the total actual expenditure for the 2018/19 financial year had been R7.448 billion, against a final appropriation of R7.483 billion. Under expenditure on the compensation of employees had amounted to R21.8 million due to vacant positions related to Programmes 1,2 and 3 that had remained unfilled during the financial year. The 42% underspent on machinery and equipment was also linked to vacant positions not being filled.  

Ms Juanita Prinsloo, Chief Director: Financial Planning, PMTE, briefed the Committee on the revenue budget of the PMTE. The biggest variance in the report was for accommodation charges leasehold. As the Department had recovered the outstanding debt from the previous year, it had received more than it had budgeted for. She highlighted the huge debt owed for municipal services, and also drew attention in the budget and expenditure analysis to cleaning and gardening, administration, goods and services, maintenance, property rates and municipal services, capital recoverable expenditure and capital non-recoverable expenditure.

Ms Prinsloo provided debtors’ information and a breakdown of the outstanding amounts owed to the department. The debtors’ age analysis sheet was also provided.

She recommended the following initiatives to address debt:

  • A letter to “ring fence” accommodation-related budgets needed to be followed up;
  • Interest on outstanding balances needed to be charged;
  • Letters from the Minister of the Department needed to be sent to the top 16 clients requesting them to settle all outstanding debts within 30 days;
  • Agreement on billing and recovery needed to be developed for clients to sign.


Ms A Siwisa (EFF) referring to the fraud and awareness section of the presentation, and asked how far the Department had developed a full plan on lifestyle audits. She sought clarity on its role in housing settlements. What was the distinction between the skills learnt from Education, Training and Development Practices (ETDP) Sector Education and Training Authority (SETA), and the EPWP? What jobs could those learners find through the EPWP training? Were there systems in place to ensure that clients were paid on time, to avoid auditing delays? She also enquired if the Department had conducted any oversight visits inspect buildings, and asked if the Committee could be provided with a list of buildings that belonged to the Department.

Mr E Mathebula referred to staff vacancies, and commented that the number of men in the Department’s delegation dominated the female representation. He asked how they planned to retrieve the R4.1 billion owing to the Department, and commented that charging interest may not be effective. Regarding the 30-day payment period, he asked whether the Department had any policy in written form that asked service providers to submit invoices within a certain period of time so that payments could be made. 

Ms L Mjobo (ANC) enquired about the R10 billion allocated for Parliamentary villages. She commented that although there were many complainta about the lack of showers in the village, there was no sign that the Department was going to rectify the situation. She commended the Department for its expanded programme to train workers, although she needed to know the actual skills being offered in the training.

Ms S van Schalkwyk (ANC) said that the Department’s report needed to be structured in a way that reflected the correlation between targets and the corresponding expenditure for that target. She recognised the contribution of the EPWP project, saying that it provided temporary relief to the unemployed workers. The worrisome concern was that it fell more than 400 000 short of its target. Speaking about the vacancy rate and moratorium, she asked how long the ban had been in force and when it would be lifted. She expressed confusion that under-spending was shown in the report, and the Department had said that the surplus had been redistributed on the compensation of employees, and wondered if that made sense. She asked if women and people with disabilities were employed merely for “ticking boxes,” or if they were being skilled to take up positions of responsibility. She expressed grave concern about infrastructure projects not being completed on time, and asked the government to get the contractor incubation programme off the ground. For the initiatives to address outstanding debt, she asked if there would be an alternative solution if clients refused to comply.

Ms M Hicklin (DA) asked what would happen if the Public Work Academy did not get off the ground.

Mr W Thring (ACDP) referred to fraud and awareness, and asked about the consequence management involved in investigations that had been initiated. He was concerned that 89% of the irregular expenditure had not been properly dealt with. Furthermore, it was not acceptable that there had been only an 11% reduction in irregular expenditure, against the target of 100%. He was disappointed that only 997 286 EPWP work opportunities had been created against the target of 1 455 840. This was only a 67% achievement, which was not good enough, especially with the high unemployment background. He suggested the Department’s failure to submit the draft Public Works bill, CIDB Amendment Act, might have been due to a lack of capacity. He asked the Department to make a comprehensive asset register available to the Committee to indicate what the Department owned. Regarding the condition of government buildings, it had been reported in the media that some of them were health hazards, and he wanted to know what the Department planned to do about it.

Mr T Mashele (ANC) asked if the Department was aware of the number of buildings and houses of the Department that had been hijacked by foreigners. Could the actual numbers of fraud and corruption cases be provided? How did the Department plan to improve the percentage of bids awarded within tender advertisement closure period, as the 26% reported was unacceptable? On land parcels, what was the impact of service delivery on the ground if the department underachieved on a specific target? 1202 beneficiaries had participated in the DPW skills development programme against the 1100 targeted – what had been the source of the budget to cover the expenses of the excess beneficiaries?

The Chairperson referred to the skills training, and said that the EPWP focused mainly on the training of unskilled workers. She agreed with the Member’s query regarding the R10 million allocated for the Parliamentary Village, while no work had been done. She asked whether the hiring moratorium had been signed by this administration.

Mr Mashele asked if the Department could provide Members with a more holistic report. The quarterly report could not be examined in isolation from the annual report, and progress of against targets had to be indicated.

Ms Hicklin asked the Department to furnish details about the fraud cases involved in disciplinary processes.

Department’s response

Mr Sam Vukela, Director General (DG): DPWI, agreed that there were challenges in getting payment from clients, but he pointed out that the Department needed these contractors to perform their work. Regarding the auditing outcomes, he said the PMTE’s report was still under way. 

The current moratorium was for one month.

With regard to the under-spending on employee compensation, the Department had projected an over-expenditure on compensation, and had scaled down on the filling of those positions. This had caused an incorrect calculation of the expenditure which had resulted in the under-spending.

The Public Works Academy was still at the conceptual stage. However, the programmes designed to train those workers were well under way.

The new method adopted in 2006 to enable the Department to retrieve debt had made the matter more difficult. The model currently practised distributed funds to clients first, and the Department then gets them from the clients. This caused complications, and was an issue of devolution and accountability.

Mr Fazel highlighted three issues related to the asset register -- their existence, ownership and rights and obligations. The main difficulty was the size and number of evaluations that the Department was dealing with, although progress had been achieved.

Regarding the condition of buildings and schools, he clarified that schools were not under the national government’s jurisdiction. However, there was a part in the asset register dealing with critical components to assess the state and condition of a building. The Department would deal with it over time.

Mr Stanley Henderson, Deputy Director General: EPWP, said there were more than 84 000 participants in the programme’s training and skills development. Although it was a small number, that was the funding which the Department had managed to obtain from the Department of Higher Education and Training. It also had training agreement with SETA. The financial training was being coordinated with the financial sector authority. The extent of the training was insufficient, however, and the Department was working with other governmental departments to secure more funding.

With regards to the EPWP targets that had not been achieved, the Department had signed protocol agreements with municipalities to ensure targets were being achieved.

He assured Members that a diverse workforce was not just a matter of ticking boxes. The Department was indeed working on it and measures had been implemented.

Mr Henderson agreed that exploitation of EPWP workers and participants was possible. The Department was thus performing oversight functions to monitor workplace conditions. EPWP workers were subjected to the Basic Conditions of Employment Act.

Mr Vukela reemphasised the issue of gender and promised it would be addressed. He conceded that there was incapacity in developing policy, and promised the Department would aim to close the gap. He admitted that the leasing of accommodation to government officials was indeed at a much lower rate, but pointed out that employers had to cover the cost of accommodation for employees when they were  away from their place of residence. It was a question for debate by the executive and National Treasury.

Sasa Subban, Head: Real Investment Services, answered questions related to how many properties were leased. In the last financial year, four agricultural and human settlements were leased for redistribution, and 37 properties for restitution. The Department could not process 27 properties because of outstanding notification documents as well as the signing of the lease documents in terms of Section 42(d) from the Minister of the Rural Development. It had leased seven pieces of land for socio-economic purposes last year, one of which was for the expansion of Cape Town International Airport. There had been no foreign disposal last year. The Department of International Relations and Cooperation (DIRCO) had identified 13 properties, with eight in Namibia and one in Germany, but she could not provide more details.

Ms Swanzie Mathews, Deputy Director General: Immovable Asset Register, said that the Department owned about 30 000 land parcels and 81 000 buildings. It had always provided the asset register to the Committee, and a current one could also be provided. Due to acquisitions and disposals, the figures were subject to change and not static. Cases of asset fraud would also affect those numbers.

Mr Lwazi Mahlangu, Chief Director: Monitoring and Evaluation, addressed the issue of fraud and corruption cases.

Mr Vukela said the Department owed municipalities about R2 billion. Responding to the issue of a gymnasium in the Parliamentary village, he said the equipment inside the gym should be decided upon by Parliament.

A member of the Department’s delegation spoke about the contractor incubation programme (CIP), which targets grade 3-6 to enhance capacity in the industry. Although there was negative growth in the financial year in the construction industry, it would only be in 2020/21 that Members would see a positive growth in the industry. The CIP programme could help contractors to grow.

Another member of the Department’s delegation said that during the last five years, the anti-corruption unit working with the Hawks and Special Investigating Unit (SIU) had investigated 178 cases of which 151 cases had been finalised, eight were in progress and 20 senior cases had been referred to the SIU. Of the 178 cases, 38 were related to fraud and corruption, 33 were tender fraud, 20 were for financial misconduct, two were lease irregularities, six were human resource irregularities, and one involved significant project mismanagement. Of the 173 investigations, 243 disciplinary actions had been recommended to labour relations, and 192 had been finalised. The outcomes had been 10 dismissals, one demotion, 38 written warnings, 20 final written warnings, eight suspensions without pay, five verbal warnings, as well as resignations without warnings. There were also 96 cases which the Department had been unable to pursue because of a lack of evidence.

Mr Thring asked if those numbers could be emailed to Members. In the case of resignations, which party would be responsible for their misconduct?

The delegate replied that an email would be sent to Members. Regarding the case of resignations, the Department would not be able to prosecute if there was no longer an employer-employee relationship.

Deputy Minister’s comments

Ms Noxolo Kiwiet, Deputy Minister, DPWI, said the Department had met with all its entities to discuss the challenges it was currently facing. Some of its new mandates overlapped with the old ones. The question was how these entities were adapting to these changes and challenges. She asked the Committee to give them more space.

The second point she raised was women’s representation, in which she had an interest. She assured the Committee that the Department would drive the necessary change, since the two ministers of the Department were women.

She commented that she had heard reports about the conditions at the Parliamentary Village. A plan had been devised by the Department, which recognised that more houses were needed for this programme. However, this plan would need the Committee’s assistance and cooperation to complete.

The meeting was adjourned.


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