Devolution of the infrastructure maintenance function: DPWI & Department of Defence briefing, with Ministers

Meeting report

Chairperson’s Opening Remarks
The Chairperson stated that the Committee engaged a number of departments to receive progress reports on the devolution of the infrastructure maintenance function from DPWI to SANDF. The meeting was a follow up on site visits to SANDF facilities in the Free State on 13 to 17 August 2018 and Tshwane on 19 to 22 April 2022. The Committee considered the devolution a wise decision because the SANDF has the capacity to do maintenance work. He called on the departments to provide a brief overview of the situation.

DPWI Minister’s Opening Remarks
Minister Patricia de Lille said she had also visited the Bloemfontein Military Base in April 2022 where she discussed the maintenance devolution of power function with the generals. On 17 May 2022, the DPWI distributed a memorandum notifying all national departments that the emergency maintenance budget had been increased from R100 000 to R1 million. The matter had been a discussion long in the making since the previous administration. She agreed with the generals in principle to, in the interim, identify specific projects that the SANDF wanted to be devolved while the legal aspects were being dealt with. The devolution would be approved on a project-by-project basis. In preparation for this meeting, it was found that the SANDF had not provided the list of projects to be devolved. Minister Modise advised that she was in the process of familiarising herself with SANDF operations. Discussions on the devolution of the maintenance function would continue when the Minister was ready to engage. Section 97 of the Constitution authorises the President to devolve power from one member of the executive to another. All applicable pieces of legislation and timeframes would be dealt with in the presentation. The critical issue to note was that projects in the pipeline should not be stopped while the devolution issue was being resolved. She observed that a number of projects in stages one to four had been stopped with the understanding that devolvement must first be finalised. She was hoping to engage Minister Modise, the generals and senior officials on the stalled projects. She would provide answers through her office and undertook to forward the 17 May 2022 memorandum regarding the increase in the maintenance budget to the Committee.

DPWI Presentation
Mr Batho Mokhothu, Deputy Director-General (DDG): Construction Project Management, DPWI, said the focus of the presentation was on specific projects where the Committee had done oversight visits. The devolution of maintenance function from the DPWI to DOD was awaiting concurrence between the Ministers of DPWI, DoD and National Treasury. The process was based on two pieces of legislation, i.e. section 19 (1)(a) of GIAMA and section 97 of the Constitution. He reported that the DPWI was instructed in July 2021 to put on hold projects that were in the design and development stages, pending the finalisation of the devolution process.

The DPWI received 114 repairs and refurbishment requests from client departments for the 2022/23 financial year. Funds had been allocated for only 29 of the 114 projects. He highlighted the facilities in Kimberley and Mthatha as projects of concern. The initial contractor at the Kimberley complex defaulted. The SANDF and SAPS introduced a programme to train 300 recruits at the facility, using the kitchen equipment to prepare meals. The project had been indefinitely suspended as repairs and maintenance cannot be done while the equipment is in use. Refurbishment at the Mthatha military base had been stalled due to the delay in the issuing of the work permit by the Department of Labour. The project was scheduled for completion by 23 July 2023.   

(See Presentation)

Department of Defence and Military Veterans (DMV) Minister’s Opening Remarks
Minister Thandi Modise remarked that she requested a briefing when the devolution matter was put on the table. She subsequently had a meeting with Major General Joseph Ledwaba and his staff. She observed issues of trust between officials of the two departments. Although the unhappiness with issues predated the new Ministers, she could not divorce herself from the situation. The problem seemed to emanate from the delay in putting up ‘warm bodies’ in the Finance Department who could take responsibility for contracts and allocation of money for contracts. She would be in a better position to support Minister de Lille as soon as she is provided with the names of the responsible officials. The overall structure of the Department is being reviewed considering that the SANDF was always on call when a disaster event occurs. The Minister urged Dr Gamede to identify the officials in the Finance Department to ensure readiness to act when faced with delays.

DOD/SANDF presentation
Dr Thobekile Gamede,Deputy Director-General (DDG): Policy Strategy and Planning,  DoD, requested Major General Joseph Ledwaba to lead the presentation. She would provide responses to questions when called upon.

Major General Joseph Ledwaba, General Officer: Commanding Defence Works Formation, DoD, said the presentation would clarify issues of the Facilities Management legal framework. He had hoped that the Task Team would have been able to put administrative issues in order but it appeared that although the Ministers were in agreement, officials were not cooperating. He expressed frustration with the capacity at the DPWI. The DOD was the last line of defence and was not able to rely on the assistance of the DPWI in times of disasters.

On advice from the Minister, the DoD would incrementally be taking over functions which it was able to manage. Taking over the day-to-day maintenance portfolio would assist in doing emergency repairs. The assistance of the DPWI was required to identify projects that the DoD could take over. The sinkhole in Thaba Tshwane was developing every two months but according to the Task Team, the project was not a priority.

Major General Joseph Ledwaba said projects would be unfrozen when money is made available. He urged National Treasury to allow the DoD to roll over savings on Municipal Charges. He supported the idea to replace members of the Task Team as it would solve disagreements at the level of officials and avoid the principals talking past each other.

(See Presentation)

Discussion
Mr E Marais (DA) requested more detail about 1 Military Hospital. He enquired about the action plans to finalise the refurbishment project at the hospital.

Mr A Shaik Emam (NFP) congratulated Minister Modise for taking a stand on the issues at the SANDF. He asked what the estimated loss was in terms of cost escalation on incomplete projects. Many departments have been raising concerns about DPWI not being able to deliver on time. He wanted to know if the Department had identified specific challenges that were causing the failure to deliver. He asked National Treasury to comment on the DoD’s request for the rollover of savings on Municipal Charges. He requested the DPWI and National Treasury to comment on whether the DoD Lease Replacement Strategy should be made applicable to all government departments. He asked the DPWI to explain the payments from the DoD and argued that savings made could be spent on development.

Mr Z Mlenzana (ANC) appreciated the engagement with the two Ministers. He requested the Ministers to share their understanding of GIAMA and to explain the advantages and disadvantages in relation to each department. Both departments were not good spenders as reflected in their cashflows. He wanted to know if activities at national departments could be synergised. He cited, as example, the clinic in Matatiele which was built by the DPWI. The provincial department was not allowed to fine tune outstanding issues with the result that the clinic is a white elephant in the midst of health challenges in the area. Matatiele is on the border of Lesotho and the Eastern Cape but there is no physical building from where migration could be controlled. In his view GIAMA was holding service delivery to ransom.

Mr O Mathafa (ANC) observed that it was painful for Major General Ledwaba to go through the presentation. He wanted to know why it was difficult to report on what had been agreed on strategic level. It seemed that he was making a case on a decision that had already been taken. The presentation echoed the sentiments expressed on a site inspection in Pretoria. He asked whether the advice given at the time had been considered and what progress had been made with the implementation of recommendations. He commended the actions by the Minister and urged her to ensure that all strategic decisions are implemented. He requested an update on the situation at 1 Military Hospital since the Committee’s last visit to the facility. The hospital had once provided services for heads of state across the continent. Having lost this status was damaging to the reputation of the country. He wanted to know what steps had been taken to remedy the situation. Funds were spent but the project had not been completed. Projects should not be under perpetual construction. The Joint Standing Committee on Defence called for the consequent management process to be fast tracked.

Mr X Qayiso (ANC) agreed that it was painful to listen to the presentation by Major General Ledwaba. The problems had been noted on the oversight visit. The two Administration Heads could not agree on what should happen which led to an uncomfortable situation between the two Ministers. He commended the Minister of Defence for her good work. He expected progress on the Thaba Tshwane building to have been at an advanced level because maintenance delays at DoD facilities affect the security of the country. The problem of ‘warm bodies’ should be resolved speedily. The history of under spending could be linked to the lack of capacity in the Finance Department. Fast tracking of consequent management procedures must be an administrative process, subject to deadlines, and should not result in court processes. He agreed that any savings should be spent with the guidance of National Treasury. He was hopeful that the transitional process would unfold smoothly.

The Chairperson remarked that the engagement was very important for a number of reasons. The Portfolio Committees on Public Works and Infrastructure, and Defence should have been invited to join this meeting. Issues should be followed up on a continuous basis to ensure that money is used for the intended purpose, during the period for which it had been allocated and that spending is done effectively. He appreciated the increase in the maintenance budget because it would assist in solving problems of emergency maintenance. He agreed with Minister de Lille on the interim measure while the devolution of the maintenance function is being finalised. The DoD should not have stalled projects and should present the list of projects to be devolved. He was concerned that the stalling of projects would have the effect of under spending resulting budget cuts as punishment by National Treasury for something not under the control of the Department. He asked the Ministers to comment on the general problems that were obstructing the execution of their mandates.

The Chairperson said infrastructure projects were meant to create jobs. Stalling projects had implications for small businesses. Underspending was the result of poor contract management skills. He enquired about the programmes to improve the situation and initiatives to address challenges. He requested detail of all buildings owned by government. Officials from both departments confirmed the existence of issues of trust. Pointing fingers at each other presented a negative picture to the public. He proposed that the two Ministers engage officials to identify the issues, find solutions and report back to the Committee. Not resolving issues was problematic as money allocated by Parliament is meant to provide solutions. Issues of a legislative nature should be brought to the attention of the Committee. Discontent between officials should be resolved and political office bearers should cooperate. He understood that the issues predated both new Ministers but the Committee was expecting solutions from them.

Minister de Lille committed herself to work with Minister Modise to ensure that the working conditions of soldiers are improved. The devolution of 1 Military Hospital to the DoD occurred on 23 October 2014. According to the presentation, the refurbishment of 1 Military Hospital had been frozen, awaiting the outcome of alleged corruption. She requested a copy of the report to be made available to enable the DPWI to address the outcome of the corruption case.

Minister de Lille said the pieces of legislation quoted by the DoD were all subject to section 97 of the Constitution. The first task of the two Ministers would be to start the process of having constitutional powers transferred by the President. In response to the issue of the Matatiele clinic, she said different spheres of government had been working together, citing the example of the six ports of entry that had been devolved to the Border Management Authority with the cooperation of the Minister of Home Affairs. She undertook to work with Minister Modise and provide feedback to the Committee within two months.

Minister de Lille noted that an official listed as a Task Team member had left the Department. She proposed that new members be selected to serve on the Task Team. The Director-General should be represented to make decisions where the Minister is not allowed to engage, e.g. on procurement processes. She acknowledged that facilities management was a problem. The Total Facilities Management (TFM) Strategy being developed by the DPWI, would be concluded by the end of September 2022 to address the problem. Interventions had been made to control overspending by Facilities Management. Private sector guidelines are being reviewed to benchmark construction price ranges. The DPWI intended to gazette and monitor prices.

Minster de Lille appealed for the stalling of projects to be lifted. She urged the DoD to provide the list of projects while the constitutional provisions are being attended to. DPWI offered professional and technical advice to assist the DoD. The two departments had been working together in rolling out bridges in rural areas across the country. The competency of the DoD should be utilised. In response to the utility bills issue, the Minister explained that utility bills are paid upfront by the DPWI on behalf of all government departments who are supposed to refund the DPWI. The DPWI is owed more than R3 billion because departments neglect to pay the refunds. She proposed a meeting with the Chief Financial Officers to verify the outstanding refunds. The savings reported by the DPWI most likely included the utility refunds owed to the DPWI.

According to the Minister, the trust issues evolved over many years. She appealed to officials to not allow the trust deficit to interfere with service delivery. In addressing the Letting-in Policy, the Minister said government is spending R5 billion on letting-in annually compared to only R80 million on letting-out. The new Refurbishment, Operate and Transfer Programme (ROTP), in partnership with the private sector, is being rolled out to reduce the spent on letting-in. The Department was in the process of signing long-term leases with the private sector to refurbish buildings for government use. All month-to-month leases had been stopped as from the end of December 2021 because the Auditor-General reported it as an irregular expense. Negotiations with landlords resulted in savings of R273 million since January 2022. The leases that the DOD had with the private sector would be scrutinised. Results would be reported to the Minister and the generals. The Minister said she had a good working relationship with Minister Modise and would do her best to solve all concerns.

Mr Chris Lombaard, Executive: Programme Management Services, DPWI, promised to provide feedback on the strategy for the refurbishment at 1 Military Hospital at a later stage. The TFM strategy would be applied at 2 Military Hospital. The DPWI cost proposal of R2 million compared to the actual cost of under R70 000 paid by the DOD for repairs at 3 Military Hospital required scrutiny. He explained that the project scope provides assurance in terms of numbers and deliverables. He suggested that the vast cost difference could probably be attributed to a difference in scope. It was important to be realistic in terms of the scope, brief and outcome of work. An assessment of the case would be valuable work experience. Raising the day-to-day maintenance budget from R100 000 to R1 billion was an innovative way of transferring capabilities to the DOD to ensure that the state of repairs is improved. It was necessary to consider alternative means of maintaining the huge portfolio of government assets which consisted mainly of old infrastructure in poor condition.

Mr Mokhothu said maintenance would prolong the useful life of a project. The condition of buildings deteriorates when maintenance projects are halted. The degrading of certain structures may result in increased capital expenditure and additional maintenance costs. The DPWI had moved to the procurement stage on the A-mess rebuilding project and would be able to proceed within the next two months if approval is granted. Repairs at the Loftus Head Quarters had gone through the development stage. It was tender ready and would soon move to the construction stage. The Thaba Tshwane project faced some challenges in the adjudication phase which the Department would hopefully soon be able to resolve. Exorbitant construction costs were a general problem. A process was in place to benchmark construction costs which would be gazetted accordingly. Project and contract management challenges had gone through Human Resources processes. The current cohort was found not to be skilled at the required level and had undergone a training programme. Mechanisms were introduced as part of the rescue plan to fast track delivery of the project pipeline. Panels were put in place to select service providers and project managers to alleviate challenges of timely service delivery.

Minister Modise agreed to return to the Committee within two months. She would be reviewing and expanding the skill set in the Finance Department. Having the right people with financial competency would put her in a better position to approach the President about the devolution of powers. The discussion on procurement could not be overstated. She cited the example of a fridge that was bought for the office of the Speaker in the National Assembly two years ago. The fridge was not in a box, arrived with dents and never worked. She suspected that the fridge was shop soiled or bought ‘voetstoots’.

Minister Modise said it was important to not stop fixing the barracks. SANDF members should not be reliant on public transport as it reflects negatively on the image of the Defence Force. Increasing the maintenance budget was appropriate because it enabled the DOD to not wait on the DPWI for day-to-day maintenance tasks. On the issue of alleged corruption at 1 Military Hospital, the Minister said all past and present members should be criminally charged for appointing companies that are responsible for the mess. She intends to restore 1 Military Hospital to the prestigious example of treating heads of state.

Dr Gamede undertook to ensure that the inter-departmental team is functional and effective once new members have been appointed. The Task Team should not be speaking from different angles and should approach the Ministers on matters of disagreement.

Major General Ledwaba appreciated the proposal to replace members of the Task Team. He would make sure that the legal framework of the Facility Management function is dealt with. He expressed frustration at the stalling of projects and called on the assistance of National Treasury to unfreeze and fund projects. The stalling of projects was due to the significant drop in the refurbishment budget since 2019. Disagreement on the rebuilding of the A-mess facility resulted in the project being halted. The relocation of members and rebuilding of the facility required funds. He appreciated the support from Members of the Committee.

Mr Qayiso asked if the underspending recorded in the expenditure report was not sufficient to cover the costs of the projects in the pipeline. He was concerned about the threat to the lives of members at the facility situated on a dolomite risk area and called for urgent attention to the matter. He did not want Committee Members to be viewed as accomplices in endangering the lives of members.

Mr Shaik Emam viewed inflated prices as a major concern. The quality of workmanship by DPWI had been raised as a serious concern. The lack of maintenance at hospitals was affecting the health of patients. He commended the DOD for saving costs and for doing more with less. He felt the SANDF was in good hands with the expertise and skills of its members and suggested that the DPWI should be shut down. The escalation in costs due to delays was evidence of a loophole in the procurement system. Service providers are being paid before maintenance jobs are completed. He said middlemen did not bring value for money and asked what it was costing the public.

The Chairperson asked Minister Modise if the SANDF was still involved in the Vaal Dam cleaning project. He wanted to know what the strategy was in terms of pulling out of countries in the diaspora or if the forces were there on a permanent basis. He asked Minister de Lille for her views on the challenges faced by the DPWI with national departments and if similar problems had been experienced at provincial level.

Minister de Lille replied that discussions were taking place on ministerial level to release buildings to national departments in terms of the new ROTP strategy. The same strategy would be applied at provincial level. She explained that in the current system, a project manager would place all 15 to 20 projects for which he/she is responsible in the DPWI pipeline when the budget is allocated. The practice was changed, allowing project managers to only put projects in the pipeline for which budgets have been allocated. The DPWI signed service level agreements with all implementing government departments. She requested a list of designated agencies because of the lack of capacity in DPWI should not be used as an excuse for inefficiency. She would be sharing the DPWI plans and remedial actions in the next meeting.

Minister Modise replied that although the SANDF participated in the Vaal River clean-up project, the problem was not fixed because the soldiers were removed and replaced with other service providers. The soldiers would return if called upon because they have the capacity and skills. The Minister felt that the intellectual property of the SANDF is being exploited. On the question of walking away from international deployment, the Minister said it was a matter that needed to be seriously confronted because South Africans were questioning the peace dividend. The United Nations was relying on the SANDF skills and therefore pulling out of the diaspora was not an option. Staff could be moved to contribute to the fixing and replacement of equipment in the DRC. However, Mozambique is too close to home and it is suspected that South Africa might be the ultimate target. The SANDF would remain until informed otherwise. The SANDF has the responsibility to support the region and has the additional task of defending the borders up to Angola and Tanzania. She was contemplating the advice to be given to the Head of State should the question arise.

Chairperson’s closing remarks
The Chairperson said the Defence Force should expand on existing skills because it was important for the security of a capable state. He requested a follow up on the Vaal Dam project. Maintenance work in barracks should be carried out by soldiers to avoid civilians entering the military environment because it posed a big risk. He noticed the willingness of the Ministers and officials to work together. He was looking forward to engaging with the two departments within the next two months. Areas identified which should form part of the agenda included the DoD Facilities Management legal framework and the removal of soldiers from the dolomite risk area. Immediate action should be taken to not endanger the lives of soldiers and other officials. The Committee might be held responsible for not acting on information that was brought to its attention. He would like to see progress at the next meeting in terms of the working relationship between the departments. Ideally there should be one presentation agreed upon by both departments.

The Chairperson thanked the officials and commended the Ministers for providing leadership amidst the challenges. The departments could count on the support of the Committee to navigate the difficult environment. The devolution would serve as a case study for other departments.

Announcement
The next meeting was scheduled for Wednesday, 7 September 2022 with PRASA.

The meeting was adjourned.