DMRE 2022/23 Q1 & Q2 Performance and solar water heater programme, with Minister

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Mineral Resources and Energy

15 November 2022
Chairperson: Mr S Luzipo (ANC)
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Meeting Summary


The Department of Mineral Resources and Energy briefed the Committee on the performance and financial reports for the first two quarters of 2022/23 and provided an update on the progress and challenges of the National Solar Water Heating Programme. 

The Department achieved 59% of its set targets in the first quarter and 75% in the second. National Treasury had appointed KPMG to conduct forensic investigations into why there had been fruitless and wasteful expenditure by the Department on the solar water heater project.

The Committee asked the Department to explain the reasons why it had not achieved some of its targets. Were there specific targets for the number of rights issued to Historically Disadvantaged South Africans? What were the details of the Social and Labour Plan development projects that had been completed? Could the Department provide copies of the reports on derelict and ownerless mines and shale gas exploration? Why were no mining rights issued in three provinces during the first quarter? What in the preferential procurement system needed to be changed now that organs of state were allowed to design the procurement system in line with their service delivery requirements? Financial support to small scale women miners was one of non-achieved targets in the second quarter. What were the reasons for this? Why was there a backlog in presenting energy-sector related legislation before Parliament? What was being done to realise the President’s announcement that municipalities would be able to buy and generate electricity from Independent Power Producers without any need for concurrence of the Minister or organs of state? The Minister undertook in March 2022 to review the fuel pricing model. What progress has been made so far?

The Committee asked why the Department came with the same set of challenges being faced by the National Solar Water Heating Programme, year after year. It also questioned why KPMG was conducting a forensic investigation into fruitless and wasteful expenditure when the cause for the fruitless and wasteful expenditure was known. Why had four municipalities out of the nineteen that had been set to benefit from the programme, exited? How would their exit affect the objectives of the programme?

Meeting report

Presentation by Department on first and second quarterly performance 2022/23

Mr Jacob Mbele, Director-General, Department of Mineral Resources and Energy (DMRE), said that the Department had set 75 and 71 targets to be achieved in quarters one and two respectively. The Department had managed to achieve 44 out of the 75 targets for quarter one while in quarter two, they had achieved 53 of the 71 targets. [See the presentation slides for details]

The targets that were achieved in quarter one included the production of the report on the rehabilitation of derelict and ownerless mines. There was a reduction in the number of fatalities and injuries arising from mining accidents. The Department had issued 46 mining rights which was more than the target of 30. In quarter two, they tabled the mine and safety health bill before the National Economic Development and Labour Council (NEDLAC) for consideration. They had also issued 77 mining rights to Historically Disadvantaged South Africans (HDSA) controlled entities and there had been no reported incidents of corruption in the second quarter. Only 12% of the targets set had not been achieved. Mr Mbele referred the Committee to the presentation for specifics.

Ms Yvonne Chetty, Chief Financial Officer (CFO), said that the Department annual budget was adjusted upwards from R10.35 billion to R10.42 billion, including the rollovers of R72.87 million. [slide 35] The Department had already spent 87.8% of the budget. The budget for the second quarter was R 4.62 billion. The biggest contributor to the underspending in terms of monetary value was goods and services due to delays in implementing planned projects.

Ms Chetty said that 98% of the total underspending emanated from administration programmes, projects, and policy development. The Department had achieved all the targets set for the Social and Labour Plan (SLP) development projects. The report on the economic viability of Shale Gas exploration in South Africa has been produced. The Department also monitored the reports on the Long Term Operations of the Koeberg Nuclear Power Plant.

In quarter two, the electricity pricing policy (EPP) review had not achieved its intended target – the final draft depends on an executive committee (EXCO) workshop and the Department finalising certain EPP positions. The number of occupational injuries had fallen compared to the previous years. The targets on Requests for Proposals (RFPs) for renewable energy issued were achieved, while those for energy storage issued were not achieved due to delays. The Department had set a target of supporting ten small scale women miners but had only managed to support three. This was because of the delay in finalising the Memorandum of Agreement between the Industrial Development Corporation of South Africa (IDC) and the Department.

No new wasteful & fruitless expenditure was incurred in the current financial year. The only wasteful & fruitless expenditure reported is for prior years and will remain (on record) until the forensic investigation by KPMG is completed.

The target for the draft feasibility report on the Multi-Purpose Reactor (MPR) had not been achieved because the South African Nuclear Energy Corporation (NECSA) was of the view that the project should take a different approach [slide 93].

Mr J Lorimer(DA) asked if there was a separate target for rights issued to HDSA entities and the target for the number of rights issued. The Department should explain the 30 SLP projects completed [slides 9 and 13], including who was consulted and what role the Department played in developing those projects. He asked for better details on the progress report on the rehabilitation of derelict and ownerless mines and for the Department to provide a copy of the report. Was the report on shale gas exploration available on the Departments’ website and if not, could it be provided to the Committee? Were there any incidences of corruption reported in quarter 1? Why were no mining rights issued in three provinces during the first quarter?

Ms P Madokwe (EFF) wanted to know if the 12% of the budget attributed as underspending would have been enough on its own to meet the targets. She said the progress of the Department in meeting its targets was very low compared to how much of the budget had already been spent. She asked when the Department projected the completion of the Department of Public Works and Infrastructure (DPWI) building claims (slide 36) and the ICT projects, in light of their challenges. Did the Department expect to purchase research materials for the shale gas project? If so, would that mean that the report, as is, was not complete yet? Why was the Department still purchasing research material if the report was complete?

Ms V Malinga (ANC) asked why there was underspending in the goods and services. She said the Department should rectify this as it had an impact on the economic output of citizens. The procurement of power for independent producers was a target that had not been achieved by the Department in quarter two despite government commitments to bring additional capacity generation online. She asked what were the formidable hurdles that caused the delay in the release of the RFP and how much investment would be unlocked by the RFP. How long would it take the Department to address the suspensive conditions for NECSA to grant unconditional concurrence given that nuclear energy plays a key role in South Africa’s energy transition?

Mr M Wolmarans (ANC) asked how the amended preferential procurement regulations announced by the Minister for Finance will affect the engagement between the stakeholders - being women, youth and persons with disabilities - in some of the Department’s programs and the Department. Could the DMRE indicate what in the preferential procurement system needed to be changed now that organs of state were allowed to design the procurement system in line with their service delivery requirements? He asked why NECSA took a different approach with regards to the project considering that a gateway review of the prefeasibility report of the Multi-Purpose Reactor project had provided assurance that the business case was viable. Could the Department provide more details regarding the Koeberg nuclear power plant long term operations in light of the fact that delays in replacing the six steam generators had caused most of the load shedding and financial budget overruns?

Mr Wolmarans asked for the Department’s view on its capacity and skills relating to the Auditor-General’s previous comments on the lack of monitoring, enforcement and implementation measures for the social and labour plans. Was this in line with the achievement of SLP targets in the second quarter?

Mr S Kula (ANC) said that the draft renewable energy sector plan was one of the non-achieved targets. This was attributed to the lack of a stress test being undertaken. Had the stress test that was postponed to October 2022 been done and if so, what were the relevant details of the report on the stress test? How was the report going to help improve the drafting of the renewable energy sector master plan? Financial support to small scale women miners was also one of non-achieved targets in the second quarter. He asked what were some of the prevailing issues between the DMRE and the IDC on that matter, how DMRE resolved those issues given the lack of financial support, and the incentives for small-scale mines to participate in illegal mining activity. Why was the National Treasury conducting forensic investigations on the fruitless and wasteful expenditure by the DMRE due to the delay in collecting solar water heaters on time, when the cause was already known? What measures will be taken post the forensic investigations?

Mr K Mileham (DA) expressed concerns that in the presentation made by the Department, the Department saw it fit to take the Committee through what they did achieve, but not through the targets that were not achieved. This resulted in a number of questions from Members. In his opinion, the Department should explain why they have not achieved their targets in more detail than just a line on a presentation. It was unacceptable. The Department needed to be called to order in that regard. He asked for an explanation of the backlog in presenting energy-sector related legislation before Parliament. What was being done about it? Targets relating to Section 34 determinations were not achieved [slides 20 and 61]. He asked whether there was going to be an amendment to the Electricity Regulation Act. The President had announced that municipalities would be able to buy, and generate, electricity from Independent Power Producers (IPPs) without any need for concurrence of the Minister or NECSA. He sought an update on exactly what was being done to refresh, revise, or publish a new Integrated Resource Plan (IRP) per the President’s announcement. The Minister undertook in March 2022 to review the fuel pricing model. What progress has been made so far?

Mr Mbele said that the forensic investigations by KPMG will make recommendations around what needs to happen. The Department will action the recommendations from the forensic investigation. The purpose of the investigation was to go to the root cause of the problem and not just to deal with the symptoms.

He said that in quarter two, they had intended to issue two RFPs. The RFP for bid window six was issued within the correct timelines. The delayed RFP was for battery storage and the reasons from the Department's point of view was that certain exemptions were needed from National Treasury and the Department of Trade, Industry and Competition (DTIC). This was why they had indicated that some of the targets had not been met due to poor planning. It also raised the question of how the Department should account for its performance on processes outside of the Department’s control.

Mr Tseliso Maqubela, Deputy Director-General (DDG): Minerals and Petroleum Regulation, DMRE, said that there was a specific focus on HDSAs to ensure constant monitoring of the achievement of transformation. The Department felt the need to have a target that spoke to historically disadvantaged South Africans. Effectively, there was no particular target focusing on all the mining rights issued. The aim is to issue as many rights as possible, focusing on historically disadvantaged South Africans.

There was active participation by the Department on the SLPs in each of the municipalities. They consult with the municipalities to ensure that the SLP projects are aligned with the Local Economic Development (LED) policies of the municipalities.

The issuance of mining rights depended on the applicants themselves. They had to ensure they provided all the requisite documentation and information sought. There was not much the Department could do to force the applicants to be more vigilant in their pursuit of mining rights.

Adjustments on the issue of fuel pricing had already been made. However, one of the things the Department had been doing was gathering as much information as possible from people in the market. If the Department had tampered with the pricing method during the time of conflict, there would probably be higher fuel prices than what was currently being experienced. It cost oil companies a lot more money to import diesel into the country than the Basic Fuel Price (BFP) allowed them to recover. The Department needed to be cautious about tampering with the BFP in the middle of conflict because they would import that inflation into the BFP. Things were stabilising now and the Department was in the process of revising the model.

Mr David Msiza, Deputy Director-General: Mine Health and Safety, said that the major causes of mine accidents were either transport-related or fall of ground. The Department was working with the sector to ensure improvement in the situation. Up to date, there has been significant improvement, with the fall of ground fatalities currently showing 77.9 % improvement compared to the previous year. Historically such accidents contributed to 30% of the overall number of fatalities. There were also machinery-related accidents that contributed to fatalities and injuries. Results had improved in the current year by 83%. The Department will ensure that the oncoming report includes the causes of accidents.

Ms Chetty said that there were challenges with the DPWI and ICT. Ms Hilda Mhlongo, DDG: Corporate Services who had appeared before the Committee previously, had already indicated the challenges they are facing in ICT and the interventions in place. The Department hoped to see some improvement on the DPWI in quarter three, which will be followed up on.

She admitted that the Department’s goods and services budget affected economic activity if the spending targets were not met. At the same time, the delayed spending had been for valid reasons at times. Spending had to be quality spending which the Department tried to ensure was linked to a target. The Department had asked the various branches whose projects have been delayed to ensure that those projects move with speed in quarter three.

The CFO said there had been a moratorium placed earlier in the year on Preferential Procurement which affected how the Department spent the allocated budget. In particular, the financial year that ended in March of 2022 was affected. The moratorium had since been lifted, so spending had started to normalise, but they were experiencing some delays on that front.

Ms Elizabeth Marabwa, Chief Director: Programmes & Projects Management Office, DMRE, said the delay in signing the Memorandum of Agreement (MOA) with the IDC was due to the demarcation of responsibilities between the IDC and the DMRE. National Treasury requires that when the money is issued, there must be a mechanism for following up on how that money was spent and whether it was used for the intended purpose. The Department was allocating particular areas of responsibilities which would enable the Department and the IDC to follow the money. The agreement should be finalised before the end of the calendar year. The Department should be able to initiate the implementation to ensure the small scale miners receive the money that has been set aside for their use.

Ms Elsie Monale, Chief Director: Nuclear Nonproliferation and Radiation Security, DMRE, said that the government had established a technical oversight committee to exercise oversight on the project on the Long Term Operations (LTO) of the Nuclear Power station. This was to ensure that before 2024, the Koeberg station operation had been prolonged. Eskom had indicated to the Department’s nuclear branch that everything was in order and that they were going to achieve their targets in that respect. However, they submitted a safety assessment report to the Regulator who noted that there might be possible delays which might mean Koeberg not meeting its target. The matter received attention from the Department and escalated to the energy crisis committee to address the matter. The Department was working together with Eskom to ensure that the LTO target was reached.

Ms Monale said that they anticipated that it would take about three months for the unconditional concurrence on the suspensive conditions to be granted by NECSA. The MPR project followed the National Treasury framework for infrastructure procurement delivery. Initially, the ministerial committee had advised that the project follow the Engineering, Procurement and Construction Management (EPCM) contracting module but this was changed by NECSA which opted to follow Engineering, Procurement and Construction (EPC) contracting owing to the possible delays with the lessons from other mega projects.

Mr Mbele said that a response had been drafted on the suspensive conditions imposed by the National Energy Regulator of South Africa (NERSA) but was still undergoing consultations to ensure the issues are addressed specifically. They hope to submit the final response before the end of the year. No incidences of corruption were reported in the first quarter. The work by Trade and Industry Policy Strategies (TIPS) on the renewable energy master plan has been done. What was outstanding was presenting the plan to the various stakeholder committees that oversee the work. The challenges causing the backlog in legislation came down to how the Department sets its targets and the planning around those targets. When the details on non-achieved targets are looked at, it will become clear that most of them are stuck between consultations. With proper planning and target setting, they should be able to resolve the issues going forward. The delay was also because there are always different views on how issues should be dealt with when it comes to policy setting and legislation. Consultations sometimes take longer than anticipated especially when one goes before bigger forums. He would ensure that the reports on the shale gas and the other reports are available and will be provided to the Members of the Committee.

Mr Maqubela said that the Department's role on the SLP projects was to evaluate and approve the identified projects to be done by the various mining companies and to ensure sufficient consultation, not only with the affected communities, but also with the municipalities. For big infrastructure projects that cannot be done by one mining company, they have encouraged mining companies to come together to ensure that they deal with the water infrastructure in communities.

Mr Gwede Mantashe, Minister of Mineral Resources and Energy, said that the SLPs are at the stage of consulting with the communities affected. That was why SLPs needed to work harmoniously with the Integrated Development Plans (IDPs) of the various communities. The Minister was concerned with posting the Shell report on the website as it contained sensitive information and there is a probability that lobbyists could use such information against the Department. The poor spending by the Department was not due to poor planning or implementation. He asked the DG to invite Ms Madokwe to one of their planning meetings so that she could understand the effort that goes into making plans for the Department. The issue of supporting small scale miners came down to the miners themselves taking the initiative to start the business and seeking the financial support needed. It was not true that the Department never took time to fully explain the targets not achieved. What was not achieved was the gap between the targets set and the targets achieved by the departments. The gap explained what had to be achieved and it was up to the Committee to ask for reasons as to why those targets had not been met. The pressure on the Department was to deregulate but there was no reciprocal investment flowing in that area after deregulation—which was why he had an issue with the deregulation requests. There were no municipalities that had applied for generation of their own electricity. The City of Cape Town and Stellenbosch had started, but had yet to complete their submission process. The removal of section 34 requirements was dangerous as this will turn the electricity sector into an electricity disposal shop, which may, in turn, have dire consequences. The Department was implementing the IRP 2019 because it had actually generated more megawatts than in the period up to 2018. They are however in the process of revising the IRP, not for renewables but to look into various respects including the combination of technology that must give South Africans not only clean energy but also a way out of energy poverty.

Further discussion
Mr Mileham said the Minister was glossing over the “not achieved” portion of the DMREs presentation. It was not about the gap between what was and was not achieved. There were targets not achieved and not explained by the Department which was why the Committee was concerned. It was completely out of line for the Minister to say that it was a gap, and that the Department places a bigger emphasis on what had been achieved because of the alleged gap. With regards to the IRP 2019, he said that he never mentioned renewable energy. What he said was that the IRP was outdated. It was not in dispute that the Department was aggressively pursuing IRP 2019. His concern was that the IRP 2019 was based on outdated assumptions. There was a need for the assumptions to be updated and information to reflect the reality on the ground. The Department could not keep working based on information that was outdated the day it was published.

Further Response
The Minister said that in some of the issues, he appealed to the Chairperson to protect the Department because they had indicated that they were already reviewing the IRP 2019. By about March 2023, they will be at the tail end of completing it. It was unfair for Mr Mileham to project the Department as indifferent because they were making efforts to review the IRP [themselves and] not because the stakeholders in the energy sector have asked for it. The review was not motivated by any realities happening on the ground. The energy availability of Eskom on the IRP 2019 was not a wrong assumption. Eskom has 45 000 megawatts connected but only gives 26 000 megawatts. If there was a lot of investment and effort in getting energy from the units that were connected and give no energy, 75% energy availability would be a reality. It was not the point of a wrong assumption but a question of the substandard performance of Eskom. The Minister said they did not understand what the fight was about. Underperformance was what the Department had not achieved and the presentation did explain a number of those things—unless Mr Mileham can provide the Department with a template of what he wants the Department to say. He reiterated the gap between what has been achieved and the targets set. He was not glossing over those non-achieved targets; it was just how it was.

Mr Mileham said that the Department had not explained why they had not achieved some of the targets.

The Chairperson said that what he understood to be the issue from the Minister’s side is that the Department had presented the targets as outlined in the Annual Performance Plan. The performance of the Department would be measured quarterly in terms of the annual performance plan and the targets. This meant that each quarter the Committee had to reflect on whether the Department would be able to meet those targets, based on the pace at which they were moving. If so, according to the assessment, there is a likelihood that they will not achieve their targets not only based on inability to meet them, but also in terms of resource allocation. He said he had hoped the Department would go back and try to provide better details. The point raised by Mr Mileham was that it was unclear why certain targets were not being met. In his explanation, he found it concerning that the DG said it was because of poor planning but did not provide better details. The issues around availability of energy and the supply thereof should be discussed in a meeting set for dealing with that specific matter. If it is brought up, it must be discussed in the context of what was presented by the Department.

Presentation on the National Solar Water Heating Programme (NSWHP)
Mr Mbele said that the Department had procured 87 206 Baseline Systems to be installed in 19 municipalities as part of the National Solar Water Heater Programme. 72 857 had been moved to the municipalities to curb high storage costs. 14 349 Units were being withheld by suppliers who were demanding payment of additional storage fees. The Department had instituted legal processes to retrieve those units without paying additional storage costs. The project experienced significant delays but installation had commenced and to date 21 367 units have been installed out of the 38 921 that had been earmarked for phase I.

The participating municipalities had been identified and framework agreements concluded. Technical feasibility studies have been concluded in participating municipalities. SWH baseline systems were also allocated and delivered to 15 out of the initial 19 municipalities. Four municipalities: Ekurhuleni, Cape Town, Swartland, and Ndlambe, have exited the programme. The training of installation assistants had commenced but had been put on hold due to financial challenges.

The Department had incurred fruitless and wasteful expenditure due to storage of SWH by the suppliers beyond the 120 days designated as free storage in the Supply Agreement with the manufacturers. This was because the Department took too long to collect the manufactured units. The Department, through National Treasury, had instituted an investigation which appointed KPMG to conduct forensic investigations related to the fruitless and wasteful expenditure incurred by the Department due to delayed collection of manufactured SWHs. The forensic investigation on SWH storage costs was currently underway.

The Department had been embroiled in legal battles through arbitration with six suppliers who demanded additional money due to various issues including storage costs. One of the cases involving Solid State Power (SSP) had been completed and the DMRE had won the case. The other cases were still pending. The installation of SWHs was divided into two phases. The first was a total of 38 921 allocated to the installation service providers between the DMRE and the CEF Group. Currently, 21 367 have been installed in 18 municipalities while 42 083 have been set for installation in phase two. During phase one, the Department experienced a number of challenges including the manufacturers refusing to conduct Product Specific Training (PST) until payments are made, and manufacturers refusing to supply missing and faulty components. Municipalities had made demands on only commencing installation when Learner training is completed. There were disputes with about six suppliers who became uncooperative and refused to supply components or provide training, and four municipalities withdrew from the programme.

Mr Mbele said that some of the SWH systems stored in various facilities had been vandalised and components, especially copper pipes, stolen. Most of the incidents had been reported to the police and the case number submitted to the Department. Investigations were pending and no cases had been finalised.

Ms Malinga said the Solar Water Heater Project was one of the projects that gave the Committee a headache, after the issues of illegal mining. She asked why four municipalities out of the 19 that had been set to benefit from the program had exited. How would their exit affect the objective of the programme, especially the need to reduce the existing burden on the grid by using cost-effective ways to generate hot water for houses? She asked whether the Department has the requisite capacity and skill to enforce the installation of the solar water heaters in phase I by themselves, given that there were fewer installer assistants to carry out the installation of solar water heaters across the targeted municipalities. She asked why the investigation on vandalisation was still pending, yet the investigating officer had reported those instances to the proper authorities. What measures had the DMRE put in place that ensured that, pending investigation, there were no adverse effects on the installation across the affected municipalities? Who bears the cost of enhanced security measures to minimise the vandalism of heaters and theft of copper wires?

Ms Madokwe said that previously when the Department had presented to the Committee on the solar water heater programme, they had highlighted six major challenges. Two years down the line, the same six challenges were still being cited, with two extra ones to boot. It seemed like the previous report was just copied, pasted and presented to the Committee word for word. The only issue that seemed to be added was the exit of the four municipalities from the programme and the six suppliers causing problems. It would have been expected that from that time to date, the Department would be updating the Committee on the progress made on the challenges that had been mentioned earlier. It was hard to believe that the Department was piling up more problems instead of improving. Why were the challenges presented years ago the same being presented in 2022? She asked why the Department was being held at ransom by suppliers considering there was a contract in place which provided for what ought to happen in the event a supplier does not deliver. The Department should not be lamenting about the failure of the supplier to fulfil their contractual obligations to the Committee. She asked what the role of the Department of Cooperative Governance and Traditional Affairs (COGTA) [Ma1] was in the solar water heater programme. Were they part of the programme, and if so, what was their role in terms of managing the working relationship between the DRME and the local municipalities to ensure that where there is a possibility to execute the programme outside the issues of suppliers, those programmes were formally executed? She said that the outcome of the KPMG investigations was long overdue. Why had the Department not received the report on the investigations? What about the other issues that have nothing to do with KPMG—how is it that the Department has not been able to handle them? Did the Department have any way of holding the people who were part of the project accountable for their decisions, regardless of whether they were within the employ of the Department, or outside the investigations of KPMG?

Mr Mileham asked how the Department expected the Committee to believe that they were going to deliver when the Department has been making the same promises since 2019. Given the time and costs that had since escalated, he asked for the average cost per geyser now and how much it was when the project started.

Ms Malinga asked the Department to explain why the National Treasury was instituting investigations into fruitless and wasteful expenditure on collecting solar water heaters when the Department had been clear on what had happened. Wasn’t the investigation itself another fruitless and wasteful expenditure?

Mr Mbele said that the Department had managed to move the units and cap the fruitless and wasteful expenditure at R100 million per annum under the solar water heater program. This is different from the situation in 2018 when no units were installed. The progress made by the Department in those terms should be enough for the Committee to take the Department at their word. Some inherent risks and challenges are part of the programme which the Department was trying to work around. A Cabinet decision had directed that National Treasury do the investigation, but subsequent checks could not find a final decision. The Director General at the time decided to give it to National Treasury.

Every project had inherent risks that would have mitigating measures in place, which was what the Department was experiencing with the programme. The Department tries to deal with the risks by working closely with the municipalities and ensuring that there is a social facilitation person who actually helps them deal with issues on the ground. The cost per unit for solar water heater, including storage costs and installation, was originally R16 500. He said that the Department was also putting pressure on National Treasury for the outcomes of KPMG investigations, which they also felt were long overdue. So far, no one has been held responsible following the said investigations. However, the funds in question are public money and he, as an accounting officer, was obligated to pursue those responsible. He assured the Committee that officers who are found liable will be pursued regardless of whether they are still in the employ of the Department or not.

Ms Marabwa said that Ekurhuleni was not in a position to allow the technical feasibility assessments to be conducted. The Department appointed service providers but on several occasions, the municipality could not agree on where the installation would occur. It was also unable to allow social facilitation to take place due to the same reasons. One of the conditions in the national framework agreement signed between the municipalities and the Department was that each municipality would have to provide storage facilities for their allocated solar water heaters. The same municipality (Ekurhuleni) failed on that front. The same reasons applied to the City of Cape Town and Swartland, save that Swartland allowed the feasibility assessment to be conducted. At Ndlambe municipality, the technical feasibility was conducted but the water quality and pressure was such that it was not possible to continue with the program. The municipality made the executive decision to exit the programme.

The training of the solar water heater installation assistants was delayed as it was a collaborative project with the Department of Labour which had pledged its support, but due to Covid, they were no longer able to offer their support. The Department had not budgeted for the training so they had been forced to put the training on hold unless the municipalities were able to assist with funding. Even in the absence of the training, the Department is still able to proceed with the installation of the solar water heater programme The main reason for installation assistants was to ensure that when the project was finished, someone on standby understood the solar water geysers.

To combat threat of vandalisation, she said that one of the conditions for the storage facility to be approved was that the municipality needed to have 24 hour security and an alarm system. But most of these systems had been stolen from facilities. The Department had requested the municipalities to also install security cameras as an extra measure but even with those, they had noted that some of the municipalities had cameras prior to the vandalisation. The cases of vandalism and theft at the facilities had been reported to the South African Police Services (SAPS) and investigations were taking place. The municipalities have committed to updating the Department whenever there is progress. One municipality reported that SAPS had already apprehended one of the culprits and the case was pending in court.

The Minister said that the Department had taken steps to address the project's challenges. Two years prior, no units were installed, but as of 2022, there were 21 000 on rooftops. That was enough for the Committee to take the Department at their word. He said that the Department was not being held to ransom by suppliers. The Department had ongoing court cases against those suppliers that had failed to deliver. Cabinet instigated the KPMG investigation. He agreed with this. He asked the Committee to look at the work being done by the Department on the solar water heater project. That should demonstrate their commitment to completing the project. If the Committee was of the opinion that was not enough, he asked that the Committee tell the Department. The solar water heater project was complex; everyone who had been initially involved in the project, from the DG to the project managers, were no longer with the Department. The project had been poorly structured but they were working on it.

The Chairperson said that the Committee would check from time to time whether the Department implements the recommendations made on projects such as the solar water heater programme. Their concern is whether the Department is taking the recommendations seriously. He noted that one of the things that could make the Department receive an unqualified audit without findings was [resolving] the recurring matter of the solar water heater programme.

Minister’s Closing Remarks
The Minister thanked the Committee for engaging with the Department. He hoped that some of the questions could be made into statements to give the Department guidance but they would be patient with the Committee to get to that point. The Committee should appreciate that the project is an obstacle between the Department getting a clean audit and an unqualified audit. The Department was therefore taking it seriously as they also want to quickly and efficiently resolve the issues arising in the project. It was not an issue of a reckless Department that did not care; rather the project itself was complex but poorly planned.

Committee Minutes
The Chairperson went through the minutes of the virtual meeting held on 08 November 2022 page by page, inviting comments from the Members.

Mr Wolmarans proposed adoption of the minutes. Mr M Mahlaule (ANC) seconded the motion.

On matters arising, the Chairperson said that the request for the supply of details on the successful and non-successful mining rights applications by the Department had no set deadline. He proposed a deadline of the end of November 2022.

Ms Malinga concurred.

The meeting was adjourned.

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