Small Harbours: progress report

Public Works and Infrastructure

04 September 2019
Chairperson: Ms N Ntobongwana (ANC) and Mr F Xhasa (ANC)
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Meeting Summary

The joint meeting was held with the Portfolio Committees on Public Works and Infrastructure and Environment, Forestry & Fisheries for a PMTE briefing on development plans for small harbours over the next five years. Topics covered small harbour and state coastal properties business; Operation Phakisa: Oceans Economy; small harbour and marine infrastructure development; funding; human resources and recommendations.

There are currently 12 proclaimed fishing harbours within the Western Cape as well as about 55 unproclaimed harbours along the Northern Cape, Eastern Cape and KwaZulu Natal. No new public harbours have been built since the 1950s. The Small Harbour Development Unit was added to PMTE in 2015.

The Operation Phakisa Small Harbours Development Lab took place in November 2018 and was well attended by various spheres of government, civil society, academia and business. The programme was divided into four weeks with the following structured programme: Problem analysis; Initiative design; Implementation plans (3-feet detailed plans); Costing and Funding. The Lab had four work streams:
- Establishing new small harbours and development of coastal properties
- Redevelopment and maintenance of existing small harbours
- Socio-economic impact (Job creation, skills development and enterprise development)
- Institutional arrangements (Governance and Operational management)

R402 million for the scope of work across of all 12 harbours was allocated, which includes Removal of sunken vessels; Dredging; Repair and upgrades to slipways; Shore Crane Replacements; Security Installations and Apparatus; and Civil and Electrical Infrastructure Repairs.

National Treasury has availed EU development funding to the Small Harbours Unit in the form of R60 million over the 2019 MTEF as Treasury sees the impact it would have in addressing the needs of rural communities and growing the state’s capacity.

The briefing concluded with recommendations:
• The support and political impetus from both Portfolio Committees.
• The Small Harbours Unit to be a standalone Unit within the Department Annual Performance Plan.
• The Small Harbours Unit to be added to the structure of PMTE or as a specialised business unit and self-sustainable PMTE subsidiary with presence in coastal regional offices and high impact harbours.

Members' questions included:
- Whether the R402m allocated has been fully utilized?
- How much work has been done on the 12 existing small harbours?
- What the strategy for the unproclaimed small harbours.
- Whether the R60m from the EU will be utilized for new harbours?
- Why small harbour development is absent in other coastal provinces besides Western Cape
 - Has SMME development including women, youth and people with disabilities been assisted?
- What about the policing of small harbours to prevent illegal activities and vandalism to infrastructure?
- Where are they going to get the remaining R482m for the project without it becoming a wasteful expenditure due to non-completion?
 

Meeting report

Mr Sam Vulela, Director-General: Department of Public Works and Infrastructure (DPWI) introduced the Deputy Director-General to deliver the briefing on the state of proclaimed and development plans for unproclaimed small harbours in the country as well as how it is getting itself calibrated for infrastructure development over the next five years
 
Mr Samuel Thobakgale, DDG: Programme Management Office DPWI, presented on the Background; the Business of Small Harbours and State Coastal Properties; Operation Phakisa: Oceans Economy: Small Harbours Development; Marine Infrastructure Development; External Funding Proposals; Property Management and Development Programmes; Human Resources; Walking the Talk – the Impact of Visibility; Overall Progress Against Small Harbours Triple Challenge; and Recommendations.
South Africa has a coastline of approximately 3 000 kms that is underutilised and has great economic potential within the oceans economy. There are currently 12 proclaimed fishing harbours that lie within the Western Cape as well as approximately 55 unproclaimed harbours along the Northern Cape, Eastern Cape and KwaZulu Natal. No new public harbours have been built since the 1950s. The Small Harbours Development Unit was born in 2015 as an addition to PMTE. As an addition this has resulted in the Unit being deprived of reporting effectively as a separate programme within the PMTE and within the Annual Performance Plan (APP). All posts advertised for the Small Harbours Unit are on a contract basis and is a deterrent. The Unit currently consists of 5 dedicated staff members of which three are on contract and two are secondments from within the Department and it has no footprint in the coastal regional offices.

He spoke about the Triple Challenge of Small Harbours:
• Budget:
- Once off R400 million repairs allocation for Proclaimed Fishing Harbours in the Western Cape
- No allocation for infrastructure in Northern Cape, Eastern Cape and KwaZulu Natal
• Human Capital Resources:
- Five staff members responsible for the entire 3 000 km coastline
- No footprint within the regions
- Contract posts cause inconsistency of officials
• Service Delivery Tools:
- The lack of an approved letting-out framework to provide long term leases
- The delay in convening of the Operation Phakisa: Small Harbours Development Lab
- Spatial and Economic Development Frameworks (SEDFs) only for proclaimed fishing harbours (PFHs).

Mr Thobakgale said the business generated from small harbours and state coastal properties includes management and development (planning, construction, maintenance and disposals) of all public harbours along the coastline and basic infrastructure for prioritised unproclaimed harbours as well as progressive revenue generation through letting out of state coastal properties.

Mr Thobakgale said the first Operation Phakisa Delivery Lab for the Oceans Economy in 2014 was convened to focus on unlocking the economic potential of South Africa’s oceans economy and create jobs. By the end of the four-week Oceans Economy Lab in 2014, it was recommended the NDPW should be tasked with the process of taking forward developing solutions and plans to unlock the identified potential of small harbours.

The Operation Phakisa Small Harbours Development Lab finally took place in November 2018 and was well attended by various spheres of government, civil society, academia and business. The programme was divided into 4 weeks with the following structured programme: Problem analysis; Initiative design; Implementation plans (3-feet detailed plans); Costing and Funding. The Lab had four work streams:
- Establishing new small harbours and development of coastal properties
- Redevelopment and maintenance of existing small harbours
- Socio-economic impact (Job creation, skills development and enterprise development)
- Institutional arrangements (Governance and Operational management)
[See document for details of the initiatives of each work stream].

In line with the Operation Phakisa governance methodology, the Small Harbours Delivery Unit is expected to report progress on a monthly basis to the Presidency in the Lab Coordinating Committee (LCC). The LCC is meant to report progress as well as unlock any bottlenecks at an administrative level first, prior to seeking ministerial interventions. all relevant Ministries attend an Inter-Ministerial Committee on the Oceans Economy. The Small Harbours Delivery Unit is expected to convene a Small Harbours Secretariat (chaired by the DDG) and a Small Harbours Steering Committee (chaired by the Minister) on a quarterly basis.

Post LAB Progress:
- The Small Harbours Development Lab Report has been completed and finalised in conjunction with DPME.
- The draft 3-feet plans have been completed and are currently being refined with DPME.
- The Small Harbours Secretariat has been established.
- The draft Implementation Protocol has been developed.

Mr Thobakgale noted Marine Infrastructure Development means both development and construction and maintenance and repairs. No new public harbours were developed in South Africa since the development of the 12 Proclaimed Fishing Harbours (PFHs) in the 1950s and are exclusive to the Western Cape (skewed development). Only the PFHs have Spatial and Economic Development Frameworks (SEDFs) where other harbours in the Northern Cape, Eastern Cape and KwaZulu Natal have only basic research completed.

The scope of work for all 12 proclaimed harbours with the once off allocation of R402 million includes:
• Removal of sunken vessels;
• Dredging;
• Repair and upgrades to slipways;
• Shore Crane Replacements;
• Security Installations and Apparatus; and
• Civil and Electrical Infrastructure Repairs.
 
Small Harbours Unit applied to National Treasury for external funding in mitigation of not receiving adequate allocations from the Department. National Treasury provided an allocation of R60 million over the 2019 MTEF under the General Budget Support component of the European Union donor funding programme. Treasury saw the potential of the proposal and the impact it would have in addressing the needs of rural communities and growing the state’s capacity. The funds will be used for these high level outputs:
• Development of SEDFs for Port Nolloth, Port St Johns and Port Edward
• Implementation of short term Operation Phakisa initiatives
• Construction of basic maritime infrastructure i.e. launching sites, slipways, jetties and cold storage facilities (dependent on the recommendation of the SEDF and budget allocation for infrastructure)
• Training and deployment of environmental officers, operations managers and harbour safety officers from the communities around the new harbours.

The Budget Facility for Infrastructure (BFI) is a reform to the budget process that supports the execution of national priority projects by establishing specialised structures, procedures and criteria for committing fiscal resources to public infrastructure spending. As directed by Cabinet, National Treasury is working jointly with the Presidential Infrastructure Coordinating Commission (PICC) secretariat, the Departments of Planning, Monitoring and Evaluation (DPME) and Economic Development (EDD) to administer the facility which forms the Joint Technical Committee (JTC). The aim of the facility is to support mega projects through robust project appraisals, effective project development and execution and sustainable financing arrangements.

Mr Thobakgale said Small Harbours Unit is also responsible for revenue generation, which includes all coastal properties within the borders of South Africa i.e. Proclaimed Fishing Harbours (PFHs), other small harbours, the admiralty reserve as well as state coastal properties. The Unit, currently manages approximately 333 state coastal leases which generates R16.7 million per annum which is almost half of PMTE’s total revenue generation. Many state coastal leases are historical and therefore nominal rentals are currently being received.
The new letting-out framework was developed in partnership with National Treasury and addresses:
• Standardising the approach on how we let-out State Coastal Properties;
• Renegotiation and regularisation of existing leases;
• Updating of property information; and
• Linking lease terms to company operating licences, fishing quotas etc., thus allowing the department to sign long term leases ultimately encouraging tenants to make informed investment decisions.
The new letting-out framework has been sent for  Director-General approval.

As the Small Harbours Unit is not a standalone unit it has only two APP targets for 2019/20:
1. 20% increase in revenue generation from small harbours and state coastal properties
2. 2 000 work opportunities created by letting out of small harbours / state coastal properties
These apply only to leases and does not provide a true reflection of the Unit’s performance.

Mr Thobakgale outlined the human resource for the Small Harbours Unit (see document). He concluded the briefing with these recommendations:
• The support and political impetus from both Portfolio Committees.
• The Small Harbours Unit to be a standalone Unit within the Department Annual Performance Plan.
• The Small Harbours Unit to be added to the structure of the PMTE or as a specialised Business Unit and self-sustainable PMTE subsidiary with presence in coastal regional offices and high impact harbours.
• The Small Harbours Unit to be added to the structure of the PMTE or be established as a specialised
• Business Unit and self-sustainable subsidiary of the PMTE with presence in the coastal regional offices and high impact harbours.

Discussion
Ms M Hicklin (DA) said that slide 40 spoke to the risk of not funding the complete programme which needed another R482m. Has the R402m been fully utilized? Was it earmarked for the existing harbours or used for the development of new harbours? How much work has been done on the existing harbours?

She asked if the R60m from the EU will be utilized for new harbours. Where are they going to get the other R482m for the entire project without it becoming a wasteful expenditure due to not being able to complete the whole project?  

Ms Hicklin said the Independent Development Trust (IDT) is the implementation arm of DPWI. She asked why the Department Public Service and Administration (DPSA) is being tasked with the implementation and oversight and monitoring of this project when they have the IDT implementation arm which will not become self-sustaining if they do not give it projects.

A DA Committee Member noted the 2018 inter-departmental meeting about the concern of policing small harbours. She asked if any progress has been made about illegal activities in small harbours, security and vandalism to infrastructure.

A DA Committee Member asked how many SMMEs have been empowered through these initiatives. In commercial diving has gender been balanced?

Ms F Shabalala (ANC) said right now she is trying to imagine the comparison between proclaimed and unproclaimed harbours which will become clearer on their oversight visits. It is very curious for her to realize that Western Cape has the advantage over their rural areas, especially KwaZulu-Natal and Mpumalanga.  

Ms Shabalala said last week they were briefed by the Engineering Council of South Africa (ECSA) and they were told how engineering graduates are struggling to get accreditation because they do not have work experience. She asked if it is possible for this tender, which requires 30 engineers, to appoint these engineering graduates to get practical experience and assist them to get the necessary accreditation.

Ms Shabalala asked for a list of small harbours, especially those in KZN. However, she is aware that the two departments are developing and doing something in those harbours.

Ms M Siwisa (EFF) said DPWI is responsible for maintenance. However, it always states there are no funds for the maintenance of public buildings. She asked how it is going to do that maintenance. Referring to slide 30 she wasked when implementation will take place because it looks nice on paper but  the implementation of plans take too long.  She asked what the role is of the vessel owner in removing sunk vessels because money is spent on removing them.

She pointed to the proposed rentals and noted there is already a crisis of non-payment of rent to DPWI by sister departments who do not pay. How is the department going to ensure that whoever it leases to is going to make payments?  Is there a plan to ensure these payments?

Ms T Mchunu (ANC) asked if the South African Weather Service is involved as SAWS has a responsibility towards the oceans economy. What is the timeframe is for the plan for the unproclaimed harbours; how long before they see its implementation? She proposed that plan should include training of local communities, who are supposed to be the beneficiaries of that particular harbour. Beforehand, those communities must be made aware of what is going to take place and trained so that they do not have community revolts. Are the vacancies in the organogram funded and when does DPWI intend filling them as it is very important to have the human resources?

Ms Mchunu referred to Richards Bay harbour, one of the deepest harbours, and asked if there is a plan for a container terminal to assist its Industrial Development Zone (IDZ) to grow. Is the DPWI working with other IDZs where those IDZs are next to a harbour.

Ms N Gantsho (ANC) expected an outline of the programme and the challenges so Members know how far  they are and what they are doing to resolve those challenges. She asked how the Department of Environment, Forestry and Fisheries (DEFF) through its policies ensures that the vessels do not pollute the water so as to protect animals at sea. With SMME development, how many are women, youth and people with disabilities have been developed and assisted. She asked what the strategy and corrective measures are for unproclaimed harbours. What happens to the construction waste in terms of Operation Phakisa?

Mr B Holomisa (UDM) commended the DPWI for a detailed report, with the exception of the lack of mention of challenges and programme. However, he is confused that these implementing agencies like IDT and Coega do not have engineers. He asked why DPWI does not use tendering and get the best implementing companies instead of throwing the money at one agent, which does not have the capacity. They should see the mess they have done at the Eastern Cape hospitals.

Mr Holomisa suggested that the air force and navy be consulted about the proposed new small harbours so they are satisfied with the security of the area. The country is worried about illegal goods entering the country and therefore they have to ensure that there is a closer relationship with security agencies.

Ms S Mbhatha (ANC) asked for clarity on the Small Harbours Unit staff member who had been seconded as an administrator to North West. Should he not have resigned from his Unit position?

Mr F Xhasa (ANC) said it is a concern that most small harbours are in the Western Cape whilst other coastal provinces do not have harbours. What the plan is for this?

Responses:
Mr Vulela replied about IDT, saying they want to ensure that when they utilize the IDT it is capable of delivering the service needed. At this stage IDT is undergoing some serious challenges. DPRI is working with IDT to resolve them. There are some projects the IDT is undertaking. They will consider this once IDT is at the stage where it is able to perform.

Mr Vulela agreed with Mr Holomisa. DPWI is assessing its capabilities to advertise and adjudicate tenders rather than sending work to the implementing agencies. It is a matter they are reviewing.

The contract of the administrator in the North West is coming to an end, and they recommended that he should not relinquish his Small Harbours responsibilities. The administrator was given the capacity to do both responsibilities in the Department and the North West work. People are on site managing the Public Works space in the North West.

Mr Vulela said his colleagues will cover how they are rolling out Operation Phakisa together with their sister departments. DPWI may have covered the area of infrastructure, but they are actually involved in implementing various initiatives in the ocean economy space.

Mr Vulela noted that Small Harbours was subsumed in the real estate management branch and it was not visible. It was only escalated in 2015 using a programme management approach so it was not a fully fledged branch. They have identified that as a gap. They are going to close that gap this financial year and will ensure it is capacitated fully. The plan will be developed once they have finalized the assessment of the actual capacity that is required.

Mr Ashley Nandou, Chief Director: Ocean and Coastal Research: DEFF, said that they do recognize that small harbour development is surprisingly absent in other coastal provinces besides Western Cape. Their plan is to identify sites which is little more challenging from an engineering point of view, but their strategic decision is that small harbours represent access points, they represent community points, and they represent centres of activities and economic activity for formal and informal trade. However, it is important to consider the sites for small harbours in other provinces, and they are working on that.

Mr Nandou replied about harbour pollution that throughout the world the number one chemical polluter is oil and diesel related products. DEFF is monitoring the whales, seals and sea birds that live in and around harbours and shipping traffic. They are monitoring them for changes in their population and are checking pollution levels that can affect breeding success of these species. There are monitoring projects and studies on chemical polluters that are undertaken routinely, and they have reports. CSIR reports validate that harbours are areas of higher level polluters. The idea is how to manage and mitigate pollution that will have an impact on the species around harbours.

Ms N Ntobongwana (ANC) said that due to time constraints, both Departments should respond in writing to the unanswered questions and sent to the Co-Chairpersons. The written responses will be sent to Members of both Committees. She thanked both departments and Members and the meeting was adjourned.

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