In this virtual meeting, the Minister of Public works and her Department briefed the Committee on developments and investigations relating to the procurement and construction of the Beitbridge border fence.
The Department stated that the technical condition report had been finalized and it was recommended that the fence can be repaired. These repairs will consist of replacing the structural supports that were removed. The rectification of fence if approved by the Department budget committees will have to be supported by commitment from the Department of Defence for increased surveillance. The rectification of the fence will support a partial deterrent and will provide the same level of security as per the original specification. The matter of restricting the service providers from doing business with Government, had been tabled with the Department’s Restriction Committee and Authority (RCAA). The committee was currently considering the evidence which will be submitted to National Treasury in support of blacklisting the contractors. The Department reported that with the assistance of the State Security Agency it vetted and issued clearance certificates for 160 SCM officials. No official was denied any clearance. A total of 252 SCM officials still need to be vetted. The Department intended to complete the vetting process by March 2022. The Department had engaged with the Department of Defence on the need to increase their presence on the borderline in terms of their constitutional obligation in terms of Section 200 (2) of The Constitution. The DPWI DG further sent a letter to the Secretary of Defence on 27 April 2020 requesting that the Department of Defence to intensify patrol and indicated the withdrawal of private security appointed by the Department.
The Committee made it clear that repairing a fence that was not fit for purpose would be a waste of taxpayers’ money.
The Committee asked how the cooperation between the various Departments been affected by the current lockdown of the border and the ban of travel through the border? From the presentation it looked like there needed to be extensive repairs. How long was that going to take? The infrastructure solutions with the rest of the borders discussed looked like it would a number of years. The Committee asked what interim measures would be put in place to make sure the border was not permeable? The fence was easily breakable and easy to breach. It did not qualify to be called a border fence. The fence was not fit for purpose. The Committee raised the issue of the blacklisting of Magwa and Profteam CC. The Committee was alarmed that the Department said it did not have enough evidence to stop other contracts with the same service providers who had worked with officials in the Department to embezzle funds. The Committee encouraged the Department to not do business with the service providers who had been accused of corruption. The Committee also wanted more details about the investigations that were being done into senior officials in the Department. What sort of actions was the Minister taking to re-engineer the Department towards what was necessary to guarantee ethical conduct?
The Committee urged the Department to deal with the Beitbridge matter with urgency so that it can move on to other pressing issues like the prestige programme and concerns about the functionality of the Department’s office.
The Chairperson welcomed the members of the Committee to the new term of Parliament and wished them well for the year ahead. He wanted the Committee to be a cohesive and formidable force. He welcomed the Department of Public Works and Infrastructure (DPWI) that was going to present a progress report and give an update on matters relating to Beitbridge border fence. The Committee had been to Beitbridge and would keep the matter on its radar. He asked the members to keep certain matters at the back of their minds to be considered at the end of the meeting. He mentioned that the members had submitted recommendations for what needed to be prioritised and focused on.
The House Chairperson had been in contact to inform him that the Committee was requested to prioritise the PPE related investigations which would be coming from the Auditor General and the Special Investigating Unit and other law enforcement agencies. Parliament needed to process those issues and see how it could run those investigations parallel to its normal programme as it dealt with corruption and fraud that has characterised PPE expenditure. He had sent a letter to the Minister of Finance, the Minister of Health and the Acting Minister in the Presidency requesting them to allow for a public adjudication process for the storage and distribution of the vaccine which arrived the previous day. National Treasury was considering deviations for the vaccine. Preventative measures needed to be put in place to ensure that vaccine distribution did not fall into the realm of corruption as well. That letter would be circulated amongst the members during the course of this meeting. It was important that the Committee kept an eye on what happens there. He welcomed Minister De Lille and her team who would be presenting on the Beitbridge matters.
Briefing by the Department of Public Works and Infrastructure on developments and investigations relating to the procurement and construction of the Beitbridge border fence
Minister Patricia De Lille said that the Department was in the meeting to provide feedback on the report of the Committee dated 17 November 2020. The delegation from the Department included Mr Imtiaz Fazel: Acting Director General, Ms Sasa Subban, Deputy Director General of Real Estate Investment Services and Mr Frans Van Wyk, Architectural Services.
Mr Imtiaz Fazel, Acting Director General, briefed the Committee on developments and investigations relating to the procurement and construction of the Beitbridge border fence. The purpose of the presentation was to present progress to the Committee on the Implementation of the recommendations of the Report of the SCOPA on its oversight visit to Beitbridge Border Post, from 4 to 6 September 2020, dated 17 November 2020. The presentation detailed the ongoing processes to affect these recommendations and continued engagements. The broader Borderline Infrastructure Solution for integrated borderline fencing and patrol roads on the border between South Africa and neighbouring countries was also discussed.
Implementation of the recommendations of the Report of the SCOPA on its oversight visit to Beitbridge Border Post
In its report SCOPA recommended that all physical defects be rectified in line with all applicable regulations. The Department stated that the technical condition report has been finalized and the team recommended that the fence can be repaired. These repairs will consist of replacing the structural supports that were removed, where the fence has not collapsed. The rectification of fence if approved by the Department budget committees will have to be supported by commitment from the Department of Defence for increased surveillance. The rectification of the fence will support a partial deterrent and will provide the same level of security as per the original specification.
SCOPA recommended that the Department write to National Treasury requesting to blacklist and monitor the Principal Agent and Main Contractor from doing business with Government, in terms of Regulation 14 of the Preferential Procurement Regulations, 2017. The matter of restricting the service providers from doing business with Government, has been tabled with the Department’s Restriction Committee and Authority (RCAA). The Committee was currently considering the evidence which will be submitted to National Treasury in support of blacklisting the contractors.
SCOPA recommended that a process of vetting of all Supply Chain Management personnel is initiated. The Department reported that with the assistance of the State Security Agency it vetted and issued clearance certificates for 160 SCM officials. No official was denied any clearance. A total of 252 SCM officials still need to be vetted. The Department intended to complete the vetting process by March 2022. The Minister has, however, requested that this process be fast-tracked.
SCOPA recommended that the SANDF deploys optimally to perform its mandate of border management and security. The Department had engaged with the Department of Defence on the need to increase its presence on the borderline in terms of their constitutional obligation in terms of Section 200 (2) of the Constitution. The DPWI DG further sent a letter to the Secretary of Defence on 27 April 2020 requesting that the Department of Defence to intensify patrol and indicated the withdrawal of private security appointed by the Department.
Planning, Design and Construction of Borderline Fencing
Phase One included pre-planning and town planning.
This included the process of site identification, securing of ownership, and the establishment of appropriate land use right/s, compliance with relevant legislation and the removal of encumbrances that may restrict development or the use of a property. The Department was currently in progress with the Town planning processes.
Phase Two included planning for the upgrade and redevelopment of borderline fences which would take between 12 to 24 months.
Phase Three included the construction of fences. It was a phased approach that would take 2 to 3 years.
Ms B Van Minnen (DA) had several questions based on the presentation. Her first question related to the first recommendation and the MoU which was in a draft format. How has the cooperation between the various Departments been affected by the current lockdown of the border and the ban of travel through that border? When the official methods of travel were locked down there will be an increase in informal travel across borders which was a concern. Linked to that was the estimated time of the decision making of the repairs as well as getting the tenders out and actually affecting those repairs. What sort of time period was the Department aiming for? This was important given the lack of the post-construction maintenance plan. Looking at the slides it looked like there needed to be extensive repairs. How long was that going to take? She then discussed recommendation 10 and the relationship with the Department of Defence regarding increasing patrols along that space. The Committee did observe an enormous amount of opportunities for people to cross over. The Committee also discussed, previously, the issue with the Minister of Defence regarding the SANDF facilitating people moving through that fence. The Committee would want to know what was happening with that matter. She then discussed the blacklisting of Magwa and Profteam CC. If it has gone to the RCAA, what was the timeline of the assessment of the evidence going to be? The Committee wanted to know what the timeline going forward would be. She then discussed the investigations into the officials, including Ms Whitehead. She asked if the first week of February deadline that was set applied to that investigation. She then discussed the plans for the fencing and the infrastructure solutions with the rest of the borders discussed. If it was going to take between three or four years to get that up and running, then what are the interim methods that are going to be applied to deal with border permeability and people potentially coming through that?
Ms V Mente (EFF) said that she needed clarity on recommendation number two. The recommendation spoke about repairs to the fence. She had a dilemma. The fence that the Committee saw was actually a residential fence not a fence meant for a border. That was as far as the SIU was concerned and the report that the Committee received. Were the repairs going to be done on the same fence that could be easily breached? Was the very same type of fence going to be installed? If that was the case, then how different was it going to be from what the Committee had already seen? She believed that would be fruitless and wasteful expenditure. The Committee saw three types of fences at the border. There were two old fences that were not in any shape or form similar to the new fence that was there. Those two were according to the prescripts a border fence. She was not sure what was being repaired? She wanted clarity on that matter. If the existing fence was being repaired, then it would be wasting money because the people would cut the fence and come through. She then discussed recommendation four of the progress report. It was a pity that Treasury did not provide a conclusive report on its own findings. There has not been a comparison between the Department’s findings and what Treasury’s regulations said. In recommendation four, the Department said that the matter of restricting the service providers from doing business with Government has been tabled with the Department’s Restriction Committee and was currently considering the evidence which will be submitted to National Treasury in support of blacklisting the contractors. She was very confused. There were regulations that were clear in terms of what happens when service providers breached their contracts. Was the Department saying that there were no comparisons to what exists in terms of defining service providers who have breached their contracts since the Department was referring this back to National Treasury? If National Treasury had given the Committee a conclusive report as to its own findings regarding the Beitbridge expenditure this matter would have been very clear. She was not sure whether there was any existing document or there was another investigation that had to take place to blacklist service providers who were clearly breaching their own contract.
On recommendation five, the Department was saying that it did not have enough evidence to stop other contracts of the same service provider who was not loyal, who was a thief and who has worked with officials in the Department to embezzle funds. She did not know what kind of evidence was needed. The Department needed to be very clear. She would not like a situation where the Committee was found complicit in lengthening a process that was not supposed to be long. The SIU report and the finding of the Department stated that the project was supposed to cost R26 million and it was overpriced by R14 million. Who did that? The service provider? The prices of material were supposed to be R23 million and they were overpriced by R17 million. Who did that? The service provider? At some point the Committee asked the Department to prove that the other projects were not in a similar mess as this one in terms of inflation of prices. The Committee did not receive that report that would have assured them that the other projects of the same company were in line with all the financial prescripts of National Treasury and its regulations. She was not sure what kind of evidence the Department was talking about when the Department said it did not have enough evidence to stop the existing projects. The Department wanted to stop this particular project yet it has existing projects with the company. Those existing projects are supposed to be stopped because the service provider was not loyal and they were proven to be corrupt. The State could not continue giving them more money.
Mr B Hadebe (ANC) said that he was concerned with recommendation number two that seeks to suggest that this fence can be repaired. He reminded the members that they had visited the fence. The members had tested the quality and strength of the fence. That fence was easily breakable and easy to breach, effortlessly. It did not qualify to be called a border fence. Ms Mente was correct when the members visited the area it was stated that the specifications used to build the fence was meant to protect the buildings at Beitbridge and not to be used as a border fence. Any suggestion or recommendation that suggests that that fence can be repaired will be vehemently opposed by the Committee. If the Department was considering using its budget to allocate more funds towards the repair of that fence was tantamount to fruitless and wasteful expenditure. The Committee could not accept that. He did not want to justify the fence at Beitbridge as a border fence. It was an insult to the capabilities and the strength of Government to protect its citizenry and its border if that thing was called a border fence. He vehemently opposed considering that fence a border fence. He wanted a detailed understanding of the technical report that suggests that the fence can be repaired. When the Committee visited the border it was stated that there were over 100 000 breaches. Over time there would be more breaches in the fence and there was nothing the Department could do to repair it. It needed to be replaced completely. A quality fence that can do the work was needed. There can be support from army patrols and sensors but that fence was fit to be used for a residential area. It could not be accepted as a fence for the border of South Africa.
Mr S Somyo (ANC) said that his point related to what the Minister of Home Affairs indicated was the problem relating to border management. The majority of border management challenges come from the Beitbridge border post. This indicated that the quality, size, capability and strength of any infrastructure which seeks to support the management of that border needed to be solidified. In its current standing there was no way that the Committee could justify the fact that the Department would do justice by only repairing the existing fence. Something else needed to be done there. He then discussed the indication of holding in abeyance the investigation into the two contracts by Magwa Construction and Profteam for them to be referred to Treasury for blacklisting. What would it mean if the Department had a reliance on assessing that action from its own internal department which has failed to manage the contracts themselves? The internal department has failed to provide the Department with a credible assessment which debarred the Department from acting immediately in such instances against the two service providers. How could the Department rely on a defective mechanism internally which had failed to assist them? He then raised the issue of the forensic audit. The forensic audit confirmed a number of defective areas which have been confirmed by various assessments which have taken place. Why was the Department taking so long to intervene when it knew that these matters required ratification? He appreciated that actions had been taken against individuals who had been found guilty of defects. He found it interesting that this was an organisation that existed over time beyond the appointment of the Minister. Meaning that this was a very endemic system which was at play. The Department could get rid of individuals but the misfortunes might remain without any prejudice in the Department. What sort of actions was the Minister taking to re-engineer the Department towards what was necessary to guarantee ethical conduct based on the capacity that was required to ensure that the Department meets its standards of performance?
The Chairperson thanked the members for their contributions. The Minister should notice the anxiety of the Committee. The Department cannot speak about repairing a fence that was not ordinarily fit for purpose. The PICC has indicated such. The SIU report indicated such. Even the assessment of the Joint Committees, and this Committee when it was there, indicated such. ‘It was very clear that that entire fence was a sham’. That begged the question what was the Department actually repairing? For all intents and purposes that entire fence needed to be stripped. The material used there, the Committee was told, was substandard. ‘The list of anomalies about that fence was longer than the Ten Commandments’. What was the Department actually repairing? How much was the Department planning to spend on this so-called repairing? This situation had a series of grey areas. He handed over to the Minister to answer the questions.
Minister De Lille said that she shared the anxiety of the Committee. She had already expressed to the Department that she did not accept the proposal that the Department repair and replace. The Department learnt lessons out of this situation. One of the lessons for the Department going forward was the transversal management of all borderline fences of the country. Therefore, there had been engagement at ministerial level. As the Department was reporting to the Committee today the Department was also a part of the Justice and Security Cluster that dealt with security issues. That body will be meeting very soon in February. She also had an engagement with the Department of Defence. The Department agreed with the Department of Defence that that fence was not fit for purpose. Any replacement, any repair to fix the mess at Beitbridge will not be decided by the Department of Public Works and Infrastructure alone. The Department of Defence was the user-Department and therefore played a major role in advising the Department of Public Works and Infrastructure on solutions and specifications to the fence. Those consultations were ongoing. She had also called for a meeting with the Minister of Home Affairs. If one looked at the Border Management Authority Act that had been signed into law by the President, the role of the Department of Public Works and Infrastructure was hardly mentioned. There was now going to be a joint meeting with the Justice and Security Cluster that includes the Department of Defence, the Department of Home Affairs and the Department of Public Works and Infrastructure. Certainly, that same poor quality of fence cannot be used again for repairs and replacement. Ms Mente was correct. It would be irregular expenditure. In the next meeting the Department would be able to put more facts before the Committee of a plan. The plan must be able to deal with the interim while the Department was planning for the medium and long term. All the relevant Departments needed to find an interim solution and that was what the meeting was about in mid-February. The Department would come and report back to SCOPA. She responded to questions concerning Melissa Whitehead. Ms Whitehead was not part of the Department. She was employed in terms of section 12A of the Public Service Act and therefore it was dealt with differently. It was attended to by the State Attorney.
She then responded to the question of Mr Somyo. She did acknowledge the previous year that there were serious structural and management problems in the Department. The Department had introduced new systems with little positives here and there. She now also had the support of the external audit committee which had just presented a report, a week ago, about the situation within the Department. Based on the report of the external audit committee she had also sought help from National Treasury. In discussions with National Treasury she asked what outside services or outside help could the Department bring in? That was what the Department really needed at this time. It was outside help that could disrupt the poor management within the Department. Those things were being discussed. She had discussed with the Acting DG that that meeting needed to be convened as soon as possible. That was how desperate the Department was. The Deputy Minister was driving a change management system within the Department and again the external audit committee was assisting the Department there. The findings of the external audit committee really ease that. A lot of recommendations had been made by the external audit committee over the years and going back as far as 2012. The problem has been the implementation of those recommendations from internal audit and external audit. As the Department went forward it would continue to brief the Committee on the remedial action and the remedial action from the recommendations of the Auditor-General management measures. The Department had also put an action plan in place to deal with the Auditor-General’s findings of 2018/2019. There was a repetitive history where the recommendations of the Auditor-General was ignored. The recommendations of the external audit were ignored. Together with the senior management, led by the Acting DG, the Department was slowly beginning to get to terms with that. The Minister shared the Members’ anxiety based on the technical report. A scoping was done in December 2020 where an assessment of the state of the fence was made. Those slides were shown to the Committee at the beginning of the presentation. She would also make a copy of that assessment report and the photographs, which was done in December, available to the Committee.
Mr Fazel discussed a point in relation to recommendation two and the rectification of physical defects. He pointed out that the condition assessment that was being spoken about in response to the recommendations was pursuant to the Committee’s recommendation that all physical defects were rectified in line with the applicable regulations. The Department’s technical condition assessment was in response to the recommendation rather than a desire to actually use the fence. He wanted to make that point clear. He then discussed the issue of restriction from doing business. In terms of restriction from doing business there was a process that the Department followed according to circular 40 of 2019. That circular was based on due process and the relevant elements of restriction contained in the Treasury regulations and regulation 14 of the PPPFA. The involvement of National Treasury is premised on the fact that National Treasury maintains the database of restricted suppliers. When the Department concluded the process it was Treasury that endorses the restriction. It was Treasury that ratifies the decision of the Department to restrict. That was the reason for the involvement of National Treasury. Internally, the Department was forced to consider all the evidence separately from the investigation by the Restriction Committee. The Department was also compelled to invite the suppliers, who in this instance were Magwa Construction and Profteam, to make representations as to why it should not be restricted. Through an independent process, the Department has to repeat the entire investigation in some instances to give these companies the opportunity to make representations as to why they should not be restricted. In the Department’s experience the bigger companies are using big legal firms to challenge the organisation so restriction was becoming a very complex process. Because of the fairness of the Department’s systems it has to pedantically follow that due process in order to bring about restriction. He assured the Committee that the Department will see the process through. The Department has had experience with this in a few earlier investigations of the pain that was necessary to bring about restriction but the Department was committed to doing this. He then talked about the existing contracts. The Department was following a stepped-up process. The Department had engaged its construction management branch and the relevant project managers who were managing the various contracts awarded to these two companies. The next step was legal services as well as internal audit. The internal audit has been instructed to finish an audit in a short space of time. He hoped that by the end of February it would be complete to give the Department a second opinion about the companies and whether they conducted themselves in an ethical manner and if they complied with all the requirements and obligations in their contracts with the Department. The Department had not left it alone. It was following a step-by-step process. The Department will only continue with the contracts once it was satisfied, beyond doubt, that there was no reason to restrict them or cancel the existing contracts. The Department was merely following due process. It wanted to ensure that the processes stand up to scrutiny. Those were the onerous processes involved with restriction. He then responded to a question about integration and whether there were interim solutions in place. The Beitbridge border fence project was intended to be an interim solution pending the long-term integrated project. DPWI would have to engage the Department of Defence to determine what it wanted to do regarding this particular area. It was likely that, with respect to the entire border line included in the site clearance process, the Department would go straight into a long-term solution because of the costs involved and because of the Department’s experience with this particular project. The Department planned to go out with a request of information before the end of March to call on companies and members of the public to propose border fence solutions to work together with the patrols systems as well as sensors and to look at best practice and how the Department could best secure the border in a cost-effective manner. He assured the Committee that the Department was far from closing the process of restrictions and the cancellation of contracts. The Department was following due process and wanted to achieve a positive result at the end of the day.
Ms A Siwisa (EFF) recalled that in the meeting last year with the PC of Public Works there was a response to a question on the charges. The response was ‘charges have been reversed due to improper channels being followed against the officials’. Does that mean for the charges that the Department was taking about the proper channels have been followed? Will the Committee receive a progress report on that? She had a concern. What guarantee does the Department give that the contracts that already exist were onboard by these companies that were being mentioned? Throughout this process the Committee had been given the projection that everything was onboard and everything was going according to the way it was supposed to go. What guarantee does the Department give the Committee that the contracts that were currently running were onboard? Or was the Committee also going to wait for a report where it will be discovered that there was wasteful expenditure and that certain procedures were never followed? This contractor has been working for Government and given contracts for the past 30 years. The contractor was working at most of the ports of entries. What guarantee will the Committee get that at a later stage the Department will not be sitting with a mess that it was currently sitting with regarding Beitbridge?
Ms Van Minnen had a follow-up question in response to something the Acting DG said regarding the assessment to repair the fence. He said it was pursuant to the Committee’s recommendations regarding the repairs rather than a desire to use the fence. Could he clarify what he meant by that particularly in light of there potentially not having been a recommendation by the Committee? What would have the Department’s approach been to that? She then discussed the long-term project that the Acting DG spoke about to find solutions to issues that were present there. Given the fact that there were not the same issues on the other side of the border fences with Namibia and Botswana, surely that indicated that long-term what the Department should be looking at was not necessarily just trying to block the spaces off but actually ensuring that people no longer feel the need to consistently incur over the borders. So that one ends up with a situation like in the rest of the country where there was no pressure to constantly cross over.
Ms Mente said she was concerned. She was not sure if the Acting DG understands the damage that corruption does to this country. She agreed with him that the Department was embarking on a process of auditing existing contracts. By the end of February, the Department will give the Committee that report to ascertain if those contracts were in line with the financial regulations of this country, PFMA and Treasury regulations. She had a problem with this particular service provider. She provided an analogy of owning a house and the owner having a service provider who maintains the plumbing. The owner gives them another contract to maintain the electrification process. The day the owner calls them to work on the swimming pool the service provider gives the owner inflated prices. The owner wants to stop them working on the swimming pool because he caught them but trusts the service provider will be loyal with the plumbing and electrification. The Department has already established that the service provider was a thief but the Department wanted to keep them for the other projects. The Department did not want to keep the service provider for this particular project where they were caught. It did not make sense. The Acting DG mentioned that big companies were using big law firms. The big law firms were available to everyone. The big law firms were available to the Department too. That was logic and common sense. She did not understand the legal team in the Department. The Department caught a thief but still wanted to work with them because the Department thought that they did not steal from them in previous projects. There cannot be any legal standing that says the Department cannot remove them or stop their contracts because the other two contracts are legitimate. This service provider was doing a continued maintenance of the Department’s projects and now the Department caught them out as thieves. What guarantee did the Department have that they would not come back and mess up the work that they had done in retaliation for the Department catching them? She watched a tribunal where there was an argument about that particular company which did the Beitbridge fence and she was ashamed. She could sense the facts that were presented were ‘the facts of the desktop’ and not the facts that the Committee saw in person. Government needed to take its job seriously and make sure that whoever is hired is a person who knows that they were talking about. That was a problem that the country was having. These companies cannot continue having contracts with the State. They were thieves. How could the Department keep them by saying that the other contracts look solid and good? The contracts cannot be legitimate if they were offered by thieves.
Mr Hadebe said that perhaps the request of the Committee was misunderstood. Everyone knew now that that fence was not fit for purpose and there was no value for money. This Committee would not suggest to repair a fence that was not fit for purpose and to repair a fence that did not provide value for money. He wanted to get an understanding of what was meant when the Acting DG said it was an interim measure that was not meant for a long-term solution? How long did the Department envisage that this fence was going to last for? If it was okay to spend close to R40 million for an interim measure then it should at least be value for money. The country should get a fence that was fit for purpose. That was what was meant when the Committee said that the fence should be fixed. The Committee wanted the Department to get a proper fence if it was going to be an interim measure. Let it be value for money. Let it be fit for purpose. The strength of that fence was compromised and it was stretched beyond its quality. When was the Department going to fix the fence? Was it going to look at the strength as well? The fence was meant to be 2.2 metres and it was currently 1.8 metres. Was the Department going to extend and add the missing part to that fence to ensure that it was 2.2 metres? Would the Department ensure that it would go back to its original strength? Currently, as things stood, that was not a border fence. He emphasised the point that the wrong specification was used. The specification used was not meant for a border fence. The Department was going to recoup money from Magwa Construction then it should at least get a fence that was fit for purpose. The Department must not get the money and then do shady work. That was what the Committee was requesting. The Committee needed to make its intentions clear so that any ambiguities could be avoided.
The Chairperson asked the Acting DG if the restriction committee had met If yes, when? What was the update? He got a sense that there was no urgency in dealing with these matters. Given the gravity of the situation and the extent to which this was one of the most glaring breaches of the PFMA, amongst others, and instances of corruption which came about because of the pandemic. He imagined that the Department would have to move with a particular speed. He then discussed the issue of the Ministerial Advisor, Melissa Whitehead. The Minister needed to provide some clarity on the matter. The information before the Committee was that there were allegations against Ms Whitehead when she was in the City of Cape Town in relation to the MyCiTi bus project. There were allegations of irregular influencing of process. She resigned in the middle of that disciplinary process. This Committee was fundamentally opposed to people migrating from one sphere of Government to another without their disciplinary processes been concluded. If this was the case then it will cast new light on why the Committee was concerned about this particular issue and Ms Whitehead’s involvement on these matters. The Committee wanted clarity on that matter. He agreed with the members that the Committee had not gotten favourable cooperation from National Treasury on this matter. That needed to be looked at. He then discussed the outstanding matters of the DG. The Committee would probably have to get a report from the Presidency on how far that issue has gone. That it runs parallel to the updates the Committee was receiving on the other disciplinary matters. The Committee would assess what it received today and prepare a complementary report to accompany the report that will be presented to the House at the first available opportunity. Listening to all the comments made by the Department, he did not get a sense of urgency on any of the matters. The corruption and the involvement of Magwa Construction, specifically, in the Department run very far and very deep. He did not receive these reports with any comfort. He was not convinced that the Department was making significant headway and moving with the necessary speed on this matter. There was just no urgency.
Minister De Lille agreed with the Chairperson on the issue of urgency. She had a meeting with the Department yesterday. She asked the Department exactly the same questions. When did the restriction committee meet? When was the restriction committee meeting again? When will this letter go to National Treasury? She told them that the Committee would ask the Department the same questions. She told the Department that today they must be prepared to give those dates to her and to the Committee and explain when the restriction committee met and when will the process be finished so that the request can go to National Treasury to do the blacklisting.
She would get a report and present to the Committee about the Melissa Whitehead issue. The Minister said that she had also left the City of Cape Town and had won all of her cases in the High Court in Cape Town. She would provide the Committee with a report that she would source from Ms Whitehead’s legal representatives.
She assured the Committee that any interim solution will not include the existing fence that was not fit for purpose because it would be irregular expenditure if the Department continued with that. She wanted to give the Committee that assurance. She also disagreed with the Department last night and asked what must happen in the interim. The transversal management of the borders has now been institutionalised with the DPWI becoming part of the Justice and Security Cluster. In the interim the request for information will go out before the end of March. The reason why the Department was going out for that request for information on how to secure the country’s borders is because it wants to test the market. The Department wanted to see what alternatives there were in the market that can be used other than this fence that was not fit for purpose. The inter-ministerial team also wanted to take this border project and look at all the borders of South Africa which was over 3000 kilometres. The inter-ministerial team wanted to register this as a strategic infrastructure project. This project will then qualify in terms of the Infrastructure Development Act of 2014. It will also qualify for the procedures and processes in schedule two of the Infrastructure Development Act. That was all under consideration. When the Department does that it will need to do some project preparation that can produce a project that was bankable so that it was able to go out into the market to go and look for funding. The Department knew that the fiscus was in a very bad space at the moment but that should not be a reason why it does not look for other alternatives. The Department did go out to the market with the 62 strategic infrastructure projects that were gazetted. The Department was able to raise R430 billion. The Department wanted to bring the broader border management, and whatever infrastructure that was going to be used, into this process to make sure that it was a bankable project. She was sure that the Department was able to take it to the international finance institutions and to the local banks. That was what was currently under consideration in terms of finding a quick interim solution. The people of South Africa were also screaming out to Government to say ‘do something about the porous borders’. The Department was listening and that was why it had to change tactics from the long-term plan whereby the first planning phase will now be concluded at the end of June 2021. That was also important because it prescribes what the Department needs to do. She looked forward giving the Committee continuous updates. She agreed with the Committee that the Department needed to drive urgency into dealing with these porous border fences of South Africa. The progress around the disciplinary matters, in the case of Melissa Whitehead, that was being dealt with by the State Attorney. The State Attorney has appointed a Chairperson and an initiator so that an independent process was followed. The Department was working together with the State Attorney. Last week she was given a briefing by the initiator of the process and the progress that had been made.
Mr Fazel endorsed and support what the Minister said. He acknowledged the concerns of the Department’s continued usage of the existing contractors. He assured the Committee that the internal audit process will generate a report by the end of the month and the Department would be able to deal with the matter of the current contracts once and for all. It will either endorse or refute the view of the Department’s construction management branch that all is good so that the Department had an alternative view, an independent voice, from the internal audit. The Department undertook to provide that report by the end of the month.
The Chairperson asked when the Department’s restriction committee met. He wanted the Department to provide pointed responses to the questions. The assurances that the Department gave were inconsistent with what has been reported. The pace of things has not moved with the kind of urgency that was required. Now the Department was generating a report at the end of the month. What has been the hold up?
Mr Fazel said that the Department had already made inquiries to the construction management branch about the level of performance of the existing contractors and whether there were any contracts where non-performance or non-compliance has been detected. The response the Department received was that there were no anomalies with respect to the older contracts awarded to these two companies. The internal audit unit was requested to also conduct an audit to validate the response and the viewpoint that was received from the construction branch. The Minister also raised the concern that the Department needed an independent audit.
The Chairperson asked how many projects was the Department speaking about?
Mr Fazel said that in total there were 19 projects that were awarded to these two companies before the Beitbridge investigation.
The Chairperson asked what the value of those contracts was.
Mr Fazel responded that the value of the contracts between the two was about R400 million. He will validate that figure before the end of the meeting.
The Chairperson said that there were 19 projects between the two that cost R400 million. The only contract that the two companies bundled on was the border fence? The companies had done everything else well. They had a track record of doing great work and then all of a sudden these trusted steeds of the Department go on and bundled on the Beitbridge border post fence? Did that not sound odd? The independent assessments will probably provide a better picture. The Committee wanted details about these other projects and assess all of them. It just did not make sense. Were these 19 projects awarded using due process? Were they regularly appointed? The Committee did not trust Magwa Construction and it was of the view that Magwa Construction had cronies working within the Department. That was why it was easy for them to be awarded the Beitbridge border post fence project without due process because they were in cahoots with elements in the Department. He took very little comfort in the fact that there were 19 other projects that were fine and that the Department received value for money for the R400 million. This matter was not just going to fall away and that needed to be understood very clearly. The Committee was not going to allow a situation where Magwa Construction or any of its elements were ‘treated with kids’ gloves’.
Mr Fazel said that the Department held the same view and that was why the audit was commissioned after the internal assessment in the construction project management branch revealed no exceptions. The decision was then taken to refer it to an internal audit to provide an independent view of this particular matter. This file was not closed and the Department will revert to the Committee on the outcome of that process. The Department will respect the concerns that had been expressed. He then moved onto the issue of restriction and Treasury. Treasury would only come in at the tail end of the process. After the Department concluded the process and took the decision that it was warranted to restrict the company then it would be referred to National Treasury to make the final decision. National Treasury would then place it on the list of restricted service providers. He then discussed the dates. Since August the restriction committee had been considering this information. The delay was caused by the fact that the committee requested all the reports and annexures pertaining to the Beitbridge investigation. At the same time the Department had the disciplinary processes unfolding where the staff were provided with provisional charges and also asking for information. The Department was guided by the State Attorney about what kind of information it should release in order not to compromise the disciplinary process by releasing inappropriate information to the restriction committee. It was all about information being released. The Department was clear on that matter. It was moving forward with respect to both restricting the companies as well as cancelling existing contracts. The Department wanted to be guided by legal arguments to ensure that they did not burn their fingers in the quest to restrict them from doing business or cancelling contracts without having a sound and legal basis. The Department was following due process. He acknowledged the lack of urgency and lack of progress that had been achieved by the Department. The Minister had raised the same issue with the Department. The Department would provide timelines in all its activities including the reports to SCOPA. Everything would have a deadline and timeline. The key stakeholders were legal services, the State Attorney, the SIU, the restriction committee and internal audit. Those were the five organisations supporting this process. The Department was going to engage with them today still to communicate the sense of urgency and to bring about those deadlines and timelines. All of the process would be fast-tracked so that the Department would not have these concerns expressed. He assured the Committee that the Department respected timelines and would show a sense of urgency going forward.
Mr Somyo said that it looked like that the Minister was facing an uphill battle against systematic instance that deals with the entrenched conduct of contract management. There was also the instance of a persistent approach of taking time in dealing with the wrongdoing. Today the Committee has met with the Minister. In today’s meeting he wanted to derive some undertaking in the areas that have been raised which would need, specifically, the Minister’s attention. The Minister should go back and rectify all the areas that the Committee had identified that needed urgent attendance. He commented that in terms of management the Department would take a long route on a simple matter. These matters could be dealt with in no time. His view was that the Minister must undertake to take the issues raises into her hands and go to the Department. The Minister needed to bring that report which highlighted critical areas of attendance to improve the current situation of the Department. He said that the Minister might not like what was taking place in the Department and that the myriad of steps that needed to be taken internally would infringe on her capability to deal with those matters. This was the time for her to find that space and get back to the Committee with a clear programmed approach to attend to all those matters which the Committee had identified.
The Chairperson said that the Committee would develop a further reporting schedule. The Committee would have to do a supplementary report, an annexure report, to accompany the one that was due to the House because clearly there were matters that were not receiving attention. If the Minister was raising similar issues the previous day and the Department was not disputing that then quite clearly the Committee was dealing with a Department that was hard-headed. The Committee should not be raising the issues that it was raising today if everyone was on the same page. He would hate a situation where he was associated with a project that was a national embarrassment and a blunder of epic proportions. It was embarrassing. If he was the Department then he would want to shape up very quickly, clean up the mess and restore a semblance of integrity and public dignity. The Committee had to sit there and be subjected to artificial, long-winded processes. This was not the note that the Committee and the Department wanted to start the year on. He said, ‘let us not pretend as though we are ignorant to the corruption that took place at Beitbridge’. If the Committee and Department were in agreement on that that things went fundamentally wrong at Beitbridge then there should not be this laissez-faire attitude to the issue. He told the delegation present that come the next meeting if the Committee was not satisfied then it would make specific recommendations about the leadership. This was the final warming. Shape up or shape out. These issues must be dealt with speed, urgency and a conclusion so that the Department can move on to the next pressing issues. The Department had a myriad of issues that it should be dealing with. The prestige programme of the Department was concerning. There had been issues raised previously about the functionality of the Department’s offices. Cleaners were said to be processing invoices. All of those issues still needed to be dealt with. The Beitbridge matter should not be a stumbling block in dealing with the other issues unless the Department enjoyed appearing before the Committee? He urged the Department to move with speed and to sort these matters out. The Department would have a period to collate the reports and present to the Committee at the end of February. The Department needed to come back to the Committee with a clear and succinct report. If not, then the Department would be on a direct collision course with the Committee. The Department should not frustrate the Committee and in turn the Committee would not frustrate the Department. This was the only Committee that says ‘render us jobless by doing the right thing’. If the Department did the right things then the Committee would have no job. The members of the Committee were the only people who wanted to be jobless. This situation was frustrating. The SIU was present in the meeting and the Committee wanted it to investigate all the Magwa related contracts with the Department. The Committee would be in communication with the SIU on that matter so that this chapter could be closed.
Minister De Lille said that the instruction from herself and the Deputy Minister to the Department was that all future reports to any Committee of Parliament must include dates. She asked the Acting DG to get calendars for every senior manager because it must include dates. The Committees do not want to hear what the Department will be doing. The Committees want to hear what the Department was doing and how far the processes were. The template of reporting will no longer be the story-telling methodology that has been adopted by the Department. She did not want to complain but sometimes she had to send the reports back. In the week she told the Department that she was not a grammar teacher and she could not be editing their submissions. She had also asked them to include dates into the reports. She requested the same thing again last night. Somewhere there must be a date. How the Department was moving forward at the executive authority level was based on one of the seven key priorities of Government. One of the priorities was to build a capable and an ethical state. That was what the Department was working towards. Sometimes if that was being done then accusations of interfering in the Department were made when it was necessary to intervene when things were not going right. She always referred senior managers to section 38 of the PFMA which comments on who was accountable for what. That needed to be adhered to. The Department needed all the help that it could get. She appreciated the Chairperson’s strong words and direct and honest assessment. She and the Deputy Minister would continue to try their best. For the sake of the people of this country the Department needed to push for the developmental State and that needed to be delivered by civil servants. The Executive had a role to play and it was accountable to Parliament. She and the Deputy Minister would continue to work hard so that the Department was pulled right once and for all. She said it was an understatement to say that the Department had troubles but it was working on that.
The Chairperson asked the members if there were any other issues they wanted to raise.
Mr Somyo said he had one unrelated matter which may relate to the Department. There was a time when a number of big companies were found to have faltered through the competition law and fined some related amounts for that behaviour. Would the Minister have any knowledge as to what had taken place to the commitments that were made at the time by the companies who were fined by the competition tribunal? Has there been any progress around those payments? What was that money being used for currently since the fiscus was such a challenge? The Minister could answer the question now or provide an answer at a later stage if she chose to. It was an unrelated question but it was of interest.
Minister De Lille said that she was in a position to respond. It related to the building of the 2010 World Cup stadiums where there was a lot of collusion amongst private companies. When it was in the private sector it was called collusion when it was in the public sector it was called corruption. Arising out of that collusion there was a settlement between Government and all of these private companies that resulted in the formation of Tirisano Trust Fund where all of these companies were supposed to be making donations to that fund that can be used for transformation of the built environment and also for the skilling up of built environment officials. She had prepared a report, that she can share with the Committee, for the Presidential Infrastructure Coordinating Council that was chaired by the President. Many of those companies were not paying into that fund. The companies have not kept to their commitment in their settlement agreement. There was no visible evidence of any projects of transformation within the built environment where these companies, through the settlement agreement, have committed themselves. She had also written to Minister Patel about the Tirisano Trust Fund because the Competition Commission was under his jurisdiction. She asked for a meeting to present the Tirisano Trust Fund report to him. It was just not working. She had sent about 20 questions to the Tirisano Trust Fund including about a donation they made to the Solidarity Fund without following due process in terms of getting permission through the board. The composition of the board consists of both private sector and public sector. Things were not in order there. She thanked Mr Somyo for the question and if the Committee wanted any information she would be able to share it with the Committee. She said it will be good for the Committee to also question the settlement agreement that was reached and the implementation of the settlement agreement. She had proof of millions of Rands that was outstanding from these companies not paying what they had committed to pay to Government for transformation of the built environment.
The Chairperson said that the Committee should get that report once it was available. Members will have a look at it and the Committee’s research team will probe further and prepare a briefing. The Committee will then determine whether it was an issue within its jurisdiction and have a look at it. He said the response of the Minister suffices. The Minister was right. Corruption was corruption regardless of who does it. The State does not do business with the State. It does business with the private sector or ‘tender-preneurs’. The extent of corruption was not fully gauged because it was not fully called out in the private sector. He thanked the Minister, Deputy Minister, Acting DG and the team from the Department of Public Works and Infrastructure for appearing before the Committee this morning on the Beitbridge related matters. The Committee will determine when the Department returns. There were issues that would be finalised at the end of the month and the Committee would look at its report and make a determination. The Department will appear before the Committee soon. The Committee would also be processing the Department’s annual report so those issues were still before the Committee. He thanked the Department for the presentation.
The Chairperson told the members that the draft programme would be circulated. The Committee was negotiating dates so that there was availability. The Committee would also be dealing with the PPE issues. The Committee was trying to avoid unwarranted and last-minute cancellations for the meetings because any day the Committee loses was worth more than can be measured. The Committee needed to make maximum use of its time. There were oversights that the Committee still needed to do. The Committee Members would receive that draft programme for their input. The Committee would be meeting tomorrow morning with the Auditor-General for a briefing on the State-Owned Entities audit outcomes.
The meeting was adjourned.
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