Government Finance and Budgets/Cooperative Governance: MECs briefing

Adhoc Standing Committee on Covid-19 (WCPP)

22 May 2020
Chairperson: Ms MM Wenger
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Meeting Summary

Video: Ad Hoc Committee on Covid-19, 22 May 2020, 14:00

The Ad-Hoc Committee on Covid-19 was briefed by the Western Cape Provincial Treasury and the Department of the Premier on government finances relating to the Covid-19 pandemic and; cooperative governance also relating to the Covid-19 pandemic, respectively. The MEC said that while the Provincial Treasury had made provision for unanticipated events and that they stood ready to support the Department of Health regarding Covid-19, they could not have imagined the size and scale of what they would face, nor the implication for the provincial budget which would require them to make deep budget cuts to deal with the implications and results of the Covid-19 pandemic.

Members heard that the country was currently projecting a R610 million in own revenue shortfall, with at least a R3 billion provincial budget cut and expenditure demand to fund the Covid-19 response. At least R2.4 billion of this would be in the Western Cape. To date, R1.14 billion had been committed towards Covid-19 related expenditure across the Western Cape government.

Members asked how the Minister and Treasury felt that about between R1.5 and R2.08 billion out of the R20 billion would be given to the Western Cape in terms of health assistance as it only amounted to approximately R10.4 million which seemed inequitable especially considering that the Western Cape and Gauteng had been impacted more severely than other provinces; and if there had been discussions with National Treasury on the R20 billion going to the province and what formula they would be using. The Minister responded that there was a large degree of uncertainty at the moment around the R20 billion and how that funding would be divided between the provinces. The formula which the Provincial Treasury had used to estimate their share was based on the provincial equitable share.  On the question of the R610 million and the revenue shortfall, they did not intend to put a moratorium on that expenditure but they did intend to take a very careful look at those line items with a view to cost containment in the first phase of the budget process. Further regarding the use of a formula Members heard that this was one of the most significant fiscal challenges that the Western Cape had ever faced and would be tested to its limits.

Members asked further for details regarding the companies that were supplying the government with PPEs and the status and criterion that had been used; and the PPE procurement for the reopening of schools what had been spent. Members heard that regarding the PPE, government stuck firmly within the legal framework and could provide further details on both the mobilisation of PPEs for schools and the SMMEs access to the procurement processes. Local suppliers were struggling when it came to sophisticated PPEs which would create a risk going forward for procurement – especially when it came more to the N95 masks and therefore they were trying to actively manage risk to the supply chain and provisioning system.

In the briefing by the Western Cape on the Covid-19 Hotspot Strategy, the Committee heard R725.5 million has been committed towards Covid-19 related expenditure across the Western Cape Government, with an established  dedicated Coronavirus Provincial Hotline for residents to call, for which a total of 28500 calls since 16 March 2020 had been received. This was on average 500 calls a day.

Members asked if there had been any discussions on moving down to level two immediately from the 1st June 2020; and whether there had been consideration to look at the multidisciplinary and multi-sectoral response teams that could attend to Covid-19. The Committee was informed that testing was critical because at the end of the day if it could not be measured then it could not be managed. Members heard that the first round of testing was the hotspot testing where they went into communities wherever they were across the province and went door-to-door – that was the half a million tests referred to. 

The Committee was concerned on hearing about 219 cases including the 50 Tygerberg Hospital cases and 69 nursing staff at Groote Schuur. Members heard that on the health WhatsApp group that morning between the Minister and Dr Cloete the numbers were corrected to 59 recovered and 43 who were positive at the moment. Given the number of complaints and tension between the management and staff in various healthcare facilities, Members recommended establishing a Covid-19 health facility response team which would include management and union representatives. The Committee asked if the pilot at Dunoon had been a success thus far and if so, and could it be extended to other hotspots; and if the Dunoon numbers were checked on a regular basis. Members were informed that Dunoon was the first in-depth model compared to the Witzenberg model but the Dunoon pilot was the focus area. Witzenberg was the first pilot and the numbers were looking good as long as one could trust the testing but it already looked like the whole of government and society approaching Witzenberg had numbers which were cooling and that was really good news because it seemed to be slowing down. Further Dunoon was a pilot and the aim was to take the learnings from Dunoon and implement it in other areas, obviously recognising that communities were different but would rely on the principles learnt and apply it in other areas. Members were informed that the Western Cape was actually the blueprint for what was going to come in the country.

Finally Members were concerned to hear that the biggest constraint was the issue around funding as at the moment there was no certainty on funding and what portion of the R20 billion that was set aside nationally would go to the Western Cape.

Meeting report

The Chairperson welcomed the two Departments and Members of the Committee to the meeting where they would be reviewing two themes. The first was government finances related to the Covid-19 pandemic, and the second was cooperative governance also related to the Covid-19 pandemic.  Apologies had been received by Mr D Smith (ANC)

Ms P Lekker (ANC) said Mr L Mvimbi (ANC) was standing in as an alternate Member for Mr Smith.

The Chairperson noted the alternate Member. The rules of engagement were explained – all microphones and videos were turned off at the beginning of the meeting and Members were requested to make use of the chat function when raising points of order.  The agenda for the day was explained – the Provincial Treasury would present first followed by the Department of the Premier.

MEC Remarks

Mr David Maynier, Western Cape Provincial Minister of Finance and Economic Opportunities, in his opening remarks, stated that when he presented the 2020 budget in early March that year they were only at the beginning of the Covid-19 crisis, with no known infections in the Western Cape. In his budget speech he noted that the Provincial Treasury had made provision for unanticipated events and that they stood ready to support the Department of Health should Covid-19 reach the Western Cape. They have done that to the best of their ability, but they could not have imagined the size and scale of what they would face, nor the implication for the provincial budget which would require them to make deep budget cuts.

The Department was currently projecting a R610 million in own revenue shortfall, at least a R3 billion provincial budget cut and expenditure demand to fund the Covid-19 response. At least R2.4 billion of this would be in the Western Cape.  In the immediate term, Provincial Treasury had taken a number of steps to support key departments like Health, Social Development Transport and Public Works with streamlined decision-making around supply chain matters which ensured that critical procurement decisions were made as fast as possible, while ensuring full compliance under the emergency procurement protocols put in place by the National Treasury.

To date, R1.14 billion had been committed towards Covid-19 related expenditure across the Western Cape government. That included, but was not limited to:

  • R628 million to the Department of Health for personal protective equipment, laboratory tests, hospital beds and ventilators;
  • R273 million to the Department of Education for personal protective equipment, digital infrared non-touch thermometers, sanitisers and cleaning materials;
  • R168 million to the Department of Transport and Public Works for the set-up of quarantine and isolation facilities, including the set-up of the field hospital at the Cape Town International Convention Centre;
  • R35 million to the Department of Social Development and R18 million to the Department of Education for an initial humanitarian response which was included to the provision on 50 000 food parcels; the re-initiation of school feeding schemes; and the delivery of 10 000 cooked meals per day for one month; and
  • R16.2 million to the Department of Local Government in the form of a Local Government Support Grant to strengthen and support the current humanitarian initiatives within municipalities.

In addition to that, the Department was working across government to identify and re-prioritise all non-essential expenditure towards their immediate expenditure needs in the Departments of Health and Social Development. They were committed to ensuring that healthcare workers and other frontline staff across the Western Cape received adequate Personal Protective Equipment (PPE). They were also working to ensure that the healthcare system was provided with the necessary funding to support a scale up of acute and ICU bed facilities, as well as quarantine and isolation facilities, in support of the overall provincial health strategy. They would continue to engage with National Treasury on a weekly basis, both in technical committees, and with Minister Tito Mboweni, to ensure that their actions were aligned with National government’s response.

Finally, that week they kicked-off the budget process towards a mid-year adjustments budget which was in response to the Covid-19 crisis and would follow the adjusted budget which National would table in June. In closing, Covid-19 would require continued efforts by all role players to overcome the pandemic, and Provincial Treasury continued to work hard to ensure that their fiscal response was aligned to support such efforts in every way possible.

Western Cape Government: Provincial Treasury Presentation               

Mr David Savage, Head of Department for the Western Cape Provincial Treasury, stated that he would be taking the Committee through the presentation.

National fiscal response package (R500 billion)

R40 billion for provinces and municipalities, with the Western Cape (WC) allocation unclear;

  • Health: R1,5 billion to R2,08billion (estimate), offsets unclear; and
  • Municipalities: Limited clarity on scope, mechanism; R7,9 billion allocated via MDRG for 19/20 municipal Financial Year (FY)

Financing: R130 billion from reprioritisation, including R30 billion from provinces (R3, 09 billion from WC PES)

National Budget Developments and Risks

Functional assignments (food, shelter, testing, etc)

  • Fiscal offloading (across all spheres).

             Revenue forecast

  • Final PES cuts decided next week (hopefully!).
  • Impacts on Conditional Grants variable and generally unclear.

Expenditure management

  • Wage increase for public servants (national & provincial, SALGA).
  • Impact of regulatory compliance is UNCOSTED and rising (for example OHS, Department of Labour testing before work).
  • Emerging labour conflict over return to work & PPE.

             Budget process

  • Early national adjustments budget proposed for 24 June (critical for WC)
  • Consultation with DPME crucial for APPs.

Data Nerve Centre

Core objectives

  • Evidence Based Decision Making: Expand availability of data in phased / incremental manner (short/medium term), including disaster and recovery financing
  • Build dynamic forecasting capacity across data modules, linked to real time data and provisioning needs
  • Lasting impact on WCG operations

             Management framework

  • Revised, improved matrix operating model being finalised
  • Leverage available systems and capabilities, across WCG, public sector and non-govt sectors

Cooperation with Textile and Manufacturing, and Agriculture and Agri-Processing Sectors

  • Disaster Relief Response: Accessing support in terms of applications for disaster relief funding, submissions for particular sectors regarding the risk-adjusted strategy etc.
  • Red Tape constraints e.g. wine exports.
  • Research and data needed for planning and decision making
  • Support in terms of hotspot management, SOP per sector in terms of managing OHS and infections
  • Recovery Strategy Development.
  • Ad hoc support requests: Legislation, export constraints etc.

Impact of lockdown on local tourism sectors; other than those provided by National Government, tourism relief packages available to industries and employees .

  • Virtually no international tourism for 12 months from start of lockdown
  • The economy will shed 240,000 jobs  of which 104,505 jobs in the tourism sector
  • Tourism accounts for 43% of all employment losses
  • International tourism activity makes up 80% of tourism activity
  • 50% of all tourism business will close down

2020 Budget pressures

Accommodate revenue reductions, expenditure growth estimated at R6.092 billion in 20/21 while maintaining existing service standards.

Revenue reduction (R3.619 billion)

  • R3.09 billion PES reduction: WC share of R30 billion provincial reductions
  • R610 million projected reductions in Own-Revenue (gambling, patient fees, licenses)
  • Does not account for a) changes in conditional grants, b) new health financing (between R1,5 billion and R2.8 billion for the WC?)

3 May 2020, disaster-related expenditure demand of R2.047 billion, now R2.473 billion

  • Med accommodation: R1.831billion
  • Humanitarian: R85 million
  • PPE: R557 million
  • Assumes cost ceilings for Q&I and PPE
  • Does not yet include a) any additional humanitarian relief, b) any economic response package

Non-COVID risks: Additional disasters: floods, fires, drought and plagues, social unrest, etcetera).

Cost containment measures for immediate savings

Immediate Phase: 1st Adjustments Budget

  • All departments to review the impact of COVID-19 (lockdown) on service delivery and identify savings, 
  • PT to also conduct immediate savings exercise and consult departments on outcome. 

Transversal expenditure containment review (taking into account delivery model of departments):

  • Identify CoE savings within the current recruitment process
  • Entertainment allowances, catering costs and venue hire costs
  • Reduce advertising budgets for employment and procurement purposes, and printing costs for internal documentation
  • Accommodation savings: impacts of new working arrangements to net out (cost savings, ICT costs), but growing regulatory requirements
  • Consultant and contractor costs
  • All non-mandatory training budgets and bursary schemes
  • Purchasing and replacement of vehicles and minor assets
  • All transfers to municipalities, including both grants and agency payments
  • Contractual commitments that can be renounced
  • Functions that are shared or duplicated across departments and/ or spheres of government

Municipal Performance – Q3 IYM, 31 March 2020

Revenue largely on track at 31 March at 76.4% of budgeted revenue (R47.8 billion of  R62.54 billion).

  • CoCT over performed (+2.5%); districts underperformed (-5%), incl transfers & ‘other revenue’.

Operating expenditure slightly behind schedule at 31 March 2020 at 64.9 per cent (R41.23 billion of R63.49 billion).

  • CoCT underperformed by - 2.9%; districts by -14%.
  • Includes personnel costs, councilor renumeration depreciation and asset impairment, materials and bulk purchases, transfers and grants and ‘other expenditure’, but HS payments, debt impairment not allocated.

Significant underspending on capital budgets, with only 17.2% spent at 31 March 2020 (R2.08 billion of R12.09 billion).

  • Significant contribution from CoCT (misreported due to data string  misalignments, but only 53% YTD)
  • SCM process and compliance delays, implementation delays (specialised vehicles), electricity supply constraints, contract disruptions and lockdown.

Municipal performance and emerging risks – 31 March 2020

Persistent liquidity risks in known cases

  • Matzikama, Cederberg, Witzenberg, Drakenstein, Theewaterskloof, Knysna, Laingsburg and Beaufort West.
  • Commitments exceeding cash due to unspent grants in Matzikama, Drakenstein, Kannaland, Mossel Bay and Knysna.

Relatively sustainable cash positions

  • Positive cash balances except for Beaufort West (overdrawn).
  • Cash coverage above norm except Drakenstein (unspent grants), Matzikama, Kannaland, Knysna and Beaufort West

TOTAL OUTSTANDING DEBT: R11.23 Billion (March 2020)

  • CoCT: R8.1 billion (R5.3 billion over 90 days, mainly households - 68.5%).
  • Districts: R57.02 million (R32.7 million over 90 days, especially GRDM firefighting account).
  • Locals: R2.30 billion (R1.6 billion over 90 days, mainly households - 75.6%).
  • Little outstanding intergovernmental debt.

Progress report on Public Private Partnership Framework (PPP) following discussions held in the Budget Committee on a framework that promotes robust accord with all social partners beyond commercial sector

  • PPP Framework does exist, focusses on arrangements between private sector – government, but does not include Social Society Structures (SSS) (i.e. NGO’s and National Provider Identifiers )
  • Obstacles to inclusion
    • Service providers or partners in development and implementation of Framework?
    • No formalised process regarding classification, process of development and implementation pertaining to SSS.
  • AGSA leading with initiative to consider obstacles from a financial management perspective.
  • Agreements must disclose secondary financial information to demonstrate impact of PPP on department/entity.
  • Revision of Framework to incorporate relationship with SSS as agreements to be audited by AGSA.

Discussion

The Chairperson thanked the Department for putting together the presentation. The floor would be open to a round of questions and per the usual procedure, each party would be given three minutes to pose their questions to the Department.

Ms D Baartman (DA) wanted to know how the MEC and Treasury felt that between R1.5 and R2.08 billion out of the R20 billion would be given to the Western Cape in terms of health assistance from National as it only amounted to approximately R10.4 million which seemed inequitable especially considering that the Western Cape and Gauteng had been impacted more severely than other provinces. Secondly, she wanted to understand who was paying for the Doctors that were being sent from Cuba to the Western Cape; after it had been estimated at a cost of R440 million. Asked how much of the R610 million that might be lost was specifically for gambling patient fees and licensing.

Mr R Mackenzie (DA) asked if there had been discussions with National Treasury on the R20 billion going to the province and what formula they would be using. Regarding Slide 11; he wanted to know if the numbers mentioned were per box or quantity as the basic mathematical formulas of the amount price purchased divided by the quantity gave no consistency – gave the example of the Department of Education who were paying R486 a mask while the Department of Agriculture were paying R15 a mask from the numbers supplied.

Ms N Nkondlo (ANC) welcomed the presentation. She asked for understanding to be provided on which of the areas in the fiscal framework had been disrupted. Regarding spending, she wanted to know how the budget was being consolidated to accommodate the limited budget. She wanted to know if the Department was ensuring that industries, especially SMMEs were being kept from the provincial coffers. Lastly, when looking at the entire public financing she wanted to know what were the new things that needed to be considered by Parliament in terms of future spending and trying to raise revenue.

Mr B Herron (GOOD) stated that on Wednesday they had the Department discussing their quarantine and isolation planning and needs and the numbers that they got on Wednesday were quite alarming; 65,000 beds in total 11,500 isolation beds in 53,000 quarantine beds; he wanted to know why there had been no request from the Department of Transport and Public Works (DTPW).  Secondly, there had been a procurement of R55 million by the DTPW to establish the CTICC as a temporary hospital and wanted to know whether that amount had been from internal funding arrangements within the Department as it seemed to be quite a high price to pay given that the CTICC was already a building with infrastructure – he clarified that the aim of the question was to understand the source of the funding for that. He wondered as to how Treasury was planning for that funding and saw that an amount of R1.8 billion for temporary hospitals had been allocated in the budget presentation, however, June and July were just around the corner and he was concerned about meeting the deadline. Regarding the anticipated job share drop of 240 thousand; he wanted to know what the parameters were that informed those numbers.                     

Mr F Christians (ACDP) stated that the national outlook of construction, exploding debt, figures not going down and wage negotiations going on and the mentioning of additional disasters occurring painted a bleak picture. He asked what the Provinces were doing, especially since the finance cake was getting smaller – the writing of revenue should be considered especially when considering the amount of stress and job losses happening within the tourism and construction industries. He asked where Provincial Treasury would be getting the R3.1 billion savings for the Western Cape as the two biggest budgets such as health and education were already under tremendous strain

MEC Maynier responded that the point to be made regarding the R20 billion was that there was a large degree of uncertainty at the moment as to how that funding would be divided between the provinces, and the formula which Provincial Treasury had used to estimate their share was based on the provincial equitable share. Regarding Mr Mackenzie’s question; he stated that at a political level there had certainly been conversations about how those funds would be allocated, including several conversations around urgently determining on what basis those funds would be allocated. He hoped that it would be settled within the next week. On the question of the R610 million and the revenue shortfall, they did not intend to put a moratorium on that expenditure but they did intend to take a very careful look at those line items with a view to cost containment in the first phase of the budget process. He pointed out that on the fiscal strategy, if one looked at the three phases set out in the budget process, it certainly indicated that a change in approach was needed in order to accommodate much deeper budget cuts than Provincial Treasury had anticipated before in the Western Cape. He stated that Provincial Treasury had also been working very closely with municipalities to deal with the financial burdens and issues placed on municipalities as a result of households and a business not being able to pay their rates – the situation was becoming more acute.

Mr Savage responded that the distribution of the additional health financing would be on the trajectory of the pandemic and the demand that the epidemiological forecasts predicted on the expenditure demand, however, there was no finality on the matter yet. He Reiterated that it was not clear to Provincial Treasury that the full R20 billion as part of the health response would necessarily be divided amongst provinces and one of the top sliced items may well be the Cuban Doctors as to his knowledge there had not been any formal agreement with the Western Cape in terms of picking up those costs. In respect to own revenue loss they were projecting a R160 million loss in motor vehicle licensing and license fees; R350 million in gambling and gambling tax revenues and; R100 million in health patient fees, against their projections. They needed to dig deep in order to find deep savings and were working with accounting officers and reviewing their own technical deep dive into expenditure items and the targets they outlined. Regarding Ms Nkondlo’s question, he explained that an entire cluster of the Provincial Disaster Response Framework dealt specifically with the issue she had mentioned and as they moved forward their data was improving which would allow them the ability to backstop more effectively and monitor national progress in the rollout of relief; so while it appeared fragmented, it was in fact becoming less fragmented.  He said that the models they had been using were constantly changing in order to adapt to the current environment; using the examples of the education system and delivery of public services.

Around the DTPW quarantine and isolation costs, Provincial Treasury were aware of those, however the formal requests for funding the approval of emergency expenditures had not gone in to Provincial Treasury, however, there were a number of them which were on their way. The approach the DTPW had taken with Treasury’s support was to move ahead where it had authorisation to spend in a particular area in obtaining services and provisioning itself; that was when the requirement for additional expenditure approval through the Section 25 process needed to be submitted. They were partnering with the DTPW and DOH to mobilize and respond to many instances where associated indemnities, guarantees with things and mobilization of facilities required the Minister of Finance approval in terms of Section 66 of the PMFA.  The Cape Town International Convention Centre and its conversion to an intermediate or field hospital was something which was being financed on the DOH budget within their existing allocation for the year. The partnership with the CTICC and the Provinces saw the CTICC venue being provided rent free. While the constraints were firstly financial, the primary constraint was the ability to mobilise facilities to be fit for purpose; the CTICC was a good start but it was not a field hospital and a lot of work needed to be done to turn it into one; the same went for quarantine and isolation facilities in order to meet the required specifications for those facilities, so the challenge was an operational one rather than a financial one. He Alerted the Committee that it would be good to get the Department of Economic Development and Tourism before them to brief them on their social accounting matrix model which dealt with the deep econometric modelling based on scenarios and assumptions of the length of the lockdown.

Regarding opportunities to the province, he explained that the fiscal assignments to the province were obviously pretty limited at that point and the intergovernmental fiscal assignment was not necessarily at an opportune moment to introduce additional taxation in the South African economy. In terms of the law, the resolution of financial challenges in municipalities rested with the municipalities themselves; who had a duty in terms of the law to notify the provincial government should they be facing financial difficulties – stating that they had not received formal notifications as yet but were actively in touch with the Department of Local Government in order to get projections on where there may be financial challenges going forward. Regarding where the R3.1 billion saving came from was precisely the objective of their budget process in a multi-phased strategy led budget process.

Mr Isaac Smith, COVID-19 Lead for Finance and SCM, Western Cape Provincial Treasury, responded that the idea was not to compare the unit cost with one another. The DTPW and DOH received lower prices, however, when other Department, which were not necessarily frontline, the prices then escalated. They were working closely with the National Treasury who also set some benchmarking for the prices as far as Personal Protective Equipment (PPEs) were concerned. What was witnessed was that some companies wanted to make certain amounts of profits, others not, some wanted to charge over the national benchmark test but at the same time when back to timing and turnaround time was important. Quite a number of the contracts were executed, however, there were still a few outstanding and depended on the availability of products in the market. In the case of the DoH they would make use of other supplier and may switch to accommodate what they needed at the time.

Mr Mackenzie stated that he always said and especially when serving on SCOPA; the way that the presentation and information was supplied was done in such a way that any individual sitting at home would interpret it the way he had and not have the assistance of the delegation with them to explain how things were calculated truly; all they had was what the information told them.

Mr Savage responded that in terms of their engagements with the National Treasury on the formula for the distribution of cuts, they were in discussions both formally and informally. It was clearly one of the most significant fiscal challenges that the Western cape had ever faced and would be tested to its limits. He stated that he had full confidence in both the National and Provincial Treasury teams.

The Chairperson stated that the Committee would go to a brief final round of questions. One minute per party.

Ms Baartman wanted to understand what the Department meant by the tourism sector when it referred to job losses; whether it included hairdressers, barbers, shoemakers. If not, she asked what would the economic impact on those types of industries be. She wanted to understand how innovations such as the gambling board using online gambling; were being used to ensure that provincial revenue was not being lost. Asked how the Department was assisting the tech industry to help the informal sector move into the digital space at a reasonable cost. Regarding the CTICC; in terms of the money she sought clarity as to what specifically was being paid for, as well as the breakdown.

Mr K Sayed (ANC) asked for details regarding the companies that were supplying the government with PPEs and the status and criterion that had been used. He wanted to know what criteria were used with regard to the PPE procurement for the reopening of schools. He asked what had been spent, the details of the companies and whether a breakdown of the quantity of PPEs that had been procured for each school could be supplied – stating that he understood if it could not be provided in the meeting but if they could get it in writing. Lastly, he wanted to know which small and medium enterprises received access to the procurement processes with regard to the PPE.

Mr Christians stated that the reserves were always used as a buffer. He wanted to know what a good reserve figure was.

MEC Maynier responded that in aggregate data the tourism sector was actually subsumed within the trade sector, therefore the Department of Economic Development disaggregated the data and then reaggregated it so that they had some sight of the effects in the tourism sector.  Regarding the subsectors; he stated that he was not sure at that particular time, however, a briefing or further information in writing about the model and its makeup and the effect in the tourism sector could be provided. Regarding the reserves, he pointed out that the R208 million referred only to the ‘unforeseen and unavoidable’ reserve which Treasury had committed to Covid-19; it did not refer to the fiscal stabilisation reserve and the service load pressure reserve. There were other reserves as well, however, the approach to the reserves would be reconsidered as they moved through the budget process.

Mr Savage responded that with respect to the online gambling and gaming; most parts of those were actually prohibited by the National Gambling Act. Cabinet had recently authorized the publication of two amendment bills in the gambling space and he believed that they would be briefing the legislature on that in the coming weeks. The Department of Economic Development would be better placed to provide information on the support for businesses to move into the digital space. With respect to the CTICC, the specific cost items was a question best left to be answered by the Accounting Officer for the DTPW, however, the cost to his knowledge were made up of electricity and water utilities costs of which the CoCT had deeply discounted to support the refitting and procurement costs associated with getting the facility up and running along with adequate security services. Regarding the PPE, he responded that it stuck firmly within the legal framework and could provide further details on both the mobilization of PPEs for schools and the SMMEs access to the procurement processes. Local suppliers were struggling when it came to sophisticated PPEs which would create a risk going forward for procurement – especially when it came more to the N95 masks and therefore they were trying to actively manage risk to the supply chain and provisioning system. The provincial reserve was effectively at a public finance policy level a function of the assessment of risk and affordability versus competing expenditure needs. The Western Cape’s historical approach in that regard was now standing it in extremely good stead and allowed them to deploy their reserves as they were doing to make sure that they maximized their response and remove any financial blockages in relation to the disaster.

The Chairperson thanked the HOD; stating that the responses concluded the first part of the meeting and the Committee would move onto the next presentation by the Premier and the Director-General of the Western Cape Government.

Briefing by the Western Cape Government on the Covid-19 Hotspot Strategy

Mr Alan Winde, Premier of the Western Cape, stated that regarding the budget and healthcare response; R725.5 million has been committed towards Covid-19 related expenditure across the Western Cape Government. They established a dedicated Coronavirus Provincial Hotline for residents to call, that had received a total of 28500 calls since 16 March 2020. On average it received 500 calls a day. The conversion of the CTICC into a temporary hospital facility which would provide some 850 additional beds at the peak of the pandemic was well underway. In total, the facility will include 4 wards - a mixed staffing model of temporary appointments, temporary re-deployment of staff, agency staff (medical -, infectious disease -, emergency - and internal medicine specialists and volunteers would be applied at the facility). It was estimated that 200 admissions and 200 discharges would be managed per day during the peak. They would open additional temporary hospitals along the R300 in the Metro, in Khayelitsha and in the Cape Winelands that collectively provided an additional 616 beds. That was in addition to the Western Cape’s 2 162 (included 658 through expansion) general care beds and 150 ICU beds that existed in Central and Regional Hospitals across the province. They opened 18 testing and triage centres (12 were already operational) that provided additional support at those facilities.

Assistance to the economy, employers and employees

  • The WC government launched the Covid-19 Content Centre for business which supports businesses by answering their questions on everything they need to ensure business continuity during Covid-19, from understanding the regulations to opening safely, from accessing funding to learning from best practice. Businesses in need of assistance can visit www.supportbusiness.co.za or email supportbusiness@wesgro.co.za
  • The WC government has assisted in preparing business for adapting to the “new normal” by preparing Covid-19 health guidelines for business. These guidelines not only provide information on how businesses can prevent the spread of Covid-19 in the workplace, but also what to do if an employee displays symptoms or tests positive for Covid-19. The guidelines can be found on our Covid-19 website
  • The WC government has produced a range of information material for employers and their staff to utilise in the workplace such as posters, checklists and decals that remind people of health guidelines to stop the spread of Covid-19. These can also be downloaded on the Covid-19 website: coronavirus.westerncape.gov.za/resources
  • To assist businesses to procure the necessary PPE required to protect employees, together with the City of Cape Town and Wesgro, and in partnership with FNB/RMB, the WC government launched a dedicated online PPE marketplace that provides a single place for small and large PPE manufacturers to promote their product ranges, and for businesses to secure masks and other PPE. The PPE marketplace can be found at www.supportbusiness.co.za/marketplace

Transport system

  • In addition to the Red Dot Transport Service for healthcare workers, the WC government has also launched a new USSD “quick code” system that enables public transport users to send free feedback using their cell phones. This is giving users a voice in the fight to prevent the spread of Covid-19 on public transport.
  • Since the lockdown started, the Department has been engaging in public and transport operator education in partnership with bus operators and taxi associations. This has established an effective system for monitoring Covid-19 hygiene in public transport interchanges.
  • The new USSD system enables the Department to keep improving its response by gathering information from public transport users to establish whether public transport operators comply with regulations and best practice by distributing masks, gloves and sanitiser.  To date, 355 responses have been completed.
  • PPE has been distributed to public transport operators, as well as support provided to others to access a supply of PPE.
  • A donation of 10 000 litres of hand sanitizer was facilitated from Distell to the MBT industry, along with a further 500 500ml units of hand sanitizer from SA Taxi Finance and from DMC Source to the MBT industry.

Driving public awareness

  • The WC government has a dedicated online website, which is being zero-rated. Nearly 1 million users have visited the page.
  • The WC government has run ads on social distancing, good hygiene, and what to do when sick, in over 3500 radio slots on over 29 regional and community radio stations. This has been done in all 3 languages of the Western Cape.
  • The WC government has run Facebook ads on all key behaviour change messages and have reached over 3 million individual users.
  • The WC government has developed an online dashboard that provides transparent data on the number of Covid-19 cases, recoveries, deaths and number of tests. This data is going to be shared down to ward level.
  • Over 1,8 million pamphlets have been delivered across the Western Cape. In Dunoon alone, some 12 000 pamphlets were distributed by our Department of Human Settlements.
  • The WC government has established a Faith Based Organisation network to ensure that we are able to share information with these organisations.

Disaster Management response

  • It operates 24/7 a day, focussing on prevention and mitigation of the Covid-19 pandemic in the Western Cape.
  • It has assisted in repatriating more than 6000 foreigners from Cape Town
  • It has managed the dedicated Provincial Hotline since mid-March assisting residents who believe they might have Covid-19.
  • It has mapped critical infrastructure, including Health Facilities, Isolation and Quarantine Sites, Feeding Points etcetera.
  • It has assisted in the planning for quarantining and isolation.
  • It is responsible for the coordinating preparations for major escalation scenarios that might occur during a disaster.

Supporting municipalities

  • By ensuring that the delivery of basic services in all municipalities is continuing uninterrupted.
  • By ensuring that front line and essential workers are operational so that these services continue.
  • By improving basic water supply in high density informal settlements.
  • All district municipalities have embarked on programmes to clean public open spaces.
  • A Local Government Support Grant, of R16,2 million was distributed to municipalities, aimed at augmenting and supporting the current humanitarian initiatives.
  • Support has been provided to homeless people in municipalities across the Western Cape Government.

Enforcement support

  • In hotspot areas the WC government was working with all enforcement role-payers to ensure compliance.
  • This has included integrated roadblocks, vehicles checks, and deployments.
  • 500 LEAP officers have been deployed to the SAPS Clusters, and they were involved in over 1300 operations during this reporting period.
  • The WC government has also taken a stand against Police Brutality and inefficiencies, to ensure proper accountability during this time.
  • The WC government was working with the City of Cape Town and all district and local municipalities to deploy accredited Neighbourhood Watch members as disaster risk management volunteers to assist in tasks such as queue management. Additionally, trained peace officers and Chrysalis Academy graduates have been deployed, subject to their availability.

Environmental response

  • The WC government has developed a Protocol to deal with waste from households with COVID 19 cases that include measures to ensure greater protection of waste workers and households from infected waste.
  • All municipal waste workers are provided with appropriate personal protective equipment.
  • The province has four licensed health care risk waste treatment plants including two incinerators where this waste is taken to. In addition, there are 71 operational waste disposal facilities across the province, of which 1 is a high hazardous waste disposal facility.
  • The Pandemic is having a severe economic impact on the waste industry, especially on the informal waste industry and waste pickers. A relief program for waste pickers, in the form of food vouchers has been rolled out to help with support of National Government.
  • We have issued three Practice Notes to our stakeholders in the Spatial Planning and Land Use Management Sector and also in the Environmental Sector, to assist both in the Municipal domain and in the Private Sector. This should facilitate processes for Planning and Environmental applications, that in time will enable property development and construction activities post the lockdown period.

Supporting our most vulnerable

  • The WC government has identified high density and risk informal settlement areas and have commenced planning to assist these areas. This includes Dunoon, Kosovo and IThemba informal areas.
  • The WC government has identified land and existing pipeline projects in close proximity to hotspot areas in order to plan and fast track assistance for communities of hotspot areas.
  • The WC government has assisted municipalities and Department of Water and Sanitation to identify areas of water shortages across the province.
  • The WC government has delivered a total of 615 water tanks in the Western Cape thus far.
  • In addition, 14 Water Tankers are in use.
  • The City of Cape Town has at its own cost purchased 93 tanks and installed all of them as of 30 April 2020.

Mr Harry Malila, Director-General, Western Cape Government, stated that regarding the current status of epidemic in the Cape Metro, the following applied:

  • A rapidly increasing epidemic with increases in hospitalisation and deaths – the country is on the upward part of the curve, which is the nature of the pandemic.
  • Concentrated in essential services clusters, care homes and in the geographical areas where the workers live, which are mostly in the more dense and poorer communities in Cape Town. Hotspot interventions are prioritised in these areas.
  • National testing/ lab capacity is under severe strain, which is affecting Western Cape testing. Requests have been made to National to scale up.
  • Facilities to isolate and quarantine off-site are being scaled up. As the pandemic progresses, the limits of the available capacity will ultimately be exceeded.
  • There are a large number of undetected cases, which will continue to grow because of the limitations on testing.
  • Individual case detection and contact tracing capacity is being stretched by the number of new positive cases.

Current status of epidemic in the Rural District

  • The Cape Winelands District is showing evidence of multiple clusters and fast spread, having started in Witzenberg 3 weeks ago, and moving onto Drakenstein, Stellenbosch and Breede Valley, in the past 2 weeks.
  • Emerging early clusters in Overberg (Theewaterskloof and Swellendam), and West Coast (Swartland), during this past week, while there is still many areas with no cases or sporadic cases.
  • Testing/ lab capacity strain is impacting on these Rural areas to detect cases early and move to aggressive isolation and quarantine interventions.
  • Ability to isolate and quarantine off-site will be scaled up rapidly across the Rural areas.
  • Projected to have a smaller number of undetected cases, and aggressive testing is still indicated.
  • Still big value of individual case detection and contact tracing, to contain the spread of virus.

Proposal for strategy alignment in Cape Metro

  • Streamline testing and contact tracing activities to focus on high risk groups such as health workers and vulnerable people.
  • Emphasise case management with a view to early detection of deterioration in health status through risk stratification.
  • Increased focus on mass communication and building agency for behaviour change – individuals and organisations (across sectors).
  • Re-purpose CST and CHWs (Community Health Workers) towards the vulnerable persons and strengthen workplace/ institutional agency with a focus on prevention through inter-sectoral action.
  • CST focuses on reaching high risk groups such as the elderly and those known with co-morbid conditions.
  • Focus on health system preparedness including utilising testing appropriately in the clinical environment.

Where are the hotspots

Clusters:

  • Linked cases in specific settings of gathering, e.g. workplaces or events  of gathering

Hotspots:

Geographic areas with many linked cases through local community transmission

Prioritised Cape Metro hotspot areas:

  • Tygerberg
  • Khayelitsha
  • Klipfontein
  • Western – Du Noon
  • Southern – Hout Bay

Prioritised Rural hotspot areas:

  • Cape Winelands – Witzenberg, Drakenstein

Hotspot strategy

  • The Health Strategy will be aligned to the risk stratified case management approach, in areas with established community transmission.
  • The identification for appropriate people for admission to designated isolation and quarantine facilities will have to be nuanced, in light of the testing capacity challenges, together with exploration of viable and feasible community-based isolation models (via community initiatives).
  • Behaviour change in terms of social distancing, hand and surface hygiene and universal mask wearing, targeted on all areas of gathering in hotspot areas will be the key drive.
  • Nuanced, agile, pro-active and adaptive responses are required in the local community spaces (in each of the local area).
  • The rate of increase of transmission rates per ward and suburb should be tracked over the next 6-8 weeks.

WoGA and WoSA in hotspot

  • Whole of Government Approach (WoGA) is required:
  • Health Response – risk stratified case management, referral for Q & I
  • Economic – map businesses, protocol management, social distancing and operations, hygiene
  • Safety – SAPS, WCG and CoCT traffic deployment and law enforcement
  • Food security & Humanitarian – Agriculture, DSD & CoCT initiatives
  • Places and Spaces - Human Settlements
  • Transport – EMS, Taxis; CoCT
  • Resource management – finance and human resources

Whole of Society Approach (WoSA) is required:

  • Behaviour Change/ Citizen accountability is required
  • Role of Councillors and Community Leaders
  • FBOs, integration, emotional support & caring
  • Messaging – behaviour change

Conclusion

  • DLG together with DoH is responsible for co-ordination
  • JDMA principles of collaboration, joint planning, budgeting and implementation, including National and provincial departments and stakeholders
  • Aspects are co-ordinated with the Disaster Management Response: PROVJOC
  • Approach relies on:
    • A differentiated approach to case management
    • Identification of ‘hotspot’ areas
    • Identification of vulnerable spaces within hotspots
    • Identification of vulnerable people within communities
    • Effective implementation of public health measures to reduce spread through all parties acting in concert
    • Effective communication to drive behavioural change to achieve public health practices
    • Effective dissemination, ownership and support of actions within society to reduce vulnerability (Whole of Society Approach)
    • Commitment of resources from across government to support and implement and sustain strategy (Whole of Government Approach)

Comment on legislation

What helps/hinders in the fight against Covid-19

The Disaster Management Act is conducive to fast and agile regulatory responses to the disaster.

Although the Act assigns primary responsibility for the management and coordination of the (national) disaster to the national executive, it empowers provincial governments and municipalities to support the national executive, which means that all three spheres of government work together and consolidate resources, capability and capacity to manage the disaster.

Although the Act contemplates all three spheres of government working together, which they are also enjoined to do in terms of the Constitution, the Act contains no detail on the type of support and the manner in which it is to be provided to the national executive nor does it provide for any regulatory powers for provincial governments and municipalities.

Intergovernmental relations during Covid-19

  • Regular meetings of the President’s Coordinating Council attended by the Premier, Minister responsible for Local Government and the DG
  • Extended Cabinet (Cabinet and PTM and Metro and Districts) meet twice per week to focus on the Western Cape Covid-19 response
  • Covid-19 response clusters report into Extended Cabinet – many of which have Whole of Government and civil society membership:
    • Health Response;
    • Humanitarian and Social Response;
    • Local Government and Disaster Management Response;
    • Business and Economic Response;
    • Safety and Security Response;
    • Infrastructure Response;
    • Strategy: Next Phase Data Management, Modelling and Strategic Management / Planning Response;
    • Finance, Administration and Institutional Support
    • Communicatio

Discussion

The Chairperson opened the floor for a round of questions. Each party would have three minutes.

Mr Mackenzie wanted to know if there were any considerations to redirect the resources such as the wi-fi project on public places that were not being utilised to kids at school or at home.  Knowing that the Premier met with the President and other Premiers every Saturday; he asked if there had been any discussions on moving down to level two immediately from the 1st June 2020.

Stating that he had already done a Covid-19 test and was proudly negative, he wanted to know if there had been discussions about using more of the private sector and government paying for those services because of the delay with national government testing.

Mr Sayed wanted to get a sense on whether there had been consideration to look at the multidisciplinary and multi-sectoral response teams that could attend to Covid-19 and some of the other issues of social security and health issues such as TB and HIV or maybe whether the Covid-19 period had given the Premier and his team an opportunity to look at dealing with the health issues. Given the rise and infections amongst health workers and some of the information at their disposal which indicated the 219 cases and including the 50 Tygerberg Hospital cases and 69 nursing staff at Groote Schuur; he wanted to know in addition to providing PPE what other measures were taken to minimise the risk of the spread and what measures were taken to decontaminate the wards after it had been affected and; to test and isolate staff after positive tests had been confirmed. Given the number of complaints and tensions between the management and staff in various healthcare facilities; he asked whether the Premier would consider establishing a Covid-19 health facility response team which would include management and union representatives. Lastly, he wanted to know what mechanisms were in place to ensure that there was one message being issues to the public – using the example of the Premier releasing stats and Ward Councillors going after the stats had been issued and debunking them publicly. He emphasised that when the Premier spoke it seemed that Ward Councillors were singing their own tune.

Mr Herron wanted to talk about the health protocols and some of the information which the Committee just received. He wanted to understand why the Western Cape’s community screening numbers were so low when compared to the National number and rest of the country given that the Western Cape was probably the most capacitated province in the country. He asked why in Cape Town there had only been to one location where screening had been done, however, in the rest of the province there had been screening at multiple locations in a day – it did not make sense to him as Cape Town seemed to be the area where most of the infections were when looking at the hotspot areas.  With regard to the contact tracing; he wanted to know why the per capita contact number had been so low and it seemed that it was not only a Western Cape problem but a National problem as well.

Mr Christians asked if the pilot at Dunoon had been a success thus far. If so, he asked if it would be extended to other hotspots. He asked if the Dunoon numbers were checked on a regular basis to check whether there had been a stop in the spread or an increase. Sought explanation on the statement made previously by the Premier that there had been more deaths from Covid-19 in private hospitals than in public hospitals. He asked for  confirmation on the rumour that not all deaths were actually Covid-19 deaths but were reported as such. Knowing that there were 432 ventilators and 100 ordered; he asked if that was enough according to the modules so that when the infection peaked there would be sufficient ventilators to deal with the peak.

Premier Winde responded that regarding public buildings and other facilities, it was something that was being spoken about and most of the public spaces were put onto an initial list for extra beds or extra triage systems. The exact number was unknown but there were a large amount of facilities on that list. There were discussions going on around the utilisation of public spaces by the Education Department; especially if they had WI-FI connections. Regarding the question around discussions at the PCC; he stated that there had been no real sort of focus on level two in their discussions; everyone had been asked to comment on the existing plans to go towards level three. Since the PCC there had been a whole range of other platforms for discussions as the President had engaged with all political party leaders in the country as well as business and stakeholders. Regarding the support between Premiers, he stated frankly that there had been good discussions where they did not only necessarily discuss the levels for economic activity or lockdown but discussed all sorts of things.

He assured the Committee that there had been lots of engagements with the private sectors by DEDAT; DOH and even their own systems who reported back to Cabinets. The private sector was not only limited to businesses but included civil society as a whole; where meetings led by Minister Nomafrench Mbombo took place either at a district or city level. All Councillors, politicians, communities were invited. Eighty specialists were invited by Ms Mbombo to speak at one of those meetings where the focus was on death. They were constantly at work in trying to get as much civil society and private sector engagement that they could get. Thanked Mr Sayed for his question and responded that he believed that the whole of government and society was a multi-sectoral response team. It was not just health but rather everyone who was in some or other way involved in each of those hotspot responses. They were definitely trying to make sure to bring everyone on board. Regarding the numbers at Tygerberg, he responded that on the health WhatsApp group that morning between the Minister and Dr Cloete; he believed that the numbers were corrected to 59 recovered and 43 who were positive at the moment. He stated that obviously at times there would be mischief with the numbers, however, assured the Committee that no matter what there would be no sugar coating – it was an extremely stressful environment for the frontline workers in health as well as all front line workers across the government and private sector. He stated that the Director-General had various plans through HR and the Dot to deal with the various issues faced by the 84 thousand people in their workforce. He expressed that the Department would want to make their data available and had seen how after releasing their data, newspapers would create their own hotspot maps and therefore they could not always stop Councillors from dealing with the data. At times it became difficult to deal with and that was why they had not put the granular slide up at ward level but rather pulled it back at the last minute because if the health granular slide was used then they would just get a dot on an Earth number which would end up being counterproductive.  Hopefully within the next week they could make the data more granular but at the same time curb the victimisation and negative stuff which went along with making the data open. While one message was always better; he would not dictate to Councillors as they were also allowed to have their say.

Regarding screening and testing; the Western Cape started off with two kinds of testing; the one being the screening and testing in which there were 407 thousand which was probably now over 500 thousand with about 12 thousand tests to the 500 thousand; which is what was happening across the country. He did not know how the country got those but when their team went to screen and test; they had a range of questions which they asked; they had to arrive at the person’s door and some could even take a person’s temperature. On average he had been told that it took around five minutes to do a screening which either got logged or reverted for testing – that was the most basic method that was being used. He explained that he had not done any cross questioning in other provinces but saw that Limpopo did 1.7 millions screenings in ten days; something he believed was not possible. Unfortunately, it was becoming increasingly difficult to follow the basic model of screening and testing because even the screening and testing results in the randomised model did not give a high response or high positive rate. The second kind of testing was the targeted testing model and he was very pleased to see that it was being used in the Eastern Cape and Gauteng as well. There was a third round of testing which was the hotspot testing.  He clarified that the testing mentioned by Mr Herron was the first round of testing where they went into communities wherever they were across the province and go door-to-door – that was the half a million he explained.  The targeted was not advertised and was where they would go directly into a factory or workspace and tested three shifts. He did not know about other provinces but according to the western Cape DOH; there should be around five to ten contacts and explained that it was not always easy to get to those contacts and therefore the numbers were maybe lower than in other provinces when it came to that. Lastly, the hotspot testing was a different regime; each hotspot got divided depending on the size of the hotspot into a number of spaces where they in tun got a senior operator, screeners and medical personnel assigned to it who moved across that space.

He stated that they had hit a real wall in south Africa when it came to testing. Just like many other countries had also hit the wall where they could not get enough testing through but he was pleased to say that it was either very early that morning or late last night when they received a letter from the NHLS to say that they could procure private sector testing although when they engaged the DOH and private sector on it, it would not give them much relief as the private sector itself was also bottlenecked quite severely and therefore it was a big problem for South Africa. The question about Dunoon; he expressed that Dunoon was the first in-depth model to the Witzenberg model but the Dunoon pilot was the focus area. Witzenberg was the first pilot and the numbers were looking good as long as he could trust the testing but it, but it already looked like the whole of government and society approaching Witzenberg had numbers which were cooling and that was really good news because it seemed to be slowing down. They would see within the next two weeks whether their interventions in the pilot were going to be effective and whether increasing challenges would appear. He stated that more people died in public hospitals than private within the Western Cape and was not sure as to the wording that may has been used but he said that if that was the case for South Africa it certainly was not the case for the Western Cape. He clarified that when he had mentioned the issue of people dying in private vs public; he had been referring to the numbers in Gauteng and not the Western Cape. While another 100 ventilators had been ordered, a ventilator was just a machine and needed to be put into an ICU facility equipped with staff that knew how to operate it and set it up properly. The model stated that there would be a shortage of 750 ICU beds in the Western Cape which included both private and government sectors. Currently they were in the process of buying 300 private sector ICU beds for government usage but were still busy with negotiations which happened at a National Level. The 15% and 11% were the post-mortem percentage tests that they did and he believed that the numbers were actually growing. It was at 15% but went down to 11%; be believed that recently it had gone up again. Testing was critical because at the end of the day if it could not be measured then it could not be managed.

Mr Malila responded that the Premier and himself in a meeting with their National colleagues where commentary had been made that the Western Cape was actually the blueprint for what was going to come in the country. He had reported to Cabinet that morning to institutionally put processes in place to communicate more regularly to staff and explain stuff such as the return to work policy and just overall positive messaging to staff and particularly within the health space that they were appreciated for what they were doing and in fact they were even making a call to their national colleagues to do the same on a national basis to nursing and medical staff all over the country. With regard to the modelling; the forecast scenarios had been validated nationally and internationally. The models were being tested by models put together by universities as well. Dunoon was a pilot and the aim was to take the learnings from Dunoon and implement it in other areas, obviously recognising that communities were different but would rely on the principles learnt and apply it in other areas. The biggest constraint was the issue around certainty on funding; at the moment there was no certainty on funding, no certainty on what portion of the R20 billion that was set aside nationally would go to the Western Cape.

The Chairperson thanked the Premier and Director-General for their presentation. They were informed that they would possibly receive additional questions for response if Members needed more clarification on matters, noting that the Premier and Director-General had another meeting at 5pm. They were dismissed from the meeting and the Members of the Committee were asked to remain behind to deal with administrative matters. Members were reminded that if they sought more information or had any further questions, it needed to be forwarded to the Procedural Officer who would forward it to the relevant Department.                                      

The next meeting was scheduled for Wednesday, 27 May 2020 at 1pm. The theme would be citizen surveillance. Members were alerted that no confirmation had been received as yet from the National Department of Health or the National Department of Communications but were in correspondence and had sent letters to them.  An upcoming brief with the Department of Health was scheduled. Ms W Philander, as Chairperson of the WCPP Standing Committee on Health, along with all other Members, of the Committee were to submit any specific issues for which they wanted to be briefed on to the Procedural officers so that it could be forwarded to the DOH.

The meeting was adjourned.

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