Department of Tourism 2021/22 Annual Performance Plan; with Ministry


04 May 2021
Chairperson: Mr S Mahumapelo (ANC)
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Meeting Summary

Annual Performance Plans

The Portfolio Committee received a briefing from the Department of Tourism on its 2021/22 – 2023/24 Annual Performance Plan. It noted that the plan is tabled in a precarious operational environment, as the tourism sector has been the hardest hit by the COVID-19 pandemic.
The Committee Chairperson said that just as the sector was beginning to recover at a domestic level, the current surge of the pandemic in India is a cause for concern for the safe reopening of international travel. The Committee called for the National Coronavirus Command Council (NCCC) to monitor developments in India to avoid a possible third wave in South Africa. The Committee called for government to be proactive in preventing such eventuality, whilst continuing to strike a balance between saving lives and livelihoods.
The Department of Tourism (DoT) noted that the tourism vote will receive R7.4 billion over the medium term, with transfers to South African Tourism accounting for 53.6% of the budget. The DoT 2021/22 budget allocation is to R2.4 billion, of which R333.1 million is compensation of employees.

Members urged the Department to strike a balance between tourism development and marketing to ensure that the demand for South African products is created whilst generating a supply base in previously disadvantaged communities in villages, townships and small towns. They welcomed the appointment of the Development Bank of Southern Africa as an implementing agent for the 30 community-based tourism projects implemented in 2021/22. This will assist in eliminating the challenges previously experienced by the Department of Tourism in implementing infrastructure projects.
Members also welcomed the adoption of the Tourism Sector Recovery Plan adopted by Cabinet to assist in bringing the industry to normality. Members urged the Department to also attend to the challenges pre-COVID-19 period including intersectoral matters such as facilitating access through e-visas; safety and security for tourists; airlift challenges; maintenance of tourism infrastructure; and transformation.
Members acknowledged the difficulty of the cap on the compensation of employees budget in the Medium-Term Expenditure Framework and that this may cause operational challenges. They urged DoT to optimise its efficiencies. South Africans were urged to take domestic tourism trips and substitute international trips with domestic tourism. This will assist to generate recovery and save labour intensive jobs provided by the tourism industry. They emphasised the importance of addressing poverty through the Villages, Townships and Small Dorpies (VTSD) tourism development plan.

Members asked if the Annual Performance Plan benefits targeted groups such as youth, women and people with disabilities. A Member asked how climate change readiness and responsible tourism, including green tourism, is included in the Department’s programmes.

Meeting report

Chairperson’s Opening Remarks
The Chairperson said that South Africa is not out of the woods yet. Actually, indications and developments in India, are such that if South Africa does not become more vigilant, if it does not adhere to the basics of ensuring that the coronavirus is not spread, it is likely that South Africa will go into a third wave. But scientists have indicated that the reason South Africa has been able to cope so far is because of the necessary education on how as a society, it must behave in the environments that people live in and the conscious efforts individuals take to ensure that people evade this virus. All know that it has affected various sectors of the economy, but the tourism sector is one of the hardest hit. A little bit of some activities have started to take place now South Africa is at alert level one. The Committee hopes that none of the actions that will be taken, either individually or collectively, will result in the degeneration of this situation, which may result in Government having no option but to again put in place additional measures to control the situation. The Committee knows that the Minister has been doing a lot of work, including individuals and enterprises within the tourism sector, to ensure that the sector is able to recover. The Committee knows as it receives the Annual Performance Plan that going forwards, everything being done will be in the context of the risk that is embedded within the virus itself, and a bit of disruption was inevitable in implementing some of the objectives set for the tourism sector.

Ministry's Opening Remarks
Minister of Tourism, Ms Mmamoloko Kubayi-Ngubane, said that discussion in the meeting will be led by the Deputy Minister.

Deputy Minister Amos Mahlalela said that the Department is presenting this Annual Performance Plan (APP) under the tourism operating environment that is fundamentally changed because of the severe disruption by the pandemic. International demand has been disrupted, and is likely to continue, as alluded to the Chairperson in the trend he was observing in India. Domestic demand is operating under very strenuous conditions due to the impact the pandemic has imposed on disposable income. The sector is still operating under a future that is very uncertain because of the pandemic. The Department of Tourism (DoT) is presenting this APP under those conditions and circumstances. Some of what DoT is implementing is to respond to the challenges confronted. The plan is premised on the Economic Reconstruction and Recovery Plan as agreed upon by government as presented by the President last year. Subsequently, DoT developed the Tourism Recovery Sector Plan, on which this APP is premised. This plan was developed in consultation with stakeholders. It is a collaborative effort of all the stakeholders, including provinces, who were engaged to make an input and finally, the plan was agreed on and adopted by Cabinet.

The tourism sector is prioritised as part of the Economic Reconstruction and Recovery Plan (ERRP) for tourism recovery and growth. Beyond that, DoT has got that the ERRP prioritises, which is infrastructure, for which tourism has a huge role to contribute, and the green economy from a tourism perspective. Tourism also contributes to mass employment, which is a stimulus employment package. The tourism sector, through the Expanded Public Works Programme (EPWP), will be able to make a contribution towards mass employment, and more importantly, to skills development in the sector, in making a contribution towards skilling South African people. The issue of gender is also important. There will be benefits for women, and also people with disability, as well as those products that are based in the townships and in the rural areas, as part of a process of ensuring that DoT creates inclusive growth in the sector and benefits the general population. Work is underway to review tourism policy that will culminate in a new policy framework that will deliver effective and purpose-led support for the sector growth and development. The Minister has appointed an advisory team, which is in the process of reviewing the White Paper and other pieces of legislation so DoT ensures that recent developments are taken into consideration. For example, the Committee has raised grading and other related matters. Once the review is concluded, it will be able to give DoT a direction on its policy position in the areas that it wants to take forward as part of the developmental agenda.

Broadly, the tourism sector recovery plan is based on three pillars. Each of those pillars will then be divided into seven sectors which contribute towards how DoT can reignite the tourism sector, create supply and demand, and ensure that it revives the sector, and makes it come back to where it was before the pandemic. DoT is working with various sectors and departments and is also engaged in infrastructure development, especially in South African parks, so that it ensures that there are products ready when the international market is opened. The Minister is engaging on a drive of domestic activations, which is aimed at mobilising the domestic market as a key pillar for the tourism sector, so that by the time the international market is fully open, then DoT is able to ensure that visitors find the sector up and running.

Department of Tourism 2021/22 Annual Performance Plan
Mr Victor Tharage, DoT Director General, introduced the four Programmes and the speakers.

Programme 1: Corporate Management
Mr Blessing Manale, Acting Deputy Director General (DDG): Corporate Management, said this branch provides strategic leadership, management and support services to DoT. It included the functions of audit, communications, and human resources.

Output Indicator 1: Unqualified audit on financial statements and performance information.

Output indicator 2: Vacancy rate not to exceed 10% of the funded establishment.
DoT wants to chase up that target every quarter. DoT appreciates that there will always be challenges of attrition and turnover but wants to maintain that target in each quarter.

Output indicator 3: Compliance with Employment Equity Plan
- Maintain minimum of 50% women representation at senior management service (SMS) level through designation of SMS posts at recruitment.
- Maintain minimum of 3% people with disabilities representation.
- Maintain minimum of 91.5% black representation.

Output Indicator 4: Implementation of Work Place Skills Plan (WSP)
Development and 100% implementation of branch-targeted WSP. DoT manages this target based on intakes in universities and service providers. Some of this intake has external dependencies in terms of the academic calendar.

Output indicator 5: 100% implementation of the Annual Internal Audit Plan.

Output Indicator 6: Communication Strategy and Awareness Campaign Plan implemented
1) Domestic and International Media Relations Plans; 2) District Development Outreach Programme; 3) Recovery Brand Activations and Seasonal Awareness Campaign.
4) 2022/23 Communication Strategy and Awareness Campaign Plan reviewed.

Output Indicator 7: Procurement of goods and services from B-BBEE businesses and SMMEs
- 100% of expenditure achieved on procurement from B-BBEE compliant enterprises
- Minimum 30% expenditure achieved on procurement of goods and services from SMMEs (this includes youth, women, people with disabilities and military veterans).

Output Indicator 8: Initiatives to support tourism sector recovery
One initiative: Targeted procurement of commercial venues for department conferences and meetings to support tourism sector recovery.

Output Indicator 9: Payment of compliant invoices within 30 days, including SOEs/municipalities.

Output Indicator 10: Seven initiatives implemented to promote reasonable access.

Output Indicator 11: Eight initiatives implemented to promote gender equity.

Output Indicator 12: Eleven initiatives implemented to promote integrity and ethical conduct.

Programme 2: Tourism Research, Policy and International Relations
Ms Anemé Malan, DDG: Tourism Research, Policy and International Relations, presented.

Output Indicator 1: Eight Monitoring and Evaluation Reports produced, including an annual report DoT has been compiling that is becoming more important, especially noting the pandemic, which is the state of tourism report (STR). The annual targets are:
1. 2019/20 STR finalised and published.
2. Monitoring of the implementation of the norms and standards for safe operations in the sector.
3. Two Reports on the Impact of COVID-19 on the tourism sector in South Africa developed.
4. Three Tourism Sector Recovery Plan (TSRP) Implementation Reports developed.
5. 2020/21 National Tourism Sector Strategy (NTSS) Implementation Report developed.

Output indicators 2 to 6 are:
- Review of Tourism Policy led by Minister-appointed advisory panel: Green Paper on the Development and Promotion of Tourism in South Africa developed.
- Four Reports on governance and performance of SA Tourism for oversight purposes.
- Two knowledge and information systems developed and implemented:
1. An Integrated Tourism Knowledge System implemented.
2. Data collection and verification for National Tourism Information and Monitoring System (NTIMS) Regulations.
- Advance South Africa’s tourism interests at regional, continental and global level through participation in G20; Southern African Development Community (SADC); African Union (AU), where DoT would be participating in the development of a feasibility study for African Tourism Organisation; Brazil, Russia, India, China, South Africa (BRICS); United Nations World Tourism Organisation (UNWTO) and Indian Ocean Rim Association (IORA). [The Minister would be participating in the G20 ministerial meeting later that day.]
- Four Outreach programmes to the diplomatic community implemented. [South Africa will continue to implement the bilateral agreements that it signed through implementation plans, and also prioritise memoranda of understanding (MOUs) with key countries, but outreach to diplomatic communities is a new target.]

Programme 3: Destination Development
Ms Shamilla Chettiar, DDG: Destination Development, said this branch ensures coordination and development of amenities, facilities, products and infrastructure to deliver quality visitor experiences and enhance communities’ well-being. This is achieved through the provision of coherent destination planning, investment promotion, tourism product and infrastructure enhancement and development, experience development and job creation through the Working for Tourism Programme. There are nine APP targets. Economic Reconstruction and Recovery Plan supports the work on tourism on infrastructure investment and public employment. The Plan responds directly to the strategic pillar in the TSRP on protecting and rejuvenating tourism. Page 32 talked to work being done on:
1. Budget resort network and brand concept (one of five destination planning and investment coordination initiatives). The target was to pilot this initiative and conclude stakeholder compacts for this. The other initiatives were:
2. Incorporate prioritised initiatives from tourism spatial masterplans into One Plan for DDM districts: OR Tambo District; eThekwini Metro; Pixley Ka Seme District; Namakwa District.
3. Manage a pipeline of nationally prioritised tourism investment opportunities (greenfield projects) 4. A database of distressed high-impact tourism projects (brownfield projects) managed (these projects will be found and matched with potential investors to allow those businesses to survive).
5. Four investment promotion platforms facilitated.
6. Destination enhancement initiative: Infrastructure maintenance programme in 19 National Parks
7. Infrastructure maintenance programme in one state owned asset in all provinces.
8. Support implementation of 30 community-based Tourism EPWP Projects to create tourism facilities to diversify the tourism product, ensuring multiple products across the country.
9. Create 3 826 work opportunities.

Programme 4: Tourism Sector Support Services
Ms Mmaditonki Setwaba, DDG: Tourism Sector Support Services, said this branch enhances transformation, increases skills levels and development. The annual targets are:
- Two incentive programmes implemented:
1. Tourism Equity Fund (TEF) applications approved.
2. Green Tourism Incentive Programme (GTIP) applications approved.
- Domestic Tourism Scheme implemented.
- One programme implemented to increase participation of SMMEs:
Incubation Programme implemented to support tourism SMMEs through seven Incubators - Two initiatives implemented to increase participation of women:
1. Implementation of Women in Tourism Business Development and Support Programme for 225 women: 25 women-owned SMMEs per Province.
2. Implementation of UNWTO Women in Tourism (WiT) Pilot in Limpopo: Vhembe and Mopani.
- Two programmes implemented to enhance visitor service and experience:
1. Implementation of Service Excellence programme in two provinces to enhance service standards of tourism products: Northern Cape and Limpopo.
2. Implementation of Tourism Monitors Programme nationally in line with project plans for nine Provinces; SANBI; SANParks; iSimangaliso.
- Ten capacity building programmes implemented:
1. One programme to capacitate tourist guides implemented in the following provinces in line with project plans: N West, N Cape, Free State.
2. Food Safety Quality Assurer Programme in KZN, WC & GP targeting 300 unemployed youth.
3. Chef/ Professional Cookery in NW, FS & NC targeting 300 unemployed/retrenched youth.
4. Wine Service Training Programme (Sommelier) in KZN & WC for 252 unemployed youth.
5. Hospitality Youth Programme Food and Beverage in nine provinces 1000 unemployed youth.
6. Twenty women enrolled in Executive Development Programme for WiT.
7. Thirty Chefs supported through Recognition of Prior Learning (RPL) for a qualification.
8. 225 SMMEs trained on norms and standards for safe tourism operations, in nine provinces targeting villages, townships, and small towns: 25 per province.
9. National Tourism Careers Expo (NTCE) 2021 hosted.
10. Implementation of  Educators Development Programme in all nine provinces.

Financial Information
Mr Ralph Ackermann, DoT CFO, said the budget in 2020/21 was R1.4 billion, because DoT returned R1 billion back to National Treasury. In 2021/22, DoT is back to R2.4 billion.

• The previous financial year, Administration was 21.0% of the total budget, which was due mostly to South African Tourism (SAT) marketing funding that DoT returned to National Treasury. Administration is now at 12.6%, and it remains in the range of 12.6 to 12.5%.
• Tourism Research, Policy and International Relations includes DoT’s contribution to SAT, and is back to R1.3 bullion; it is the biggest component of the 2021/22 budget at 56.9%.
• Destination Development includes the Working for Tourism projects (12.6%, and Tourism Sector Support Services, which includes the Tourism Incentive Programme (TIP) at 18.0% of the budget.

Over the past financial year, R336 million was spent on compensation of employees. Going forward over the next three financial years, it remains at R336 million. There are no increases in compensation of employees. “It is going to be a very tight three financial years ahead of us”. Under transfers and subsidies, it was R473 million, and it increased by R1.6 billion in 2021/22. That includes the SAT marketing funds that have been included again.

Programme 1: Administration
This is for human resources, legal, and communication facilities management. The biggest component is Corporate Management, which is 55.3% in 2021/22. There is also Office Accommodation, which includes a contract with the Department of Public Works (DPW) for the DT’s head office building; it is at R45 million in 2021/22. Compensation of employees was the biggest component of Programme 1; it was R151 million and it remains more or less the same over the MTEF period. The total budget for Programme 1 is R305 million.

Programme 2: Tourism Research, Policy and International Relations
The biggest component is DoT contribution to SAT which is nearly R1.3 billion. Total budget is approximately R1.4 billion. Compensation of employees remains constant over the MTEF.

Programme 3: Destination Development
The budget for Working for Tourism (EPWP project) has been reduced over the MTEF; DoT only has R216.6 million in 2021/22. Total budget for this programme is R305.5 million. Compensation of employees is constant at R55.8 million over the MTEF. The biggest component is Working For Tourism at R249.5 million, which is included under goods and services.

Programme 4: Tourism Sector Support Services
This includes TIP. The Tourism Equity Fund has been included at R540 million over the MTEF. One can see in 2021/22 it is R327 million and then in 2022/23 it is R332 million. Compensation of employees is the biggest component; across the financial years, it remains mostly the same. The transfer payments are the Tourism Equity Fund and the TIP.

Key Risks
Mr Tharage presented key risks and risk mitigation (see presentation). There is no increase, not even in nominal terms, for the compensation budget. This poses a risk to some targets, such as the vacancy rate, as well as the targets associated with employment equity. DoT has to ensure that it recruits people into the positions. The tension between recruiting people and extending the budget for compensation, which is not allowed, becomes a challenge.

A second risk to the budget is to ensure DoT is maximizing efficiencies for projects using the EPWP budget because DoT has a reduction of about R180 million so it calls on Department to be more and more innovative in bringing in efficiencies.

Key risks for increasing tourism sector’s contribution to inclusive economic growth:
- Inability to meet the Tourism B-BBEE Sector Code targets.
- Inability to create enabling legislative and regulatory environment for tourism development.
- Norms and standards for COVID-19 safe operations in tourism sector not implemented.
- Poor brand reputation (South Africa labelled as having a “South African variant”).
- Decline in supply side products and services following the COVID-19 pandemic.
- Negative effect of public health emergencies due to global outbreaks.
- Negative impacts of climate change (including natural disasters).
- Negative impacts on implementation of signed bilateral agreements due to pandemic.
- Negative impact of COVID-19 to employment creation.
- Poor implementation of bilateral agreements due to health outbreaks and political instability.
- Capacity of SA Tourism to fulfil mandate.
Mr Tharage added that in DoT made a provision that unemployed youth includes those retrenched qualify to beneficiaries of DoT programmes for reskilling them to be able to be active again.

Key risks for achieving good corporate and cooperative governance:
- Inadequate capacity for management of infrastructure and training projects.
- Inadequate contract management by project managers.
- Inadequate impact evaluation of COVID-19 on the tourism sector.
- Inadequate understanding of the supply side of tourism.
- Monopoly and collusive practices by suppliers.
- Corruption.

Minister Kubayi-Ngubane said it would be important to talk about the environment in dealing with COVID-19. The Deputy Minister had covered DoT work that continues with the recovery. Many of the public will be worried about what is happening in India, and the impact on South Africa’s international borders. A decision has not been taken by the National Coronavirus Command Council (NCCC), but work being done by the Minister of Health together with the scientists. Decisions by Government on opening or closing borders will be scientific and informed. There are discussions on that and Minister Mkhize communicated publicly on the issue. There has been a lot of speculation on how people came from India have got COVID-19. Minister Mkhize has confirmed that there is no such information, so DoT appeals for the Committee to assist in communicating this. Some of the public fake news and misinformation sometimes creates panic, which is unnecessary.

Mr K Sithole (IFP) appreciated the presentation. He did not hear a target in any programme that targeted youth and people with disabilities. The only target he saw for a specific group is for women. Are there targets or budget that target youth and people with disabilities? He asked about the implementation of Educators Development. If DoT says that it has a programme for all provinces for educators, can it give the budget attached to that programme? He was concerned about compensation of employees. It seems that there is no increment. He was concerned because DoT does have vacancies. How will DoT fill those vacancies? He asked if DoT could alert the Committee about its plan for the predicted third COVID-19 wave. How will it manage if that happens? The tourism industry was the one that suffered from COVID-19. He asked if DoT could give the Committee a full report on the EPWP. All the departments talk about the EPWP programme. He asked if DoT could give the Committee a full report on its budget and implementation of the EPWP.

Mr H Gumbi (DA) asked if the policy review suggests free grading that is accepted by all parties? It is one thing to review a policy with new suggestions and new knowledge, but it is another thing to review it with a policy consideration that is now generally accepted across all political parties. Does the policy consider tax breaks, especially for businesses in the tourism sector? The Committee would want to potentially send that to the Minister of Finance as part of the tourism sector’s recovery. The sector suffered heavily financially; it is a very difficult space in which to recover. This space has overhead costs. What consideration has there been on what is increasingly a standard tourism protocol for countries to accept visitors who can prove they have been vaccinated? There was mention that South Africa continues to ban some countries, but on what basis does it do that? If the recovery of the tourism sector is being talked about, why does it not accept people who have been vaccinated from other countries and are COVID-19-free, as a standard policy, if South Africa is serious about sustaining the sector?

Mr P Moteka (EFF) asked about Destination Development projects at Pixley Ka Seme and Namakwa. What will be done at Pixley Ka Seme, at which town, and who will be main beneficiaries? He was looking for the transformation target as the Committee’s focus is on transformation. He had the same questions about Namakwa; his focus was on the Northern Cape. What will be done, where, and who are the main beneficiaries, focusing on transformation. He had seen some programmes will be done in Limpopo – where is this place and what will be done? On the financials, there is zero increase in compensation – what will that do to transformation targets, to vacancies, and to the fight against unemployment? If DoT has zero increase in compensation of employees, it will not be able to fill vacancies and employ more people, and it has the potential of retrenchment or layoffs. What does that mean to the unemployment challenges in the country?

Ms P Mpushe (ANC) appreciated the remarks by the Deputy Minister. On Programme 1, as much as she applauded DoT’s attempts in playing a more proactive role in the recovery of the sector, can DoT explain how suppliers will be chosen and the geographic spread of these initiatives? On Programme 2: How will the decrease in budget affect the work of DoT? Generally, in areas where there is a decline in budget – how will DoT work be affected? Could the Minister share details on the stability in DoT and the internal capacity to deliver on the APP? How is DoT striking a balance in its budget allocation between tourism development and marketing? These outreach programmes that are targeted there – how will those differ from the SADC and BRICS engagements? Will DoT be participating with with key stakeholders such as the Department of International Relations and Cooperation (DIRCO)?

In Programme 3, what will be the impact of the budget cut on delivery of targets? The budget allocation for that programme has decreased by 37.5%, from R465.9 million in 2020/21 to R305.6 million in 2021/22. What are successes of the TEF and [unclear 01:32:16] programmes of DoT? She asked for a specific target for "pipeline of national projects on tourism investment opportunities managed". There is a need for detailed presentation on these targets. How do these differ from current targets? What has DoT done to improve challenges in APP implementation such as poor project planning and implementation by third parties, and contract management in appointing service providers, and supply chain and procurement challenges?

Ms H Winkler (DA) asked how climate change readiness and responsible tourism, including green tourism, is included in DoT programmes overall, and how does it inform its programmes? Has the Minister considered extending Temporary Employer Relief Scheme (TERS) for a further three months since domestic tourism is still very low, and DoT is looking at recovery of the sector? For recovery of local tourism, there is the need to confer with other departments when it comes to concerns that predate COVID-19, such as safety and environmental health and water quality, Blue Flag status of beaches, etc. These still need to be addressed. How are they going to be absorbed into the tourism recovery plan?

Ms M Gomba (ANC) raised again the tourism policy review and asked about the grading of the establishments for quality assurance. Is the policy going to address free grading of establishments, as the Committee requested in 2020? With whom does DoT need to sign bilateral? Is there a plan to ensure that the EPWP is properly implemented and that funds will be used for the benefit of EPWP as planned. She asked about Villages, Townships and Small Dorpies (VTSD) tourism infrastructure development. The piece of pie for them was the smallest of all. The presentation talked about training in safe tourism but said nothing about the destination development areas in the VTSD.

DoT should know their plight. The Committee's number one priority is to ensure that tourism is given attention in VTSD. The Committee is also talking about grading for those already established tourism destinations and attention needs to be given to those VTSD to create forums that will enhance tourism in those areas. She did not hear DoT talking about growing tourism in those areas. It only talks about safe tourism training, which is not enough. This means there will be a slow pace in developing tourism in those areas, and ensuring that tourism is growing in VTSD, and especially in townships, where the majority of South Africa’s people are found. One finds tourism moving very slowly in those areas. The presentation stated that due to COVID-19, domestic tourism is going to be the backbone of tourism in South Africa. But there is no way it can be the backbone without improving or supporting tourism in VTSD to ensure that tourism is growing in those areas where the majority of people reside.

Ms L Makhubela-Mashele (ANC) commented that what is seen in India is very scary, and “we are left traumatised, and we pray that we do not see such in South Africa”. Although one can see pockets of the country where infections are growing, avoiding what India has witnessed will be entirely on individual people’s behaviour, and people continually encouraging fellow South Africans to take COVID-19 protocols seriously. Previously, DoT has had challenges in implementing APP targets where DoT relies on third parties to implement the project. This is due to poor planning, poor project management, and poor implementation of the project. That has resulted in DoT, year-on-year, not being able to meet its targets for implementation of projects. This resulted in project delays, rollover of project funding, starting afresh, and going back to the drawing board. That does not look good. It is not an aspect of DoT to be proud of. For DoT to achieve the set objectives and targets for this 2021/22 APP, what will it do differently when it comes to project implementation? Previously, the Committee had heard that DoT "implemented corrective measures, appointed new contractors, went back to the drawing board" but that has been ongoing. Can the Committee be appraised of a different strategy to enable DoT to implement projects and proper management?

Ms Gomba asked if the unmet targets for 2020/21 due to COVID-19 are included in the new APP. She would find it helpful if such targets were included.

Mr M De Freitas (DA) said that although the latest Tourism Equity Fund (TEF) addresses bigger businesses, what is being done for the smaller businesses such as small tourism startups? What is being done to revive and assist tourism enterprises in the VTSD? He had gone through the report and did not see much where something has been done to assist tourism operators on the ground in those areas. On interdepartmental coordination: What is being done to coordinate with other departments on issues that impact on tourism such as Home Affairs on visas, or safety and security with the South African Police Service?

Department response
Mr Manale replied on Programme 1 compensation of employment: DoT is ensuring that it keeps the total cost of employment as per the Treasury target, so that area is not in DoT control. DoT appreciates that it needs to continue to create jobs in the public sector. It currently has about 32 interns, and it is continuing to look into its structure to ensure that its vacancy rate is kept to a minimum, so that it keeps as many of its employees as possible in the organisational structure. DoT is finding various measures to ensure that it has the staff, and it keeps to the maximum number it can keep within its resources.

Mr Ackermann, CFO, replied that there was a big cut on the EPWP budget. The money was taken away from EPWP and it was increased in the tourism incentive programme. DoT already had discussions with Treasury to see how it could correct this because its EPWP budget is running short of money for 2021/22. Treasury indicated that DoT can address this in the adjustment budget. DoT will have to take the opportunity in the adjustment budget to do that shift.

On compensation of employees: It is also a concern for DoT because it knows that it needs to meet its targets, but a limit has been placed on this. Should it exceed the compensation of employees limit, the expenditure is classified as unauthorized expenditure. If DoT exceeds the limit, it would have to ask Treasury for approval again. That is also something that DoT will have to look at in the adjustment budget; that it request Treasury to raise the limit for DoT, so it can be in a position to fill its vacancies and to reach its APP targets.

On selection of suppliers: DoT follows the procurement process prescribed by Treasury. DoT will ask for three quotations and follow the process, and then apply the 80/20 principle. It will award the contract company which gets the highest points. It is not always the company that is in accordance with the [unclear 01:54:22].

Ms Malan replied on Programme 2 that the policy review process has started, led by the advisory panel. The panel is in consultation with numerous stakeholders, and finalising the policy proposals for the Minister’s consideration. Quality assurance and grading are part of the matters the panel is considering. Once DoT has received the final proposals for the Minister’s consideration, it will be gazetted for inputs by the public. DoT is still in the process of finalising the outcome.

On the plan for the COVID-19 third wave: As a sector, DoT has always said that it proposes the opening of the sector as soon as it is safe to do so. Safety of citizens and visitors is DoT’s first concern. Within the NCCC, all of this will be taken into consideration when South Africa faces the third wave. Ms Malan was aware that this is being discussed on the different platforms and also in NCCC subcommittees.

On outreach, and how it will differ from multilateral work: Within the multilateral work, DoT is working together with the relevant countries, whether it is within BRICS or SADC to advance South African interests. Within the DoT outreach programme, it is more focused on bilateral discussion. The Minister is reaching out to specific countries, and to specific embassies, to have discussions on specific matters that affect South Africa from both sides, with a focus on tourism. The MOUs that South Africa has to sign are with countries that South Africa has identified, or has been approached by to enter into agreements in the area of tourism. South Africa has finalised discussions with a number of countries. What needs to happen now is for the ministers from both the countries to sign the MOUs for those to come into effect. DoT has prioritised that to be done in 2021/22. With the MOUs that are ready for signature, DoT has put a plan in place for signing by the two ministers.

Ms Chettiar replied that the Programme 3 Destination Development initiative is to work in areas where tourism is already key driver. DoT tries to support developments where there is already an anchor project; namely a tourism project where tourism is a key economic driver, and then support further developments that enhance that destination. Although DoT would like to work across the country, it is not always possible to do that with the limited resources it has. The destination development approach is to focus where DoT can maximise its effort as a department, working in collaboration with both the private and public sector to ensure that tourism continues to drive those specific economies. Not all areas in the country has tourism-led economic development, and so DoT tries to focus on those areas where tourism is the key economic driver. Within that context, there were questions on how DoT will manage previous EPWP challenges with planning, contract management, and delivery. This year, DoT has partnered with the Development Bank of Southern Africa (DBSA) as implementing agent.

DBSA is going to roll out all infrastructure projects, in line with the standards on infrastructure development. At this point, there is a detailed infrastructure implementation plan for all the projects that DoT has listed in its APP. The DBSA team is at this point developing individual project implementation plans. The DBSA team is also responsible for contracting the services of built environment professionals to both plan and implement the project, and will then manage these projects on behalf of DoT. An important challenge DoT has had that will be addressed by DBSA is that it has built environment professionals who will be managing these infrastructure projects. DoT is working very closely with the DBSA team on a plan for skills transfer to DoT staff. DoT feels confident that DBSA will be able to address some of the previous challenges DoT has had, and complete these projects to the required specification within time and within budget. The project funded through EPWP is the data collecting project in Programme 2; the skills development and tourism monitor project in Programme 4; the infrastructure community-driven ones and the maintenance programmes in Programme 3 Destination Development. EPWP does and must address youth, people with disabilities and women, and there are percentages within that. All these programmes respond to the targets for youth, people with disabilities and women.

On how the pipeline of nationally prioritised projects are different: The process to develop the national pipeline was to invite catalytic projects from various provinces. There was a total of 81 projects presented to DoT as possible catalytic projects that could be developed over a period of time. Most of these then required support in project packaging, feasibility studies, and matching with specific domestic and international funders. The team has worked with provinces to identify those specific projects that have the highest degree of success in becoming catalytic, and ensuring developments in various parts of the country.

DoT has been working systematically with provinces to take these projects through feasibility studies, to package them properly, and to ensure that they are projects that can be matched with funders. It is very different to the work that DoT already has in its APP, because these are both public and private sector projects that are greenfield and brownfield, and these projects are being developed over a period of time. These are also projects that, for example, get taken to DoT investor platforms, such as the South African Investment Conference and other investor platforms. At the moment, these projects are in some ways conceptual, but DoT is working systematically with various project owners, both public and private sector, to make these projects materialize. It is a small number of catalytic projects, but DoT believe that these are very important. These have been identified in partnership with provinces. There are many other projects which provinces and local government work on independently. The catalytic projects DoT works on are on an agreed list of projects that it works on at a national level.

On the work that DoT is doing in the Northern Cape – it did three master plans in the Northern Cape. This was following the work that it did on coastal and marine tourism. Those three master plans were from Port Nolloth to Hondeklip Bay, Carnarvon to Sutherland, and from the Orange River Mouth to Vioolsdrif. Within that space, there are various initiatives identified in the master plans. DoT has also been working with the Department of Science and Innovation (DSI) on the Square Kilometre Array (SKA) project, and an interpretation centre there on the SKA project. DoT has also been working with South African Local Government Association (SALGA) on the Karoo-led initiative, looking at creating a single tourism brand for the 26 municipalities within the Karoo.

The work that DoT is doing this year is to take some of those individual projects, which include an air access programme, into the Northern Cape. There was a study on this by DoT, working with the province, which looked at how these then get infused into the District Development Plan for the Pixley Ka Seme and Namakwa districts to ensure going forward, the practical projects contained in these master plans find expression both in the One Plan, and in future budgeting and implementation for these districts.

Tourism is not necessarily an activity that can be contained to a single district. The way that DoT has been looking at the work it is doing across the country is to look at how it integrates master plans into regional economic development. The work already being done by SALGA assists DoT to be able to do that, together with the District Development Model.

Mr Tharage replied to Mr Moteka that Ga-Tisana is a village in Makhuduthamaga municipality in Sekhukhune District.

Ms Setwaba replied to the Programme 4 questions saying that the DoT technology innovation incubator, food services, etc are all targeting young people. In terms of EPWP policy, only youth can participate in the skills programme. This year, DoT is partnering with implementers, and it will have a bigger voice in recruitment and selection. The intention is to ensure that a certain percentage will be reserved for people with disabilities to participate in these programmes.

The Educators Development programme does have a budget – DoT is at a stage where it is engaging with its stakeholders across provinces to ensure it identifies specific needs. It will do a needs analysis, and once these are assessed. DoT should be able to quantify the budget for the programme.

On the EPWP use of funds specifically to ensure the benefits go to the identified beneficiaries: There is a process in DoT to ensure that contract management is tightened up. Contract administration is very focused on ensuring that the contracted service providers do take responsibility for reporting on the financial performance of the programmes.

DoT is introducing, together with the CFO, a new method where it will cap advanced payment to service providers. With the contracts DoT is negotiating currently, it has been able to split the budget between what goes to the service provider fees, and what is due to beneficiaries. DoT will not allow easy access to project funds for service providers to in their accounts as done in the past.

DoT’s strategy on climate change is guided by the White Paper on the National Climate Change Response and the national adaptation strategy. DoT has developed the national tourism and climate change response programme which focuses on both adaptation and mitigation in the sector. It has also conducted a climate change risk and vulnerability assessment on 27 tourism attractions across the country. A three-year tourism adaptation implementation plan has been developed and DoT is finalising the climate change communication plan for the sector as part of the implementation plan.

On incubation programmes: Members will have noted the areas where DoT will be running its incubation programme. It has a programme established for Mier and for Phalaborwa as well. It is introducing an incubation programme for community-based enterprises; it is hoping to have bigger participation from enterprises that are within VTSD. In the incubators, DoT provides mainly business development and support programmes to small businesses. This includes financial management skills and how to manage resources such as human resources. DoT assists with being ready to comply with business rules and regulations, such as how to go about engaging with the South African Revenue Service (SARS) on tax certificates. During the lockdown, the incubators played a critical role in assisting small businesses to access funds made available for supporting businesses during COVID-19.

Mr Tharage commented on readiness for the potential COVID-19 third wave. DoT will take guidance from the NCCC. If we see what is happening in India, it is scary, and we can only hope and pray that we donot meet the same fate. DoT believes that it must continue with the balance between lives and livelihoods, and it will take guidance from the NCCC. Most important from DoT’s side is compliance with the protocols, so it is able to demonstrate the ability to operate in an environment that requires strict adherence and a cautious approach in rolling out operations.

The policy review process is underway and the panel has not yet brought its recommendations to the Minister on what it believes should be reconsidered. Although for matters DoT would not have a policy mandate on such as taxation, that would be under the ambit of the Minister of Finance.

On whether South Africa will be part of the idea that once vaccinated, one can travel: At the risk of speaking out of turn since DoT does not have expertise on this, one of the things that DoT believes is important is for South Africans to reach population immunity, which then gives a sense of security for South Africans. Thus, people who are coming to South Africa would not be a big risk as South Africans would have immunized themselves. That aspect would be a factor in what ultimately becomes a protected destination in having that assurance on safety. DoT is observing developments globally and what it being done. He supposed DoT would look at what is happening globally, but it is important to develop population immunity in South Africa.

On staff attrition: DoT has not seen large numbers of staff leaving. At management level, DoT unfortunately lost two colleagues due to natural causes; one at DDG level and one at Director level. Other colleagues had reached retirement age. DoT has not seen anything that points to instability, where people leave because they are unhappy with the organisation. Mr Tharage had had discussions with the employee health and wellness which collates information on exit reports where people indicate reasons for leaving and about their stay in DoT; it has not experienced a sense of negativity. DoT does interact. Mr Tharage was also talking about the level of political leadership, there is interaction across the organisation with the staff. It allows for people to be able to raise concerns that in turn allows for timely intervention to ensure all are moving in a common direction. There will be instances where a democratic leadership style is not necessarily going to be able to bear fruit. In such instances, DoT needs to ensure that it pursues what will instill discipline in the organisation and DoT does that consistently.

On balancing tourism development and marketing: It is going to be a long-term challenge for DoT. DoT has a small budget, and it has many needs. It could catalyse quite a lot of development and economic activity, but unfortunately, the budget it has confines it. DoT has to be out there in the world ensuring that the message goes through. DoT has to ensure that message is well-informed by data analytics. All of that costs a significant amount of money. That is why he indicated the need for DoT to continually look at efficiencies to maximise the small budget it has. That tension will always be there how DoT appropriately balances development and marketing. DoT could do with a more resources for that.

On the Tourism Equity Fund: There will not be an opportunity as of now to say what has been a success. DoT has been ordered by the courts to keep a hold on matters pertaining to implementation until court processes associated with the TEF are concluded. DoT will be guided by the outcome of the court and once that arrives, DoT will do as ordered. Only then can it speak about the success or otherwise after implementation of the programme.

The Tourism Transformation Fund has seen some successes such as the Graskop Gorge Lift is a project funded from that facility. There are other products funded from that facility.

On green tourism and climate change: The work that DoT is doing around the tour operators incubator, has to do with responsible tourism. Responsible tourism has a [unclear 02:26:25] that speaks to communities, and how communities are also able to access the value chain. There is a green [02:26:34] that would speak to issues of energy, water management, etc. For all of that, DoT has the Green Incentive Fund. But when it comes to the community aspects, there are a number of activities there that DoT is dealing with.

Mr Tharage said that TERS is not within the DoT mandate and he would leave that question.

Domestic tourism is the backbone of the industry. DoT continues to do those intergovernmental activities that it is supposed to be doing. There are three that DoT has prioritised for the recovery plan that includes issues of e-visas, safety, transportation, tour operators, aviation, etc. Given the environment that DoT is in, it needs to prioritise those. There may be other things that need to be worked on, but DoT believes that for tourism to succeed, it is an environment that requires everyone to play a role. For example, municipalities have a direct mandate when it comes to keeping beaches in pristine condition. Municipal and provincial roads must be maintained for visitors to gain access to facilities. Where DoT is able to intervene, working with provinces and national parks to ensure proper upkeep of the facilities, so it does not have a collapse of that type of infrastructure, then it does so. Resources are hindering how far DoT can be able to succeed.

In the main, DoT programmes are focused on villages. If one looks at DoT infrastructure projects, they would be either in a village, or on the outskirts of a small town. DoT does not have many things that would be in the big cities. At the same time, it also has a lot of work that relates to skills. It would be youth that are coming from the VTSD. If Members have followed the graduation activities, they would have seen that most of these graduations take place in small towns and townships. The bulk of the youth participating are coming from those particular areas.

On small businesses: There is business development in Programme 4, particularly targeting women-owned businesses. The presentation mentioned 225 of those businesses. At the same time, it is important to state that DoT’s initial support mechanism went specifically to small businesses. Mr Tharage clarified that the TEF is not a relief mechanism, it is an equity fund. If there is something that DoT has done to provide support in COVID-19, it went to small business. R200 million went to small businesses, and each of those businesses was able to get R50 000, and 4 000 businesses benefitted from this. That is how far DoT could go due to resource constraints and the priorities it has to cover.

On third party partners and the implementation of targets, DoT vets its partners. In most instances, those partners where DoT finds delays, are not necessarily outside the government system; they are largely within the government system. When DoT vets its partners, it finds that everything is fine. Then at the point of implementation, certain signs start to show signs that they not moving at the requisite speed.

Mr Tharage emphasized those within DoT managing those contracts must have awareness of the contract and the enforcement of the requirements the contract provides. DoT is not in position where it finds itself helpless. It is able to intervene using those instruments. The challenges may even necessitate the relationship has to be terminated. Where it gets terminated, DoT has no choice but to go back and restart the process with the delays that would then arise. DoT will continue to manage this. Despite the assurance he is providing, he does it with caution as in a project management environment, there will be instances where it does not go the way DoT had planned. DoT has to minimise those instances. Part of vetting is escalation. Those are critical and significant issues that need to be dealt with. That is the approach DoT will take as it goes forward.

On the 2020/21 unmet targets and if those targets are in the APP. When DoT finishes the year, it accounts through an internal audit process to confirm if the claims by management are legitimate. Then it is submitted to the Auditor General on 31 May. The AG may say that the evidence provided does not tally. Therefore when DoT brings the Annual Report, it will be clear what DoT has been able to do. There are quite a number of projects that are year-on-year and are continuing. There will be new groups of people for skills development who will graduate and a new group will come in. There may be such types of programmes that were not concluded, those still continue. DoT will account for this once the audit has been concluded. DoT needs to give the Committee properly verified information so it does not mislead the Committee.

Follow-up discussion
Mr Moteka said his question was very clear when asking for the specific place in Pixley Ka Seme. There are eight municipalities, so it would be very clear in the APP where and what will be done, so the Committee can do oversight. He thanked the DG for answering on Ga-Tisana which is six kilometres from where he lives so oversight would be very easy. In Namakwa, the main city is Springbok. In Pixley Ka Seme, the main city is De Aar. It cannot be that difficult to answer where the plan is going to be implemented, so that the Committee can follow up and do oversight.

Ms Chettiar replied that she did not have a list of the specific initiatives. The APP target is to incorporate the initiatives into the tourism spatial master plans. That is contained in the detail of the master plans for Port Nolloth to Hondeklip Bay, Carnarvon to Sutherland, and Orange River mouth to Vioolsdrif. DoT can provide those very specific initiatives to the Committee in writing.

Ministry response
The Deputy Minister said that the DG had tried to be very extensive in the responses to issues that Members raised. Most of the projects that DoT is implementing, especially the skills development, is targeting young people. Youth are at the centre of DoT’s skills development project. With rural areas and townships, most of these young people are recruited from townships and rural areas. With the community-based tourism projects, most if not all of them are based in rural areas and townships. That includes most of DoT’s incubators. These incubators are mainly situated in rural areas, e.g. it has the Manyeleti incubator, the Phalaborwa incubator, and the Mier incubator in the Northern Cape. Those are mainly in the rural areas and in the townships.

DoT does give the EPWP quarterly targets. After the compilation of the 2020/21 Annual Report, the Committee will have a detailed picture of how many opportunities were created last year. In the 2021/22 APP, DoT is proposing a number of opportunities be created though the EPWP. The infrastructure is mainly implemented in the townships and rural areas, because most of South Africa’s national parks, where DoT is assisting in revamping infrastructure, are in rural communities. The MOU with SANParks was when it sought out service providers, it would ensure that the surrounding communities are the beneficiaries of these initiatives. Last month DoT launched a pilot project in the Eastern Cape, which focuses on townships and rural areas, and involves a basic quality verification programme. Part of this programme are home stays; DoT wants to ensure that all home stays being initiated in the townships and rural areas are upgraded to ensure quality assurance.

 DoT is working with SAT to ensure that happens. In the past month, DoT has launched a Travel with Purpose project, where it has gone to all nine provinces and had workshops with small, medium and micro enterprises (SMMEs), and provided SMMEs with opportunities, trained them, and also ensure that SMMEs are registered with Google [unclear 02:46:45], so that their businesses can be marketed. There is a lot of work being done to assist SMMEs so DoT is able to develop them accordingly. On a quarterly basis, DoT will be able to provide details on progress to ensure that it revives tourism and addresses the VTSD, and that equal benefits and inclusivity are made available. It is work in progress. If one looks at all the projects that are in the plans, most of them, in one form or another, are located in townships, rural areas or small dorpies.

Perhaps going forward when DoT talks about the Numbi Gate project, for example, it could elaborate on the villages around it which are rural areas under traditional institutions, and these areas will be beneficiaries. Some of the names might not be able to explicitly reflect that it is a rural area, or it is a township. The Committee will be able to see this as it conducts oversight and the extent to which DoT is living up to that approach the Committee has adopted.

The Minister replied to the question about her giving assurance of DoT’s capacity to deliver. Where DoT had vacancies, it has made [audio cut out] especially within the available resources. For example, DoT had a vacancy for a DDG, and it has already filled it, which is Ms Setwaba. It has already done the interviews for the DDG: Corporate Services position and is almost ready to go to Cabinet. The Minister could assure the Committee that with leadership positions it ensures that it closes the gap; there are no vacancies with people in acting positions and therefore not taking accountability. The Acting DDG of Corporate Services has been doing well in keeping the DoT engine running. On a number of matters the DG has overseen, the DDGs are working together so DoT has a collective of teams in management to ensure it is able to achieve. If one looks at DoT and how it has been highly affected by COVID-19, and one looks at the work it has tangibly done between the executive authority such as the Deputy Minister going out into the provinces, the SMS members, especially in top management, one would be assured that there is focus in ensuring DoT serves the country and the people of South Africa.

TERS is decided by the Minister of Employment and Labour. DoT has discussions at NEDLAC, it has discussions at the NCCC; the Minister sits in on those discussions. That is why one could see last time the specified sectors of the TERS extension. DoT does believe that when it looked at the statistics for Easter, it has seen some level of recovery, especially for domestic tourism. Those businesses that re-positioned themselves to be able to respond to the domestic market have seen a benefit out of that, and their cash flow has seen a recovery. The Minister was listening to SA FM, where callers were saying they were at home, but now about 60% of the staff are back. The country is starting to see a little bit of recovery.

 DoT has released the Tourism Sector Recovery Plan, which is on DoT’s website, and it can have a specific discussion on that. It also did a media briefing on that plan. The plan tells one about strategic interventions and enablers. The Minister thought that Ms Winkler was talking about things not directly in DoT. When one looks at the Tourism Sector Recover Plan, one will see that it addresses those things. That is why DoT emphasized that the plan needed to be approved by Cabinet, because it has impact on other sectors. DoT needs other departments and other role-players to support and assist it with doing the work.

Closing remarks
The Chairperson wished the departments working with the Department of Tourism could understand that one area where South Africa can quickly resuscitate the economy and create jobs, and in particular create entrepreneurs, is in tourism. He gave an example of the Department of Human Settlements, Water and Sanitation where a beneficiary of a RDP house before it is constructed, could be allowed to make a presentation to government and explain the beneficiary was prepared to stay in an informal shack so the house could become a bed and breakfast (B&B) so the house plan is done in that context from the amount allocated for an RDP house. It can accommodate the aspirations of a future entrepreneur in the tourism business. The house will become a B&B in a village or township and it will start generating capital. With that capital, the beneficiary can then use it to build their own house, and still sustain that B&B. He wished that one day those who deal with policy in government will introduce necessary flexibility in the regulations that govern how houses are built. He was not saying that the Minister must do anything about it. This was just one example of using the existing resources in the state to approach the challenge we face differently, instead of looking for new money.

He thanked the Ministry and the DoT collective, the Committee as the “frontline troops in oversight” for this engagement. He thought that this engagement took things further. He thanked the South Africans who had followed this engagement, and hoped that they had benefited from this interaction, and that gradually, DoT is beginning to say it must go where poverty is. That poverty is embedded in the VTSD. “One day, we will triumph against this embedded poverty in those areas”.

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