DPWI & PMTE 2022/23 Quarter 2 & 3 performance: with Deputy Minister

Meeting report

The Chairperson made a reference to the infrastructure projects and the allocation of funds in the President's State of the Nation Address to the directorate in Department of Public Works and Infrastructure (DPWI) known as Infrastructure South Africa, which the Committee is sure will hit the ground running especially as it would be facilitating rural development.

The Chairperson noted that the Committee, from the end of 2022, was ready to facilitate oversight visits to small harbours which the Committee had been unable to do as planned at the start of this term. She noted the allegations of illicit activity taking place there. The problem is that the Eastern Cape with its long coastline does not have a single small harbour. The country’s harbours are concentrated in Western Cape. The Fifth Parliament Legacy Report referred to the Port St John’s harbour but no work has commenced there but there was only one year left of the Sixth Parliament so the Committee would be vocal about raising Port St John’s harbour.

The Chairperson said the meeting agenda was to view and address the DPWI 2022/23 Quarters 2 and 3 performance reports. She noted the Minister's apology for her absence.

Committee Programme
The Chairperson outlined the programme and the Committee discussed and adopted it:
• 31 Jan - 3 Feb 2023 Oversight visit to small harbours
• 22 Feb 2023 - DPWI & PMTE 2022/23 Quarter 2 & 3 performance
• 22 Feb 2023 - Bodlani petition
• 1 Mar 2023 - Auditor General report
• 8 Mar 2023 - Department briefing on Audit Action Plan
• 15 Mar 2023 - Independent Development Trust (IDT) Agrement SA (ASA) Annual Performance Plan (APP)
• 23 Mar 2023 Construction Industry Development Board (CIDB); Council for Built Environment (CBE) APP
• 27 March - 1 Apr 2023 - study tour yet to be confirmed where Committee will visit Egypt to learn more about the country’s progressive ways and hopefully implement that in South Africa.
• 5 April 2023 - Adoption of Budget Vote Report.

Deputy Minister's introductory remarks
Deputy Minister, Ms Noxolo Kiviet, said that the meeting took place at a favourable time which was soon after President, in his State of the Nation Address, made promises that were hopeful, for infrastructure projects. She spoke about the Welisizwe Bridges Programme that would make the living conditions of village inhabitants better, seeing as it is the government’s duty to improve the living conditions of South Africans, especially the poor. DPWI had been progressively working with the Department of Transport to attain some of its goals. She appreciated the Committee physical oversight visits to small harbours.

On the small harbours project backlog, DPWI is working with Infrastructure SA (ISA) to remedy the situation.

The Deputy Minister lastly stated that DPWI was working on stabilising the internal leadership and the Acting DG would introduced the new Deputy Directors General they have added.

DPWI & PMTE Q2 and Q3 Progress Report
DPWI Acting Director General, Dr Alec Moemi, had technical difficulties so Mr Lwazi Mahlangu, Acting Deputy Director General: Governance, Risk and Compliance, took the platform to present the non-financials of Quarters 2 and 3. This spoke to the performance and progress indicators and achievement against targets for these two quarters. He went through each of the 11 programmes, with five in DPWI and six in Property Management and Trading Entity (PMTE).

The two sets of financials were presented by Mr Aaron Mazibuko, Chief Director: Finance, and DPWI Chief Financial Officer, Mr Mandla Sithole. The 2022/23 adjustment budget was discussed noting items such as compensation of employees, and transfers and subsidies (see document).

Discussion
Ms S van Schalkwyk (ANC) commented on the recurring underspending in DPWI programmes despite which makes them very uneasy. She asked what is to be done to resolve the vacancies and the acting positions.

Ms van Schalkwyk noted the R6.1 million allocated to the bursaries of non-employees. She asked if current and internal employees benefit from skills development and the criteria for external candidates qualifying for bursaries. How would DPWI resolve the challenge of employees who could not be professionalised?

Ms van Schalkwyk asked if underspending did not result in poor service delivery and what was being done to ensure it stops recurring especially in Programmes 3 and 5. On the low level of infrastructure implementation, DPWI said that oversight must be increased so what is being done about that? There is a lack of EPWP funds being transferred to municipalities and provinces because of poor compliance with Division of Revenue Act (DoRA). What is being done to strengthen their capacity to improve on their mandate. She asked if the Department considered the Committee BRRR recommendations as a measure to improve service delivery. DPWI rental collection was at 39% in Quarter 3 and she asked it to prioritise its revenue generation capacity.

Ms S Graham-Mare (DA) expressed concern at DPWI overall performance. She asked about the availability of the 2023/24 APPs, and agreed with the previous speaker that delays in filling funded positions was a recurring problem. Key positions were not being filled, and that delays in disciplinary hearings were a problem for the department’s leadership.

DPWI draft legislation was not gazetted in Quarter 2002/23 as planned due to the delay in the appointment of a new legal drafter. It was only developed in Quarter 3 for input and submitted to DPWI in October 2022 with the aim to be only introduced in Parliament in March 2023. The next step, however, has not been communicated and gazetting is not mentioned.

Ms Graham-Mare was concerned about the PMTE underspending and contractors, despite their qualification and expertise, not fulfilling their obligations. Project managers and consultants simply did not do their jobs.

Ms Graham-Mare suggested that there is a lack of skill selection, and expressed her concern about leases and letting. She asked about the accessibility to circulars addressing leasing procedures and if the leasing strategies in place benefitted the Department.

Ms Graham-Mare asked about the refurbishing of old buildings for social development purposes. From where did the funds to perform such a task come? Did these non-profit organisations (NPOs) have a sustainable maintenance plan in hand? She asked if punitive measures would be put in place to ensure maintenance compliance and if a clear definition between DPWI and client departments had been established to maintain coherency in function.

Ms Graham-Mare had concerns over land reform asking why only 2% of land was used for land reform.

She commented on the importance of the verification of immovable asset registers, particularly in the Eastern Cape, and the improvement of facilities management.

Ms Graham-Mare asked about IDT being given funding. She asked if the Parliamentary Villages Board met the meeting requirements and procedure, and if they were meeting frequently. She asked for reports that they observed all protocols.

She suggested that the PMTE revenue percentage was too high, considering that 88% of revenue transfer was from DPWI. She asked for the accuracy of this. She asked about the underspending of the infrastructure budget, which addresses its core mandates, and reported that she had received frequent complaints of negligence in buildings owned by departments.

Ms Graham-Mare closed off by questioning the increased spending on leases.

Ms M Hickling (DA) posed a question on the Expanded Public Works Programme, asking which provinces and municipalities were affected by those not complying with requirements, and if there were punitive measures in place in the event that they were not. Mismanagement only affected the EPWP workers because they did not get paid. The NPOs should be held accountable if they do not comply with requirements.

Ms Hickling also asked why IDT received funding seeing as it was a Schedule 2 entity that was meant to be self sufficient and not receive a state fund allocation from DPWI. IDT had generated revenue in 2022/23, and yet there was no report accounting for Quarter 3 transfers or funds. Despite this, the DPWI was still going to give the IDT a new transfer payment of R70.3 million.

Ms Hickling asked about the PMTE decision to stop payment of leases and rent during discussions. PMTE lacked accountability and shifted the blame onto its non-paying client departments. She asked how these clients were expected to pay when there was no service delivery rendered due to the absence of a maintenance agreement. There was no follow-up on missing payments, and it did not honour its obligation to clients, as it did not facilitate maintenance.

She asked about the faults that hindered the department from performing at its optimum, and how these can be resolved.

Ms Hickling’s last two questions were based on historical debt to DPWI. How did it aim to resolve the R7 billion debt and why does PMTE not keep record of or collect remuneration for the municipal services it renders.

Ms Hickling’s closing statement urged DPWI to do its job thoroughly.

Ms L Mjobo (ANC) expressed her dissatisfaction with the vacancies and the sudden large number of “acting” candidates in leadership positions. She asked which provinces and municipalities did not comply with the DoRA requirements. She asked about the progress in the transfer payment to the Parliamentary Villages Management Board.

Ms M Siwisa (EFF) echoed the concern about the vacant positions. DPWI should know by now, due to past experiences such as the Beit Bridge saga, not to delay projects.

She made mention of lack of action, and how despite the promise of physical involvement in previous Committee meetings, all promises never seem to leave the office. Government’s physical involvement would help avoid the consistent incoming complaints of poor performance.

On EPWP job opportunities, Ms Siwisa asked if they refer to the renewal of internal employee contracts or if new people are being hired. If new people were being hired, there was a discrepancy because the employee compensation report indicated poor performance results.

Ms Siwisa asked for the progress in solid leasing to ensure payment coherency. She asked about the utility of department buildings; how many buildings had been identified for GBVF shelter purposes in Gauteng and Western Cape and the number of buildings that remain unutilised.

Ms Siwisa echoed comments on consequence management, suggesting that when correct measures are not in place, those in power may be spared while their subordinates suffer the most.

Ms Siwisa stated that the country is in a standstill because of the malfunction of DPWI.

Mr W Thring (ACDP) stated that the cumulative average of 45% for the targets reached is unacceptable when measured against 73% of budget spent. There was a 55% deficit in targets in Quarters 1 to 3, and asked if this can be rectified in the remaining quarter left.

On the EPWP work opportunities, Mr Thring asked if they lead to employment, seeing as South Africa's unemployment rate remains high. He suggested that an achievement of at least 50% of three million job opportunities would be a success for DPWI.

Mr Thring asked for progress on previously delayed projects such as the Jersey Barrier Wall in KZN and if there are consequences for the delays in these projects.

Mr T Mashele (ANC) stated that the Department was inconsiderate of the livelihoods of South Africans. Underperformance was a recurring problem, but he was hopeful DPWI would improve. He asked how the department budget remained underspent, yet property is skyrocketing.

Mr Mashele recommended external employment to improve department functionality.

The Chairperson stated that most of the issues raised by Members resonated with her. Policy issues were not addressed due to the delayed Public Works and Infrastructure Bill. She agreed that the absence of this legislation would prevent DPWI from resolving their client department debts. She asked for a progress update on this Draft Bill.

The Chairperson expressed relief at the reduction of private leases, and hoped it would result in corruption reduction too with the ending of month-to-month leases. The Department's refurbishment project of the Telkom Towers is on the Portfolio Committee radar and it would have impromptu visits to the site to see how the SAPS headquarters has been accommodated after all these years.

The Department has potential to collect revenue from its own buildings, but it is not because of poor performance and spending on private leases. She noted the departmental debts to DPWI such as the Department of Correctional Services which owed it an exorbitant amount. This should be taken to ministerial level immediately.

The Chairperson commented on the neglect, vandalisation and even possible illegal occupation of unutilised buildings owned by Public Works. DPWI has a responsibility to raise revenue from these but it must look after them properly.

The Chairperson expressed gratitude for the vacancy filling although slow and asked that this continue to be concentrated on. She asked when they can have a DG that is not “acting”.

Response
Deputy Minister Kiviet replied that the recruitment process for a Director General was in place, and that an appointment panel consisting of ministers had been set up. This recruitment was one of a diligent nature due to the seriousness of the leadership role. She handed over to the Acting DG as his network connection was working.

Mr Alec Moemi, Acting DG, stated that he and his team recognised the spending blunders, and were currently meeting to find solutions on this and work flow. He had taken the liberty to write to his DDGs to ensure that the resolutions are achieved.

Mr Moemi explained that there was documented progress on vacancies which he could show to the Chairperson and Committee. He had promoted external employment and had tried to find and hire external employees as a measure to fast-track the functionality of the department as promoting internally always leaves another vacancy. However a balance is important as the unions would not take kindly to this. He believes that they had done exceptional well in this. DPWI has increased HR personnel in the form of short term contracts to increase capacity to ensure a 10% vacancy rate norm.

Mr Moemi replied that there is tremendous progress on leasing, in that the number of month-to-month leases outsourced by the department has been reduced to a manageable number. Only 18 months ago, 1 819 leases of 2 500 were on month to month which has been reduced to a manageable 131. It uses the Rode Report as a benchmark. The only difficult leases left are those in small towns where there is a single landlord. They are looking at permanent solutions such as developing to avoid this extortion.

Communication towers for police and defence were delayed by limited building space due to factors such as private ownership in suitable locations. Land expropriation had to be considered for the distribution network of Eskom. This expropriation has now been achieved. Still on expropriation, Mr Moemi noted its necessity for a few leases. However, the long term solution is for DPWI to rely on its own portfolio of government buildings because of the hefty annual expenditure of over R5 billion spent on leasing privately-owned property for client departments. There has to be a change in the reliance pattern to rely more on its own facilities than others. It would concentrate on its Refurbish, Operate and Transfer (ROT) Programme.

Mr Moemi replied that it is taking the Committee's BRRR recommendations seriously. It is not only findings of from the Auditor General but they also infuse the BRRR into the audit action plan. He gave the example of the Committee recommending changing the implementing agent for the Telkom Towers refurbishment as DPWI had implemented a new agent, Coega Development Corporation (CDC), for that. It had consulted with SAPS and it has approved this.

Mr Moemi attributed the delay in applying disciplinary measures which can take three to four years to complete due to how the procedure is structured in the Public Sector Bargaining Council. DPWI is frustrated by the slow process but the procedures are laid out and it is not through a lack of will.

Mr Moemi attributed the “acting” persons in key positions to the lack of suitable candidates applying for these positions such as engineers and town planners. They have focused attention on this. Of the vacant DDG positions only one has not yet been advertised

He conceded the point about poor construction project management. He spoke to collusion in not protecting the interests of government. They have been quick in referring such cases to the Special Investigating Unit (SIU) or internally investigating them. He stated that there had been some success in project investigations, as some employees have been charged and are awaiting suitable punitive measures. He gave the example of the Sarah Baartman Centre of Remembrance project. It has managed to get approval that projects do not halt but that the investigation process is ring-fenced while concurrently DPWI proceeds with the construction project.

On the social use of unutilised government buildings land for GBV centres, DPWI has engaged with the Department of Social Development and entered into a MOU for 40 properties to be handed over while DSD provide capacity to NGOs. As a resolution to maintenance, long term leases have been introduced, but the management of payment of utilities is not for DPWI. The first 21 buildings have been approved and awaiting the remaining 19. The same goes for sporting fields for schools on a long term lease but the school takes responsibility for the land.

On the 44 000 hectare land reform release, Mr Moemi replied that there had been inadequate research by assisting departments. Most of the time, when reform-able land was identified, proper consultation had not been done. Four military bases were not prepared to release land as it was still in use. Some identified land parcels were even privately owned. DPWI had dedicated capacity to scour the Government Immovable Asset Register for suitable land parcels for human settlement, land reform and social and economic use.

The reason for the funding of IDT was that it was currently not in a position to take up projects independently as it is not self-sustainable, and so this funding was aid.

The Public Works and Infrastructure Bill and the Construction Industry Development Board Amendment Bill were delayed due to awaiting a new legal drafter or waiting to go to the Cabinet Cluster but delayed by concerns that had to be addressed.

Ms Thembi Hlatshwayo, Chief Director: HR Management, spoke about the advertisement of senior positions such as that of DG. Hopefully these applications would be shortlisted on 24 February 2023 but they are still waiting for other ministers to indicate their availability for that date. In 2022, nine of the DDG positions were vacant and at least three have now been filled. There was a decrease in the vacancy rate from 28% at the start of 2022/23 to 10% now. Of the 467 positions advertised this financial year, 363 have been filled.

Mr Mzwandile Sazona, Chief Director: Prestige Policy, referred to facilities management contract for Parliament. DPWI was ready to issue a tender which would be advertised by 15 March 2023 and it awarded by 30 June 2023. The Parliamentary Villages Board is only supposed to fit a year’s timeframe. Delays are caused by constantly having to find new board members. There was no meeting in 2022 but draft annual financial statements dating up to 2020/21 were in existence.

On 30-day payments by PMTE, 98% of December 2022 invoices were paid on time. Also the actual recovery rate is 61%.

Ms Carmen-Joy Abrahams, Chief Director: EPWI Partnership Support, answered questions on transfers to NPOs. There were three transfers within the EPWP programme. She noted the implementation of wage subsidies in NPO programmes. There were no discrepancies in the social sector, and R55 million had been since transferred to compliant public bodies. DPWI provided technical assistance to public bodies and writes to public bodies to inform them of non-compliance and this does help. She listed the non-compliant provincial departments which included departments in Free State, North West and Mpumalanga. The EPWP provides work opportunities not employment. She could circulate the report on the impact of the EPWP which noted that the chances of EPWP graduates finding a job in the formal economy are five times greater than those who have not worked. The economy has not yet returned to pre-Covid levels and remains under stress.

Mr Batho Mokhothu, DDG: Construction Project Management, replied about construction performance. There was a review of project pipelines and the sticking points. There are 800 projects being considered and about 227 projects in the construction phase with only about 75 to 90 projects completed per year. They have engaged stakeholders as the project pipeline has to improve. They are awaiting Ministry approval for expert support. There was a need to review the rating of all hired contractors in the portfolio and have their skills evaluated. It also is having a skills audit of its project managers to achieve optimum results as their correct placement is important to ensure all players work together to deliver.

Mr Adam Mthombeni , Acting DPWI: Inter-Governmental Coordination, spoke to the contracts concluded in Joburg, Cape Town and Bloemfontein to make planned maintenance more sustainable.

The meeting concluded by the Deputy Minister clarifying certain responses noting that the Department had more than 5000 employees; the allocation of provincial department oversight to the Minister and Deputy Minister; its new approach to infrastructure projects blocked by disputes and litigation; pushing gender and disability equity in the filling of vacancies; and the anomaly of DPWI being given the responsibility of transport of MPs to and from parliamentary villages.

Meeting ends.