Public Works & Infrastructure 2023/24 Annual Performance Plan

NCOP Transport, Public Service and Administration, Public Works and Infrastructure

19 April 2023
Chairperson: Mr M Mmoiemang (ANC, Northern Cape)
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Meeting Summary


Public Works

Despite the absence of the Ministry, the Chairperson decided to go ahead with the virtual meeting on the 2023/24 Annual Performance Plan and budget of the Department of Public Works and Infrastructure (DPWI). Expenditure over the medium term of R17.1 billion is allocated for infrastructure projects for 24 departments including correctional centres, police stations, courts and office buildings. The Acting Director General pointed out that the shrinking budget and aged government property portfolio required innovative solutions to deal with this. He emphasised the significant policy shift that looked at the involvement of the private sector in investment in state facilities through a pilot programme DPWI calls Refurbish Operate and Transfer (ROT). This key shift was needed because National Treasury could not give the additional funding for the huge maintenance backlog for crumbling buildings that are being vandalised. The pilot programme will be rolled out in the current financial year.

Committee members asked about the development plans for mixed use government precincts using smart city principles; repair and refurbishment of Parliament after the January 2022 fire, infrastructure requirements; small harbours especially Port St Johns; mega cities infrastructure; procurement allocations for women, people with disabilities and youth SMMEs; if the skills pipeline programme was ongoing; and parliamentary village concerns. It was also raised if the Select Committee ongoing concerns had been fully captured in the Annual Performance Plan.

Meeting report

The Chairperson noted the technical connectivity problems. He said there were apologies from the Minister and the Deputy Minister but because of the strict budget, the meeting could not be postponed.

Mr T Brauteseth (DA, KwaZulu Natal) said that a resolution had previously been taken that when the Annual Performance Plan was presented in the absence of the political heads, the meeting was not to proceed.

The Chairperson agreed however noted that the ministers have cabinet meeting at the same time as the committee meeting and that it was a challenge. As recommended the meeting would proceed.

Mr Brauteseth said the resolution should be honoured. However, he was not going to attend the meeting.

Mr M Dangor (ANC, Gauteng) noted that in the Whips meeting it was concluded that Parliament convene for physical meetings with the Executive. There were only two committee rooms available according to the secretary. The matter needs to go to the presiding officer in order to be resolved. The question of wifi in all the rooms for hybrid meetings was another challenge.

Mr J Londt (DA, Western Cape) said that a decision was taken; it must be implemented.

Ms S Boshoff (DA, Mpumalanga) said that if resolutions were not respected, then they should not be taken. It was clear that they Committee must move back to physical meetings. Without electricity for up to four and a half hours it was difficult to attend meetings without the necessary equipment and that inverters were unable to charge batteries in hour. The meeting should be postponed to give the political heads an ultimatum that they do not treat the committee in the manner that they do.

Ms B Mathebula (EFF, Limpopo) supported Ms Boshoff and said that in the absence of the political heads, there will be no one to account.

The Chairperson said that there had been a reconfiguration in the Cabinet. The Deputy Minister has always been available at meetings; however she has been redeployed to head Public Service and Administration. The resolution taken by the committee was taken by virtue of that understanding. However to mitigate the new deployees, DPWI will be permitted to present following that there will be a word with the Minister about the absence of the Deputy Minister. Resolutions must be kept but my ruling will be to proceed with this meeting. In future the committee meeting must convene on Wednesdays at 9:00 so as to have the Minister for an hour before the cabinet meeting starts – if that will mitigate the concerns raised.

Mr Brauteseth said the Democratic Alliance will be logging off from the meeting because of the absence of the two political heads. He was unsure if Ms Mathebula would leave.

Department of Public Works and Infrastructure 2023/24 Annual Performance Plan (APP)
Mr Alec Moemi, DPWI Acting Director General, gave an overview stating that the work done on the Annual Performance Plan had to consider comments by Treasury, DPME, the Auditor General and other oversight bodies inclusive of the Select Committee and incorporate key matters identified into the Annual Performance Plan to ensure responsiveness to all the concerns raised and the catch-up plans. The financial envelope available was also considered to reprioritize and restructure the budget in such a manner that it is responsive in the target setting. The Annual Performance Plan has been pre-submitted to the Auditor General for quality assurance and compliance in its content packaging in reaching set targets.

Ms Karabo Sebati, Director: Strategic Planning and Performance Monitoring, presented the 2023/24 Annual Performance Plan for both the DPWI and Property Management and Trading Entity (PMTE) for 2023/24 as well as for the medium-term expenditure framework (MTEF). A situational analysis was done to ensure that we are responsive to the internal and external environment to realise impact using infrastructure for economic growth. She detailed the performance indicators.

Mr Aaron Mazibuko, DPWI Chief Director: Financial Management, stated the DPWI budget for 2023/24 is R8.8 billion increasing to R9.4 billion for 2024/25 and R9.6 billion for 2025/26. He outlined the budget for each programme for the next three years.

Ms Juanita Prinsloo, DPWI Chief Director: Financial Planning and Reporting, presented the Property Management and Trading Entity budget. A transfer from DPWI was received for 2023/24 of R4.5 billion. It will be R4.6 and R4.8 billion in the years after that. In total the projected budgets will be R23.8 billion in 2023/24 with an increase in 2024/25 and then decrease again in the third year of the MTEF due to the payment of municipal services which are done on a recoverable basis. Based on the current project plan DPWI will no longer be recovering this from client departments. The biggest programme is the estate management services which has the bulk of the budget at R13.9 billion included in this are the municipal services property rates and operating leases.

Acting DG Moemi concluded that DPWI has a challenge considering that the budget was actually shrinking as opposed to increasing despite the aged property portfolio which required innovative ways to deal with this. He wanted to emphasize the shift in policy that looked at the involvement of the private sector in investment in state facilities through a pilot programme DPWI calls Refurbish Operate and Transfer. This has been the key shift because National Treasury could not give the additional funding for what essentially is a backlog in maintenance needed for buildings as they are crumbling and being vandalised around us. Innovative solutions were needed for this big challenge. That programme will be rolled out in the current financial year to assist in turning the situation around. That is the key area of emphasis to speak to because of the significant policy shift in as far as our way of operation.

Mr M Dangor (ANC, Gauteng) noted on process that due to the absence of the principals, the response should come either from the administration or the principals some time but not necessarily today.

Mr Dangor asked about the DPWI 2023/24 technical indicators that speak of business process automation to minimize human intervention to improve operations and to prioritize automation.

On Outcome Two: Integrated Planning Coordination, he recommended that DPWI provide the Committee with copies of the government development plans for the purpose of further oversight. He asked DPWI to elaborate on the smart city principles that will be incorporated into government development plans to address future smart city projects.

As a number of smart city projects have been announced recently, what role if any does DPWI have for the infrastructure requirements and client department requirements for smart cities such as Mooikloof Mega City in Pretoria, Nkosi City adjacent to Kruger National Park, the Durban Aerotropolis and the Lanseria Smart City.

On Outcome Three: Sustainable Infrastructure and Investment, Mr Dangor asked about indicator 9.3. DPWI had emphasized that the delay by organs of state in paying outstanding debt was affecting the financial viability of PMTE. The Department reported that the options for improving payments included declaring an inter-governmental dispute or liaising with the Auditor General (AG) to resolve such matters.

On indicator 9.9, is there a list of the pipeline of projects that will benefit from the release of land from the DPWI portfolio that can be provided to the Committee for the purpose of oversight? For indicator 10.1 on the number of National and Provincial Immovable Asset Registers assessed for compliance, the APP reflects an annual target of 12 whilst the presentation differs. Can DPWI confirm the correct target?

On Outcome 5: Transformed built environment, what are the key objectives introduced through the Public Works Bill? The Critical Infrastructure Protection Act No 8 of 2019 includes important provisions for the same kind of critical infrastructure. The APP does not appear to reflect any indicators related to implementation of this Act. He referenced Section 26 of the Critical Infrastructure Protection Act which states that a person who does the following commits an offence: “hinders, obstructs or disobeys a person in control of a critical infrastructure in taking any steps required or ordered in terms of this Act in relation to the security of any of critical infrastructure”.

On Outcome Seven: Dignified Client Experience, the MTEF includes DPWI as the leading or coordinating department for the target that all schools meet minimum sanitation infrastructure norms by 2024. He asked about the schools within the programme.

Ms L Moshodi (ANC, Free State) and Ms L Mamaregane (ANC, Limpopo) did not have questions as they had already been covered by Mr Dangor.

Mr M Rayi (ANC) noted the Director General had said DPWI had taken into account the recommendations made by the Committee. However, issues raised in previous meetings are not reflected in the APP. For example, under Administration, percentage of expenditure on procurement of goods and services from SMMEs must be reflected. Payment of all compliant invoices within a 30-day period is also not reflected. Most departments, including Transport where the Director General was previously, used to indicate this. The percentage of the staff establishment trained as per the DPWI skills pipeline plan is normally reflected in the APP of other departments including Transport and the number of bursaries. Under the finance section there is a number for bursaries. However, the performance indicators are not reflected as well as the number of people involved – only the amount allocated. The percentage for resolution of reported incidents of corruption; the other issue is the filling of vacancies included in its quarterly reports. Some of DPWI work could not be done because of the non-filling of priority vacant positions.

Under the Administration programme on ethics and fraud, DPWI is required to disclose the results of the participant survey noting the reduction in the target which previously was 41-60% which has gone down from that to 20 percent. Could we get clarity about those reductions? In the DPWI quarterly report there was an indication that fund transfers were being withheld to some provinces. Have the problems around that now been addressed? The vacancy rate move from the previous 10% to 11% is appreciated. The other issue about Administration is the allocation in its procurement for small businesses which the President in one State of the Nation Address said that 40% of procurement is to be allocated to women and another percentage to young people. However, the allocation dedicated to the youth is not reflecting.

Mr Rayi asked for an update on small harbours. The Committee was informed of a small harbour in Port St Johns. He comes from the Eastern Cape. Last year the caucus had a programme in Port St Johns and we were briefed about the small harbour. The presentation highlighted refurbishing programme and transfer in Port St Johns. There are a lot of vacant state properties owned by DPWI and the municipality has confirmed engaging with DPWI with the aim to transfer these vacant buildings. He was uncertain if this is part of this programme of refurbishing and transfer referred to in this meeting. Generally, there are a number of these properties and he asked for the total number in the country.

In the last meeting on parliamentary villages, he had requested that Laboria Park be paved since there is no growing grass due to the level of dust that goes in the houses. We had suggested this to the previous acting Director General who had accepted the proposal for consideration.

Mr Dangor added that on the other hand the parliamentary village in Acacia had too much grass and snakes and DPWI needed to be aware of that.

Mr Dangor asked about the progress in the rebuilding, repairs and refurbishment of Parliament after the fire. On the question of insurance, he is aware that the state self-insures. Is the self-insuring in all respects or are there some areas where properties are actually insured through an outside company, particularly its property in Berlin and in London that could be worth billions?

The Chairperson said there was one target that was in the last APP under Administration about the number of beneficiaries participating in the DPWI skills intervention programme which is no longer part of the APP. Could we get a response to that?

DPWI response
Mr Moemi replied that DPWI will indeed supply the development plans for precincts for all that are currently proclaimed especially the Salvokop precinct in Tshwane where we are much more advanced phase in Phase 1 of the project rollout with the servicing of the land, access roads and preliminary planning. DPWI has commenced with contracting before moving to Phase Two to commence with the construction of the offices. Six departments have already signed up for that precinct. We are talking to districts, metros and provinces to harmonize efforts to ensure we do not have a scenario where there is duplication but we offer a comprehensive plan for all. We will provide the Development Plan as well as a concept note around this and the update reports.

Mr Moemi confirmed that our current precincts are planned around the principles for Smart Cities. First and foremost is the facilitation of movement of people as well as traffic flow. We are looking at safety and also at multi use of the precincts in our possession so that they are not just government offices but they are supporting the commercial activities around them and that they coexist in peace with the neighbouring facilities. They embrace green buildings and the new buildings they are building – particularly at Salvokop – having a minimum rating of five in the green building rating tool. DPWI is keen on ensuring that the planning goes beyond with the outer circle being at a radius of up to a 100 kilometres. That tells you how thorough the town planning is in looking at the pull forces and in terms of the plans of the cities are actually themselves pulling towards these precincts DPWI develops. This is also used to bridge spatial divides and to also encourage integration of communities. Most importantly these are places of work and therefore the environment and design approach embraces the smart city principles in ensuring a healthy balance of work, play and as well as stay. Therefore, DPWI indeed confirms incorporating the principles of smart cities precinct planning.

In terms of mega smart cities, DPWI plays a significant role in troubleshooting where one finds challenges. For example, there is the Mooikloof Mega-City development where an investment commitment has been made. However, there is a challenge in the east of our capital city, Tshwane, around bulk services and water supply in the area as well as access roads and energy supply. Funding has been requested from Treasury to assist in investing in these services that will in turn unlock the major investments that will follow to make these developments a reality. Not only is DPWI participating in the steering committees but also participates at both a political as well as an administrative level. DPWI has been chairing the steering committees that looking at troubleshooting the challenges of the planned smart cities developments.

While each of them as Mr Dangor pointed out have different challenges at this stage and they are at different planning stages; nevertheless they are looked at in totality and the tailor-making of responses is done to each and every one of them together with the Presidency, Treasury as well as the inter ministerial committee (IMC) established to troubleshoot challenges faced by these cities.

There are new innovative instruments as Treasury has finally accepted the wisdom of what DPWI aims to do even though it has not agreed with us on the establishment of a separate catalytic fund. It has however introduced new instruments to support the quest in making these cities a reality and amongst some of the offers it has put forward is the front loading of budgets. Treasury has put a mechanism in place to allow cities like Tshwane to utilize ahead of time allocation budgets that are committed in the future and those budgets are front loaded to be able to unlock this development. When Treasury finalises allocations in the division of revenue, those cities will know that they have been front loaded in advance in terms of what had been allocated for them to do bulk.

This has allowed the move to even a greater thrust of negotiating uptake agreements with these developers that DPWI does not put in bulk and the investment is not followed through in terms of the development. These are under negotiations putting the bare minimum. For every rand we aim to leverage as much as R100 000 so as to make perfect sense with the strategy taken. Indeed, DPWI has a key role to play and has been driving the process of troubleshooting the challenges and making sure that the developments make financial and economic sense for the municipalities in which they are planned to be built in.

The pipeline that exist for the Land Release Programme, DPWI indeed through the Provincial Land Community Forums engages with provinces which are requesting land that is on our own asset register. In such cases, the land is released to provinces whether be it for the building of schools, human settlements or provision of cemeteries. It is according to requests that are on the table and based on the pipeline of the projects the provinces or districts and municipalities in those provinces have planned. Nationally, where departments other than DPWI require land from our register and also for our own purposes, land that belongs to DPWI in which we intend to build offices or other state facilities, there is a pipeline for this. Land is released for those specific purposes and being beneficiaries as well we also receive land.

For example, DPWI accepted a donation of land in KwaZulu Natal for the building of a Marion Hill Police Station which the municipality had donated and we are now in a position based on the needs already communicated and encapsulated in the pipeline to do what is required. The list of the Land Release Programme pipeline will be shared with the Committee.

On the Critical Infrastructure Protection Act, there is no indicator as the Act sits with the Security Cluster particularly the Police. DPWI does not provide any significant budget to this however DPWI does participate in the critical infrastructure subcommittee of the JPS Cluster and is active in that as a support not an elite department. In as far as what the provisions of the Act, DPWI is observant of that and as and when the need arises particularly where the properties belong to us, we undertake efforts to ensure that we are responsive.

On the safe schools programme and the provision of sanitation, this is no longer part of the DPWI asset register. It is driven directly by the Department of Basic Education. Even the safe schools programme is being driven directly by DBE. DPWI plays a minimal role or close to no role at all.

In Acacia parliamentary village in the last month or so the grass growing there has been looked at. The directive was given that our Cape Town region should actually process that. In the same breath to answer whether the grass should be replaced with paving to ensure that dust is contained, there are a number of option and horticulturalists have been advising on the type of trees to be planted and in what format to contain the dust. We are cognisant of the type of grass supposedly grown there. It was wrong from the onset to replace the naturally occurring grass there with Kikuyi and this has backfired in a big way. It is a challenge however one needs to point out that of immediate concern is the task of prioritizing the budget.

The former Minister as well as the new one have pointed out we are running behind schedule in the roll out of the removal of asbestos in the parliamentary villages and that has become our first priority. If you recall renovations had already began on the refurbishment of the parliamentary villages and that programme is continuous however a priority of the budget is to purely focus on the removal of asbestos and there was budget allocation to that extent. Paving and related aspects of the refurbishment rollout would have to be pushed to the back burner to year 2 or 3 from a budget point of view.

On insurance policy, indeed the state “is its own insurance”. SASRIA exists for purposes of looking at damaged infrastructure for riots and natural disasters as well as acts of God. However as far as normal vandalism, this does not feature anywhere and that means that the state needs to provide the resources for refurbishment. Accordingly they hold no insurance policy on immovable properties. However, DPWI does hold insurance for assets such as vehicles but as a department there are no key insurance policies. Although the risk is shifted during construction in terms of process and the joint venture agreement to force contractors to provide and raise sufficient capital insurance to protect DPWI should the work not be completed and that condition has been added to the contract documents.

All international properties are with DIRCO and we no longer deal with properties in foreign countries. However DPWI assists. Often DIRCO contracts via the African Renaissance Fund to assist in the building of schools in foreign lands and it supports those programmes but all those assets are no longer on DPWI asset register. They are with DIRCO and DIRCO has its own policy on what is done and some of their assets are insured in some foreign countries however they are not on our asset register at all.

On the refurbishment of Parliament, there are two processes involved. The first one being that Treasury has made a budget allocation not in favour of DPWI but rather Parliament itself. Looking at the provisions of the Government Immovable Asset Management Act (GIAMA), Parliament is exempt from GIAMA. However the reality of the matter is that the building itself belongs to us making it our asset. While Parliament is not being bound by GIAMA, no tenant can just move in and start renovations without the consent of the landlord. That is the principle we have engaged with Parliament and Parliament had stated its willingness to undertake the refurbishment itself. After which we advised each other in terms of the procedures to be followed, Parliament has requested the Minister for custodial responsibility of Parliament and that is provided for in section 19 of GIAMA. It is a long tedious process and requires consultation with Treasury, DPSA and the item must also be sent to Cabinet. However, in order to enable the work to start, DPWI has issued a preliminary go-ahead. Parliament has announced they have contracted DBSA to commence with rubble removal and all other related aspects including a temporary roof to avoid winter rains that are now approaching. In consideration of section 18 which is assignment of functions to enable a start to that process, DPWI has asked for the provision of a section 18 application that will be processed in tandem with the section 19 application. Once the assignment is received the work can start. But ultimately the building and precinct are to be under direct control and maintained by Parliament going forward and that section 19 application the Minister will consider to take the process forward.

While it does not appear as a target, percentage of expenditure for SMMEs is tracked monthly and DPWI is required to report upon this even to the Presidency. A report to the Committee to monitor progress on this will be done. DPWI also tracks expenditure on SMMEs owned by women, disabled people and youth on a monthly basis.

Mr Moemi assured the Committee that DPWI is one of the best and lead department in the payment of invoices, hitting the upper 90s each month for all compliant invoices with the system it has in place and the CFO could speak to this. Our system has been hailed by Cabinet attesting that it should be a government-wide system that is utilized to clear, track and pay invoices within 30 days.

On the number of bursaries, the provision of this information can be done. One of issues highlighted when doing our review, was that our targets were bulky and that there was a need to filter for others to reflect in the operational plan. Nevertheless, this is tracked although it is not a standalone feature in the APP; however the budget is provided for. In fact the provision of bursaries and beneficiaries has been ramped up.

The Department has been hard at work in the filling of vacancies. At the start of 2022/23 there was an excess of 700 vacancies and this has reduced significantly by filling 310 positions as of 31 March 2023. The only difficulty had been that most appointments have been promotions which mitigates against the attempt of bringing the number of vacancies down.

This tells a story of the vigorous commitment DPWI has had and it hired temporary HR practitioners on 36 month contracts to assist with the recruitment process to get the vacancies filled so as not in the next financial year report about the inability to do certain activities because of critical vacancies not being filled. That has been the continuous trajectory although it is slowed down by the existing moratorium. However, once lifted, a return to vigorously filling all vacancies will be maintained. DPWI is on the normal 10% vacancy target that all public service departments should be on. However, it continues to set a more ambitious internal target at a range of 3 to 5%.

On EPWP transfers being withheld, while there are minimal challenges it is no longer the bigger challenge it was in the previous year that warranted even the AG raising it. During the interim audit it was reviewed and no significant finding was raised about it. Our concern had been on the ability and capacity of the NGOs contracted – to deliver in the non-state section – to actually do and account for the work. There is longer a challenge of transfers but rather a challenge of ensuring that the quality of reporting meets the expectations of the AG. In response to this, it is dispatching staff to sites from Head Office to support struggling NGOs and to increase the allocation of the Independent Development Trust (IDT) to enable effective support of the work done by NGOs.
On harbours, a prepared report will be supplied to the Committee as currently your sister committee in the National Assembly is its way for an oversight visit to the harbours and fortunately a comprehensive report has been prepared on the status of all harbours including Port St Johns. However progress was significantly slowed by the damage and floods that occurred at Port St Johns. Immediate repair plans are being looked which will even more delay the planned programme of having ocean-going pier that is a catalyst for that small harbour to actually become viable. The report will be shared to provide greater detail of our projected plan in that space.

On vacant properties, the Refurbish Operate and Transfer (ROT) is being looked at. Piloting will be done in the City of Tshwane. Five buildings are in the pilot and will be done through this model in testing the water for the responsiveness of the market. Once essential lessons have been learnt the project will be taken to scale. DPWI has already begun identifying its properties and 200 have been identified. In terms of stratification in the immovable asset register, properties are classified in categories as excellent, good and fair condition, those in a poor state and those that are bad requiring being condemned as not being in a usable state needing demolishing. The biggest concern is 60% of the portfolio is in the three lowest categories of fair, poor and bad categories and the remainder is good and 8% being in the category of excellent. The challenge is huge and DPWI is aware of the maintenance backlog and projections show a R19 billion shortfall in what needs to be done. It has led to looking at different innovation practices including temporary land lease of properties with properties reverting back after use. We will pilot all possible ways for recovery of all assets to benefit us in one way or another.

DPWI will relook at the beneficiaries in the skills pipeline programme. He assured the Committee that the programme continues through professional services and they have not stopped and the are being young cadets is undertaken with a whole host of other things. However the report will be shared with the Committee to see that these programmes are being rolled out. It is the prerogative of the Committee if it feels strongly to add and amend the APP prior to approval as Parliament is the approving body.

The Chairperson asked noted the question on ethics and fraud asking if DPWI had touched on the methodology of the target dropping from 61 – 40% which was currently at 20 – 40%.

Ms Sebati replied that the ethics and fraud perception survey was answered by DPWI staff as well as external stakeholders. In terms of target performance level, the survey results ranged between 81 and 100% which we deemed unacceptable especially when looking at the prevalence of fraud and the perception of DPWI in dealing with ethical issues. Interventions were put in place and there was an improvement in perceptions about DPWI dealing with ethics and fraud. The results for the last perception survey were between 41 and 60% after the interventions at operational level. Hence its target is set at a lower perception rating of zero to 20%.

DPWI noted that withholding provincial transfers had not been an issue in the 2023/24 financial year therefore the matter has been resolved.

The Chairperson asked if the KwaZulu Natal Premier had signed off.

A DPWI representative responded that it was still a current discussion on the protocols; however, the full allocation of the incentive grant had been transferred.

As there were no follow-up questions, the Chairperson thanked the Director General and DPWI team for the Annual Performance Plan for 2023/24 presentation and for the responses given.

In his closing remarks, the Director General reaffirmed DPWI’s commitment and accountability to the Committee in seeking wisdom and guidance on what needed to be the priorities facing the DPWI portfolio and the country as a whole.

The meeting was adjourned.


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